Welcome to Money for the rest of us. This is a personal finance show on money, how it works, how to invest it, and how to live without worrying about it.

I'm your host David Stein. Today's episode 323. It's titled The Economy is Not a Machine.

Yesterday Loprill and I were at a CVS pharmacy buying a gift card and the gentleman before us in line added $61.05

to a prepaid visa debit card.

He added that amount because there was a $4.95 fee to add money to his card.

Now I hadn't seen that before and I looked. These prepaid

Visa cards can cost up to $9.95 a month and $5.95 a month and $5 or more to

actually add money to the card.

That is extremely expensive.

Now, why would anybody do that?

Well, usually because they don't have a bank.

7.1 million U.S. households, or about 5% of the total, don't have a bank account

in the U.S.

It reminded me how different the interaction with the economy, the banking

system and money is for many individuals in the US who are extremely poor.

The recent US Consumer Survey by the Federal Reserve,

only one-third of lower- income families participated in the stock market,

compared to 70% of upper middle income families and more than 90% of families

in the top decile of income. Less than 40% of families in the bottom half of the income

distribution in the U.S. were in a retirement plan. Compared to more than 80% for upper middle income families and more than 90%

for families in the top desk of income.

I thought about this a lot over the Thanksgiving break as I was reading a book by Roger Martin.

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