Can you live without a bank account?

or getting drunk for that evening. Yeah, however it crosses over, I think it'll be proof positive that uh we endorse afternoon drinking, you know, yeah, you know, a couple of drinks, maybe it'd be bloody Mary. What were we talking about. Oh, yeah, we're promoting our show. Oh, that's right. So we're doing that show on January. Uh. You can go to the s F Sketch Fest website to get tickets and it's awesome. It's a great, great comedy festival. Lots of awesome shows

that weekend and for the following weeks. So I encourage you, like to buy lots of tickets just by ours first. Yeah, and hurry, hurry, because they're selling out fast. No joke, that's not a ploy. That's not as a marketing ploy. They're really selling fast. We get emails every time. Guys, you told me to hurry, I didn't hurry. I'm shut out. And since this promos petered out, it ends right now. Welcome to stuff you should know from how Stuff Works

dot com. Hey, and welcome to the podcast. I'm Josh Clark, and there's Charles W Chuck Bryant, and it's just us. We've been abandoned this week now. No one was in there for a second earlier, but it's like home alone. Ah boy, I love that movie. When it came out. Oh yeah, yeah. I thought the sequence, the big break in sequence where he had everything rigged that fifteen or twenty minute I thought that was one of the funniest things I've ever seen. It was a pretty good movie.

I just laughed and laughed and laughed. Was that a John Hughes movie? Yeah? Okay, makes sense that Chicago Suburbs setting he loved, Yes he did. R I P Chicago Suburbs alright, P John Hughes. Oh I see that makes way more sense. Yeah. It was just a couple of years ago, right, not too long ago, for sure, Within the last five I would say, Man, all those great movies, cry baby um in Flamingos, Nope, Apocalypse now, yeah, he's good. Oh wow. He passed away in two thousand nine, so yeah,

seven years ago. What No? Wow? Yeah, I thought it was way more recent than that. Time flies in a world without John Hughes, you know where time doesn't fly chuck at the beginning of our episodes kind of drag. That's funny. So today we're talking about the possibility, the potential of living in this modern American life, this modern world in general, without a bank account. Yeah, this ended up being a little more interesting than I thought it was gonna be. Oh yeah, I'm glad that was the case.

It was less interesting than you thought it was gonna be. No, no, but I mean we've had some of those before, Like jack Hammers comes to mind. That was better, it was going It was the opposite. I was like, wait, wait, wait, there has to be more on jack Hammers than this. Nope, that was your pick. Yeah, it was no forever bear that cross. So you would think that banks in general is ubiquitous and huge and powerful and um out of control as they are had been around for millions of years, right,

Terry maybe not millions, tens of thousands of years. Uh. It turns out actually the bank, the concept of the bank as we see it today, is actually only about five hundred or so years old. Yes, I would have guessed way older than that. Yeah, and I'm glad this article did a little history there, because I didn't know any of this stuff. Um, the first actual bank, kind of modern bank that we think of as a bank, was the Bank of St. George or the Banco the

San Giogio in Genoa, Italy or is it Genoa. I've always seen Genoa, Genoa, Genoa, Genoa. So that was um. And and they point out in this article that wasn't the invention of banking, because banking is different than a bank. Yeah, banking actually did start several thousand years ago, as far as far back as Mesopotamia and Egypt. And this article says that the that grain started to be kept in

temples in a grain bank, I saw gold. But the upshot of it was is that these temples that were built were basically sacrosanc the armies would protect them with their lives. So it would just make sense that if you wanted to store something extremely precious and valuable UM like gold, We'll just put in a temple, so the earliest reserve banks I guess you could put it, or temples in Egypt and Mesopotamia. And then one at some point some of the local people or local rulers came

along and said, hey, I really need some money. You guys have tons of gold just sitting in there. Can I borrow some of it? And then I'll give you that amount back plus a little more for letting me borrow it? And they said, why should we call this? And they call it banking. Do you know where that work came from? No? I don't either, because they probably didn't call it banking. They probably called it like sun crow or something like that. So, uh, let's go back

to UM in Italy. And this is when Italy had a city states. Oh wait, I had more, I had more. Yeah, it's it actually is kind of interesting. All right, Well, let me down the machine. Okay, yeah, just keep it idling,

keep on um. They so you had the initial banking practices, and they kept developing and developing, and then Greece and Rome really kind of took them and and went to town with them, and things like UM book transactions where you could go into a bank in one city in deposit some money, and the banquet handle credit arranging credit for you in another city, so you didn't have to travel from one city to another, which is very dangerous

