another interesting article

Investment Analysis Clubs Saul’s Investing Discussions
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This from a future looking newsletter:

I’d say this is worth the read and seems to have focused on a very rapidly growing trend involving internet payments and brick and mortar banks.

When I read any futuristic articles, I always spend time thinking about and carefully analyzing just how fast their predictions are moving and separate the facts from the guesses, (if possible). So with that caveat, I offer this. Being in the older crowd he says are not in the know, I can’t vouch for his main premise but perhaps someone with good ties to the younger set can.

FYI

http://armstrongeconomics.com/2014/06/19/google-the-new-bank…

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Mykiemon

nice article thanks for the “post”

I fit into the older generation…my aching back tells me so…I haven’t used a brick and mortar bank in at least 10 years…in fact I haven’t even set foot in a bank in about 10 years…even refi the house without stepping out of the house…did the most recent closing at the kitchen table…all of the above thanks to Charles Schwab Bank and Quicken Loan…

As for Google Wallet…I’ve had it on my Droid for quite a while and have not used it…because…most retailers and credit card companies have not caught up to Google…at least it’s the way things used too be…maybe now it’s better…if it is I will use it…

I hope my “sometimes” adult kids…and grandkids don’t figure out Google Wallet and it can be used to transmit money…then I am in big trouble…I don’t need Google to give me more options in this area of my life…

Sincerely

Nick (floridafool6)

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Mykie,

Interesting article. He’s making a lot of assumptions though about what he thinks will happen, not what is already happening. Does Apple, for instance, or Facebook, really want to have to deal with banking regulations, monitoring, and all the rest, just to set up their own bank. I’m not so sure. It wouldn’t be to compete with mainline banks, if they did, but just to make payments easier for their own customers.

JMHO, and I’m one of the older generation,

Saul

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Hello,

I haven’t posted on the MF forums yet because I never feel I have anything of value to contribute. However, being a member of the “Younger Set”(27 is young?) myself, I feel I can touch on a few points of uncertainty you guys may have.

First, I don’t know a single one of my friends, or any 20-something for that matter, who doesn’t implicitly trust Google. Generally, we also hate absolutely everything about our bank. This alone would go a long way if Google stepped into the banking arena. Adoption wouldn’t be a problem, since I’ve known Google for 10 years, and they’ve never hit me with an overdraft fee.

Second, Google and Facebook both have the same goal, no matter what market they’re entering: Get Better Data. They already know where you spend almost every cent online, but that only accounts for a single facet of your purchasing habits. If they had access to the same information your Bank does, they would be that much closer to building a complete picture of You. Which means improved targeted ads, due to Better Data.

Third, The overall investment would be low, from an infrastructure perspective. They (Facebook and Google) already have systems that span the globe, allowing instantaneous communication with anyone on the planet. How difficult would it be to integrate some additional services? Not nearly as high a barrier of entry as PayPal faced, I would suspect, and now we know there is a proven market.

Anyhow, Hopefully there is something useful in there for someone. A few bits of information about myself: I work in Information Technology for a Bank, amusingly enough.

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Nice post, slips. Glad to have you on the boards. Let us hear more from you!

Jeb

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I haven’t posted on the MF forums yet because I never feel I have anything of value to contribute.

Great post, that was certainly something to contribute!

Thanks slips

Saul

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I fit into the older generation…my aching back tells me so…I haven’t used a brick and mortar bank in at least 10 years…in fact I haven’t even set foot in a bank in about 10 years

Hi FloridaFool,

This is one of the reasons I have invested in BOFI.

I just hope the Goog wallet and other entries, do not disrupt that business.

IF you think brick and mortar banks are bad in the states (I have managed to stay out of there also), you should try to bank in MX. Broken Spanish makes it a challenge but even with that, they are unbelievably inefficient, long lines, disrespectful cage handlers, managers without a clue, etc.
Mykie

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Anyhow, Hopefully there is something useful in there for someone. A few bits of information about myself: I work in Information Technology for a Bank, amusingly enough.

Nice post, Slips,

So do you think this would be enough to damage the credit card companies (long MA) and the online banks (long BOFI) and if so, in what kind of time frame (rough guess)?

