
Want a steady income? There's an app for that - ColinWright
http://www.nytimes.com/2015/05/03/magazine/want-a-steady-income-theres-an-app-for-that.html
======
preinheimer
tl;dr App called "even" allows people with incredibly variable income (case
study is on a massage therapist, lots of money one week, little the next) to
even out their income. They evaluate their income history, then offer a
stabilized value, say $380/week. Weeks they make more, the application takes
it and puts it aside. Weeks they make less, it either pulls it in from a
reserve, or an instant loan is made.

Costs users $3/week. Which is non-trivial, but less than a payday loan
company.

~~~
qzcx
For once I wished I came to the comments before reading. It was an interesting
article, but it is definitely full of fluff

~~~
mblevin
Brilliant from a PR perspective though for your average NYT reader.

I would kill to get an article like that written - it's lengthy, detailed, has
an accurate representation of the actual function of the app with tone a
that's not breathless or sycophantic, and just the right level of skepticism
thrown in so that readers believe a deep, detailed analysis has been done and
that this is the future.

~~~
redthrowaway
What's the value of that PR? Attracting quality employees or boosting VC
interest? Because I highly doubt their target market is reading articles about
startups in the NYT.

~~~
noer
Attracting quality employees I'd imagine. I think a twitterbot I had been
using followed the user researcher in the article because she tweeted today
about looking for talent.

------
jawns
The article opens with the story of Heather Jacobs, a masseuse whose income is
volatile, and it implies that she's a prototypical Even user. But she actually
seems to be an undesirable user, from the company's point of view.

It sounds as if she's struggling not just to budget but to earn enough money
to pay for all her expenses, both recurring and unexpected. (She says she's
often "desperate" around the end of the month.) That's exactly the kind of
user that Even should try to avoid.

I'm not necessarily faulting the woman for not being able to make enough; I'm
just saying that Even's ideal user should be someone who, over time, earns
enough to cover their expenses, but either has trouble sticking to a budget or
would prefer the convenience of an app to handle budgeting for them.

For instance, my parents (one a teacher, who got paychecks from September to
May, and the other a landscape, who earned little during the winter months)
could have used an app like this when I was growing up. Between the two of
them, they made ends meet, but they struggled to figure out how much to save
so they'd have a reserve during the months when their incomes dipped.

One thing I am curious about, which the article doesn't touch on: What happens
if I have a surplus in my Even account (which the article says is kept in a
savings account), and I run into a huge unexpected expense? What are my
options for tapping into that surplus?

