Digital Banking
Use a neobank with no monthly fees, not a traditional bank with a high-fee checking account.
For years, Sarah paid a $15 monthly fee to her traditional bank for a checking account that offered no interest. It felt like a penalty for keeping her own money. Her friend recommended a neobank, an online-only bank. Sarah switched and was amazed. There were no monthly fees, no minimum balance requirements, and she even earned a small amount of interest. She realized the high fees at her old bank were just paying for the expensive physical branches she never visited.
Stop going to a physical bank branch. Do use your mobile banking app for all your daily banking needs instead.
An elderly man used to make a weekly trip to his local bank branch to deposit a check and check his balance. It was a time-consuming part of his routine. His granddaughter sat with him and showed him how to use his bank’s mobile app. She showed him how to deposit a check by just taking a photo of it and how to see his balance instantly. He was delighted. He no longer had to wait in line, and all his banking information was securely at his fingertips.
The #1 secret for choosing the right challenger bank for your needs.
The secret is to look beyond the basic features and find the bank whose unique tools match your specific financial goals. A person who traveled a lot chose a challenger bank that offered no foreign transaction fees and a great exchange rate, saving him a fortune on his trips. A different person, focused on saving, chose a bank that had a “round-up” feature, which automatically saved the spare change from every purchase. The “best” challenger bank is the one that has a specific feature that solves a real problem for you.
The biggest lie you’ve been told about the safety of online-only banks.
The lie is that because an online-only bank has no physical branches, your money is somehow less safe. A person was hesitant to use a neobank, worried about its legitimacy. He then learned that reputable online banks in the US are FDIC-insured, just like traditional banks. This means his deposits were protected by the federal government up to $250,000. He realized the safety of his money had nothing to do with whether the bank was made of bricks or code; it was about the regulatory protections.
I wish I knew this about the power of budgeting tools integrated into my banking app when I was in college.
As a college student, I was always running out of money and had no idea where it was going. I wish I had used a modern banking app with integrated budgeting tools. These apps automatically categorize your spending, showing you exactly how much you’re spending on food, entertainment, and transportation. Seeing a simple pie chart that showed I was spending 40% of my income on eating out would have been a powerful wake-up call and could have helped me build healthy financial habits much earlier in life.
I’m just going to say it: Traditional banks are becoming obsolete.
A person needed to open a new bank account. At a traditional bank, it was a 45-minute process involving a lot of paperwork. With a modern neobank, she was able to open a fully-functional account from her phone in less than five minutes while sitting on her couch. From instant payment notifications to easy-to-use budgeting tools, neobanks are providing a faster, cheaper, and superior user experience. The old model of inconvenient, high-fee banking is being disrupted, and traditional banks are struggling to keep up.
99% of people make this one mistake when managing their bank accounts online.
The most common mistake is using the same, simple password for their online banking that they use for other, less important websites. A person used the same password for their bank and their social media account. The social media site had a data breach, and a hacker took that leaked password and used it to log into the person’s bank account. Using a unique, strong, randomly-generated password for your online banking is the single most important step you can take to protect your finances.
This one small action of setting up automatic savings transfers will change your financial health forever.
A person always struggled to save money. She would wait until the end of the month and try to save whatever was “left over,” which was usually nothing. She took one small action: she set up an automatic transfer to move $50 from her checking account to her savings account the day after every payday. Because the money was gone before she even saw it, she didn’t miss it. This “pay yourself first” strategy, automated and consistent, allowed her to build up a significant savings balance without feeling any pain.
The reason you’re always overdrawing your account is because you’re not using real-time spending alerts.
A person would frequently get hit with overdraft fees because she would lose track of her spending and her account balance. Her new digital bank offered real-time alerts. Now, every time she made a purchase, she would get an instant notification on her phone showing the transaction amount and her new balance. She also set up an alert to warn her if her balance dropped below $100. These real-time alerts gave her a constant, up-to-the-minute awareness of her finances, and she never overdrew her account again.
If you’re still writing paper checks, you’re losing time and convenience.
A person needed to pay her rent. She had to find her checkbook, write the check, find an envelope and a stamp, and then walk to the post office. It was a whole process. Her roommate, using a modern bank, just opened his app and sent the money to the landlord instantly and for free using a P2P payment service like Zelle. The world has moved on from paper checks. Embracing digital payments is faster, cheaper, and far more convenient.
Robo-Advisors
Use a robo-advisor for low-cost, automated investing, not a high-fee human financial advisor for simple portfolios.
A young professional with a simple investment portfolio was paying a human financial advisor a 1.5% annual fee. This fee was eating up a huge portion of his returns. He switched to a robo-advisor service like Wealthfront or Betterment. The robo-advisor created a diversified portfolio for him based on his goals and charged a fee of only 0.25%. For most people with straightforward investment needs, a low-cost robo-advisor provides the same service as a human advisor for a fraction of the cost.
Stop trying to time the market. Do use a robo-advisor to implement a passive investing strategy instead.
An investor was constantly trying to “time the market.” He would sell when he thought the market was going to crash and buy when he thought it was going to go up. He was usually wrong, and his portfolio performed poorly. A smarter investor used a robo-advisor. She just set up automatic monthly deposits. The robo-advisor implemented a passive strategy, automatically buying a diversified mix of low-cost index funds, regardless of the market’s daily fluctuations. Her simple, consistent, hands-off approach dramatically outperformed the active trader.
The #1 tip for getting started with your first robo-advisor account.
