There probably isn’t a living person who understands the banking and monetary system and most of us don’t even get the basics of money right. Don’t take my word for it - about 69% of Americans are
living paycheck to paycheck and we need to change that before we can evolve as a society.
This might be a pressing issue but the established institutions aren’t helping - schools can teach you how to do algebra but not how to manage money. If only budgeting, filing taxes, and investing weren't such a hassle — or inaccessible — we would be much
better off. Fortunately, solutions are on the way.
What Exactly is a Self-Driving Wallet?
Imagine if your bank automatically did your taxes and invested a predetermined part of your paycheck each month. Then you wouldn’t have to be your own accountant and your retirement would be secured through your investments. Now imagine if this was the norm
- we would probably have a lot less financial troubles all-around.
A self-driving wallet is just that - an online service you would use to receive money and buy stuff. But also, it would send your taxes to the IRS and invest a part of your cash as you wish automatically.
This would save us all a lot of time, but for some, it might be a complete game-changer - investing even a little bit can pay off immensely over a long period. For a while now, fintech firms have been developing online platforms that make wealth management
a breezy process instead of a hassle - and there has been a lot of success.
How Fintech Has Revolutionized Our Society
When we consider all the student debt, health care expenses, and high prices overall, we can only conclude that living paycheck to paycheck is a bad idea. Luckily, investing has never been easier.
Since the introduction of online brokers like Robinhood, the stock market has seen millions of new investors - and the number of new entries just keeps increasing. This is because Robinhood is super-accessible, free, and effortless to use - just about anyone
can figure out how to invest their cash into more money through their phone.
Since COVID-19 started, millions more have started a number of these
top stock trading apps — and it’s a good thing. People are becoming financially literate and are taking care of their money. How many people exactly? Well, just Robinhood has grown from 1 million to
10 million clients since 2016 - this is a big deal.
Perhaps this increase in financial literacy is just following the growth in digital skills. Most modern companies are
undergoing digital transformation, meaning, all their services will be fully-digital. The same digital revolution is already affecting our finances.
A complete self-driven wallet might not exist yet but there are services that hint towards becoming just that. Take Jack Dorsey’s new company, Square, as an example - this business makes cashier machines that are connected to Square’s online platform.
Whenever a purchase is made, it’s documented and the platform automatically makes revenue reports, tax reports, and everything an accountant would do manually. Services like Wawe Money are similar - all the accounting is automated and you can also use them
like checking services.
In summary, you need one platform for receiving money, paying, and all the legal stuff in between. Of course, banks can do this too, but these digital solutions do it faster, are more accessible, and dramatically cheaper (or even free).
Now, let’s say you combine Robinhood and Square. This would result in something that can meet everyone’s financial needs and then some - it would save a ton of money for small businesses as well.
The way small enterprises do most of their taxes and accounting right now is through traditional banks - that isn’t working so well. In fact, traditional banks do a very
bad job at helping small businesses - they are slow, expensive, and have built-in bureaucracy that no one on this planet likes even remotely. Banks are already outdated, and by the time self-driving wallets arrive, going to a bank will likely be a thing
of the past.
Why Money Management Matters
Basic investing doesn’t require a sophisticated education — but it can pay off like crazy. Think of this - the average growth of the US economy in the past century has been a bit over 10% per year. If you deposit, let’s say, $10,000 in total and leave it
to sit for the next 40 years with a 10% annual return rate, you’ll be a millionaire when it’s time for retirement.
Investing for something that will happen in 40 years isn’t too exciting, but 73% of baby boomers have less than $100,000 saved up to last their entire retirement - and millennials will end up paying for their social security checks. That’s just one of the
reasons why self-directed wallets would be a saving grace for future generations.
When Can We Expect a True Self-Driving Wallet?
What we have seen in recent years is an increase in financial literacy, computer skills, as well as huge developments in fintech. With services like Robinhood and Square around, it’s not difficult to imagine what a real self-driving wallet will look like.
So, when can we expect this game-changing new trinket that will change our world for the better? It’s hard to say, but probably sooner than we think.
Looking how things are going, someone will launch a fully-functioning self-driving wallet in the years to come and we can, at least in part, let our finances take care of themselves. Until then, we can enjoy all the cool services we already have to make
life easier and to invest our money for the future.