If I have the same access to it as a regular savings account, does that kind
of defeat the point of the app (to prevent people with poor willpower from
spending their surplus instead of saving it)? Or is it treated like a
withdrawal from a 401(k), with penalties for taking the money out earlier than
scheduled?

~~~
qzcx
Although it sounds like she doesn't really have enough money to live
comfortably on. It does imply in the article that she isn't sure of where she
should spend her money. Dollar store vs. Walmart for groceries, ect. With a
consistent paycheck, then she would know exactly how much she can spend on
groceries and other things. Often it is the unknowns which cause people to
mismanage, not that the managing was impossible to begin with.

------
lhurtig
Looking at their website ([https://even.me/)-](https://even.me/\)-) this app
both acts as a bank itself and interacts with a person's bank account. Some
interesting notes - even is actually FDIC insured, so at least the money they
are moving out of a person's bank account is insured in case the company
collapses. Their linkedin page also notes they are...

"A bank that automatically manages its customers' finances. Pays their bills.
Balances their budget. Saves and invests. And at the tip of the iceberg, gives
each and every customer a weekly paycheck of purely disposable income. "

So not only is the income you get each week stabilized - the long term intent
is the income you get is solely above and beyond bills and, presumably,
investment goals.

At some point - Even could issue debit cards, link up with paypal accounts,
and literally supplant the banks that they are working with currently.

Loans are a tricky concept, and Even is attacking a very appropriate market -
more than 69% of payday loans are used just to pay normal bills, counter-
intuitive to what I would have guessed (emergencies such as health and auto-
repair are only around 16%).

Some math: $3 a week = $156 a year - savings of ~$360 versus average payday
loan interest. 12 million people use at least one payday loan during a year,
with numbers skewed as a higher % of population in states with "looser"
regulations on payday loans (6.6% of pop) rather than states with "very
strict" regulation (2.9% of pop). Average loan = $375, 8 separate loans taken
during a year, plus $520 on interest payments across all loans. 6 of those 8
loans are actually extensions of just 2 loans!

If regular bills are budgeted for, and the money is literally reserved by
Even, that eliminates the need for 70% of all non-extended payday loans. Add
in budgeting for emergencies, and 84% of payday loans are gone - so whatever
interest they do or do not charge for the other 16% is not going to approach
normal interest costs.

As jawns points out - majority of loans are because people can't afford their
bills...

Since they are FDIC insured - I'll assume they operate like a standard credit
union overall and are buffering people's loans using other people's
savings...again they also claim they want to invest people's money for them.

------
mhuffman
> If you have no money saved, Even will boost your pay with interest-free
> credit. You'll automatically pay the credit back the next time you earn more
> than your average pay.

... then later

> ... Even is not a lender and Even does not provide loans.

I'm guessing this is to stay on the right side of lender regulations, but talk
about being slippery with semantics!

------
rjaco31
That's a seriously fucked-up webpage without Javascript =/
[http://i.imgur.com/Lr53m7u.png](http://i.imgur.com/Lr53m7u.png)

~~~
toxican
How the fuck? I go to ridiculous lengths to avoid using JS for anything
critical (ya know, like SITE STRUCTURE!), and then these people waltz in....

~~~
thrownaway122
Please continue to do so. I'm sure that there are others like me that
seriously appreciate you doing so.

------
btbuildem
Amidst all these verbose vignettes of precious characters, what DOES Even DO?
Oh, ok, there's one paragraph in there that sheds some light:

"The app then holds back an “Even cushion” — a savings account it manages for
the user. In the demo I saw, the app, drawing on a sample bank account,
reported that “if you earn less than $380, Even will automatically boost your
paycheck. If you earn more than $380, Even will automatically pay back boosts
and save the extra to your cushion.”

~~~
def_illiterate
It reads like a precocious high-schooler wrote it. I stopped reading when I
got to that paragraph.

------
madcaptenor
Duplicate of
[https://news.ycombinator.com/item?id=9460628](https://news.ycombinator.com/item?id=9460628)

------
jklein11
This interest free loan makes it VERY susceptible to fraud or abuse.

Lets consider for example, a technology contractor, making $120,000 a year
from various contracting jobs. The contractor could sign up for Even, and then
retire, collecting a $2500 "paycheck boost" interest free.

I think this idea has a lot of value, but their current business model can't
be profitable.

~~~
mrsteveman1
The interest free part of course limits them from generating profit directly
that way, but alternate revenue models are certainly possible on top of the
$3/week users have to pay on a continuous basis.

> The contractor could sign up for Even, and then retire, collecting a $2500
> "paycheck boost" interest free.

I'm not sure how things play out legally with them claiming to not be a
lender, but I doubt the Even team hasn't considered something so basic as how
to recover money they've "credited" to someone's account if the income they
see drops to zero and stays that way.

In cases of outright fraud the person wouldn't just be risking collections or
a court judgement to recover the money, they'd probably be facing criminal
charges.

~~~
jklein11
Just because something is illegal doesn't make it any less costly to enforce.
I agree that Even probably has some recourse, I'm just not sure what it is.

Part of me thinks that this is Even's first pivot. See if there is a market
and then see if and how they can monetize it.

------
bradleyprice
I worked with a company a few years back that did this exact thing, although
we couldn't get past regulations and ended up shutting down.

