A Truck, A Man, and a Financial Journey
May 24, 2021
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Last week I was running an errand. Cutting through a parking lot, knowing I needed to get this task done and get back to my desk as fast as humanly possible. I was in such a hurry, I didn’t see the pick-up truck, or the man leaning across the hood on his elbows holding his wallet that was stuffed with cash. A lot of it. He said, “Hey….you got a minute?” I stopped and said, “…sure.” He was African American and in his 60’s. His hat was dirty and propped up with the bill standing straight up on his head. His shirt and pick-up truck were as dirty as his hat, and he was missing some teeth. His name was Fred. He pointed at a storefront that was 15 feet away, right in front of his truck, which was a branch for a well-known bank. He motioned with his left hand holding his bulging wallet toward the front door of the bank, “You like those guys? You deal with them.” I looked over my shoulder to look up at the logo, and then back to him, “Yeah, I actually do have an account there. They have been good so far…. But when it comes to big institutions like that, you should really do your homework.” He just sighed. Kind of half baffled, half frustrated. I said, “Why do you ask?”
We ended up speaking for over 30 minutes. He explained how he had been homeless until around 2017. He finally got on his feet and was now a dump truck driver, and was able to save some money, which was all in cash that he kept in his house. He said he had around $18,000, and he wanted to invest it, in something, anything – he just didn’t want it to be too risky since he planned on retiring in a few years. He needed to get the cash out of his house and into some sort of institution, but no one had ever taught him how. He told me the story of walking into the bank in front of us and trying to open an account. He was frustrated that the branch lobby was closed due to COVID, but there was a virtual rep on a TV monitor at the entrance that explained they couldn’t take cash at that location and he would need to make a deposit with a check. He also needed to go online and open an account, provide all the necessary personal information, scan his government ID and then come back and deposit his check. The problem was he didn’t have a checking account, didn’t have a computer or a scanner, and his ID was expired. On top of that, even if he had all those things he didn’t know what type of account he needed or what was a good or bad investment. Also, he didn’t have another day off for 2 weeks.
So here he was – he had battled his way out of homelessness, got a job, worked hard to move up from being the low man on the totem pole cleaning up construction sites, to being a truck driver, to saving $18,000 DOLLARS! And still, he was on the other side of the moat looking up at all the people in the castle, wondering where the bridge is to get across. He said, “I’m just beat down man. There must be a better way. I pray at night that there has to be a better way.” I stared at this man and could not believe he had been put in my path.
We spoke for a while longer and I explained what he needed to do to get his money into “the system.” I also walked him through all the low fee frictionless digital banking options that were available to him and how he should think about investing. I also told him about what we are building at Flyp and how there WILL be a better system, and that our conversation will help fuel the engine as we build an entirely new way to handle your finances. One where you can easily open an account. Where you aren’t charged any fees just to store your money somewhere. Where you don’t get hit with a $35 overdraft fee for making a budgeting mistake and going negative by $5. Where just for being a Flyp customer you can get your paycheck several days early. One where you can learn about the financial ecosystem and how it can, and should, work for you. How Flyp will be a company that provides channels for peer to peer sharing of social capital and a community that really looks out for one another. A place that has an array of loan and investment products that meet you wherever you are on your financial journey. When you add it all up it equals the first social network for your financial journey. And it’s all right there on your phone, accessible 24/7.
The conversation with Fred got me thinking that I take the basics of what I have been taught about finance for granted. So let’s break this down a little. I am the first one to complain about “the system” and how it excludes so many people etc, but for the time being it’s the best system we have. Being a part of the system vastly increases your odds of building wealth and creating a baseline of stability in your life. What are you talking about being part of “the system?” I mean you need to get your house in order and start down the path of going from a spender to a saver to an investor – and the earlier and the quicker that happens – the wealthier you are going to be. That entails having a banking account, a savings account, an investing account and building credit that will provide you with borrowing options when you want to buy a car or a house. It will take time to do all these things, so let’s get to work!
Start with the basics. First things first:
You should always have proof of identity, and always know when it expires. The main forms of identity that are critical are:
- a valid driver’s license
- a state issued identification card
- a passport
Opening a banking account, getting on a plane, applying for a loan – the first thing you will be asked for is your ID. Additionally, having a social security card or at the very least knowing your social security number is also important. The combination of a valid form of ID and a social security number will make opening a banking or investing account extremely easy.
Why is it important to have a banking account? One reason is it starts a paper trail and a history of your financial footprint, which will be helpful down the road when you need a loan. According to RocketMortgage, you need at least 2 months of bank statements for Mortgage Underwriting. Also, it’s protecting your money. It is true that cash is king, but putting your money under your mattress is not a strategy, it’s a disaster waiting to happen. Finally, it is a foundation for your financial journey. Carrying cash around for all your purchases is not the best option. It’s hard to keep track of how much you’re spending, and even harder to stick to a budget. Once you open your bank account you will be issued a debit card that will make it super easy to make purchases, earn rewards and pay your bills. Plus – mobile banking technology has modernized to the point where you not only don’t need a branch but everything you need to do with your finances can be done on your phone. The bank literally sits in your pocket and is insured by the FDIC.
Track Your Spending
80 million Americans live paycheck to paycheck. If you are one of those, have you ever really wondered why that is? One possibility is that you are not looking at where your money is going. Many of us just swipe a card without thinking about whether the purchase is necessary or not, and not even realize that that money should be saved for a more important purchase, like rent, utilities, or car payment. Spending a little time every month to see where your paycheck went and making adjustments for next month will help with shortfalls and allow you to break the paycheck to paycheck cycle. Want more tips? Check out our blog about financial stress HERE.
As I drove back to my office, I could not stop thinking about Fred, and how many other people are in the same situation as him. I also could not stop thinking about the transformation that is happening in digital banking and how we have only scratched the surface on what is possible. Banking and finance shouldn’t be an exclusive club with a horrible, cold and untrusted user experience.
One thing I love about this country is that every day is election day. Every day we have the choice to vote with our feet and our dollars. To choose who we want to give our time, and our money to. In my opinion – we need to be more discerning with our time and money. To give it to people, and to companies that are trying to make the world a better place. Join us at Flyp to build a better way to handle your finances. Raise your hand and vote with your money and open a Flyp account. Launching later this year 2021 – Sign up today at flypmoney.com/waitlist/