The most important tip is to just start, even if it’s with a small amount. A person was intimidated by investing and kept putting it off, thinking she needed a large sum of money to begin. She finally decided to open a robo-advisor account and set up an automatic deposit of just $25 a week. This small, consistent action got her in the habit of investing. Over time, as her confidence grew, she was able to increase her contributions. The hardest part is starting, and you can start with less than the cost of a few coffees.
The biggest lie you’ve been told about robo-advisors being only for millennials.
The lie is that robo-advisors are just a trendy tool for young, tech-savvy investors. A retiree was paying high fees to a traditional wealth manager. He was looking for a lower-cost way to manage his retirement portfolio. He discovered that many robo-advisors offer sophisticated tools for retirement planning, income generation, and tax optimization that are perfectly suited for investors of any age. Robo-advisors are not about age; they are about providing access to low-cost, evidence-based investing for everyone.
I wish I knew this about tax-loss harvesting when I first started investing.
When I first started investing, my portfolio went down in value. I just held on and waited for it to recover. I wish I had known about tax-loss harvesting, a feature that many robo-advisors automate. This strategy involves selling a losing investment to “harvest” the capital loss, which can then be used to offset your capital gains and reduce your tax bill. The robo-advisor would have then immediately bought a similar, but not identical, investment to keep me in the market. It’s a way to turn a market downturn into a tax-saving opportunity.
I’m just going to say it: For most people, a robo-advisor is a better choice than picking your own stocks.
A person spent hours every week researching individual stocks, trying to beat the market. He was essentially competing against an army of professional Wall Street analysts. Most of the time, he underperformed the market. His friend, who had no interest in picking stocks, just put her money in a robo-advisor. The robo-advisor bought a diversified portfolio of the entire market. For the average person who doesn’t have the time or expertise to be a full-time stock analyst, a low-cost, diversified, automated approach is almost always the more successful one.
99% of new investors make this one mistake when setting up their robo-advisor profile.
The most common mistake is being dishonest about their risk tolerance. A new investor, wanting to get the highest possible returns, will tell the robo-advisor that they have a very high risk tolerance. The robo-advisor then creates a portfolio that is 90% stocks. When the market has its first downturn, the investor panics and sells at a loss because they couldn’t actually stomach the volatility. It’s crucial to be honest with yourself about your true risk tolerance when you set up your profile.
This one small action of enabling automatic deposits into your investment account will change your wealth-building journey forever.
A person would try to invest a lump sum of money “when the time was right.” That time never seemed to come. She took one small action: she set up an automatic, recurring deposit of $100 from her checking account into her robo-advisor account every single month. This automated, “set it and forget it” approach removed the emotion and the procrastination from investing. It put her wealth-building on autopilot and ensured that she was consistently investing for her future, month after month.
The reason your investment portfolio is not growing is because you’re paying too much in fees.
An investor’s portfolio was managed by a traditional financial advisor who had put him in a series of actively-managed mutual funds. The combination of the advisor’s fee and the high expense ratios of the funds was costing him over 2% of his portfolio value every single year. These fees, compounding over time, were a massive drag on his returns. By switching to a low-cost robo-advisor that uses cheap index funds, he was able to cut his annual fees by more than 80%, which had a huge impact on his long-term growth.
If you’re still keeping all your savings in cash, you’re losing purchasing power to inflation.
A person was very risk-averse and kept all of her long-term savings in a bank savings account. With inflation running at 3% and her savings account paying 0.5%, the real purchasing power of her money was decreasing by 2.5% every single year. She was “safely” losing money. By investing a portion of her long-term savings in a diversified portfolio through a robo-advisor, she was able to achieve a long-term return that outpaced inflation, allowing her wealth to grow in real terms.
Peer-to-Peer (P2P) Lending
Use a P2P lending platform to diversify your investment portfolio, not just as a high-risk gamble.
An investor was looking for an asset class that was not directly correlated with the stock market. He decided to allocate a small portion of his portfolio to peer-to-peer lending. He would lend small amounts of money to hundreds of different borrowers. When the stock market had a bad year, his P2P lending portfolio continued to generate a steady stream of interest income. He was using P2P lending not as a get-rich-quick scheme, but as a strategic tool to diversify his investments and reduce his overall portfolio volatility.
Stop relying solely on the stock market for returns. Do explore alternative investments like P2P lending instead.
An investor had 100% of her investment portfolio in the stock market. She was looking for other ways to generate returns. She started exploring alternative investments and discovered P2P lending. She learned that by lending money directly to individuals or small businesses through a platform, she could earn attractive interest rates. This provided her with a new source of investment income that was completely independent of the daily fluctuations of the stock market.
The #1 secret for analyzing and selecting loans on a P2P platform.
The secret is to pay close attention to the borrower’s debt-to-income ratio and credit history. A novice P2P investor was attracted to loans that offered a very high interest rate. He didn’t look closely at the borrowers, who often had a poor credit history and a high level of existing debt. Many of these loans defaulted. A more experienced investor focused on lending to prime borrowers with a low debt-to-income ratio. The interest rates were lower, but the risk of default was also significantly lower, resulting in a much more stable and predictable return.
The biggest lie you’ve been told about the “guaranteed” returns of P2P lending.
The lie is that the high interest rates advertised by P2P platforms are a guaranteed return. A platform might show that a loan has a 15% interest rate. But this does not account for the risk of default. If the borrower stops paying, you can lose your entire principal. Your actual return is the interest you earn minus the losses from any defaults. There is no such thing as a guaranteed return in P2P lending; you are being compensated with a high interest rate for taking on the risk of default.
I wish I knew this about the importance of diversification across hundreds of loans when I first started with P2P lending.