[http://finovate.com/videos/finovatefall-2011-tandem/](http://finovate.com/videos/finovatefall-2011-tandem/)

~~~
Locke1689
This is super interesting! Do you have any more details on the problems you
faced?

~~~
bradleyprice
So, I left a couple months before the final audit before going to public
launch.

As far as I know, they were going to have to change a good bit of stuff
focused around the taking out loans.

The sole investor cut his losses since we were already over time and budget.
Also, we were having custom development done from the bank that hosted our
accounts and the bank that provided us with credit limits. And we were going
to have to have them go back and overhaul a lot of their system that had been
changed for us, which was extremely expensive.

------
thrownaway122
What is to stop someone simply opening two bank accounts. Then paying their
unsteady income into one and then transferring a steady amount of money into
the other.

Combined with the old adage about spending less than one earns and the result
is happiness.

~~~
ticviking
The service automates that, and adds friction to violating your budget. (or at
least that is how I see it).

------
nissimk
The article is very good and the business idea seems solid too. It reminded me
of the article from last week about how etsy is a "B corporation" and they've
committed to put social and environmental concerns before profit. It sounds
like that would be a good choice for this company too. Providing financial
products to poor people is a slippery slope if you're trying not to be evil.
Payday loans, rent a center, layaway, check cashing all serve to perpetuate a
cycle of poverty. If even can be a profitable company and also help to break
that cycle it will be really great.

------
Spooky23
I wanted to really hate this, but it sounds like a really interesting idea.

It seems like it would either be very capital intensive, or it's going to need
to operate like a bank. Also, folks in these situations tend to be very
transient and have fluctuating income. How do you establish an adequate
virtual salary when the terms of the person's employment change?

Forget about massage people -- they are a bad example because two or three
customers may make for a windfall-like experience. How about a person who
works at the Gap or BestBuy? You might get 35 hours one week, 20 the next,
then 18 for a month.

~~~
joshdance
They probably will look at the average of your hours across several months.
Trial and error. Should be interesting.

------
socialbullets
Its kind of marketing tactic? Spend some dollars to get viral!

------
d135_1r43
TL;DR?

~~~
MarkyC4
Sets aside money when you make more than your average paycheck, uses the money
that was set aside when you make less than your average paycheck

------
hurin
Thank you for double posting the infomercial for an app
([https://news.ycombinator.com/item?id=9460628](https://news.ycombinator.com/item?id=9460628))
within a mere 6 hours of it's last appearance. (HN really should have a built
in filter for this).

Also a big thanks to the new york times for their uninterrupted commitment
towards high-quality journalism.

~~~
DanBC
Those links were posted by different people. You might want to check
ColinWrights submission history - they submit many interesting articles.
They're not shilling or astroturfing for this company and your assumption is a
bit rude because it's so easy to check.

About the dupe: This submission has a clean url, the earlier submission has a
bunch of cruft which is probably why the dupe filter didn't spot it.

[http://www.nytimes.com/2015/05/03/magazine/want-a-steady-
inc...](http://www.nytimes.com/2015/05/03/magazine/want-a-steady-income-
theres-an-app-for-that.html)

[http://www.nytimes.com/2015/05/03/magazine/want-a-steady-
inc...](http://www.nytimes.com/2015/05/03/magazine/want-a-steady-income-
theres-an-app-for-
that.html?emc=edit_tnt_20150429&nlid=66702700&tntemail0=y&_r=0)

~~~
hurin
The article author obviously is astro-turfing for the company and if people
want to link infomercials passing for journalism I can have an opinion on
that. (I agree that I did not phrase my first comment well and it makes it
sound like I implied ColinWright's involvement specifically, I've fixed that).

That doesn't change the fact that it's a duplicate from within 12* hours and
should get removed.

~~~
VikingCoder
> obviously

Or they think it's fascinating and want to share. I'm saying it's not
"obviously" anything, to me.

~~~
hurin
Yes, because the fascinating thing about earning near minimum-wage in the US
is that there is a new app to help you budget.

But I guess you can believe that if it helps you sustain the tech-companies
selling apps are doing great things for society myth.

