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Even – Get your average pay, every payday
- keerthiko 11y agoI would imagine it's hard to convince people who live paycheck to paycheck to pay $3 per week on this. That's the cost of a meal at McDonald's, where many of the target market members probably get at least a meal a week. Wouldn't it make more sense to try and get the employer's on board this program? It allows the employer to offer a more reliable compensation to the employee, and they can just pull the fee out of their salary anyway?
- run4yourlives2 11y agoPretty sure it would be illegal for employers to withhold salary in this manner, even with the employee's permission.
- NSAID 11y agoThis concept isn't terribly different than what the FLSA rules for Fluctuating Work Week offer. http://kielichlawfirm.com/fluctuating-work-week-flsa-calculations/ http://kielichlawfirm.com/fluctuating-work-week-flsa-calcula...
- fuddle 11y ago"Does the weekly $3 fee every change?" - Some obvious typos on the site.
- jrbancel 11y agoHow is it different from using a credit card and paying the balance once the paycheck arrives? There is no fee if the balance is paid on time.
- dragonwriter 11y ago> How is it different from using a credit card and paying the balance once the paycheck arrives? You have to pass a credit check to get a credit card.
- llamataboot 11y agoLess friction, less temptation to "let it ride for another month and pay it back then" while debt keeps growing, nothing to do or think about, etc.
- zasz 11y agoIf, for whatever reason, you have poor credit, you may not have access to a credit card.
- s73v3r 11y agoA person who needs this service likely isn't getting a decent interest rate (still important to consider even if you plan on paying the balance in full), or a high enough credit limit.
- nestlequ1k 11y agoI don't understand the financials on this. Unless this is a non-profit charity (and funded by donations), I can't see how Even stays in business. The key point as I understand it from reading: - if I make more money than the average, i get the savings and Even does not make any money off of it - if I make less money than the average, Even will give me an interest free loan that I don't have to pay back Seems fairly easy for someone to game this system so they get more $$ than they pay in, how do you protect against that? Freelance works on Uber / Lyft / etc can set the amount of hours they work easily. And then stop using Even when they've earned more than they've paid in. To be clear: I like the idea a lot, I'm just looking for more info about how it intends to stay operational.
- run4yourlives2 11y ago1. They calculate the average. I'd imagine they'd like you to be "over average" more often than not. 2. All "overages" go into an account they control. Sure it's yours, but they are pooling money from all users and investing it in the meantime. Bullshit they aren't making money off of it. It isn't sitting under their mattress, that's for sure. 3. They promise no interest either way, but the amount they "loan" people is more than covered off in interest earnings on the pooled "overages" from all users. 4. On top of all that, they charge $12 a month. I think they've got the profit side down.
- davrosthedalek 11y agoThey claim they don't earn interest on the savings. From their FAQ: "Money you've saved with Even does not earn interest. To be candid, if Even savings did earn interest, you would only earn about a dollar per year. For what it's worth, Even doesn't make any money off your savings." So they do that all for $12 a month?
- run4yourlives2 11y agoMoney you've saved with Even does not earn interest. For YOU. Not for them. They say it goes into an insured bank account. The moment you put any money into a bank account, it stands to reason it earns interest. For what it's worth, Even doesn't make any money off your savings." That isn't the same as saying they don't earn money off of these accounts. It just may not make them any profit, hence the $12.
- jackfrodo 11y agoThis is a great idea, especially for people living from paycheck to paycheck. I would imagine most people who read HN are salaried, so I'd definitely be interested in the opinion of a freelance or contract worker.
- slg 11y agoWould this be easy to scam if I know in advance that my income will be decreasing, especially if it will decrease incrementally? EDIT: This is almost the equivalent of paycheck insurance. Like most insurance companies, I imagine Even makes money off of float [1]. However, insurance companies are also great at modeling their customers' risk. I don't see how Even could accomplish that. It is a natural information asymmetry and I'm not sure how Even could have a better idea of a customer's future earning then the customer. [1] - https://en.wikipedia.org/wiki/Float_(money_supply) https://en.wikipedia.org/wiki/Float_(money_supply)
- sanderjd 11y agoI was pretty surprised to see they're charging $3 because I figured they would give it away "for free" and make money on the float.