When I first started with P2P lending, I invested $1,000 into a single loan because it had a high interest rate. The borrower defaulted, and I lost my entire investment. I was devastated. I wish I had known that the key to P2P lending is to diversify across a huge number of loans. By investing just $25 into 40 different loans, I would have spread my risk. Even if one or two of those loans defaulted, the interest I earned from the other 38 would have more than covered the losses.
I’m just going to say it: P2P lending is a high-risk, high-reward investment.
A person saw the high single-digit and even double-digit returns being advertised by P2P platforms and thought it was an easy way to make money. He didn’t fully appreciate the risks. Unlike a bank deposit, your investment is not insured. The loans are unsecured, meaning there is no collateral if the borrower defaults. P2P lending can provide returns that are higher than many traditional investments, but you must go into it with your eyes open, understanding that you are taking on a significant amount of credit risk.
99% of P2P investors make this one mistake that increases their risk of default.
The most common mistake is chasing the highest interest rates. P2P platforms assign a risk grade to each loan. The loans with the highest interest rates are also the ones with the highest risk grade, meaning they are the most likely to default. A new investor will often be lured in by the promise of a 20% return and will invest only in the riskiest loans. This concentrates their risk and makes it highly likely that they will suffer significant losses from defaults. A more balanced approach is to diversify across a range of risk grades.
This one small action of reinvesting your earnings will change the power of compounding in your P2P portfolio forever.
A P2P investor would receive monthly payments of principal and interest from his loans and would withdraw the money to his bank account. Another investor took one small action: she set her account to automatically reinvest her earnings into new loans. This put the power of compounding to work. Her interest was now earning its own interest. Over the course of several years, this small habit of reinvesting resulted in her portfolio growing at an exponentially faster rate.
The reason you lost money in P2P lending is because you didn’t diversify enough.
A P2P investor was complaining that he had lost money. He had invested $5,000 across five different loans. One of those borrowers defaulted, and the loss of that $1,000 principal wiped out all the interest he had earned from the other four. The reason for his loss was a lack of diversification. A successful P2P investor would have invested that same $5,000 by putting just $25 into 200 different loans. With that level of diversification, a single default becomes a small, expected part of doing business, not a catastrophic event.
If you’re still looking for a personal loan from a traditional bank, you’re losing out on potentially lower interest rates from P2P platforms.
A person with a good credit score needed a personal loan to consolidate his credit card debt. His bank offered him a loan with a high interest rate. He decided to apply for a loan on a peer-to-peer lending platform. Because the P2P platform has a lower overhead cost than a traditional bank with physical branches, they were able to offer him a loan with a significantly lower interest rate. For creditworthy borrowers, P2P platforms can be a more efficient and affordable source of credit.
Insurtech
Use an AI-powered insurtech company for a faster and more transparent insurance quote, not a traditional insurance broker.
A person wanted to get a quote for homeowners insurance. She called a traditional insurance broker. It was a long, slow process involving a lot of phone calls and paperwork. Her friend used a modern insurtech company. She went to their website, answered a few simple questions, and an AI-powered system instantly analyzed public data about her home to provide her with a transparent, accurate quote in less than two minutes. The insurtech company used technology to make the process dramatically faster and more efficient.
Stop filling out lengthy paper forms for insurance. Do use an app to get a policy in minutes instead.
A person trying to get renters insurance was mailed a 20-page paper application to fill out. It was a frustrating and outdated experience. She gave up and downloaded an app from an insurtech company like Lemonade. She was able to get a policy, customize her coverage, and pay for it, all from her phone, in about 90 seconds. By replacing the paperwork and the middlemen with a smart, user-friendly app, insurtech companies are transforming the insurance buying process.
The #1 hack for lowering your car insurance premium using telematics.
The secret is to prove that you are a safe driver. A young driver was being quoted very high insurance premiums because of his age. He signed up for a policy from an insurtech company that used telematics. He plugged a small device into his car (or used their app) that monitored his driving habits—how often he sped, how hard he braked. After a few months of demonstrating that he was a safe driver, the company rewarded him with a significant discount on his premium. Telematics allows your rate to be based on how you actually drive, not just your demographic profile.
The biggest lie you’ve been told about insurance loyalty discounts.
The lie is that staying with the same insurance company for many years will always get you the best price. A person had been with the same car insurance company for a decade. She assumed her “loyalty discount” meant she was getting a great deal. Out of curiosity, she spent 15 minutes getting quotes from a few online insurtech companies. She was shocked to find that she could get the exact same coverage from a different provider for 30% less. Loyalty is often punished, not rewarded, in the insurance industry.
I wish I knew this about the power of usage-based insurance when I was a young driver.
When I was a student, I barely drove my car. It would sit parked most of the week. Yet I was paying the same high insurance premium as someone my age who drove 20,000 miles a year. I wish I had known about usage-based insurance. A modern insurtech company could have offered me a policy where my premium was based on how many miles I actually drove. This would have saved me a huge amount of money and would have been a much fairer way to price my risk.
I’m just going to say it: The insurance industry is ripe for disruption.
For decades, the insurance industry has been dominated by a few large, slow-moving companies with outdated technology and poor customer service. It’s an industry that is famous for its confusing paperwork, its slow claims process, and its adversarial relationship with its customers. The rise of insurtech—using AI, mobile apps, and big data to create a more transparent, efficient, and customer-centric experience—is a long-overdue disruption that is fundamentally changing this massive and archaic industry.
99% of people make this one mistake when buying insurance online.
The most common mistake is choosing the lowest premium without understanding what the policy actually covers. A person bought the cheapest homeowners insurance she could find. When her house suffered water damage from a burst pipe, she was devastated to learn that her cheap policy had a very high deductible and didn’t cover that specific type of damage. It’s crucial to read the details of the coverage, not just to look at the price. The cheapest policy is often not the best value.
