17 ms·

Want a Steady Income? There’s an App for That

114 points by known 12y ago

aresant 12y ago
Something that surprised me when I first started hiring employees was how hard it was for people to manage their cash flow, especially at the more limited levels. We started with a once-a-month paycheck, which my co-founder and I were used to and saved some payroll fees. This subsequently blew up in our face within a few months as people would spend heavy @ the front end of the month, wouldn't save for things like car repairs / gas / etc, and were out at the end of the month funding living with CCs. So I applaud this effort for a start-up - I'm excited to see where they take it.
- Swizec 12y ago
  As somebody who varies between managing cashflow well and not-that-well ... it all depends on how much you make and the steadiness of your income. For instance, last year I had a string of events where clients were a few months late in paying me. This created a snowball effect that took over a year to fully get rid of. During this time I was always running out of money by the end of the month, and it was always a race of whether my credit card payment[1] would get triggered before the wire transfer for my payment arrived. Now I have enough saved up for just two months of living. Suddenly cashflow management isn't a problem at all. If something happens, it happens, I can buffer it all out and money just isn't as big a problem. At least not for the big stuff. It's a bit like clothes. I can manage my laundry perfectly fine. But if for some reason I don't do laundry on Saturday, I will be out of clean clothes by Tuesday. [1] it's set up so it gets blocked if I don't pay it off in full every month
  - peteretep 12y ago
    "Rich" people have a real advantage here. For historic reasons, I have an overdraft facility on one of my checking accounts of $15,000. This means I can time dividend payments from my company optimally for tax, large investments, and so on, without worrying too much about personal liquidity, which saves and makes me money. The interest isn't free, but we're talking "daily latte" sort of expenditure.
- sukilot 12y ago
  Monthly payroll is illegal in California, for this reason. Credit cards half one-month grace period, so living on credit cards wouldn't actually be a problem though. Spending more than income would be a problem.
  - pzxc 12y ago
    Every one of the 200,000 public employees working for the State of California gets paid once a month, on the 1st.
  - cornellwright 12y ago
    IANAL, but monthly payroll is legal in California for salaried exempt employees. For non-exempt it has to be at least bi-monthly.
  - peteretep 12y ago
    > Monthly payroll is illegal in California, for this reason Monthly payroll is the usual in the UK. If you switched to weekly, most people wouldn't save enough to make their rent each month, where the trick on monthly income is to just front-load all the big expenses to just after you've been paid.
- cperciva 12y ago
  once-a-month paycheck I was surprised to learn recently that this isn't legal in BC: Employees here must be paid at least twice a month, with at most 16 days between paychecks. It always seemed a bit silly to me, but what you describe explains why it's necessary I suppose.
- patmcc 12y ago
  >>We started with a once-a-month paycheck, which my co-founder and I were used to and saved some payroll fees. Just a reminder to any other founders - some jurisdictions may dictate how often you must pay your employees, make sure to check your local laws. My province requires payment at least twice a month. I'm not suggesting aresant was violating any laws here, but once you start to pay people you need to be up on your employment law - there can be serious consequences.
grecy 12y ago
> Thinking about money gives her a jolt, “like you’re about to get into a car accident,” she later told me. There’s the $3,700 for massage-school tuition that she still owes on her credit card; the $60 a month for drugs for her anxiety and bipolar disorder, which she might skimp on again Sentences like that make me sad about the reality of life for tens of millions of working Americans. I just visited Australia after 9 years in North America, and it's like a slap in the face to realize there are no desperate people there. Almost everybody has enough money for basic essentials, and nobody is crushed with student debt or the fear of not being able to pay medical bills. It really does feel like another planet when people earning "minimum wage" are doing just fine, are extremely happy, and likely less stressed than the career workers in North America, simply because they earn "enough to live comfortably"
- Swizec 12y ago