- dragonwriter 11y ago> Would this be easy to scam if I know in advance that my income will be decreasing, especially if it will decrease incrementally? They're using a non-disclosed algorithm to calculate an "average" that's not really an average, and holding on to all the money above that, and charging you $3/week for the privilege. If they haven't already constructed the algorithm so that its nearly impossible for them to ever be giving you a "boost" other than from your own deferred wages that they are holding on to, I'd be surprised. > However, the insurance companies are also great at modeling their customer's risk. Insurance companies also have to disclose the terms and conditions, including, particularly, the specific events that qualify for a payout and the amount of the payout; Even does not disclose this. > It is a natural information assymetry and I'm not sure how Even could have a better idea of a customer's future earning then the customer. Because of the non-disclosed "average" algorithm, there's an additional -- and potentially more significant -- information asymmetry working in the opposite direction of the one you describe.
- slg 11y agoThen they are almost assuredly in violation of some type of regulation. They can't just charge interest, call it a proprietary average algorithm and avoid all the regulation regarding publishing interest rates and such. Also their about page is throwing red flags in regards to regulation. First off, it doesn't look like anyone involved has experience in either finance or the law. Secondly it says "We're not bankers. We're not a payday lender or a credit card company." That isn't up to Even, that is up to the law and this sounds a lot like those laws are being completely ignored.
- chetanahuja 11y agoSo this is basically a payday loan scheme with venture backing? At any rate, for the kinds of jobs this seems to be designed for, $3 a week (~ $156 a year) sounds like a very high amount of fixed interest to be paid. EDIT: Regarding the argument in this subthread regarding interest rates, the common mistaken assumption seems to be around what constitutes the "principal" here. In "steady state", there will be very little money flowing out of Even's coffers into the user's wallet. So the "average" amount loaned to the user is likely to be close to zero... or even negative (in case the user makes a bigger paycheck than usual). So the interest calculations only make sense on that amount. Not the entire amount of money that the user made. The actual "interest" payment in those cases could easily be in 100% + range or more for the average user.
- callmeed 11y agoMin. wage in California is $9. At 40 hours/week, that's $360. $3/week is less than 1% of that. Payday loans use much higher interest from what I understand. (I ignored taxes/withholdings to make the math easier).
- chetanahuja 11y ago"$3/week is less than 1% of that" That's 1% for one week !! In comparison, current CD yields are close to 0% per annum
- chaostheory 11y agoI don't feel that most of the people this service is targeting even knows what a CD is, but I'm pretty sure a lot of them are familiar with payday loans. Unless I'm missing something this service definitely seems a lot less evil than a payday loan.
- dboyd 11y agoThat's less than 1% over one week. The APR would closer to 15-20% (depending on salary, pay frequency, etc.).
- run4yourlives2 11y agoThis is actually a pretty cool idea. I've got no use for it directly, but I can see that many people that would benefit from it. Nice, innovative, and actually useful. I wish them luck.
- chetanahuja 11y ago@run4yourlives2 You're pretty bullish on the idea (no harm in that..). Do you know things here that we don't know?(Again, nothing wrong with liking the idea and the company.... just wondering if perhaps you can be source of further knowledge).
- run4yourlives2 11y agoNope, no idea. First I saw of it was this post. I work in employee benefits software outside of the US. The more I look into it though, the less bullish I am on it. There is a lot of black magic here that creates that "too good to be true" product. It's still a great idea and will likely have many fans, but this is a pretty capitalistic product.
- DarthMader 11y agoI disagree. I feel like the people that would need this idea the most can't really afford to throw away $150 using this service
- run4yourlives2 11y agoYou're likely correct, but you and I could probably give them a list of 50 things they "can't afford" to be doing in about 10 minutes. Point is that it's not for us to say what a person does with their money. If the only benefit of this is that it gets a person through college or post college table hopping without a completely destroyed credit, perhaps it is worth the $150.
- s73v3r 11y agoThe people who need this idea the most are the ones whom generally have to pay the most for other things. And this sounds close to the argument that people make against the poor having smartphones, without realizing that there are lots of cheap smartphones out there, and generally this is their own connection to the internet, which is increasingly needed for everyday life.