~~~
VikingCoder
I highly recommend you watch the John Oliver segment on Payday Loans.

[https://www.youtube.com/watch?v=PDylgzybWAw](https://www.youtube.com/watch?v=PDylgzybWAw)

ANYTHING that helps get rid of those scum is a huge improvement.

~~~
hurin
> ANYTHING that helps get rid of those scum is a huge improvement.

And these guys are truly crusaders for the working-class poor that are going
to fix the system? Or they are just going to cash in on updating payday-loans
to the 21st century Iphone version.

I mean it's a good idea and I'm sure they can be very successful if it's well
executed. AND I have no doubts they will be just as scummy-bag as the market &
regulations allow them to be. Which is very American and I guess it's fine.
But please excuse my low tolerance for packaging the profit motive of a
company as _helping the working class poor_.

~~~
zo1
> _" But please excuse my low tolerance for packaging the profit motive of a
> company as helping the working class poor."_

They're not mutually exclusive, to be honest. You can make a profit _AND_ help
the target group. Additionally I hope you're honest as well, and say that's
_okay_ instead of bashing them for "making a profit" while helping the needy.

On a curious side note... Where abouts exactly do you place "non-profits" in
this whole thing? What about government?

~~~
hurin
> They're not mutually exclusive, to be honest. You can make a profit AND help
> the target group. Additionally I hope you're honest as well,

Exactly - and talking about the app "helping the needy" is especially
_dishonest_. Sure she can pay $3 a week instead of a $35 over-draft on her
Bank Account -- and if you think that's _help_ then I assume you've never had
to live on minimum wage.

> Additionally I hope you're honest as well, and say that's okay instead of
> bashing them for "making a profit" while helping the needy.

To be clear, I did not bash the company. They picked a particularly scummy
industry that hasn't been _disrupted_ by technology and they are doing their
thing -- and the job of their PR department is to sell their technology and
part of that is playing up "help the needy".

On the other-hand I have a real problem with this as an article. It doesn't
start off talking about an app, instead it introduces a particular person,
draws in the reader's sympathy to that person's difficulties and then resolves
that into marketing a product - basically making a joke of the actual problems
([http://en.wikipedia.org/wiki/Income_inequality_in_the_United...](http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States)).

No, I don't seriously believe there is any such journalist who interviews
someone living on an unpredictable near-minimum-wage and whose honest first
impulse and thought is "they need an app to help them". This is a shill if
I've ever seen one.

~~~
zo1
" _Exactly - and talking about the app "helping the needy" is especially
dishonest. Sure she can pay $3 a week instead of a $35 over-draft on her Bank
Account -- and if you think that's help then I assume you've never had to live
on minimum wage._"

It's not up to me to decide, nor does my income-level have anything to do with
the validity of my arguments. You simply have to answer "is this person better
off with this thing X".

If we go under the assumption that steady-income is better than unpredictable
income, then the answer has to be yes because this app satisfies that
requirement. Let's not confuse that component with discussion about "real"
help for the needy. There may be better ways, but that's a separate talk of
"what is the best help for the needy".

~~~
hurin
> It's not up to me to decide, nor does my income-level have anything to do
> with the validity of my arguments. You simply have to answer "is this person
> better off with this thing X".

By your logic of: _better off == "helping the needy" == Saving a few $bucks_

General Mills cereal coupons are "helping the needy". That's seriously
complete bullshit.

If you are going to use strong terms like "helping the needy" I would expect
e.g. improved quality of life or another reasonable indicator backed by a well
presented position and/or statistics.

> my income-level

I very much doubt any person living on minimum wage would say "Yes, my quality
of life would be improved by a budgeting app for my IPhone". But if you had
lived on minimum wage at some-point and honestly thought so, I would have
considered it relevant.