  > It really does feel like another planet when people earning "minimum wage" are doing just fine There's a big difference between getting minimum wage every 5th of the month on the dot, or getting $2k one month, $10k next month, $1k third month and so on.
  - grecy 12y ago
    When getting minimum wage is enough of a baseline to have a great and worry-free life, anything above that is cream.
    - Swizec 12y ago
      The issue the article is talking about is the whole not getting minimum wage every month. It's the uncertainty. Minimum wage in California is $9/h. That means that if you work minimum wage full-time (160h/month), you get $1440 per month. You won't have luxury, but I imagine that managing your money when $1440 appears on your bank account every 5th of the month at 3pm isn't that difficult. But when the deposits look like this: - Jan 10th: $800 - Feb 4th: $2500 - Mar 15th: $1400 - Apr 29th: $1060 Managing cashflow is hard. But the average monthly income in this example is still minimum wage.
ndomin 12y ago
My understanding of this is you set up a monthly allowance with them and they save your surplus for the months where you don't make as much. This doesn't seem like solving a problem, rather they are creating an illusion of solving a problem. Essentially they are parenting. Which some people might need. But what a better solution might be is to teach people to create a savings account and budget themselves. And not surprisingly there are plenty of apps that do just that.
- cortesoft 12y ago
  They also will provide interest free loans if the user hasn't yet built up enough savings. So, in that sense, it is also a bit of an insurance program.
  - bduerst 12y ago
    Yeah, it seems strikingly similar to payday-advance lines of credit, except with lower interest rates (I assume).
    - dragonwriter 12y ago
      The loans are interest free, but given that they have an undisclosed mechanism of calculating your allowance ("Even Salary"), it should be fairly trivial for them to assure that they are almost never going to be using anything other than the customers own deferred income to pay it.
- dragonwriter 12y ago
  > My understanding of this is you set up a monthly allowance with them and they save your surplus for the months where you don't make as much. No, they calculate what they call an "average" of your income over a period of time (though it is expressly not any of the usual mathematical averages and they don't disclose how they calculate it) and they retain your surplus above that "average" in better months pay you the difference to reach back to your "average" in months that are below. > This doesn't seem like solving a problem, rather they are creating an illusion of solving a problem. Not always an unsuccessful business model.
hurin 12y ago
I like how someone struggling to make it on an unpredictable $700-90 a week turns into an advertisement for an app.
- sukilot 12y ago
  It's actually the reverse. http://paulgraham.com/submarine.html http://paulgraham.com/submarine.html
didgeoridoo 12y ago
> Even’s purpose is hardly to change the distribution of wealth in society. It is simply to redistribute one person’s own limited wealth across time. People in Silicon Valley may believe there’s an app for everything. That’s their hammer. But improving the lot of the poor will require other tools, including an old one the valley often wants to wish away: politics. Sorry, did you read your own article? The whole idea is that by lightening the load of uncertainty, SOME people will be able to pull themselves out of poverty with nearly zero net spending increase. Are we to fault Even for not trying to solve EVERYONE'S problem so neatly?
joshuapants 12y ago
> Employers increasingly use cutting-edge scheduling tools like Kronos to calculate the profit-maximizing head count for every hour and adjust schedules accordingly, week to week or even day to day, sometimes with scarcely any notice. Reminds me of this short story: http://marshallbrain.com/manna1.htm http://marshallbrain.com/manna1.htm
- Tossrock 12y ago
  I find the idea that Kronos is 'cutting-edge' pretty amusing. Last time I had to interact with it, it was still an in-browser java applet with a user experience about on par with sticking your hand in a blender.
  - bandrami 12y ago
    Yeah, their JIT stuff is like 30 years old at this point...
yodsanklai 12y ago
> Jacobs, in her habitual bright pink lipstick and matching headband, was explaining all this via Skype, from her “little box of a house” in Simi Valley, to Jane Leibrock, 33, who had the more muted look of the fortunate and was sitting in the Oakland headquarters of Even, the start-up where she works. Leibrock — an alumna of Yale; a onetime Beijing resident and Mandarin speaker; a street-fashion blogger; a tweeter of first-world problems (“My personal hell would be having my earbuds pulled out over and over throughout eternity”) — used to study the user experience of privacy settings for Facebook. Now she is a researcher for Even, which proposes, for a fee, to help solve the problem of income volatility. I'm off topic, but am I the only one to find NY times articles to be abusively long? is it a trend in this type of US publications? While I find the topic interesting and I would like to know more, the article is just too long, repetitive and boring.