This one small action of bundling your home and auto insurance with an insurtech provider will change your annual savings forever.
A person had her auto insurance with one company and her homeowners insurance with another. She was paying two separate, high premiums. She took one small action: she got a quote from a single insurtech provider to “bundle” both policies together. Because she was now a more valuable customer, the company was able to offer her a significant discount on both policies. This simple act of bundling her insurance saved her hundreds of dollars a year.
The reason your insurance claims process is so slow is because you’re using a company with outdated technology.
A person’s basement flooded. He filed a claim with his traditional insurance company. The process was a nightmare of phone calls, paperwork, and waiting for a human adjuster to visit his home. It took weeks to get his claim paid. His neighbor, who was insured with an insurtech company, had a different experience. He was able to file his entire claim through a mobile app, submitting photos and videos of the damage. An AI system processed his claim, and the money was in his bank account within 48 hours.
If you’re still not comparing insurance quotes online, you’re losing hundreds of dollars a year.
A person had been paying the same car insurance bill automatically for five years. He had never shopped around. He finally decided to spend 20 minutes on an online comparison site. He was shocked to find that he could get the same or better coverage from a different company for $500 less per year. Insurance companies are constantly changing their rates, and the company that was the cheapest for you a few years ago is likely not the cheapest for you today. Regularly shopping around is essential.
Regtech (Regulatory Technology)
Use Regtech solutions to automate compliance, not just hiring more compliance officers.
A large bank was facing increasing regulatory pressure. Their old solution was to just hire more compliance officers to manually review transactions. It was expensive and inefficient. They switched to a Regtech approach. They implemented an AI-powered system that could automatically monitor millions of transactions in real-time, flagging suspicious activity for human review. This allowed them to improve their compliance effectiveness while actually reducing their headcount and operational costs.
Stop doing manual compliance checks. Do use AI to monitor transactions and identify risks in real-time instead.
A compliance officer at a financial firm would manually review a small, random sample of the previous day’s trades to look for signs of market manipulation. It was like looking for a needle in a haystack. The firm adopted a Regtech solution that used machine learning to analyze every single trade in real-time. The AI could identify complex, suspicious trading patterns that a human would never be able to spot, allowing the firm to detect and stop illicit activity as it was happening.
The #1 secret for a successful Regtech implementation in a financial institution.
The secret is to start with a small, well-defined problem and demonstrate value quickly. A bank tried to implement a massive, all-encompassing Regtech platform to solve all of their compliance problems at once. The project was too complex and failed. A more successful bank chose one specific, painful problem: the manual process of customer onboarding and identity verification. They implemented a Regtech solution for just that one area. The project was a quick win that built momentum and buy-in for further Regtech adoption.
The biggest lie you’ve been told about Regtech replacing the need for human oversight.
The lie is that Regtech will make compliance completely automated and eliminate the need for human compliance professionals. The reality is that Regtech is a tool to augment, not replace, human expertise. An AI might be able to flag a suspicious transaction, but it still takes a skilled human investigator to analyze the context, make a judgment call, and decide whether to file a report. Regtech handles the data-heavy lifting, freeing up the humans to focus on the high-level analysis and decision-making.
I wish I knew this about the potential of blockchain for KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance.
As a compliance professional, I spent my career dealing with the repetitive and inefficient process of KYC, where every single bank has to independently verify a customer’s identity. I wish I had known about the potential of blockchain. With a blockchain-based digital identity system, a customer could be verified once by a trusted institution. They could then share that secure, verifiable credential with other financial institutions, eliminating the need for every bank to repeat the same work. This could make the entire financial system more efficient and secure.
I’m just going to say it: Regtech is no longer a “nice-to-have” but a “must-have” for financial firms.
In the past, compliance was a manual, back-office function. In today’s world of increasing regulatory complexity, real-time transactions, and massive data volumes, the old manual approach is no longer viable. A financial firm that is still trying to manage its compliance with spreadsheets and manual checks is not only inefficient, but it is also exposing itself to a huge risk of multi-million dollar fines and reputational damage. In the modern financial world, using technology for regulatory compliance is a necessity for survival.
99% of financial institutions make this one mistake when adopting new regulatory technologies.
The most common mistake is trying to bolt the new technology on top of their old, broken, and siloed internal processes. A bank will buy a fancy new Regtech tool, but their different departments still won’t share data effectively. The tool fails to deliver on its promise because it’s being fed bad or incomplete information. A successful Regtech adoption requires not just new technology, but a willingness to re-engineer the underlying business processes to be more integrated and data-driven.
This one small action of implementing a digital identity verification system will change your customer onboarding process forever.
A bank’s customer onboarding process required a new customer to physically come into a branch with their identity documents. It was a slow and inconvenient process. They implemented a modern Regtech solution for digital identity verification. Now, a new customer could simply take a photo of their driver’s license and a selfie with their smartphone. An AI-powered system could verify their identity in seconds. This one small change made their onboarding process faster, more secure, and dramatically improved the customer experience.
The reason your compliance costs are so high is because you’re relying on manual and outdated processes.
A financial firm had a large and growing team of compliance analysts whose job was to manually read through reports and cross-reference spreadsheets. The work was labor-intensive, slow, and prone to human error. Their compliance costs were a major drain on the business. By investing in Regtech solutions that could automate these manual, rule-based tasks, they were able to significantly reduce their compliance costs while actually improving the accuracy and effectiveness of their risk management.
If you’re still using spreadsheets to manage your compliance reporting, you’re losing efficiency and increasing your risk of errors.
