Efficiency, Scarcity and Technology: A Story of Financial Wellbeing

Editor’s note: A version of this post first appeared on LinkedIn Pulse.

I have had an obsession with efficiency from a young age. It is what drove me to study economics. To me, the human experience can be distilled down to one word: scarcity. Scarcity is the economic concept that we have unlimited needs and limited resources. It is a concept most people struggle to manage.

“Where scarcity exists, technology can bring efficiency.” John Larson, Director, Financial Wellbeing

Neil Gabler recently published his own story of managing personal financial scarcity in The Atlantic. I highly recommend you read it. In it, he details his “secret shame” of poor financial decisions made throughout his life. His writing is tremendously brave and I applaud him for his honesty. It is easy to read through it and think “You fool!,” but I’m certain every one of us has made poor financial decisions.

Mr. Gabler’s purpose is to illustrate that personal financial struggles are a systemic problem in the United States. Citing a 2013 Fed study on the American consumer, the author makes the point that 47% of respondents would struggle to produce $400 for an immediate emergency. A similarly focused Princeton study found that nearly half of those surveyed would struggle to produce $2,000 in 30 days for an emergency. Citing growing expenses and stagnating wages he concludes that this isn’t just a rough patch for America, this is now our way of life.

The message is clear – the American consumer is struggling with their day-to-day finances and middle America is in trouble. None of this is earth-shattering news.

So this raises the question: What can we do to fix the problem? There are large macro solutions that can be pursued including welfare, tax policy, or monetary policy changes; but these are slow moving solutions. We have a generation of Americans that need help now.

Where scarcity exists, technology can bring efficiency – but there has yet to be developed a comprehensive solution for efficient financial management and advice. It is a solution the market is demanding. The consumer has tremendous power in their personal financial data that is unutilized.

Personal finance has traditionally been a mosaic of fragmented solutions where the consumer struggles to fit the pieces together.  It doesn’t have to be this way. These are the solutions I am building. Financial aggregation, advice optimization and benchmarking are the requirements of a comprehensive personal financial solution. I’m always interested in conversation, feel free to ping me with your thoughts.

We can build a better personal financial model and help Mr. Gabler throw off his “secret shame.”

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