- llamataboot 12y ago
  It's from the Sunday magazine which traditionally has much longer-form articles.
- username223 12y ago
  "Abusively long?" You should try the New Yorker! No, seriously, you should; it would give you a chance to appreciate long-form journalism.
- plink 12y ago
  Spot on. I agree that the example you cited evinces abuse and not interesting, long-form journalism. It's writing ineptitude.
- boskonyc 12y ago
  This is from the magazine, which typically features long-form journalism.
- matthewmcg 12y ago
  This article ran in the Sunday Magazine and not one of the news sections of the paper. Articles in the magazine tend to have a more freewheeling style and are usually longer.
suprgeek 12y ago
From their FAQ: Is Even a lender? No, Even is not a lender and Even does not provide loans. yet the Article claims that: "....On bad weeks, when users fall short, they still get their salary, thanks to past surpluses or to interest-free credit from Even." Interest-free Credit == Loan right? What am I missing
- sukilot 12y ago
  Maybe they take it as an advance against payroll (direct deposit) and explicitly eat the risk of a user losing their job and never repaying a week. So it wouldn't be a debt.
- thaumasiotes 12y ago
  There's a legal difference between "loan", the legal transaction, and "loan", the economic transaction. My sister had an internship once at a South American company that bought receivables. In that country (probably Brazil), loans were illegal. A receivable is a promise of payment in the future according to some schedule. So this company would buy receivables at less than full value from companies (or individuals, I guess) who wanted the money immediately. Obviously, that's a loan (technically, it also assigns responsibility for collecting payment to the owner of the receivable). But despite being like a loan in all other ways, it has the key difference of not being illegal. I suspect something similar is going on here.
  - idoh 12y ago
    What your sister did is called factoring: http://en.wikipedia.org/wiki/Factoring_(finance) http://en.wikipedia.org/wiki/Factoring_(finance) It is a thing in the US as well. Retailers and construction companies do it. I was looking into it for apps e.g. advance money against IAPs or ad revenue. It doesn't look like there is demand for it.
    - thaumasiotes 12y ago
      Here are some relevant selections from wikipedia: > Factoring is not the same as invoice discounting > Factoring is the sale of receivables, whereas invoice discounting is a borrowing that involves the use of the accounts receivable assets as collateral for the loan > However, in some other markets, such as the UK, invoice discounting is considered to be a form of factoring > Invoice Discounting is sometimes referred to as Discreet Factoring as it is essentially the same product as Factoring (That last quote is from the page on invoice discounting) None of that indicates to me that there's any difference at all, other than (possibly, but not necessarily) the name, between selling your accounts or borrowing against them. They're both loans, identically structured. There's no demand for this euphemistic product in new US markets because we already have finance. Oh, another quote from the factoring page: > in other industries, however, such as textiles or apparel, for example, financially sound companies factor their accounts simply because this is the historic method of financing
alex_young 12y ago
This seems like just as bad as payday loans to me. In 2013, there were 45.3 million people in the US under the poverty line. [1] The article cited a figure of $3.4B / yr for payments to the payday loan sharks. This startup charges $3 / week and only services cash flow positive customers. A little math presuming we cover the poor as a group with this 'service': In [1]: 4530000352 Out[1]: 706680000 That's $706 million / year, or about a fifth of the total amount the sharks charge. But we shouldn't stop there. The sharks are still necessary, since this company is only covering the predictable expenses, not the extraordinary but common visits to the emergency room, or to get a car fixed, or any number of less predictable expenses. We still need the loan shark. And this guy is taking 20%. [1] http://www.census.gov/library/publications/2014/demo/p60-249.html http://www.census.gov/library/publications/2014/demo/p60-249...

