Ethan Bloch founded Digit with the intention of making personal finance feel less like a daunting chore and more like an effortless task. In a world where smartphone apps rule, the answer was simple. We sat down (digitally) with Bloch to catch up on everything from the story behind the Digit name to the ins and outs of the industry that Digit occupies.
Grit Daily: You had your own adventures before Digit. Share those.
Ethan Bloch: I grew up in Baltimore. My obsession with personal finance started at age thirteen. I began day trading technology stocks with my bar mitzvah money only to lose it all two years later when the market crashed. I attended the University of Florida where I studied finance and started understanding that the human brain is not wired to make rational financial decisions.
After college, I moved to San Francisco where I founded my first company, Flowtown. The platform, which helped small businesses connect to email and social marketing, was acquired by Demandforce two years after its launch.
Then in 2013, I founded Digit. Since then, I have been on a mission to make financial health effortless by making managing money as simple and straightforward as possible.
Grit Daily: What’s behind the Digit name?
EB: An AI character named Jane in Ender’s Game series was some of the inspiration for building Digit. Specifically, in the short story Investment Counselor by Orson Scott Card, Jane helped solve complex stuff with his finances. I loved the idea of this helpful, friendly AI financial assistant, and after stumbling upon the name Digit it seemed to fit this well. It sounds like a friendly character in a sci-fi story but also indicates there’s something behind every number and how you got to it.
Grit Daily: What sets Digit apart from “traditional” savings accounts?
EB: It’s intelligent. Digit uses a proprietary algorithm to analyze your checking account balance, expected income, incoming bills, recent spending, and other personalized savings controls set by you to determine when and how much you can spare. Then, it sets aside a small amount of cash in your checking account into a secure Digit savings account and then allocates the appropriate amount towards each of your savings goals. Digit works on the idea that you save money more effectively when you don’t have to think about it.
Unlike traditional banking institutions, there’s no required minimum for your Digit account, and you can withdraw your money at any time. Your funds are also stored at FDIC-insured banks up to a balance of $250,000 and securely stored.
Grit Daily: For the uninitiated, what is guardrails?
EB: Guardrails make financial planning easy by offering you peace of mind, savings, and preparation for the future while providing you with financial control and protection. This includes overdraft prevention to avoid getting hit with overdraft fees, safe saving levels to ensure that Digit does not try to save below a comfortable checking balance, max daily save which allows you to control your maximum daily saving limit and a “pause” feature you can text to Digit and your saving will be temporarily stopped for up to 60 days at a time.
Grit Daily: What’s one conventional piece of wisdom about savings that’s just plain wrong?
EB: Some say, It’s important to get a job and start saving for retirement the minute you’re out of college. I would argue it’s more important to spend time thinking about what you want to do and improve your earning potential. If your goal is to want to relax, surf, and work hard so you can do that one day, it doesn’t cost that much to surf in South America. You could do that and still be financially responsible, even with student loans.
Think about how much you care about money and what that means in terms of a job. I’d still say figure out what you want to do even before you think about paying back your student loans. If you’re 21 or 22, spending the next few years deciding what you want to do will be more important long-term than making student loan payments for three years. When you get out of school, there’s so much pressure to pay your student loans back immediately, and that feeling can be debilitating. But the reality is you have time. Take your time so that you can make big-picture decisions that will work best for you.
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