Ben Soppitt

Why we created a bank for doctors

The first and last person many people will see in their lives are doctors.From birth to death, we rely on medical professionals’ competence and dedication to help us when we need it — from the minor annoyances of childhood bumps and scrapes to life-threatening and traumatic events.Doctors spend the best part of their 20’s absorbing immeasurable amounts of information, enduring rigorous examination, working endless hours in hospitals (which aren’t always the nicest work environments), before specializing in a certain field.Needless to say, these are not fun years compared to the average graduate.In many careers, what you learn early on becomes less relevant over time — few senior executives still code, do spreadsheets, or draft their own presentations. Medical professionals, however, must continue to sharpen their skills and develop their knowledge base, as they are expected to perform at a higher level with seniority (not less).There are much easier ways to make money — but the high earning potential isn’t the predominant incentive. It’s a stressful and competitive career choice that is reserved for those for whom it’s a vocation. The American Medical Association conducted research to determine why people choose to become doctors. The overwhelming answers? To help people and from early positive experiences with the medical profession. Most reported their decision to become doctors was reached relatively early in life.There has been and will always be an unparalleled appreciation for those in medical fields. For decades, medical roles of all types have been among the most respected professions.

Medical positions are also lucrative. Of the top ten best-paid jobs in America, healthcare dominates, holding the top four spots.

Even with well-established salaries, there’s a deep-rooted financial problem in the healthcare industry: medical professionals still struggle with their personal finances, despite the high income, high IQ, and unrivaled work ethic.

Dr. Jim Dahl, “The White Coat Investor,” quotes a 2016 Survey showing “that 1 out of 9 physicians in their 60s has a net worth under $500,000 and about 1 out of 4 has a net worth under $1,000,000, despite 30 years of fat doctor paycheck.”

There are many structural reasons for this.

  1. Extended education — most graduates start earning from age 22, but doctors typically don’t finish training until their 30’s. As a result, they lose almost a decade of earnings. Plus, they’re weighed down by substantial student loans.
  2. Financial education — doctors make a sharp turn from being poor students to earning six-figures, and they arrive there without any formal money management training or preparation. Suddenly, being “rich” can engender poor financial discipline at the very moment they need it most (see below).
  3. Life stage — your 30’s tend to coincide with getting married, buying homes and cars, and having children — all very expensive milestones. Coinciding with this change, you need to pay taxes (top bracket), saving for retirement, and making prudent investments. All whilst managing the mountainous challenges of your budding career.

The challenges in managing personal finances are not reserved for doctors — other professions experience similar issues including lawyers, architects, etc. but these issues are pronounced in medicine.

So, what’s the solution?

To answer this financial riddle, we would need to find a way to reduce the burden in time, energy and resources that are required to manage money.

Financial services companies have not evolved to serve the interests of their customers — but rather their own shareholders. Banks continue to profit from this conundrum. So, why would they even want to change?

Separate checking and savings accounts require effort and time to move money between them to maximize interest. In practice, people leave far too much in their low-paying checking accounts. The average checking account pays only 0.06% — over $2 trillion in the US alone earns nothing for consumers but a great deal for banks, who loan that money out as mortgages and personal loans at a huge markup.

Even savings accounts (if you happen to have one and use it) pay paltry returns — the average savings rate is only 0.09% nationally, with the largest banks offering only 0.06%. Of the top 12 banks in the US, two have the same interest rate for both checking and savings accounts! How backwards is that?

Conventional companies know that people see financial services as complex, time-consuming, and — to be frank — uninteresting. They also know that once they have customers, consumer inertia to move is substantial, even when it’s in their economic interests to do so.

As a result, banks focus their marketing on upfront acquisition incentives such as cash, points, or temporary interest rates — rather than delivering real value for money. After all, if everyone is doing the same thing, where are they going to go?

Established financial services companies have a substantial economic incentive to maintain the status quo; therefore, only new companies are incentivized to change the model. If JP Morgan chase suddenly increased their checking and savings accounts (currently at 0.03% and 0.05%, respectively) to levels like 1.70% they would lose hundreds of billions of dollars of profit overnight.

Unifimoney is one of these new companies. Created to meet the needs of working professionals, Unifimoney seeks to ensure that users enjoy the best returns from their money without the effort. We believe a customer’s money should work for the customer, not the bank.

Unifimoney integrates and automates the three core functions of everyday money management — saving, spending and investing.

Saving — a high-interest checking account means money is earning maximum interest 100% of the time without the need to move money between accounts.

Spending — a cashback credit card that makes purchases more efficient.

Investing — a no-fee Robo investment platform, every time the card is used or deposit interest is paid the funds are invested.

Users maximize both their passive income and their long term growth.

This helps take care of everyday money management — the average customer is estimated to save over $1,500 per year in lost interest alone. Over 30 years of working life (even assuming these deposits don’t increase — which they should) that equates to over $120K for a couple.

In addition, Unifimoney is developing a portfolio of benefits and services to help physicians and medical professionals outside of everyday money management — such as helping manage student debt, insurance, loans, and mortgages.

The US also relies heavily on doctors born abroad, which represents 29% of all doctors. For them, access to low-cost, fast, easy international remittances is also important.

Unifimoney is launching in Q1 2020. While we’re driven to provide solutions to the financial problems of medical professionals, we will also be extending tailored services to other professions over time.

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