25
May

42,000,000 Adults Over 50 In Deep Financial Trouble in Need of Creative Loan Products

A quick scan of the media headlines leads the average reader to conclude all is well in the U.S. economy.

42,000,000 U.S adults 50+ years old are BROKE! Did they count the homeless?

Hell, if you’re in the business of lending money to the masses, you might conclude that you should shut the doors, layoff all your employees, and open a yogurt shop.

Then, there’s this: The Center for Financial Services Innovation (CFSI), the “nation’s authority on consumer financial health,” together with AARP Foundation, a “national leader in the fight to end senior poverty,” announced the release of a new report based on the U.S. Financial Health Pulse report data that shows 83 percent (42 million) of the estimated 50 million low- to moderate-income people over the age of 50 (LMI 50+) living in America are struggling with some or all of the components of their financial lives.”

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According to the press release, this report, “Redesigning the Financial Roadmap for LMI 50+ Segment: New Challenges and Opportunities,” offers an in-depth look at the increasing financial insecurity of LMI 50+ and the major factors contributing to a more complex financial reality for them than for past generations.

This study revealed that the 50+-year-old demographic want to retire but can’t; they’re broke!

The bottom line according to this Report? It’s a B&*(((tch when you hit 50! No savings. Loss of home in 2008 – renting now, living with kids and grand-kids, medical issues [obesity]…

There was even an expose in I believe the NYT that revealed seniors are “on the hook” for their children’s student debt because Grandma co-signed. [Are you aware student debt cannot be discharged in a bankruptcy?]

The report identified specific financial challenges facing the LMI 50+:

The Report summed up:

  • More than half (51%) have liquid savings of less than three months of expenses, and only a quarter (26%) have an emergency savings account.
  • More than 6 in 10 (61%) indicate they don’t have savings in an employer-provided or individual retirement account. For those with savings in either account, the median amount is $20,000, far less than recommended for a comfortable retirement.
  • The vast majority (81%) have some amount of debt, with half (48%) reporting their debt isn’t manageable.
  • More than a third (36%) with debt report that their debt has delayed or prevented them from saving for retirement.

LMI 50+ Medical Shocks & Multi-generational Living

  • Overall, 38% had to forgo health care or medication in the past year because they couldn’t afford it.
  • Nearly a third (31%) indicate they’re supporting someone financially who lives outside of their household.
  • Households of three or more people report having higher financial stress (87%) than households with one or two individuals (82%). Of households with three or more people, 83% report that their financial stress leads to negative impacts on their family life.

Why is this important to you?

OPPORTUNITY! These folks need a multitude of loan products that work for them. The LMI 50+ demographic is invisible to the majority of lenders in the marketplace today

The Report goes on to state, this LMI 50+ Demographic:

  • Are open to using digital technology to manage aspects of their financial lives.
  • Appreciate being able to monitor transactions and pay bills online.
  • Care about security, but not in a way that limits the use of technology.
  • Desire relevant, actionable financial education and coaching for everyday financial management.
  • Use technology-centric innovations, but have different levels of comfort with high-tech vs. high-touch engagement.

FINALLY, for all my PC [that’s politically correct] readers, rather than attack check cashers, pawn shops, small-dollar lenders… while locking your gate-guarded community entrance tight, [Don’t look at me! We have a bridge, not a gate.] build a team, create a loan product that you define as fair, make some $$, give back to your community and help a little! PS: Don’t leave banks and credit unions out of your attacks! They are not the answer! And then, there are the money transfer businesses working with these banks who charge as much as $25 in fees to transfer $100 to El Salvador, the Philippines… Go Ripple, Bitcoin, Stellar, EOS… Crypto.

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