Make micro-investing as easy and unobtrusive as possible and people will deem it “Worthy” of their time.
That’s the philosophy behind Worthy, a free, micro-investing app that allows people to grow savings without impacting their lifestyle, cofounder and CEO Sally Outlaw said.
Ms. Outlaw said Worthy was formed from her experiences in crowdfunding and finance. As the cofounder and CEO of peerbackers, she worked to help promote private offerings to investors while becoming a passionate advocate of the new methods of funding small businesses.
“I fell in love with the direct finance approach,” Ms. Outlaw said. “For years I was literally converting people one at a time.”
Ms. Outlaw said promoting alternative finance reminded her of the time in her career when she worked in film, as distribution was an issue with both industries. She was always directing people to these new platforms, but saw the sector struggle to gain mass acceptance. So she set out to develop a gateway that would introduce people to the world of alternative finance as simply as possible.
Users link Worthy to their debit or credit card, and every time they make a purchase, Worthy rounds it up to the next dollar. The extra money is put aside, and once it reaches $10, it is invested into a bond earning five per cent interest. Those bonds in turn support small businesses, who apply for loans secured by inventory.
I asked Ms. Outlaw about the public’s appetite for and knowledge of microfinance. Do they understand how quickly considerable sums can accumulate?
She believes they do. The Bernie Sanders campaign tuned many in to the significance seemingly small steps can have.
The basic concept is also easy to understand. Much like real estate, the most successful area of retail investor alternative finance, people inherently get the advantage of bonds, especially in the current market.
“People also understand five per cent interest versus .06 per cent nationally,” Ms. Outlaw said. “Five per cent interest is an easy message.”
In order for Worthy to succeed, it has to provide clear benefit while being as easy to adopt as possible, Ms. Outlaw said.
“The app tucks money away that people don’t even think about. What’s exciting for people is they open up their app and they see $350 in there.”
In one case a user amassed $950 in eight months Ms. Outlaw said. Users can buy additional bonds at any time, she added.
Worthy is developing educational materials that promote the benefits of micro investing, Ms. Outlaw said. The timing is good, as millennials are showing a strong inclination for social impact investing. If they can earn five per cent while supporting Main Street many will happily do so.
“One thing people do respond to is social good,” Ms. Outlaw said.