"The American Dream is a national ethos of the United States, the set of ideals (democracy, rights, liberty, opportunity and equality) in which freedom includes the opportunity for prosperity and success, as well as an upward social mobility for the family and children, achieved through hard work in a society with few barriers." Wikipedia
Today there are more and more invisible barriers and catch 22 scenerios that no matter how hard you work to achieve the American dream you don't have equal access. It is more expensive for education, home ownership, and transportation than back in our grandparents' or even parents' generations. Millenials have an average of $42,000 in debt. Mostly in credit card debt with interest ranging from 4%-35% (average 16% APR) before they even enter the workforce. Throw in the mixed bag of ways to earn enough money to pay for their American Dream including a regular day job, freelance jobs, temporary contractor, gig economy jobs like Uber and Lyft, just to keep up with monthly expenses and try to save for the future. The only catch is that traditional banking loan qualification process uses credit reports and very strict employment qualifications that leave most millenials 1-3 years paying high interest loans upto 35% to "build credit" if they are even approved at all.
Sure maybe 1-3 years to "build credit" isn't so bad... or is it?
[Millenials "don't really internalize the fact that they're really racking up a large amount of interest," Kent Smetters, a finance professor at The Wharton School.
Imagine if you were starting a business, or planning a wedding, or going to college, or all 3 at one time. Institutions are limiting access to personal loans that slow down the productivity of these individuals to start living their adult lives.
"Millennials (62 percent) owing more in debt than they currently have in savings, many young adults are holding off on getting married or having kids. According to the poll, 16 percent of 18- to-34-year-olds said they had delayed starting a family because of debt, while 14 percent said debt had forced them to put off marriage." www.Vice.com
If you had to wait 1-3 years before starting your next major life goal, you may be close to 40 before you can even try to buy a home or even think about having a family. It's really hard for young people to try to imagine their future. They are left further in debt and limited to renting vs building equity as new home owners and often paying crazy interest to get by that should be savings for emergencies.
What are the alternatives if institutions don't lend you money you need to start living the American Dream?
Again, No surprise it's very limited to more preditory lending like payday loans. The average interest rate on these short term cash advances is 400% interest. People just need a bank account and employement stub/deposit.
"Student loan debt very well could be exacerbating the week-to-week, month-to-month challenges that drive payday loan borrowing." Nick Bourke, director of consumer finance, Pew Charitable Trust. One in every 3 college students has had to take out a pay day loan just to pay rent or food in the US.
Another alterantive for the 75% of people who apply for personal loans are denied due to credit score is online Peer to Peer loans. This still has a strick credit score check but some are able to offer loans on higher credit risk applicants or "no credit" applicants somewhere between 16%-35%. These online Peer-to-Peer loans use algorithyms to match borrowers with lenders who are funding and investing in these peer to peer loans for return on their money. Here I suppose the high interest is at least going to individuals vs institutions. It's still not great for the borrower or helping their finacial future.
There is always the charity route, where you can publicize your story and why you need funds to achieve some important life event on a 0% fundraising site like www.gofundme.com. This requires you to market and promote your fundraising event and doesn't guarantee you will get fully funded. If you have ever been part of a fundraising effort, to do it right its a full time marketing job. Digital marketing is very expensive, as these site have gained popularity it's harder and harder to have your page to be heard and seen, much less funded. When you are in school full time, with part time gigs on the side to make ends meet, this is simply not a realistic or productive option. Afterall, you don't really want charity when you know you are fully capable and willing to work hard and pay your own way.
What if we could pool everyone together and have a new way we can help fund each other's life events? The goal of Life.Cafe's funding helps the individuals we fund achieve their major life goals vs. a vehicle designed to take advantage of the borrower. Now with AI data and machine learning Life.Cafe has a proprietary solution for a new kind of peer-to-peer loan. Life.Cafe is introducing the peer-to-peer buying power loan alternative:
- 0% interest
- NO credit check
- Pay a simple monthly subscription
How is this possible? "We midigate the risk on the back end instead of the front end." David Snelling, CTO of Life.Cafe. You can access the buying power you need at the precise moment you need it to accomplish your life goals.
What's the catch? It's not cash put into your bank account, it's buying power you can spend using a life.cafe credit card authorized at each step of your personalized action plan. At each milestone of your goal you will be given access to use your buying power to pay your vendor, products, or services with your Life.Cafe credit card. People need access to flexible financing and guidance on how much to spend and where. This is what buying power does, it helps you know how much to spend at each step towards accompishing your goals. You have one simple monthly payment and no interest. Imagine how this will change our lives forever! With Life.Cafe's AI technology, buying power will perhaps bring the American Dream to everyone within their lifetime.
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