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Pay Your Family First Network

ROUGH THOUGHTSJuly 27, 2007

David Carrithers

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High Level Observations

• Ton of information out there on Pay-Yourself-First (web, seminars, booklets)

• Most is very financial industry focused loaded with lingo, equations, industry terminology

• Targeting kids, novice savers, underserved • Many banking intuitions have information or tie in with

“charity & community good will” and PYF• Universities, businesses, financial planners all have an

angle or advance• Today PYF seems fractured, self-serving, abstract and

“OK now what” – lacking connection to action and ability

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High Level Observations

• PYF movement needs simplification and individualization of message

• Less about financial terms and equations and more about the end goal and goal attainment

• The average person needs to see, feel and desire the end result/ goal – once they embrace this they will move mountains

• Need to fit in with everyday life, the way we work, earn and live.

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High Level Market Indicators

Growth Of Acceptance Of Stored-Value Cards• The stored-value marketplace, which includes both prepaid debit cards and

merchandise gift cards, is expected to grow from a $216 billion market in 2005 to $650 billion in 2010, according to a report released by the Pelorus Group, a U.S. market research group.

• National Retail Federation Gift Card Survey, 2006– $24.8 billion: total gift card sales this holiday season – $116.51: average amount consumers will spend on gift cards this year – $88.03: average amount consumers spent on gift cards last year (2005) – 79.7 percent: consumers who said they plan to purchase at least one gift card this holiday

season

• Prepaid card sales at convenience stores jumped 68.5% in 2005, a phenomenal growth spurt by anyone's reckoning--and it looks like the next wave is prepaid debit cards. The entire prepaid market has a defined value of more than $2.5 trillion dollars, and the business-to-cardholder portion consumes more than $1.5 trillion of that, stated C Store 2006 Sales Trend Handbook

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High Level Market IndicatorsTo Keep In The Back Of Our Minds• The U.S. General Accounting Office has estimated that there are almost 60 million

unbanked individuals in the U.S., including approximately 24.2 million U.S. house-holds that do not have a checking account.

• Franchising, which employs more than eight million people domestically while generating retail sales in excess of $1 trillion annually, it is important to recognize that banking the unbanked into direct deposit can have a significant impact on the bottom line. This is true for franchise businesses and their unbanked employees.

• More than half of all workers in the U.S. use direct deposit in one form or another. Ninety-seven percent of employees who sign up for direct deposit are very satisfied with it and more than 70 percent of employees who have access, use it.

• Unbanked employees who are paid by paper check often resort to "check-cashers" or check-cashing services. These services charge as much as 8 percent of the face value of the check as a cashing fee. This is an expensive transaction, especially for those who can least afford it.

• Teens spend about $153 billion on goods and services each year, mainly with cash, according to Visa.

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Pay Your Family First Membership Program• Free to users: educates & provides path to action

• Web based enrolled membership program

• Family Savings Goal Oriented: either by

Family category, i.e. trip, college, retirement, home ownership or

Community oriented, i.e. church group, school, nonprofit or

Custom / personalized

• Downloadable software management tools (pay yourself first software)

• Includes ways to increase earnings potential, self payment tools, account management, etc.

• Allows for earnings to be accumulated, tacked and when ready applied to goals

Features Of PYFF Membership Program

Information & Tools

Web Community PYF Tools

Help In Capturing $

Account & Card

Accumulating & Appling Funds

Earnings Acceleration

Retail Partners

Goal Attainment

Assistance In Use Of Earrings

PYFF

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Earnings Accumulation

$$$ InPYFF Account

Pay Check

Bonuses

Retail Partners Shopping

Credit Card ProgramsDonations

Family Contributions & Giving

Fundraising

Tithing Loyalty Programs

Gift Card Funds ConversionBirthday Gifts

Wedding Contributions

Selling On EbayOvertime

% Of All Cash Flow

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Earnings Improvement & Build Up

$$$ While SavingPYFF Account

Savings Account

Investment Tools

IRAs/401ks

Mutual Funds

Etc.