114 points by known 12y ago

Something that surprised me when I first started hiring employees was how hard it was for people to manage their cash flow, especially at the more limited levels. We started with a once-a-month paycheck, which my co-founder and I were used to and saved some payroll fees. This subsequently blew up in our face within a few months as people would spend heavy @ the front end of the month, wouldn't save for things like car repairs / gas / etc, and were out at the end of the month funding living with CCs. So I applaud this effort for a start-up - I'm excited to see where they take it.

Swizec 12y ago
As somebody who varies between managing cashflow well and not-that-well ... it all depends on how much you make and the steadiness of your income. For instance, last year I had a string of events where clients were a few months late in paying me. This created a snowball effect that took over a year to fully get rid of. During this time I was always running out of money by the end of the month, and it was always a race of whether my credit card payment[1] would get triggered before the wire transfer for my payment arrived. Now I have enough saved up for just two months of living. Suddenly cashflow management isn't a problem at all. If something happens, it happens, I can buffer it all out and money just isn't as big a problem. At least not for the big stuff. It's a bit like clothes. I can manage my laundry perfectly fine. But if for some reason I don't do laundry on Saturday, I will be out of clean clothes by Tuesday. [1] it's set up so it gets blocked if I don't pay it off in full every month
- peteretep 12y ago
  "Rich" people have a real advantage here. For historic reasons, I have an overdraft facility on one of my checking accounts of $15,000. This means I can time dividend payments from my company optimally for tax, large investments, and so on, without worrying too much about personal liquidity, which saves and makes me money. The interest isn't free, but we're talking "daily latte" sort of expenditure.
sukilot 12y ago
Monthly payroll is illegal in California, for this reason. Credit cards half one-month grace period, so living on credit cards wouldn't actually be a problem though. Spending more than income would be a problem.
- pzxc 12y ago
  Every one of the 200,000 public employees working for the State of California gets paid once a month, on the 1st.
- cornellwright 12y ago
  IANAL, but monthly payroll is legal in California for salaried exempt employees. For non-exempt it has to be at least bi-monthly.
- peteretep 12y ago
  > Monthly payroll is illegal in California, for this reason Monthly payroll is the usual in the UK. If you switched to weekly, most people wouldn't save enough to make their rent each month, where the trick on monthly income is to just front-load all the big expenses to just after you've been paid.
cperciva 12y ago
once-a-month paycheck I was surprised to learn recently that this isn't legal in BC: Employees here must be paid at least twice a month, with at most 16 days between paychecks. It always seemed a bit silly to me, but what you describe explains why it's necessary I suppose.
patmcc 12y ago
>>We started with a once-a-month paycheck, which my co-founder and I were used to and saved some payroll fees. Just a reminder to any other founders - some jurisdictions may dictate how often you must pay your employees, make sure to check your local laws. My province requires payment at least twice a month. I'm not suggesting aresant was violating any laws here, but once you start to pay people you need to be up on your employment law - there can be serious consequences.

grecy 12y ago

> Thinking about money gives her a jolt, “like you’re about to get into a car accident,” she later told me. There’s the $3,700 for massage-school tuition that she still owes on her credit card; the $60 a month for drugs for her anxiety and bipolar disorder, which she might skimp on again Sentences like that make me sad about the reality of life for tens of millions of working Americans. I just visited Australia after 9 years in North America, and it's like a slap in the face to realize there are no desperate people there. Almost everybody has enough money for basic essentials, and nobody is crushed with student debt or the fear of not being able to pay medical bills. It really does feel like another planet when people earning "minimum wage" are doing just fine, are extremely happy, and likely less stressed than the career workers in North America, simply because they earn "enough to live comfortably"