with a bunch of money on you. It's a book transaction that came from like the Greeks and the Romans, and these were going to smoothly. And then Rome fell and it was replaced by the Holy Roman Empire, which was a Christian empire, and Christianity had this very strict rule against usury, and usury today means extremely high interest rates, whereas at at the origin of the word it meant just charging interests at all. So there was no money

whatsoever in banking UM, so there weren't any bankers. Well, the Jewish faith didn't have any rules against usury. So as the Holy Roman Empire was in in UH in power for these several hundred years, they fulfilled the banking UH industry UH until finally about the I think thirteenth and fourteenth century when UM, like the Italians started to get into it and they kind of created that that UM modern banking system that we see today. Can I get back in, Yeah? Can I? Can we go to

fourteen o eight, Yes, specifically March fourteen o eight. This is UM, like I teased before in Italy, this is the at the time of the city state UM, when you would go to war with one another within your own country UM. Specifically in this case, UH, Genoa was getting UH trod upon by Venice. Long long war with Venice big rivals. And basically as what happens many times in war is it's sort of bled that city state of Genoa dry and it was in bad shape. So

these folks got together. I did look it up. I can't remember who it was, though, the initial investors UM that started the Bank of St. George, and he said, hey, let's create this thing and like literally in a building, UH, it will be a bank and we can finance reap aim it of all these war debts UH and earn a little seven percent on top interest on top of it all. And in fact we got a better idea. Why don't we even have the power to go and collect uh city taxes and customs and stuff to make

sure we get paid back. And it worked, Yeah, it did. They brought Genera out of bankruptcy and apparently the bank went on until the nineteenth century, like four hundred years George, Yeah,

it is cool. Um. One of the reasons probably why it was successful is that the people who were overseeing it were directly invested into the bank, like substantially, Like if you were one of the treasurers, you had to um invest at least sixteen thousand lira, which is several hundred thousand dollars in today's money, um directly into the bank, right, So, so you wanted to see that bank succeed like crazy because you were directly invested in it, and if the

bank went under, you stood to lose quite a bit. That's that's not the case with banks today. I mean companies and I'm sure including banks too like their employees to be invested in the company. But certainly there it's not a requirement that you have several hundred thousand dollars worth of your company's stock to be a director of the bank. And then the bank itself can very easily

be overextended, um, just because of what are called reserve requirements. Right, we should do like a whole episode on banking, by the way, Yeah, boy, especially that that fall out recently with Wells Fargo. Oh about the fake um, the fake accounts, dude, have you seen the ad that they have about it.

They have this ad and it's almost like they shaved off the first five seconds where they admit that their people created all these fraudulent accounts, right, and then the ad comes in at everyone who has affected will be fully refunded. We want to gain your trust back. But they never say specifically what they're talking about, like they never cop to it. Like it's bizarre. You know that thing,

it makes it stand out like a sore thumb, you know. Yeah, it's an oily, oily, weasily add and they have it like it's you know, they've got the Wells Fargo guy like running in the background to distract you, to make you think about your childhood, playing with stage coaches and stuff, and Elizabeth Warren is somewhere like blood dripping out of our eyeballs. Yeah, yeah, for Elizabeth Warren circus two ten right, So yeah, no, I mean she's watching the commercial and

crying blood tears. No, I'm saying, Elizabeth Warren circus, who's who doesn't ten would have? I think these days she's like whatever, No, man, she laid into him? Oh did she go after him? Oh yeah, yeah, you gotta see that that video. That was pretty awesome. Well, good for her. When was that may oh, when when she lambasted him? Yeah, it was right after it happened. It was like, you know, a month, a month or two ago, okay, because I feel like she was a little more lionized in the

last several years than she has been lately. Yeah, I mean she she went after specifically. I mean she just read the riot Act to the CEO. That's good, and was like, are you going to give back your bonus money? Like this happened on your watch? Why don't you give that money back? He was like, who are you talking to me? But one of the one of the things I wanted to say though about banks, um that that is just such in such stark contrast to the idea

where you used to have to um contribute your own money. Um. The reserve requirements of banks. I was looking into this, Chuck, you ready, if if if there's a ten percent reserve requirement of um that a bank has, and they they have a hundred dollars, they can loan out ninety of that hundred dollars to somebody, right, Okay, so they have a ten percent in reserve. Now, let's say that that person um writes a check for that ninety dollars, like they borrowed that hundred bucks to um to, or they