A compliance manager at a small firm spent the last week of every quarter manually compiling data from multiple sources into a complex Excel spreadsheet to generate a regulatory report. The process was a nightmare, and there was always a risk of a copy-paste error that could lead to an inaccurate filing. By implementing a Regtech tool that could automatically aggregate the data and generate the report, she was able to turn a week-long, high-risk process into a one-click, automated task.
Open Banking
Use Open Banking to connect your financial accounts to third-party apps, not just using your bank’s native app.
A person used her bank’s app to see her checking account balance. But to see her mortgage balance, her credit card statement, and her investment portfolio, she had to log into three other separate apps. It was a fragmented view of her finances. Through Open Banking, she was able to securely connect all of these accounts to a single personal finance app. Now, she had a single dashboard where she could see her entire financial life in one place, giving her a much clearer picture of her overall net worth.
Stop living with a fragmented view of your finances. Do use an app that aggregates all your financial data in one place instead.
A person was trying to create a budget but had to manually log into five different websites—for her two credit cards, her checking account, her student loan, and her car loan—just to see all of her balances and transactions. It was a huge hassle. By using an app that leverages Open Banking, she could securely link all of her accounts. The app would automatically pull in all of her financial data, giving her a unified, real-time view of her entire financial situation without the need for manual data entry.
The #1 secret for leveraging Open Banking to get better deals on financial products.
The secret is to use your own financial data as leverage. A person wanted to get a personal loan. Instead of just filling out a standard application, she used an Open Banking-powered service that allowed her to securely share her transaction history with potential lenders. Because the lenders could see her consistent income and responsible spending habits, they were able to offer her a lower interest rate than she would have gotten with a traditional credit score alone. She used her own data to prove her creditworthiness.
The biggest lie you’ve been told about the security risks of Open Banking.
The lie is that by connecting your bank account to a third-party app, you are giving that app your banking password and handing over control of your account. Modern Open Banking standards use a secure, token-based system called OAuth. You are never sharing your password with the third-party app. You are simply granting that app a specific, limited, and revocable permission to access your data, all through your bank’s secure portal. It’s a much safer and more controlled way of sharing data than the old method of “screen scraping.”
I wish I knew this about the power of Open Banking to create a personalized financial dashboard for my life.
For years, I just used my bank’s website. It showed me my balance, and that was it. I wish I had known about the world of possibilities that Open Banking unlocks. By connecting my data to different apps, I could have a dashboard that not only showed me my balance but also tracked my subscriptions, alerted me to unusual spending, forecast my future cash flow, and even recommended ways for me to save money. Open Banking transforms your raw financial data into personalized, actionable insights.
I’m just going to say it: Open Banking will do to banking what the internet did to media.
In the past, media was controlled by a few large, centralized newspapers and television networks. The internet broke that open, allowing anyone to create and distribute content. Similarly, Open Banking is breaking open the walled gardens of the traditional banks. It allows innovative fintech companies to build new products and services on top of the existing banking infrastructure, creating a more competitive, transparent, and customer-centric financial ecosystem. It’s a fundamental shift from a closed system to an open one.
99% of consumers make this one mistake by not taking advantage of Open Banking.
The most common mistake is simply not knowing that it exists or what it can do for them. A person will continue to manually manage their finances with spreadsheets and log into multiple websites, completely unaware that there is a better way. They are living with a fragmented and incomplete picture of their financial lives because they haven’t yet discovered the apps and services that Open Banking enables. The biggest mistake is one of omission.
This one small action of connecting your bank account to a budgeting app will change the way you manage your money forever.
A person struggled to keep a budget because she found it too tedious to manually track every single expense. She took one small action: she downloaded a budgeting app and used Open Banking to securely link her bank account and credit cards. The app automatically imported and categorized all of her transactions. For the first time, she had a clear, real-time, and effortless view of where her money was going. This one action turned the frustrating task of budgeting into an automated and insightful process.
The reason you don’t have a clear picture of your financial health is because your data is trapped in silos.
Your checking account is at one bank. Your credit card is at another. Your mortgage is with a third company. Each of these institutions holds a piece of your financial puzzle, but none of them have the full picture. Your financial data is trapped in these separate, walled gardens. Open Banking is the key that unlocks these silos, allowing you to bring all of your financial data together into one place so you can finally see the complete picture of your financial health.
If you’re still manually entering your transactions into a spreadsheet, you’re losing the power of real-time financial insights.
A person would diligently sit down once a week to update her budgeting spreadsheet. The process was manual and the data was always a week out of date. Her friend used a personal finance app connected via Open Banking. Her financial data was updated in real-time, every day. She could get an instant alert if she was approaching her budget limit in a certain category. The real-time nature of Open Banking provides a much more dynamic and proactive way to manage your finances.
Crowdfunding Platforms
Use an equity crowdfunding platform to invest in startups, not just donating to Kickstarter projects.
A person loved supporting creative projects on Kickstarter and getting a cool product in return. She then discovered equity crowdfunding platforms like StartEngine or Republic. She realized that instead of just being a customer, she could actually invest in a startup she believed in and get a small ownership stake in the company. If the company succeeded, her investment could grow in value. She moved from being a patron of the arts to being an early-stage venture investor.
Stop thinking that startup investing is only for venture capitalists. Do explore equity crowdfunding to get in on the ground floor instead.
For decades, the only people who could invest in promising, early-stage startups were wealthy, accredited investors and venture capital firms. It was an exclusive club. The JOBS Act and the rise of equity crowdfunding changed that. Now, an ordinary person can go to a regulated crowdfunding platform and invest as little as $100 into a startup they are passionate about. It has democratized startup investing and opened up a new asset class to the general public.
The #1 tip for vetting a startup on a crowdfunding platform.