Swizec 12y ago
> It really does feel like another planet when people earning "minimum wage" are doing just fine There's a big difference between getting minimum wage every 5th of the month on the dot, or getting $2k one month, $10k next month, $1k third month and so on.
- grecy 12y ago
  When getting minimum wage is enough of a baseline to have a great and worry-free life, anything above that is cream.
  - Swizec 12y ago
    The issue the article is talking about is the whole not getting minimum wage every month. It's the uncertainty. Minimum wage in California is $9/h. That means that if you work minimum wage full-time (160h/month), you get $1440 per month. You won't have luxury, but I imagine that managing your money when $1440 appears on your bank account every 5th of the month at 3pm isn't that difficult. But when the deposits look like this: - Jan 10th: $800 - Feb 4th: $2500 - Mar 15th: $1400 - Apr 29th: $1060 Managing cashflow is hard. But the average monthly income in this example is still minimum wage.

ndomin 12y ago

My understanding of this is you set up a monthly allowance with them and they save your surplus for the months where you don't make as much. This doesn't seem like solving a problem, rather they are creating an illusion of solving a problem. Essentially they are parenting. Which some people might need. But what a better solution might be is to teach people to create a savings account and budget themselves. And not surprisingly there are plenty of apps that do just that.

cortesoft 12y ago
They also will provide interest free loans if the user hasn't yet built up enough savings. So, in that sense, it is also a bit of an insurance program.
- bduerst 12y ago
  Yeah, it seems strikingly similar to payday-advance lines of credit, except with lower interest rates (I assume).
  - dragonwriter 12y ago
    The loans are interest free, but given that they have an undisclosed mechanism of calculating your allowance ("Even Salary"), it should be fairly trivial for them to assure that they are almost never going to be using anything other than the customers own deferred income to pay it.
dragonwriter 12y ago
> My understanding of this is you set up a monthly allowance with them and they save your surplus for the months where you don't make as much. No, they calculate what they call an "average" of your income over a period of time (though it is expressly not any of the usual mathematical averages and they don't disclose how they calculate it) and they retain your surplus above that "average" in better months pay you the difference to reach back to your "average" in months that are below. > This doesn't seem like solving a problem, rather they are creating an illusion of solving a problem. Not always an unsuccessful business model.

hurin 12y ago

I like how someone struggling to make it on an unpredictable $700-90 a week turns into an advertisement for an app.

sukilot 12y ago
It's actually the reverse. http://paulgraham.com/submarine.html http://paulgraham.com/submarine.html

didgeoridoo 12y ago

> Even’s purpose is hardly to change the distribution of wealth in society. It is simply to redistribute one person’s own limited wealth across time. People in Silicon Valley may believe there’s an app for everything. That’s their hammer. But improving the lot of the poor will require other tools, including an old one the valley often wants to wish away: politics. Sorry, did you read your own article? The whole idea is that by lightening the load of uncertainty, SOME people will be able to pull themselves out of poverty with nearly zero net spending increase. Are we to fault Even for not trying to solve EVERYONE'S problem so neatly?

joshuapants 12y ago

> Employers increasingly use cutting-edge scheduling tools like Kronos to calculate the profit-maximizing head count for every hour and adjust schedules accordingly, week to week or even day to day, sometimes with scarcely any notice. Reminds me of this short story: http://marshallbrain.com/manna1.htm http://marshallbrain.com/manna1.htm

Tossrock 12y ago
I find the idea that Kronos is 'cutting-edge' pretty amusing. Last time I had to interact with it, it was still an in-browser java applet with a user experience about on par with sticking your hand in a blender.
- bandrami 12y ago
  Yeah, their JIT stuff is like 30 years old at this point...

yodsanklai 12y ago

> Jacobs, in her habitual bright pink lipstick and matching headband, was explaining all this via Skype, from her “little box of a house” in Simi Valley, to Jane Leibrock, 33, who had the more muted look of the fortunate and was sitting in the Oakland headquarters of Even, the start-up where she works. Leibrock — an alumna of Yale; a onetime Beijing resident and Mandarin speaker; a street-fashion blogger; a tweeter of first-world problems (“My personal hell would be having my earbuds pulled out over and over throughout eternity”) — used to study the user experience of privacy settings for Facebook. Now she is a researcher for Even, which proposes, for a fee, to help solve the problem of income volatility. I'm off topic, but am I the only one to find NY times articles to be abusively long? is it a trend in this type of US publications? While I find the topic interesting and I would like to know more, the article is just too long, repetitive and boring.