borrowed that ninety bucks to pay off a debt. So they write a check for that ninety bucks to somebody who banks with that bank, So that ninety bucks comes right back to that bank, right they they can loan of that, and so on and so forth until this one hundred dollar chunk can be like loaned and repaid and loan and repaid all over the place, which makes sense, and it keeps everything kind of going um financially. But the problem is that if something happens, if a panic

sets in. This is why runs on banks are so um such travesties, and everybody calls in their loan all at once. Well, there's a lot of people who are calling in that one single hundred dollar hundred dollars rather than having the time to pay to to to pay it back and then call it in from somebody else and use that to pay the other person back. It's just a big cluster all at once. That makes sense.

That's just one of the many interesting things about banks. Yeah, I mean, there are clearly other podcasts that we should tie to this one, I think, but since this one is about not banking, we'll take a break. Here, go withdraw our funds, and we'll be right back. All right. So, if you live in modern society today, uh, it is pretty tough to get by without a bank. Um, most cases these days, you have well I don't know about most cases, but in many cases you have automatic deposits

of your of your work checks. A lot of people pay their bills wirelessly online directly from their bank. Uh. You might have a student loan, you might have a car loan, you might have your house mortgage, you might pay your credit card bills. All of this stuff is running through a bank most likely. And you would think it's probably impossible to not have a bank account these days. And I would say pretty much all Americans have them.

Not true, You well know, pretty much all Americans do. Like, yeah, but that's not all. No, No, it's true. Yes, seven percent of Americans do not have bank accounts. About nine million people last year in two thousand fifteen did not have bank accounts. Not million peoples, a lot of people. No, it really is, um, and apparently that's that's households, sorry, not people. Yeah, you're right, you're right. That is a

big distinction to UM. And the f d i C said, man, that's the lowest since we've been tracking this by far, And someone said, well, how long have you been tracking this? They said, well, of the last six years really yeah, which I'm like, really that's when they started tracking it. But apparently so two thousand nine. So if you want another number, that's the nine million American households don't have

bank accounts at all. Uh. Then there are twenty five million households in addition to that, so that makes almost that's like thirty four million households, which that's a substantial number at this point. The twenty million or what's called underbank meaning they may have a bank account, but they

don't use the bank account. Yeah, they don't use it because, UM, they are probably afraid of overdraft fees, or they have uh, maybe a bank account that got grandfathered in so that they don't have to pay minimum amount fees UM and who knows. There's all sorts of reasons for people to not use a bank account that they they have, UM, but probably chief among them is overdraft, which you'll talk

more about. Yeah, and the majority of these underbank people in the United States are poor usually um, A lot of times, their minorities, a lot of times they are less educated. Um. And these communities, I mean, there's there's a few reasons why they may not want to use a bank. One, maybe they don't trust banks. And if you look in the history of the United States, are certainly even we're just talking about the Wells Fargo scandal. Like when you see stuff like that on the news, um,

it should be upsetting to everyone. But obviously if you're poor and you don't have a lot of money, that will that may scare you into not wanting to use a bank at all, right, you know. Yeah. And another one is that the overdraft fees, which so basically, I guess in two thousand one, the current overdraft fee idea scam you could call. It was set up as a way to generate like way more money for banks, right.

And the way that overdraft fees generate money for banks is when you are overdrafted on your account, they can charge you a fee for covering that amount, right, and then you still have to deposit that amount, but they don't return your check. They cover, They cover the check that you paid, but they charge you a fee, say like thirty five dollars for that amount. And it seems fine and dandy and everything's fine. But there's something called clearing checks from high to low, right, okay, where the

bank will clear checks in descending order of value. So if you have of UM a hundred dollars in in your bank account and you have a checkout for a hundred and fifty dollars, check out for twenty dollars, to check out for five, and to check out for fifteen dollars. Right, if they cleared the lower amounts first and then the last one, only the last one would bounce and create an overdraft fee. If they start with the bigger one, well you've got an overdraft draft fee right out of

the gate. But then you also have three more because the other smaller checks all bounced as well, and so instead of one over draft fee, they get to charge you four overdraft fees UM. And that was a huge thing when when that was finally reported and exposed, and that actually resulted in that UM rule that now you UM either I think you have to opt in for overdraft protection, whereas before you had to opt out. Yeah.