By the way, I can’t tell you how valuable it is to at least me, to hear openly from someone that is, 1. Working at a real job, 2. is under $35 and 3. Is an investor.

Thanks and please keep posting
Mykie

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So do you think this would be enough to damage the credit card companies (long MA) and the online banks (long BOFI) and if so, in what kind of time frame (rough guess)?

I remember when I used to work a Best Buy several years back they had a big campaign trying to get us to convince customers to pay with Debit Cards, or with Cash. The reason being MA and all of the other credit cards take a cut off the top of each purchase. So for example, if they were selling a widget for $100, with $5 of margin, MA would take 2.5% right off the top, thus leaving Best Buy with only $2.50 profit.

I know those are wonky numbers, but what I’m getting at is Google and Facebook would be entering this industry with the intention of strengthening their core business, not fighting for the 2.5% skim, and late payment fees. What would you do as Best Buy if Google or Facebook came knocking on your door offering 1% or 0%, and all you had to do was nothing?

I wish I could speculate on timelines, but I don’t trust my opinion enough, honestly. Something I do know is that MA is big business, and big business isn’t usually nimble. I think it would take a long time for a threat to be seen as such, and what will they fall back on when profits are eroded in their core business?

Just my $.02

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IF you think brick and mortar banks are bad in the states (I have managed to stay out of there also), you should try to bank in MX. Broken Spanish makes it a challenge but even with that, they are unbelievably inefficient, long lines, disrespectful cage handlers, managers without a clue, etc.
Mykie

Mykie, This is just an aside, but you don’t make living in Mexico sound very attractive. Why are you there? If you want to avoid state income taxes you could live in Texas or some other state with no state income tax. Just curious.

Saul

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This is just an aside, but you don’t make living in Mexico sound very attractive. Why are you there? If you want to avoid state income taxes you could live in Texas or some other state with no state income tax. Just curious.

Hi Saul,
Actually, we live on the beach in Mexico, nice and quiet except for the crashing waves during the storm season (now). And we have hardly any neighbors, viz., it’s peaceful and quiet and beautiful.

I came here as I love the beach, I love the dry climate, I want to be fluent in a second language and I needed time to live with my girlfriend to make sure we could be a successful married couple some day.

I’m fluent in Spanish to my satisfaction but that is only after living 3 months in Spain on the Costa del Sol (really hated that), then living 3 years in Buenas Aires (really loved that) and finally 5 years here.

After being here 5 years, some of the negative issues that build up from living in different culture have begun to get to me, but I’ll only mention two: the rate of obesity here with children…it really kills me to even look at them. I’m trying not to be judgemental, but their parents have doomed them to an inferior life, emotionally and physically and it’s imminently avoidable.

Another complaint here are the banks (as you’ve noted) and, in general, how the businesses work the customer (but not in a good way). For example, you can’t pick up a friend at the airport at the arrival depot. A non commercial vehicle drive by is not allowed. You have to go to departure depot while your friends have to lug their luggage upstairs. The taxi union has won that concession from the government and in fact during the G20 meeting here a few years back, the taxi drivers blockaded the streets to protest the thousands of foreign government people trying to get to the convention hall by bus.

Having listed pretty much my only 2 serious complaints, know that I live here for about 1/3rd the cost of living in LA or San Diego, which have a similar climate. Our lifestyle here is just as good as it was when I was working in LA years ago and making lots of money.

Further, in order to find out if I and my girlfriend could be successful as a married couple, (she’s from the Philippines, is much younger than I plus I have been single for over 39 years), we would have had to make a married-for-life decision in 3 months, in the USA, via a fiancee visa. By moving here, we were able to live together (for 2 years now) before making the joint decision that we could be a happy, successful couple. With the age, socio-economic, educational & cultural differences, it wasn’t a given. Put it under the high risk/high reward banner.

By the end of this year, we expect to move to the states, trigger the fiancee visa and then get married probably in Vegas as I want my darling to see that wild city.

More info than possibly you wanted to hear but there it is.
Mexico Mykie

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Actually, we live on the beach in Mexico

Thanks Mykie, It’s a wonderful, and very romantic, story. Thanks for sharing so much of your personal life with us.

Saul

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Mykie,
Great story and we want to get updates on the Vegas trip :slight_smile:
Erik

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