We think really that poverty stops where savings starts. —Chris De Noose
Would lower-income Americans hop on the idea of a prize-linked savings? It might not be a bad idea, according to Freakonomics.
In 2011, Americans wagered more than $58 billion in the lottery. Under a prize-linked savings plan, people won’t make straight bets. Instead the “bets” will be put into individual savings accounts. The interest from the money will fund lottery-like prizes each month. The idea gives Americans the excitement of a lottery, yet the safety of a saving account, Freakonomics reported.
According to studies by Peter Tufano, a Harvard Business School professor, Americans could come up with $2,000 in a month if they had to, although half said they couldn't. In poor countries, such as Africa and Asia, PLS plays a big role and could be dimed as a asset here in the U.S., according to the podcast.
"We think really that poverty stops where savings starts," said Chris De Noose of the World Savings Bank Institute, according to the Los Angeles Times.