I remember back in the day when I was broke as back and I would overdraft things in there, I remember, and I knew nothing about how things worked with finances. Still don't really, but um, I just remember thinking, like I would rather it's say no, you you like, don't cover me and then charge me. Just just say no, you don't have the funds, right, that's the smart way

to do it. So I never understood, like it was like I think they even called it overdraft insurance maybe at the time, or I might be making it up. I seem to remember them saying that, and I was like, I don't want that, like just to like let the check bounce and I'll take it up with them. Yeah. The way it was marketed though, was like hey, we we we value you. We want to make sure that you can pay all your bills. So if something happens and you're overdrafted, we'll cover it. We're just going to

charge you a fee. And it sounds good. But again, when you go from high to low and all of a sudden your overdraft fees go from one to four or five or however many, um, you know, that's a huge problem. Well, and the people that are overdrafting in the people that are at least able to afford those fees exactly. So it's a disproportionate burden on the poor, which makes it as a scam, one of the more

evil scams around. Yes, it's just wrong man. So so yeah, the idea that that if you are if you open an account, you should not opt in for overdraft protection. And that's easy to say when when you're talking about checks for like, um, you're writing a check for a mountain dew and some cheetos, you know, who cares if you if you're if you're short for that, you can

go without that. But you know, when you're talking about like your rent check or like an actual grocery bill or something like that, you know, it sucks that that you can't get that stuff. But it's better to have to put a couple of things back than to pay thirty five dollars for one two dollar item that that you went over by. Yeah, that's a good point. And

this was in my case too. This is also back in the day when you uh, I mean a lot of times it was a mystery how much you had in your account, Like you couldn't just get on your phone and and before you write the check and be like, oh, well, no, I don't have enough money to cover this. Yeah, because even if you balanced your checkbook, sometimes you forgot to carry the one like it wasn't always a d percent in accurate. And if you had a life, you didn't

necessarily rectify your bank checkbook every day. Oh wait, what is balancing a checkbook means? Serious? Yeah? Thank god for my wife. Um. So another reason you might avoid a bank, uh is philosophically. You may um, you may have that there may be a longstanding distrust of banks in your family that you don't want to put your money in. Or you may just want to be like, you know what, I don't want to take part in this modern society.

I want to kind of drop out a bit. And a really good first move is to shut your bank account down. That's a big statement. Oh yeah it is, you know, but a lot of people that are under banked and don't have accounts aren't. They're on purpose. It's not some philosophical statement. A lot of times is simply because uh, they are poor and they don't have a lot of alternatives. Yeah. And the other thing about um

about not having a bank account. Not only do you not have a bank account, you also are like basically just avoiding banks altogether. There's plenty of other things that banks offer, like loans and mortgage stuff like that. Yeah, yeah, maybe some free nasty coffee UM. But the so when you're when you don't have a banking account, that's like the the most basic unit of the banking world. Right.

If you don't have that, you obviously aren't going to be exposed all these other things that can help things like um build your credit history through like a revolving loan UM or a mortgage or a car loan or something like that that you can build up your credit for and ultimately save money. UM. So when you don't have a bank account for whatever reason, you are effectively

out of the banking system. The problem is, you can live parallel to the banking system outside of it, but it can be really dangerous, especially if you're just dealing with cash, because that cash has to stay somewhere, and whether it's on you or in your mattress or in a coffee can in your backyard, you're you're exposed for for having that UM readily available to anybody who finds it or comes into your house with a gun to get it, which is another thing that sucks. Yeah, there's

no insurance for that. You know, if you lose your cash, you lose your cash. So one thing that people rely on sometimes these days as an alternative source for a loan at least is something called a payday lender. You might have seen these little brick and mortar shops with UM with the the neon sign in the window. Cash now available to you, uh X business day stuff like that. UM, you can you can go to these places. It's a

quick application process. UH won't affect your credit score sometimes UM that you know, they'll say that if it doesn't, and you can get money like the next business day. If you want three hundred bucks, you can go in there and get three hundred bucks. But you're gonna pay a fee on that UM and it's big, they say, the fees if you pay back within eight days, it works out if you if you put it on a scale of a p R annual percentage rate of like

three d is what you're paying on that loan. I saw one for a hundred dollar loan on cash net usas site. UM for a one hundred loan pay back in eight days for their flat fee and the interest you pay six It's one of those things, man, when you see this and you're like, man, how can you not look at it as bilking poor people out of more money? Well, some people who use payday lenders say, hey, if you look at this, you when you look at