llamataboot 12y ago
It's from the Sunday magazine which traditionally has much longer-form articles.
username223 12y ago
"Abusively long?" You should try the New Yorker! No, seriously, you should; it would give you a chance to appreciate long-form journalism.
plink 12y ago
Spot on. I agree that the example you cited evinces abuse and not interesting, long-form journalism. It's writing ineptitude.
boskonyc 12y ago
This is from the magazine, which typically features long-form journalism.
matthewmcg 12y ago
This article ran in the Sunday Magazine and not one of the news sections of the paper. Articles in the magazine tend to have a more freewheeling style and are usually longer.

suprgeek 12y ago

From their FAQ: Is Even a lender? No, Even is not a lender and Even does not provide loans. yet the Article claims that: "....On bad weeks, when users fall short, they still get their salary, thanks to past surpluses or to interest-free credit from Even." Interest-free Credit == Loan right? What am I missing

sukilot 12y ago
Maybe they take it as an advance against payroll (direct deposit) and explicitly eat the risk of a user losing their job and never repaying a week. So it wouldn't be a debt.
thaumasiotes 12y ago
There's a legal difference between "loan", the legal transaction, and "loan", the economic transaction. My sister had an internship once at a South American company that bought receivables. In that country (probably Brazil), loans were illegal. A receivable is a promise of payment in the future according to some schedule. So this company would buy receivables at less than full value from companies (or individuals, I guess) who wanted the money immediately. Obviously, that's a loan (technically, it also assigns responsibility for collecting payment to the owner of the receivable). But despite being like a loan in all other ways, it has the key difference of not being illegal. I suspect something similar is going on here.
- idoh 12y ago
  What your sister did is called factoring: http://en.wikipedia.org/wiki/Factoring_(finance) http://en.wikipedia.org/wiki/Factoring_(finance) It is a thing in the US as well. Retailers and construction companies do it. I was looking into it for apps e.g. advance money against IAPs or ad revenue. It doesn't look like there is demand for it.
  - thaumasiotes 12y ago
    Here are some relevant selections from wikipedia: > Factoring is not the same as invoice discounting > Factoring is the sale of receivables, whereas invoice discounting is a borrowing that involves the use of the accounts receivable assets as collateral for the loan > However, in some other markets, such as the UK, invoice discounting is considered to be a form of factoring > Invoice Discounting is sometimes referred to as Discreet Factoring as it is essentially the same product as Factoring (That last quote is from the page on invoice discounting) None of that indicates to me that there's any difference at all, other than (possibly, but not necessarily) the name, between selling your accounts or borrowing against them. They're both loans, identically structured. There's no demand for this euphemistic product in new US markets because we already have finance. Oh, another quote from the factoring page: > in other industries, however, such as textiles or apparel, for example, financially sound companies factor their accounts simply because this is the historic method of financing

alex_young 12y ago

This seems like just as bad as payday loans to me. In 2013, there were 45.3 million people in the US under the poverty line. [1] The article cited a figure of $3.4B / yr for payments to the payday loan sharks. This startup charges $3 / week and only services cash flow positive customers. A little math presuming we cover the poor as a group with this 'service': In [1]: 4530000352 Out[1]: 706680000 That's $706 million / year, or about a fifth of the total amount the sharks charge. But we shouldn't stop there. The sharks are still necessary, since this company is only covering the predictable expenses, not the extraordinary but common visits to the emergency room, or to get a car fixed, or any number of less predictable expenses. We still need the loan shark. And this guy is taking 20%. [1] http://www.census.gov/library/publications/2014/demo/p60-249.html http://www.census.gov/library/publications/2014/demo/p60-249...