- deleted 11y ago[deleted]
- dragonwriter 11y ago> Even – Get your average pay, every payday Note that "average" is misleading; as used by Even, it means "some amount we calculate by a secret-sauce algorithm that is not any usual definition of 'average'." From the Even FAQ [0], under "How does Even calculate my average paycheck": Even looks at how much you've earned and how much you've spent in the last 6 months. To be fully transparent, your Even pay isn't actually a mathematical average. When we use the word "average" we're using that word to make things easy to understand. Your Even pay is calculated using an algorithm that is more complicated than an average, because it does things like treating more recent paychecks as more important than paychecks you got 6 months ago. (That they characterize this description as being "fully transparent", is further illustration of their creative use of words outside of their normal meanings.) [0] https://even.me/faq https://even.me/faq
- run4yourlives2 11y agoI don't think they're being too misleading though. If I were to do something similar, I'd weigh current pay higher than past pay too. They're topping up the difference so they need the overall math from the excess + interest to work in their favour after all. They are most certainly targeting people who are bad with money though. But then again, so do lotteries and designer jeans makers.
- codewithcheese 11y agoThey should be 'fully transparent' and publish the algorithm in a simple layman's formula
- Breefield 11y agoPut on your product designer hat for just one second.
- run4yourlives2 11y agoSo should a lot of industries. Tell me, what's the spread on a Big Mac? A new car? Anything, really?
- Johnny555 11y agoAt $150/year, this sounds like a service for people are so bad at managing their money that they'll pay $150 for someone to meter out their paychecks.
- baddox 11y agoWhat's so bad about that? If you can recognize that your money management skills are such that this $150/year can result in a net improvement to your money management, it seems like a solid product.
- sanderjd 11y agoI think it's a buying fish versus learning-to-fish thing. There's nothing "wrong" with paying $150 a year for someone else to manage your money, but it would be better to invest in getting better at doing it yourself.
- 9872 11y agoWould it really? How many people do you know who learn to fish compared to the number who buy fish when they want to eat some?
- sanderjd 11y agoYes. You're right about the fish analogy, but wrong about learning to manage one's own finances. I recognize that I shot myself in the foot by using such an imperfect analogy :)
- tomasien 11y agoAny product the serves people with uncertain income or abnormal financial lives (freelancers, contractors, poor, etc) is met so predictably with comments that criticize the audience by proxy of criticizing the product. "How could someone be so stupid that they need to pay someone $60 to smooth their income" is what I'm seeing here. Look at what people pay financial advisors and then calm down.
- nmrm2 11y agoAs someone who has freelanced and is also criticising (I guess, although I'm not critical of the business overall, just one way in which it lacks transparency), I don't think financial advisor is a fair comparison. The assumption with a financial advisor is that there's value add; the advisor should either out-perform a standard investment mechanism, or know how to navigate bear markets, or preferably both. And also should definitely handle taxes and fees etc. without blow a bunch of my money or exposing me to risk/loss. In other words, they should know how to do something that I cannot reasonably learn how to do, or even if I learn could not do on my own without investing a huge amount of time/effort. What Even provides is a service that someone with the ability to do a bit of personal financial planning is certainly able to do for themselves by taking :30 out of every Sunday afternoon, no knowledge of tax code or stock market finesse or weekly research projects required. It's certainly not a worthless service, but the recurring monthly fees seem on the high end of what I'd be willing to pay. For that reason, the lack of transparency about how exactly these amounts get determined (and where exactly the time value of my money is going) is extremely troubling to me.
- caioariede 11y agoIt would be better if it could consider exchange rates. Lets say I receive in USD but in the end I get it in BRL. Right now, 1 USD is ~ 3.40 BRL but last year it was ~ 2.80 BRL.
- mherdeg 11y agoIt's really interesting to think about this in the context of the "1099 economy", especially people whose sole income comes from contractor work for some combination of Lyft, Uber, Postmates, Handy, Instacart, GrubHub, etc. This product seems like one way for "dependent contractors" to make a predictable wage. That's a real problem in that line of work.
- grhmc 11y agoThis seems to be a bandaid over someone failing to correctly budget their money. I was there, I think everyone has probably been here. I can't recommend http://youneedabudget.com http://youneedabudget.com enough. I don't work there, get kickbacks, or anything. They have turned my life around.
- prawn 11y agoI was thinking about this idea the other day, but it paid out at a higher frequency (hourly or daily). And there was a companion app that simulated cents trickling into your pocket based on your hourly rate.
- edoceo 11y ago$12/mo to manage money for persons in jobs that pay <$12/hr