their rates in terms, it's all laid out. It's not some crazy percentage I have to figure out and come up with compounding interest or anything like that. It is it says, if you borrow one hundred dollars, you have to pay us back one hundred and fifteen dollars. There's a like a ten dollar service fee, and then for a hundred dollars it's five five dollars in interest. Right, So that's what you owe us is a hundred and fifteen dollars. It doesn't require a lot of thought, a

lot of um. There's not a lot of wiggle room for them to um to add more fees or anything like that. It's you know what you have to pay back. But that said, they they very quickly can comprise a trap payday lending trap that people get caught in, especially

when they start rolling over loans. Yeah, and you know when I said it's like hard to not look at it that way, it's because it's it's not like it just feels like, hey, these people have their backs up against the wall and they really need two hundred bucks exactly, so you can come get it from us. But then of course there are another complete other set of people that say, yeah, dude, that's the deal, and you know what,

don't use that place then right right there. The thing is that some people are saying, Okay, that's a that's a valid philosophy, but you need to have an alternative that's fair for people, because people need loans, people get overextended, emergencies come up, there's just things that people need money for legitimately, and like they shouldn't have to be preyed upon. So one of the alternatives that's been proposed is to get the regular standard banking industry involved in small um

short term loans. Is what a paid a loan is um and six to ten times less, right exactly. But you would, as far as the bank's concerned, the customer would still be paying way more than what the standard APR that a normal bank charges, but to the customer it would be way less than what they're paying to the payday lending place. UM. I'm not sure why banks aren't into this yet. I don't know. I got the impression that there might be some regulation that prevents them

from being involved, or they're just not interested. But that seems to be the key, because that also would seem to be a pretty good gateway to getting people who wanted to have a bank account into the banking um network by starting out with a small a small loan. You know you would think so you would? UM? What else? Prepaid credit cards? Those are more and more popular these days. You can get them at a convenience store. You can load money onto it, use it like a regular old

debit card. What I say, credit card, debit card, and it's just what you think it is. UM. Here's the deal with those is uh? They are really really easy to scam. UM. In two thousand thirteen, the Federal Trade Commission got eighty five thousand complaints totally forty three million dollars in in scam frauds with debit cards. What do you mean like, there's no they're they're almost impossible to track anything after purchase, impossible to trace. So it's it's

really easy. It's like a prime opportunity for someone to to scam someone. Like if someone says, hey, uh, we request payment from a prepaid credit debit card, then once they have that information, they can just go use it. And it's not like they have some bank behind it that can trace it and track it down and it's it's it's just a really easy way to scam people out of money. UM. And that's just one of the

problems with them. Well, despite that, the UM they've grown incredibly in popularity in the US Between two thousand three and two thousand twelve, the amount deposited I'm prepaid debit card went from one billion to sixty five billion dollars between two thousand three and two thousand nine years up to sixty five billion dollars right from one billion UM.

And this this despite the easy scam ability, but also getting kind of scammed by the people who legitimately run these prepaid debit card companies, Like apparently there's fees for everything from like loading your card, which you usually do it an a t M, using an a t M, checking your balance. Um, there's just a lot of additional fees that really kind of quickly sapped the amount of

money on your prepaid debit card. So fortunately UM, the Consumer Financial Protection Bureau stepped in and as of the last month, is it December yet? Okay? So as of October of two thousand and sixteen, there's new rules that say that if you are prepaid debit card company, you have to disclose your terms up front. You have to let people UM find out their balance for free. UM cuts on on some of the fees. They have to opt. They have to be able to UM have the option

to not have overdraft charges, overdraft protection. It's a lot. It's a lot more regulated now as of last month. Yeah, but I wonder what if it's the same thing as like banking. If they they're like, sure, we'll disclose that in a fifty page document and that no one ever reads. Like what they need to do is say how they need to disclose this. Yeah, that's true. Some guys to come to your house, maybe bring a little dinner and

and just tell you straight up. All right, I got a little worked up, so I'm gonna go splash my face with egnog and how many right back after this? All right, Chuck. So let's say that you don't feel like getting scammed by anybody. Nope, you just want to be free. Yeah. Uh, what what can you do? What are some of the things you can do? Well, um, there are a few things that you can do. You can try an alternative currency. So if you want to be really weird dollars, that's what you mean. No, I'm

talking about Well we've talked about bitcoin. Um, is that even still a thing? Did that go out? No? No, it's still there's much a thing. Yeah, okay, I didn't. I think it's just maturing and growing constantly. So we did an episode on bitcoin. But I had no idea that there are alternative currencies in communities all over the world, but right here in the US and had no idea. And it's a really cool thing, I think. Yeah, like

