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Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

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Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#71

Post by Jommi »

zomglings wrote: post #70
Jommi wrote: post #67

Earlier quoted context omitted.

As a mathetmatician how can you ever justify participating in a lottery where there is a possibility of no-winners or shared winners. It just destroys any hope of any positive EV.

The point is that my personal happiness level does not only depend on positive expected gain in capital. I gain happiness also from the miniscule hope of the life-altering outcome of winning the lottery. That gain in happiness is occasionally worth the price of a lottery ticket.

Interesting to hear. This is something similar I do with some betting/stock buying I do.

But the odds are on a completely different level of impossibility in lottery that I just cant really get your end of the argument :/

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#72

Post by adammoelis »

adav wrote: post #60
adammoelis wrote: post #56

Earlier quoted context omitted.

Having the backing of the government like with Premium Bonds is huge. Both for marketing and for trust. Building trust is definitely a challenge for us as a new company. Funds with Yotta are FDIC insured up to $250,000, which helps, and we communicate that to users, but people still need to trust us fundamentally. We looked into Premium Bonds and also found that a lot of Premium Bond ownership comes from older genera…

As a Brit not attuned to American retail banking I didn't notice the FDIC insurance element (aside: in the UK that's called FSCS Protection). Actually that's pretty huge for trust, great job :)

Yup - but people still need to trust that we actually are FDIC insured. We've had some people contact our partner bank directly to verify they are working with us, for example. But hopefully as we get some PR and more word of mouth, we won't have that issue as much.

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#73

Post by adammoelis »

Jommi wrote: post #40
arosier wrote: post #37

How does users being able to withdraw their money immediately affect your business model? How are you preventing someone from depositing/withdrawing the same $25 a billion times per week?

Its a savings account so you can only withdraw 4-6 times a month.

The regulators actually lifted this cap recently, so it's now unlimited most places. But this is temporary from covid.

They wanted people to have more flexible access to their funds given given the macro environment.

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#74

Post by zomglings »

Jommi wrote: post #71
zomglings wrote: post #70

Earlier quoted context omitted.

The point is that my personal happiness level does not only depend on positive expected gain in capital. I gain happiness also from the miniscule hope of the life-altering outcome of winning the lottery. That gain in happiness is occasionally worth the price of a lottery ticket.

Interesting to hear. This is something similar I do with some betting/stock buying I do. But the odds are on a completely different level of impossibility in lottery that I just cant really get your end of the argument :/

Fair enough - I think it's a subjective thing and also depends on your current financial circumstances. I'm a starving startup founder, so the hope represents a real escape from my current financial circumstances.

If I were poorer, I suspect the happiness I gained from the lottery ticket purchases would be even greater.

If I already owned a home, on the other hand, I would value the lottery ticket hopes much lower.

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#75

Post by weego »

adammoelis wrote: post #24
CJefferson wrote: post #12

The grand prize of $10,000,000 will be paid out as... $5,800,000? I don't understand how you justify saying (as far as I can tell) "The grand prize is $10,000,000. We reckon you could invest $5,800,000 and make $10,000,000 in 40 years, so we will give you $5,800,000 instead".

A fair point for sure. The rationale is the $10 million headline is the annuity value of the jackpot, and it's standard practice for sweepstakes or the PowerBall/MegaMillions contests to use the annuity value for promotion in marketing materials and on the website.

The irony of using the promotional approach of an awful poverty tax by a startup focused on promoting saving.

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#76

Post by tasogare »

adammoelis wrote: post #24
CJefferson wrote: post #12

The grand prize of $10,000,000 will be paid out as... $5,800,000? I don't understand how you justify saying (as far as I can tell) "The grand prize is $10,000,000. We reckon you could invest $5,800,000 and make $10,000,000 in 40 years, so we will give you $5,800,000 instead".

A fair point for sure. The rationale is the $10 million headline is the annuity value of the jackpot, and it's standard practice for sweepstakes or the PowerBall/MegaMillions contests to use the annuity value for promotion in marketing materials and on the website.

This is straight up lie.

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#77

Post by lyrrad »

Jommi wrote: post #58
adammoelis wrote: post #15

Earlier quoted context omitted.

Yeah. Right now, the EV from prizes is actually higher than that. We are subsidizing to provide an even better value for early users. But in the long run, that's exactly right. The base rate plus prizes will be, on average, what you would earn in a vanilla but high yielding HYSA

Did some quick excel sketching here: https://docs.google.com/spreadsheets/d/17t00LzdgRcC8dtVKnTwK... Odds from here: https://www.withyotta.com/official-rules I might be completely wrong but looks like your estimate yield is heavily dependent of amount of other people saving as well. I bet the real model gets pretty damn interesting. Would love to get a closer look for sure. If you wanted to be a bit more "evil genius…

A few errors in the spreadsheet:

- Odds for the $0.20, $0.80 prizes are slightly off.

- The $15 and below prizes are not split between participants, so one would not need to consider the number of other entries for winning those prizes.

If one just considers the $15 and below prizes, I think the odds work out to about 3.2% per year, making it about a 3.4% expected interest total.

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#78

Post by lyrrad »

adammoelis wrote: post #73
Jommi wrote: post #40

Earlier quoted context omitted.

Its a savings account so you can only withdraw 4-6 times a month.

The regulators actually lifted this cap recently, so it's now unlimited most places. But this is temporary from covid. They wanted people to have more flexible access to their funds given given the macro environment.

My understanding is that the Federal Reserve seems to intend the lifting of the cap to be essentially permanent, despite the cap being lifted in the form of an "interim final rule".

See the third question at the Fed FAQ here: https://www.federalreserve.gov/supervisionreg/savings-deposi...

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#79

Post by lyrrad »

Section 14 of the official rules says that you can write for a list of winners. https://www.withyotta.com/official-rules

Does that mean that one could essentially get a list of your customers (that won in a particular week) if someone requests the winners every week? Over time one could figure out about how much each customer has in their savings account.

What information is released on the winners list? I'm not sure if I'd be willing to sign up for an account where my personal information would be released publicly if I "won" a 10 cent prize.

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