Monthly Archives: November 2018

Get Paid Every Hour?


November 26, 2018

I recently became aware of “paycheck acceleration services” aimed at workers on a tight budget.  One app-based service called Earnin advances workers part of their earnings within 24 hours of completing a shift.  There are no fees but Earnin enables users to pay an optional “tip”.  Up to $500 can be advanced per pay period.  Users report the nature of their work and provide time sheets, which the app validates by tracking a worker’s location.  The worker’s paycheck is later reduced by any advances taken during the period.

As part of the arrangement, users may grant Earnin access to their transactional data.  This allows Earnin to study the habits of its users’ shopping at retailers like Walmart and Amazon.  In September 2018, the company posted its users’ average checkout price at each retailer. Walmart purchases were the most frequent and had larger transactions, with an average of around $44.  Earnin also identified a late February/early March spike in the average spending at Walmart, which was attributed to users receiving their tax refunds.

Paycheck acceleration services may well spare less prosperous members of society from bank account overdraft fees and payday loans at usurious interest rates.  Conversely, these new tools for “borrowing” from one’s future paycheck could create further financial risk for workers without any savings cushion.

A June 2018 survey by found that 45% of respondents had less than 3 months’ worth of expenses saved.  Of those, about half had no savings at all.  Those without any cash reserves are now also missing out on higher interest rates for savings.  Over the last three years the Fed Funds rate has risen from effectively zero to its current 2.25% level.  Many banks now offer interest rates near 2% on FDIC-insured savings deposits, and 30-day Treasuries yield 2.25%. $400,000 in 1 month Treasuries now creates a dollar of interest every hour.  In November 2015, the same capital in Treasuries would have taken 16 hours to generate a dollar.

While researchers tell us that much of our approach to finances is hard wired in the brain or learned in childhood, certain behavioral approaches that promote saving can be learned.  Behavioral finance researcher Shlomo Benartzi and Nobel prize winner Richard Thaler pioneered an approach called “Save More Tomorrow” which asked 401k participants to commit in advance to saving more into their 401k account, next year.  They found that less than one third of participants were willing to immediately increase their savings rate.  However, of those, almost 4 in 5 committed to increasing their savings in one year’s time.  When the increase went into effect, only 2% dropped out within a year, and after four years all but 20% maintained the higher savings levels.

As with resolutions and dessert, it tends to be easier to put off a sacrifice to some date in the future.  For those contemplating changes in the New Year, there is still December to enjoy!

Cam Simonds


Happy Thanksgiving


November 19, 2018

For many years there’s been an ongoing debate in my household about whether spring or fall is the better season. I am not a fan of pollen, so I lean towards fall. Some argue fall is a time of decline. Plus, it signals the onset of winter. For me, it’s a time of reflection, a time for taking stock, and a time for thanksgiving. Plus, I tend to sneeze less.

Last week we celebrated our annual NHCO Thanksgiving Luncheon. Everyone contributes, bringing dishes prepared at home to share around our collective table. All the staples are there: turkey, ham, stuffing, endless side dishes and desserts. Nick, of course, formally sets the table. And then we break bread together, taking time to reflect and give thanks for all the gifts we’ve received (our client relationships chief among them). It’s a wonderful prelude to the official Thanksgiving holiday.

With all the hurricanes and wild fires and random acts of violence on the news feed, this year seems more precarious than most. I am thankful for all the first responders and law enforcement officials who put themselves in harm’s way day in and day out to protect us. I am thankful for the men and women in uniform who have volunteered to prosecute our wars and defend our interests across the globe to help keep us safe here at home. I am thankful for our free enterprise system and the rule of law that enables our country to be the greatest land of opportunity on the planet. The list goes on . . .

Sure, we have problems. And sometimes progress seems illusive. Then I remember that Thanksgiving was not always a national holiday. George Washington made the first Presidential Thanksgiving Proclamation in 1789, but that was a one-off event. In subsequent years different states celebrated Thanksgiving at different times, some as early as September, some as late as January, others not at all. Thomas Jefferson famously refused to proclaim the holiday on concerns related to state sponsorship of religion.

Not until the fall of 1863 did the holiday take shape as we know it today. Amid the Civil War, President Abraham Lincoln proclaimed a national day of Thanksgiving to take place on the fourth Thursday of each November. As we all know, the union survived those contentious times and great progress has been made in the years that followed. Much remains to be done but we can all be thankful for the progress that has been made.

Wherever you may be headed this Thanksgiving, we wish you safe travels, meaningful conversations, closer connections with those you love, and of course, a bountiful provision of good food.

As for my household, we will adopt the theory that calories don’t count until January.

Mike Masters1119