burk shares. You looked into berk shares, right, Yeah, burke Shares a very clever name because it is a western Massachusetts and the Burke Shears launched in two thousand six. Uh. They have sixteen branch offices and four local banks that support where you can actually get a berk share trade in your money for burke shares um four hundred participating businesses. So here's here's what it is, and in fact, I'm even gonna read directly from their website because it just

makes a lot more sense. It can get a little convoluted. Can we get some background music? You probably should something berk Shire. So there's a five percent discount, and here's how it works. They follow a hundred dollars UH through a day to explain it. So wait, tell tell us when you start the quote. Right, ready, here we go. You go to a bank and you purchase your birth shares because you want to go to a restaurant that night.

Let's say, Uh, you go in with ninety five U S. Dollars and you say I would like to exchange of this, So they give you one hundred birth shares back. Yeah. Right, So you go to your dinner, your dinners, let's say a hundred bucks right on the nose. The restaurant takes your birth shares, takes all one hundred of them. You pay your whole bill and your birth shares, and so you have actually spent ninety five U S. Dollars for a one dollar meal. So you've gotten your little five

percent discount. Then the owner of that restaurant has that hundred birth shares they want to deposit that for real money, or let's just say us dollars, return them to that bank. They bring him to the bank and the bank deposits that hundred birk shares and gives the restaurant the ninety five dollars, the same ninety five bucks that you exchange.

So in the end you get that five percent discount because all because of that initial exchange, that same ninety five dollars you traded for the Berkshires goes to the business where you spend it. Yeah, So that's yeah, and that's that's the key to this whole alternative hyperlocal currency is that it's intended to keep goods and services and within the community. Yeah, because you can't go spend a Berkshire anywhere else but the Berkshires. They'll say, what is

this weird looking bill? Where are you from the future or something? And it's actually very cool looking. It's not weird looking. I looked it up. The one Berkshire unit is uh Mohican, the original inhabitants of the Berkshires. The five is W. E. B. Dubois born in Barrington. The ten is Robin van In, co founder of the community supported Agricultural movement Indian Line Farm. This just keeps getting better. The twenty is Herman Melville, awesome, author of Moby Dick.

Of course. The fifty is Norman Rockwell. Is it a Rockwell painting of Rockwell? No, it's just Rockwell. And then the one thousand Berkshire it's a photo of him drunk on account. Yeah, pretty much. The one thousand Berkshire is John Hodgman. Yeah, he's the National Treasure, not just the Berkshire Treasure. Now I'm just kidding. There is no one thousand. But it's cool. They have their own money, and it's like it just is a really really cool thing, like

you're you're spending. There's, like I said, four hundred participating businesses, so it seems like a really successful program. And there's a lot others. There's the Toronto Dollars, Salt Spring Dollars, Ithaca Hours, uh, but the Berkshire seems to be like one of the more robust programs. Yeah, I mean I had heard of it before. I hadn't heard of the

other ones. I think Detroit has one as well, um, but the Berkshire's i'd heard of before, so it must be doing pretty well well And this is nothing new. In the early, like into the early nineteen hundreds, local currencies were a big thing. Oh yeah, like every bank could legally print money for the federal government finally said no, we're really the only ones who can print money. And there were I think like a hundred or a thousand or ten thousand or some ridiculous amount of currencies in

the United States up until like the eighteen sixties. Yeah, that's crazy. What about the m paisa? Have you heard of that before? I hadn't heard of that, but it's it's really pretty cool as well. So m paisa is stands for mobile paysa paysa means um money in Swahili, and it's this kind of new alternative currency that's um come up in Kenya in the last few years, right right right, I forgot that part. Um. So in Kenya most people don't have bank accounts, but they do have

cell phones and they rely on cash a lot. Well. As we said before, cash can be very dangerous. There's all sorts of bad guys out there who need or want cash for their own But I don't feel like, you know, going out and doing anything for aside from robbing somebody, right, so cash is dangerous no matter where you are, and uh and and pays. It gets around that by allowing the people with the cell phone. I think it's the country's biggest cell phone provider who's created this.

