Build wealth while you shop

A Reward program for Money Nerds

Ben Le Fort
Aug 14 · 4 min read
Photo by Jacek Dylag on Unsplash

As a society, we don’t save enough money. The personal savings rate in the U.S dropped to 6.1% in May 2019, which is down from 7.7 in January of 2016. This is a concern given the low unemployment rate and continued economic expansion we would expect savings rates to increase not decrease.

While it is clear most people aren’t saving enough money, America’s investing problem does not get talked about nearly enough. More than half of American citizens don’t have any money invested in the stock market according to a report from the Washington Post.

This includes direct investment in stocks, mutual funds and ETF’s and indirect investment through participation in a 401k plan.

This is how stock ownership breaks down by household wealth:

  • The bottom 40% own 0.5% of stocks
  • The bottom 60% own less than 2% of stocks
  • The bottom 80% own 6.8% of stocks
  • The top 20% own 93.2% of stocks
  • The top 1% own 40.3% of stocks

How can 80% of Americans who currently only make up 6.8% of investment in the stock market make up some ground? The simplest answer is that more people need to make investing a lifelong habit.

That is why I am excited about Bump, a new fintech app that rewards people with company stock while doing their everyday shopping.

How does it work?

  • Download the Bump app and link your debit and credit cards to the app
  • Select your favorite companies, brands, and stores that you regularly shop at
  • Spend money at these companies and get rewarded with stock in the company you shopped at or ETF’s

Let’s say you shop at Walmart on a regular basis. You would simply keep shopping at Walmart like you normally do and each time you make a purchase you would be rewarded with a “fractional share” of Walmart Stock.

Offering fractional shares is important because it would take a long time to see any benefits if you had to wait until you had enough credit to earn 1 full share. Sticking with the Walmart example, it’s share price is $114 at the time I write this so it would take a while to earn a share.

Say you have $10 worth of fractional shares in Walmart stock. If the stock goes up 10% your fractional share also goes up 10% and your $10 is now $11.

Most reward programs that brands offer allow you to earn up “consumption credits”. If you build up enough points you might receive a $10 gift card which can be used only at their stores. Once you spend the $10, your benefit is gone. Most people probably can’t even remember the last thing they bought with a gift card which says something about the value it has on your life. By being rewarded with stocks you are building a lifelong benefit that will only grow over time.

Why would a company want to give away it’s stock? In doing so they are giving away an asset for free. If you select a company to earn reward stocks in the Bump app, odds are you like their brand and their products. By becoming an investor in that company, you deepen your relationship with that company, and you are quite literally invested in their success.

You are now technically a “micro-owner” of that company and that will deepen your connection and loyalty to that brand.

My understanding is that the primary way Bumped generates revenue is by charging the companies involved a fee. This is important because this means it is the companies paying for this service, not you. While there is always the possibility of hidden fees, Bumped has been very explicit in saying there are absolutely no fees charged to the consumer.

Is Bumped going to solve all your financial problems and guarantee you become wealthy?

No.

Will Bumped help the 51% of Americans who have nothing invested in the stock market?

Yes.

The greatest value in this idea is that it can get people off the sidelines and become invested in the stock market. There are three primary reasons people do not invest in the stock market.

1. They don’t feel they have the money

2. They are scared they will lose their money if they invest it

3. They are lazy

By rewarding you with stocks for doing your regular shopping, Bumped addresses all three of these problems. Once people see positive returns from their “reward stocks”, they will be much more likely to invest their own money in the stock market.

I fully support any project aimed at getting more people comfortable with investing for the long term.


What do you think of this idea? Would you use this app? Let me know in the comments.

This article is for informational purposes only, it should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.

Making of a Millionaire

Stories about money, personal finance and the path to financial indepndence.

Ben Le Fort

Written by

Sharing my journey to financial independence. For freelance inquiries reach me at benlefort1988@gmail.com

Making of a Millionaire

Stories about money, personal finance and the path to financial indepndence.

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