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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

#131

Post by Jommi »

lyrrad wrote: post #77
Jommi wrote: post #58

Earlier quoted context omitted.

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.

Thanks so much!

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

#132

Post by adammoelis »

thoughtstheseus wrote: post #130

Maybe have the winners announced @ noon or something similar. I’m usually not as engaged with friends/family at 9pm on a weeknight. I’d have the biggest prize set for Friday. Why 9pm?

Thanks for the feedback. We chose 9pm thinking it would be a time when people are less busy. HQ Trivia picked it and we thought it worked for them in terms of getting engagement.

But to be fair, we didn't think too deeply about the exact time and probably should have, so we will think about this some more.

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

#133

Post by clairity »

zomglings wrote: post #61

This is an awesome idea, and I intend to try it out. I am a mathematician, and at the same time I can't resist the temptation to purchase the occasional lottery ticket. What most people miss about the lottery is that there can be utility to variance - the opposite of ennui. Have you guys read The Lottery in Babylon https://en.wikipedia.org/wiki/The_Lottery_in_Babylon

incidentally, you’re describing a key limitation of economic systems, whereby value as represented by price doesn’t reflect holistic utility to infinitely-complex humans and human societies. it’s true of basically everything, including stocks (efficient markets and all that), and forms the basis of a material critique of laissez faire capitalism.

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

#134

Post by Invictus0 »

kentosi wrote: post #116

I want to believe in it, but the skeptic in me wants to ask how this isn't a vehicle for the rich to get richer: If every $25 gets you a ticket, then someone with a $50 account has far worse odds than someone with a $5000 account. Of course, the $50 person has nothing to lose, but there's also a sense of dejection. Perhaps a cap on the total number of tickets an account can have?

Maybe something more like each consecutive entry counts for slightly less than the previous entries.

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

#135

Post by Jommi »

lyrrad wrote: post #78
adammoelis wrote: post #73

Earlier quoted context omitted.

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...

Super interesting!

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

#136

Post by tudorconstantin »

zomglings wrote: post #74
Jommi wrote: post #71

Earlier quoted context omitted.

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.

I totally understand you! I'm a software engineer since 2006 and even though I followed a classical career (in Eastern Europe), we (me, my wife and our daughter) were struggling financially for the first approx 9 years.

Buying a lottery ticket from time to te, when the prize was big, made us live in a fantasy world between the time we bought it and when te results were announced. I think this thing - imagining a life without financial worries, lavish vacations and expensive toys, motivated me to learn more, try to launch a few startups and sacrifice my free time in order to try and achieve greatness.

Were those money well spent? Definitely yes (even though I haven't actually won the lottery)

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

#137

Post by bingdig »

Why are you letting people without deposits get in on the drawings? Seems like I could just spam you with mail and get a bunch of entries without depositing savings, at the cost of users who are depositing.

From the website: > Mailing In. You can receive one (1) Ticket by sending a handwritten sheet of paper with your name, address, e-mail, and phone number to: 45 East 22nd St. #26B New York, NY 10010. For each completed sheet of paper, you will receive one (1) Ticket. If you want to select your own numbers you should include those numbers on the sheet of paper. If you do not provide numbers, they will be randomly provided. Limit of one request per envelope. The entry will award a Ticket for the drawing that starts on the next Monday, after the mail in was received (not postmarked). ... Limit of 10,000 Tickets per person per week, regardless of method of obtaining a Ticket.

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

#138

Post by vdalal »

adammoelis wrote: post #119
waterside81 wrote: post #115

FNB, a bank in South Africa, used to do something similar. It was called the Million a Month account. If I recall the South African Supreme Court shut it down because it was considered a lottery

Yeah we actually studied the FNB program when we were setting out to develop Yotta. Basically, it got shut down because it got so popular in its ~2 years of operation and was taking away from the National Lottery. The difference in the U.S is that there has been legislation explicitly supporting prize-linked savings, which didn't exist in South Africa. It was more of a grey area there. A great academic read on the FN…

I love the hack to lottery-fy savings.

Few comments:

1. Product: It in the wide spectrum anywhere between savings account lottery. In your mind, is it closer to one edge vs. other? - Per my read and based on the rate (0.2%) offered, it is closer to the lottery end

2. Web page: "Savings + rate >15-100x banks + Win $10 mil" is what could be a turn off. Depending on the answer above, fix the headline

3. math on how this works: Show ONE public account with $ (say median of all accounts on Yotta or $100 for simplicity) that you would fund and track it in realtime with APY

4. FAQ: Could be more direct. Yes, one will need a Yotta account

5. FAQ: "3rd party “A” rated insurance carrier": May help you if you can reveal who on your website & theirs too

6. FAQ: In one answer, it say 15x and in another it say 20x (Chase or Wells Fargo)

7. 7 digits = 10 ^ 7 #s: if one can get 1000 users with $250K each, is the $10 mil guaranteed? :)

Edit: for readability

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

#139

Post by adammoelis »

bingdig wrote: post #137

Why are you letting people without deposits get in on the drawings? Seems like I could just spam you with mail and get a bunch of entries without depositing savings, at the cost of users who are depositing. From the website: > Mailing In. You can receive one (1) Ticket by sending a handwritten sheet of paper with your name, address, e-mail, and phone number to: 45 East 22nd St. #26B New York, NY 10010. For each compl…

For legal reasons, we need to have a mail-in option. It's called an AMOE ("Alternate Method of Entry").

We prohibit automated entries though and each mail-in entry needs to be handwritten sent in its own envelope. The postage costs more than the EV of one entry, so we don't expect this to be an issue.

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

#140

Post by mD5pPxMcS6fVWKE »

Jommi wrote: post #67
zomglings wrote: post #61

This is an awesome idea, and I intend to try it out. I am a mathematician, and at the same time I can't resist the temptation to purchase the occasional lottery ticket. What most people miss about the lottery is that there can be utility to variance - the opposite of ennui. Have you guys read The Lottery in Babylon https://en.wikipedia.org/wiki/The_Lottery_in_Babylon

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.

For example, in some cases (I won't specify for the fear of being cancelled) your chance of becoming rich by your skills is exactly zero, and you know it. Chance of winning the lottery is small, but higher than zero.
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