And you can go to one of the cell phone company's kiosks. There's like a hundred thousand of them around the country, and you can say, here's some money, I'd like it deposited as credits on my phone, and all of a sudden you have a phone full of money. Well, the cool thing is you can take that money and transfer it via text to somebody else's phone, and it's as simple as that. It's as simple as that. You go load up your money or your phone with some money at a kiosk, and then it's up to you

to spend that money however you want. And you can use your phone to pay things like um for groceries, for water, for goods and services, all using your phone. It's basically what everyone who's thinking about the future of money thinks of when they think of the future of money. That there's not gonna be dollars or anything like that's all to just be credits associated with your name. In this case, with the m PAYSA and Kenya it's associated with your phone number. Yeah, and it's a big deal.

Now it's not just in Kenya, it's in Tanzania, m Mozambique, Egypt, UH, Sootho, Ghana, India, UH Democratic Republic of Congo, and then even in a couple of Eastern European countries now Albanian, Romania. They don't think it will spread west but you never know. It's a much bigger deal than anyone thought it was going

to be. I think, well supposedly the the there's a big push to keep it from spreading westward by the banking industry because one of the things that makes it so attractive is there's really low overhead involved in this and so the the self, the cell phone company is charging very little interest or fees, so it's way cheaper to borrow or get or use money through the m pays the system than it is through traditional banks. Apparently m pays is just kicking their butts all over the place. Yeah.

And of course what has happened then is that the banking lobby has started barking all over the world to block things like MPAs are from coming into their markets. Yeah, that's what I'm saying, because they would just completely undermine them. And again, this is basically the future of money. That there's credits associated with your name, which I mean if you if you bank virtually online, um, where you your get your paycheck electronically and you pay your bills um

over over websites and all that, like, that's you're already there. Basically, it's just dressed up to kind of look like what you think of as money too, but it's still it's just credits and numbers associated with your name and in this case bank account numbers. This is just with your phone, and it also removes the bank because it puts it on your phone. So it's up to you a lot more closely. Shout out to our our episode on currency. Yes that was a good one. Shout at um. So

then there's this other thing. If you want to get a little more hippie dippy even um, if you thought berkshires were crunchy, prepare for the Yeah, I get ready for time banking. Uh. Time banking is a thing where you uh, it's a given give and take an exchange of services, with the core principle being it's all equal. So if I babysit for your kid, you build my deck, and the hours are the same that the the value per hour is the same, right, no matter what you're doing,

it's a value. It's a an hour of your time and effort. So it sounded kind of cool. It's like a barter service exchange where basically all you have to do is get people to agree on that core principle and then you have kind of the same cool thing going on in your community. Um. So I went to their website and there's these little there's a map if you can view by map, like the places where you

can time bank, and I clicked on. Boy, I feel like I clicked on about fifty of them, and none of them had any activity within like three or four years. I could see that. So I don't know if time banking took off like they thought. And so then I thought, you know what, maybe I'm looking in the wrong places. I was like, let's go to like Burlington, Vermont, And sure enough, Burlington had had some time banking going on in like the last week, but other places in Vermont didn't.

I was like, let me go to some really crunchy towns, and a couple of them looks like they were still using it. But it doesn't look like I don't know when this article is written, but I'm not sure how viable it still is. Well, I mean, I like the the sentiment as a concept. It's cool. But but I mean, is are all hours of there, all types of effort equal?

If you agree that they are, they are? I mean, yeah, sure in that case, for sure, But I I it just seemed ripe for introducing like um leechers and and hard feelings and resentiment and stuff like that. Yeah, I got is he like, well, you fix my fridge, I'll I'll watch your driveway. What do you mean you know, I'll stand out there and watch it, make sure it's good. I'm a driveway watcher. It's an hour. Did you say challenge? Did you say washer? No? No, no watcher. Rain Showers said,

we can't challenge each other's hours. Uh. And then we got to finish up with this dude, Mark Boyle, the moneyless Man yep, which I thought this was pretty admirable. Yeah, he's He's written a couple of books, one called I think the first one was called The moneyless Man Colin A Year of Free Economic Living, and then a more recently, one called What Have I Done? The more recently called The Moneyless Manifesto. Uh, both of which are available for

purchase unnoticed. But the money doesn't go to him. They just dump it into a landfill and it goes to him. But in his uh, I don't want to slag him. He does offer it completely free online. Oh that's cool. If you want to read it for free, uh, it said, or if you'd like to support the author, you can buy the paperback. So he was, Um, he basically just said, I'm gonna live without money for three years. Yeah, it's like an experiment. He's like, Uh, have you ever heard