The most important tip is to scrutinize the founding team. A startup might have a brilliant idea, but if the founders don’t have the relevant experience and the resilience to execute on that idea, the company will likely fail. Before investing, you should research the founders’ backgrounds on LinkedIn, see what they have built in the past, and evaluate whether they have the specific expertise needed to succeed in their target market. You are betting on the jockey, not just the horse.
The biggest lie you’ve been told about the potential returns of equity crowdfunding.
The lie is that you are going to get rich by finding the “next Facebook.” The marketing for equity crowdfunding often highlights the massive potential returns. The reality is that startup investing is incredibly risky, and the vast majority of startups fail. While the potential for a large return exists, it is a low-probability event. A realistic investor understands that they are more likely to lose their entire investment than they are to see a 100x return.
I wish I knew this about the high failure rate of startups when I made my first equity crowdfunding investment.
I was so excited about the potential of a startup I found on a crowdfunding platform. I invested a significant amount of money, thinking it was a sure thing. A year later, the company ran out of money and shut down. I lost my entire investment. I wish I had known that the failure rate for early-stage startups is extremely high, often over 90%. Understanding this high probability of failure from the start would have encouraged me to invest a much smaller amount and to diversify my investments.
I’m just going to say it: Most equity crowdfunding investments will go to zero.
A person who invests in a single startup on a crowdfunding platform is very likely going to lose all of their money. Startup investing is not like investing in the public stock market. These are illiquid, high-risk investments in unproven companies. The model for venture capital is based on the understanding that out of ten investments, seven will fail, two will do okay, and one will be a massive success that pays for all the losers. As a small investor, you must adopt the same mindset.
99% of new crowdfund investors make this one mistake.
The most common mistake is getting swept up in a company’s slick marketing video and compelling story without doing any due diligence on the business itself. A founder might be a great storyteller, but that doesn’t mean they have a viable business model. A new investor will get excited about the vision and invest without looking at the company’s financials, understanding the competitive landscape, or critically evaluating the valuation. You have to invest with your head, not just your heart.
This one small action of diversifying your crowdfunding portfolio across at least 10-20 startups will change your chances of success forever.
An investor put $1,000 into a single startup. It failed, and he lost everything. A different investor took that same $1,000 and invested just $50 into 20 different startups across various industries. Many of those startups failed, but a few of them succeeded, and one of them did exceptionally well. The gains from his one big winner more than covered all of his losses. This one small action of building a diversified portfolio is the only statistically viable strategy for investing in this high-risk asset class.
The reason you lost money in equity crowdfunding is because you put all your eggs in one basket.
A person was absolutely convinced that a specific startup was going to be the next big thing. He invested a large portion of his savings into that one company. He was emotionally invested and suffered from confirmation bias, ignoring any red flags. When the startup failed, he suffered a significant financial loss. The number one rule of investing, especially in high-risk asset classes, is diversification. Never put all your eggs in one basket, no matter how shiny that basket looks.
If you’re still a startup founder and not considering crowdfunding, you’re losing a powerful way to raise capital and build a community.
A startup founder was struggling to get meetings with traditional venture capitalists. She decided to try equity crowdfunding. She was able to raise the capital she needed not from a few wealthy investors, but from thousands of her own customers and fans. This not only provided her with funding but also created a massive, built-in community of passionate brand advocates who were now financially invested in her company’s success. For many consumer-facing businesses, crowdfunding can be a powerful alternative to traditional fundraising.
Personal Finance Apps
Use a comprehensive personal finance app like YNAB or Mint, not just a simple spreadsheet.
For years, a person tried to manage his budget with a complex spreadsheet he had built. It was a chore to update, and he was never sure if it was accurate. He switched to a modern personal finance app. The app automatically imported his transactions, categorized them, and gave him a clear, visual overview of his financial life. It turned a tedious, manual task into an automated, insightful, and even enjoyable process.
Stop manually tracking your expenses. Do automate it by linking your bank accounts to a personal finance app.
A student tried to track her spending by keeping all of her receipts and manually entering them into a notebook at the end of every day. She gave up after a week because it was too much work. She then downloaded a personal finance app and securely linked her bank accounts. The app did all the tracking for her automatically. For the first time, she had an accurate and effortless record of where her money was going, which is the first step to controlling it.
The #1 secret for finally sticking to a budget.
The secret is to give every single dollar a job. A person would create a budget but would always overspend. She started using the “zero-based budgeting” method, popularized by apps like YNAB. At the beginning of the month, she would take her income and assign every single dollar to a specific category—rent, groceries, savings, entertainment—until there was zero dollars left to assign. This proactive planning, instead of reactive tracking, gave her a new level of control and intention over her spending.
The biggest lie you’ve been told about budgeting being about deprivation.
The lie is that a budget is a financial straitjacket designed to stop you from having any fun. A person avoided budgeting because she thought it meant she could never go out to eat or buy a coffee again. She finally tried it and had a revelation. A budget is not about deprivation; it’s about permission. By intentionally setting aside money for “restaurants” and “fun money,” she was able to spend on those things completely guilt-free, because she knew that her essential expenses and savings goals were already covered.
I wish I knew this about the “zero-based budgeting” method when I was struggling with debt.
When I was trying to get out of debt, I felt like I was just throwing money at the problem with no real plan. I wish I had known about zero-based budgeting. The method forces you to be incredibly intentional with your money. By assigning a “job” to every dollar you earn at the beginning of the month, you can prioritize your debt repayment goals and see exactly where you can cut back on other spending to accelerate your progress. It’s a powerful tool for taking back control of your cash flow.
I’m just going to say it: A personal finance app is the single best tool for improving your financial literacy.