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Goal Attainment

$$$ OutPYFF Account

Targeted Goal

First Home

Training

Debit Reduction

Church Need

Special Needs

Charity Program

Starting A Business College Tuition

RetirementCareer Development

Vacation & Travel

New Car

New Appliance

Purchasing Assets

Paying Of Home Loan

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Income

Expense

Asset

Taxes

Rent

Food

Liability

Job

•

Save

Invest

Family Member 1

Income

Expense

Asset

Taxes

Rent

Food

Liability

Job

•

Save

Invest

Family Member 2

Income

Expense

Asset

Taxes

Rent

Food

Liability

Job

•

Save

Invest

Family Member 3

Pay Your Family First Program

Diagram Concept From Rich Dad, Poor Dad Book, Page 174

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PYFF Stand ProgramStandard Web

Base Account & Card

PYFF Branded

Off The Shelf Program

PYFF Co-Branded Program Church XYZCo-Branded Web

Co-Branded Account & Card

Co-Branded With Charity/Church

PYFF Custom Program Financial Institution ABC

Custom Web

Custom Account & Card

Total Customized

PYFF Custom Program Business ZYX

Custom Web

Custom Account & Card

Total Customized

PYFF Personalized Program Nonprofit Standard Web

Base Account & Card

PYFF Branded

Limited Co-Branding

Pay Your Family First

Centralized Platform

Centralized Data

Centralized Accounts

Centralized Payments

30,000 Feet View

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Ideas On Revenue Stream

Network As Private Currency – Power of Accumulated Funds• Ability to accumulate and aggregate funds into a private network

and currency program (creates a pool of funds) – can invest, can manage and greater value, savings and returns

• Spending funds through a stored value card program with filtered redemption option allows for negotiating commissions with merchants

• Custom cards and materials allows for fee generation

• Data accumulation and reports

• Could develop a credit instrument for expense and liability management (capturing acquisition fees) and a stored value product for spending on asset accusation

• Provide way for asset conversation (things like gift cards, checks, loyalty points, etc.) into account – processing or conversation fees

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Ideas On Revenue StreamNetwork As Added Value – The Program Reach• Network could be developed so that it could be attached to other

financial and/or loyalty programs out there (i.e. enhancement to loyalty programs, banking programs, credit unions, credit card programs, etc.) – set up fees, issuance fees, transaction fees, interchange fees/sharing, etc.

• Custom Branding/White Label version – set up fees, issuance fees, transaction fees, etc.

• Corporate Benefit Programs – Allows for offering helpful benefits to employees, partners and others supporting a company - Membership fees, set up fees, etc.

• Credit Reports - Fees • Community Support – Allows companies to help people and local

communities and outreach programs – Participation and sponsorship fees

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Ideas On Revenue Stream

Network As Loyalty Program – Buying Behavior & Funds In• Allows for the support of existing card programs out there, tapping

into existing program earnings, rebates, etc.

• Develop retail partners and promotions that allows for the accumulation of funds

• Potential to develop a credit instrument (or charge card) that has favorable terms and again allows for the development of a loyalty program on buying behavior driving percentages to the PYFF account

• Promotion and publishing revenues and opportunities – merchant partners, supporters, etc

• Fundraising avenue – allowing for a platform to raise funds through a variety of fundraising channels, including scrip, products, etc.

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Ideas On Revenue Stream

High Level – To Be Shared With Members, Foundation, Partners

• Filtered Merchant Commissions - (3% to 30% Potential Based On Transaction Amount)

• Program Customization Fees - (Per Card Fee $1.50 to $5.00 Potential)• Credit Card Interchange Sharing - (10 to 30 Biases Points Potential)

• Accusation Commissions - ($25 to $100 Per Potential)

• Membership Fees – Sponsor paid or individual paid (Yearly, Monthly, One Time Potential $15 to $25 Per Potential)

• Bank or Partner – Sponsor Fees ($50k to $200k)• Value Of Money – Interest (TBD by market and type)• Promotion & Advertising – Fees (Per Click, Banner, Sponsored Magazine,

etc. $500k per year)

• Fundraising Tools/Products – Commissions (2% to 20% off face value)

• Loyalty & Partnership Marketing – Conversion of Points/Miles, Discount Off, etc. (TBD)

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Things To Drill Down On

• Ability to get lower income and/or unbanked to utilize PYFF concept

• Building trust between people who may live off the “grid” into a program that builds an account and data

• Those that are not utilizing direct deposit of payroll and how to improve this acceptance, which would improve the results

• Ongoing management requirements of the marketing, development, operations and support of this concept

• Making it easy to understand, easy to set up and easy to use

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Just A Start

Best In Spirit,

David Carrithers, Chief Bee Keeper

707-484-3620

david@businesshive.com

www.Businesshive.com