of a J. Jacobs? Is that the guy who traded up from a paper clip to a house? No, he's just uh, he's a writer in uh in New York that has done Um. I mean I think they call it stunt writing, which cheapens it a bit. I think because he's awesome, but um, yeah, he'll do things like he did one called the Year of Living Biblically, where he completely just lived according to the Bible's practices and

stuff like that. So a J like is probably down with this Mark Boil guy, because a J lives in New York, so he wouldn't live moneyless, No, I don't. Yeah he Mark Boyle went out to the woods, right, Yeah, well he a j listens to the show. Oh hey, um so this Mark who Mark Boyle may listen to

the show. Who knows if it is free? Um? But he uh he went out and lived in the woods and sustained himself through farming, foraging, em bartering, right and um he basically just said like like money doesn't exist to me, not like, uh, you could give me money and I can use it for something like that. Like he just didn't use money at all. And apparently he said he was way happier during this time, like it

made him more creative. He had to get by with his personality or on his personality, so had to make sure it was a good one. Yeah, that one that really jumped out at me is something beneficial? Like I didn't think about that. Like he literally was, like my currency was was me and my character, And how can not work on that if that's what you're counting on? Can't be a jerk to everybody, right, you know you gotta like you gotta be a good person. Yeah, No

one wants to give a jerk. A free bag of carrots. You know that's a T shirt. Sure he's Irish by the way too, which means he's a great person. Right. Maybe he was at our show in Dublin that wasn't free. No, I guess he could have snuck in this theft count. I wouldn't mind. He would have had to have explained himself that we take stow aways. We do. Don't encourage that. You're like, we didn't talk about this. Ah, you got

anything else? I got nothing else. Let's see, don't feed your baby's junk food or alcohol wise words across the board, yes, no matter the episode agreed. If you want to know more about living without a bank account, you can take those words in the search bar at how stuff works dot com. And since I said how stuff works, it's time for listening amount. I'm gonna call this uh cool email from cool Kid. Hey guys, I am Ryan uh

Gun Sorrowsky. I'm sixteen years old. I don listened to your show, UM since two thousand and ten, when I was just ten years old. Absolutely, I wanted to email you guys for so long, UM, and I'm finally doing that.

I found your show through my cousin, and when I first started listening, I downloaded all the podcast to my small iPod, all that could hold, and I listened almost every night before I go to sleep or to go to sleep with wonderful learning and entertainment, and you two are masters of So I like this kid all over the I do too. Last year, you came to Philadelphia for the live show on Public Relations and I was there. I was in awe to see you do your show live.

When I was there, I got me thinking I should complete my task of emailing both of you. So he came up with an idea and how to share his story with how he's diagnosed with type one diabetes on August seven, fourteen. He said, with that came a different world than the one I knew before. It was tough, but I knew that others would Type one. I've had it so much harder than I. I'm doing well and

I'm healthy, which is something I'm proud of. Another reason I'm writing is maybe you could take this on as a topic, maybe a two parter, Type one as one part in Type two as another. Not a bad idea, not a bad idea. The reason I want to make that request is that a lot of people don't understand the difference between the two and you two being the best at explaining things that I know. I thought you could totally explain it excellently. Man, this kid has mastered flattery.

He's the best. He's I like this guy a lot. You have shaped my mind. You too, have shaped my mind from the very start. Keep doing what you're doing and keep being the best. Much love, Ryan gunt Siowski from Pennsylvania. Thanks a lot, Ryan, We appreciate that. If you want to put this on listener mail, I wouldn't mind. Wink wink, nudge nudge. What a cool guy. Yeah, he's a cool dude, Ryan. We appreciate it. We will put that on the great list of ideas and maybe we'll

do that one day. Yeah. And you know what, Ryan, if we ever come back and do a show and Philly or anywhere near you that you can get to you my friend or on the guest list. Nice, You'll just have to remind us of that hi writing us and saying hey give me free tickets in the subject line. Chuck will be like, wait, who are you? You will have to show us some idea, though, because there's so many people who will try to fake it. Now, yes, and you will probably have to come with your parents

and that'll probably be the tickets are left thunder. Okay, so we've hammered all this out. This is a thrilling end to this episode. If you want to get in touch with this, like cool dude, Ryan did, you can tweet to us I'm at josh um Clark and then the official s y s K one is s y s K podcast. You can hang out with Chuck on Facebook at Charles W. Chuck Bryant or Stuff you Should Know.

You can send us an email this podcast at howstuf Works dot com and has always joined us at our home on the web, Stuff you Should Know dot com. For more on this and thousands of other topics, visit how stuff Works dot com