A person felt like she didn’t understand anything about her own finances. She downloaded a personal finance app. The app showed her clear visualizations of her spending habits, tracked her net worth over time, and sent her alerts when bills were due. It was like having a personal financial advisor in her pocket. The simple act of engaging with her own financial data in a clear, user-friendly interface was the most effective financial literacy education she had ever received.
99% of people make this one mistake when they start using a budgeting app.
The most common mistake is getting discouraged and giving up after the first month. A person will start using a budgeting app, and at the end of the month, they will see that they have overspent in several categories. They feel like they have “failed” at budgeting and quit. A budget is not a test you pass or fail. It is a plan. The first few months are about gathering data and learning. It’s normal to have to adjust your budget as you get a more realistic picture of your spending habits.
This one small habit of reviewing your spending every week will change your relationship with money forever.
A person would only look at his finances once a month when his credit card bill arrived. By then, it was too late to change his behavior. He adopted a new, small habit: every Sunday morning, he would spend 15 minutes with a cup of coffee and his personal finance app, reviewing his spending from the past week. This frequent, low-stress check-in kept him connected to his financial goals and allowed him to make small course corrections throughout the month, instead of being surprised at the end.
The reason you can’t save money is because you don’t know where your money is going.
A person was frustrated that despite having a good income, he never seemed to have any money left over to save. He felt like his money was just disappearing. He started using a personal finance app and was shocked to discover that he was spending over $400 a month on ride-sharing services and food delivery. He had no idea. The simple act of tracking his spending and seeing it clearly categorized revealed the “leaks” in his budget and showed him exactly where he could cut back.
If you’re still not using a personal finance app, you’re losing control over your financial destiny.
Two people had the same income and the same financial goals. The first person managed their money with a vague mental accounting. The second person used a personal finance app to create a budget, track her spending, and set clear savings goals. Five years later, the second person had paid off her student loans and had a significant down payment for a house. The first person was still living paycheck to paycheck. A personal finance app is a tool that allows you to be the intentional architect of your financial future.
AI in Trading
Use AI-powered tools for market analysis and pattern recognition, not just trading on gut feelings.
A trader would make decisions based on his “gut feeling” and whatever he read in the news that morning. His results were inconsistent. A different trader used an AI-powered platform. The AI could scan thousands of news articles and social media posts for sentiment analysis and could identify complex technical patterns across hundreds of stocks in seconds—a feat impossible for a human. The AI provided her with data-driven insights, allowing her to make more informed and less emotional trading decisions.
Stop trying to manually scan hundreds of charts. Do use AI to identify trading opportunities instead.
A technical analyst would spend hours every single day manually looking through hundreds of stock charts, searching for specific patterns like a “head and shoulders” or a “golden cross.” It was a tedious and inefficient process. He started using a trading platform with an AI-powered scanner. He could now define the exact patterns he was looking for, and the AI would scan the entire market in real-time, alerting him only when a potential opportunity that met his criteria was found.
The #1 tip for using AI in your trading strategy without becoming a quant.
The most accessible tip is to use AI not to predict the price, but to understand the market sentiment. A retail trader didn’t have the skills to build a complex predictive AI model. Instead, she used a tool that performed sentiment analysis on social media and financial news for a particular stock. She could see if the overall “chatter” around a stock was becoming more positive or negative. This provided her with a unique, real-time data point that she could use to supplement her more traditional analysis.
The biggest lie you’ve been told about AI trading bots that promise guaranteed profits.
The lie, often found in online ads, is that you can buy an “AI trading bot” that will generate guaranteed, high returns with no risk. A person bought one of these bots. It worked well for a few weeks in a rising market, and then it lost all of his money when the market conditions changed. These bots are often just simple, over-optimized strategies that are not truly intelligent or adaptive. There is no such thing as a guaranteed profit in trading, and if someone is selling you one, it’s a scam.
I wish I knew this about the dangers of overfitting when backtesting an AI trading model.
I built my first AI trading model and backtested it on historical data. It produced amazing, perfect results. I was so excited. I deployed it with real money, and it immediately started losing. The problem was “overfitting.” I had tuned the model so perfectly to the historical data that it had just memorized the past, including all its random noise. It hadn’t learned a real, generalizable pattern. I wish I had known to use separate data for training, validation, and out-of-sample testing to prevent this.
I’m just going to say it: AI will not replace human traders, but it will augment them.
The idea that AI will make human traders obsolete is a misconception. A fully-automated AI trading system can be very brittle and can fail spectacularly in unexpected market conditions. The future of trading is a “centaur” model, where human traders work collaboratively with AI tools. The AI is a powerful analyst that can process vast amounts of data and identify patterns. The human provides the contextual understanding, the intuition, and the final judgment, especially during times of high uncertainty.
99% of retail traders make this one mistake when they try to use AI for trading.
The most common mistake is blindly trusting the output of a black-box AI model without understanding why it’s making a certain decision. A trader will use an AI tool that just says “buy” or “sell.” He has no idea what factors the AI is looking at. This is not trading; it’s gambling on an algorithm. A smart trader will use AI tools that provide explainability, showing them the key factors—like a surge in trading volume or a change in sentiment—that led to the AI’s recommendation.
This one small action of using AI for sentiment analysis of news and social media will change your trading edge forever.
A trader used to just look at a stock’s price chart. He started incorporating an AI-powered sentiment analysis feed into his workflow. Before a company’s stock price moved, he could see a significant spike in positive or negative mentions on Twitter and in the financial news. This gave him a small, early-warning signal that something was about to happen. This one small action of analyzing the “unstructured” data of human sentiment gave him an information edge that he couldn’t get from a price chart alone.
The reason your trading strategy isn’t working is because you’re not adapting to changing market conditions, but AI can.
A trader had a strategy that worked well in a bull market. When the market became choppy and sideways, his strategy stopped working. He failed to adapt. A modern, AI-driven trading system can be designed to recognize different “market regimes.” The AI can identify if the market is trending, volatile, or stable, and then automatically switch to the trading model that is best suited for the current conditions. This ability to adapt is a key advantage of an AI-based approach.
If you’re still not exploring how AI can improve your trading, you’re losing to the machines.
The world of finance is becoming increasingly automated. A huge percentage of the trading on Wall Street is already being done by sophisticated algorithms and AI systems. A retail trader who is still making decisions based purely on gut feeling and manually-drawn trend lines is like a person trying to compete in a car race on a bicycle. By not leveraging the power of AI tools for data analysis and pattern recognition, you are at a significant and growing disadvantage.
Blockchain in Finance (Beyond Crypto)
Use blockchain for cross-border payments, not just the slow and expensive SWIFT system.
A company needed to send a payment to a supplier in another country. Using the traditional SWIFT system, the payment took three days to arrive and involved high fees from multiple intermediary banks. A different company used a blockchain-based payment system. The transaction was settled directly between the two parties in a matter of minutes, and the fees were a fraction of the cost. For international payments, blockchain offers a faster, cheaper, and more transparent alternative to the archaic banking system.
Stop thinking of blockchain as just Bitcoin. Do explore its potential for trade finance, identity, and asset tokenization instead.
A person thought blockchain was just about speculative cryptocurrencies. She then learned about its potential in other areas of finance. She learned how blockchain could be used in trade finance to create a single, shared, and tamper-proof record of a shipment’s journey. She learned how it could be used for self-sovereign identity. She realized that Bitcoin was just the first application of a much more fundamental technology, much like email was the first application of the internet.
The #1 secret for understanding the real-world applications of blockchain in finance.
The secret is to think of it as a “trusted, shared database.” Many financial processes are slow and inefficient because each party (e.g., two different banks) maintains its own separate, private ledger. They then have to go through a complex reconciliation process to make sure their ledgers match. A blockchain provides a single, shared ledger that all parties can trust without needing a central intermediary. This simple concept of a shared source of truth is the key to streamlining a huge number of financial processes.
The biggest lie you’ve been told about blockchain being a solution for everything.
The lie is that blockchain is a magical technology that can solve any problem. A company tried to use a blockchain to build a simple internal database that didn’t require trust or decentralization. The project was a failure; it was slower, more complex, and more expensive than using a standard database. Blockchain is a very specific tool that is well-suited for a specific set of problems: those that involve multiple, untrusting parties who need to coordinate and agree on a shared set of facts.
I wish I knew this about the difference between public and private blockchains when I first started learning about enterprise blockchain.
When I first learned about blockchain, I only knew about public blockchains like Bitcoin and Ethereum, which anyone can join. I was confused about how a large bank would ever use this. I wish I had known about private, “permissioned” blockchains. These are blockchain networks that are controlled by a consortium of known and trusted parties. They offer many of the same benefits of a shared, immutable ledger, but in a controlled environment that is suitable for the privacy and regulatory needs of large enterprises.
I’m just going to say it: The tokenization of real-world assets will be the biggest financial innovation of the next decade.
Imagine being able to buy a tiny, fractional share of a commercial real estate building, a famous piece of art, or a stake in a startup, and for that share to be represented as a liquid, easily-tradable token on a blockchain. This is the promise of “tokenization.” It has the potential to take illiquid, real-world assets and make them accessible to a much broader range of investors, unlocking trillions of dollars of value and fundamentally changing the nature of ownership and investment.
99% of financial professionals make this one mistake when dismissing blockchain technology.
The most common mistake is dismissing the entire technology because they are skeptical of a specific cryptocurrency like Bitcoin. A banker will say, “I don’t believe in Bitcoin, therefore blockchain is useless.” This is like saying, “I don’t like the first website ever created, so the entire internet is a bad idea.” It’s crucial to separate the speculative asset class of cryptocurrencies from the underlying database technology of blockchain, which has its own distinct and powerful set of use cases.
This one small action of learning about smart contracts will change your understanding of how blockchain can automate financial agreements forever.
A lawyer was confused about the potential of blockchain beyond payments. She took an hour to learn about “smart contracts.” She understood that a smart contract is a piece of code that runs on a blockchain and can automatically execute the terms of an agreement. For example, a smart contract could automatically release an insurance payment after a verifiable event, like a flight cancellation. She realized that this technology could automate a huge number of legal and financial agreements, making them more efficient and transparent.
The reason traditional finance is so inefficient is because of a lack of a single, shared ledger, which blockchain provides.
Think about the process of buying a house. It involves dozens of different parties—banks, lawyers, title companies, government registries—all maintaining their own separate records. The process is slow, expensive, and prone to error. The core inefficiency is the lack of a single, trusted source of truth. A blockchain-based system could provide this single, shared ledger for property ownership, dramatically streamlining the entire process and reducing the need for many of the intermediaries.
If you’re still a finance professional and not learning about blockchain, you’re losing your relevance in the industry.
A veteran financial analyst dismissed blockchain as a passing fad. A younger analyst took the time to learn about the technology and its potential to disrupt areas like supply chain finance and asset management. As their company started to explore these new technologies, the younger analyst was able to lead the new initiatives, while the veteran was seen as being out of touch. Just as the internet changed finance a generation ago, blockchain is a foundational technology that will reshape the industry, and understanding it is becoming a necessary skill.