This single act would help many Americans reach retirement savings goals — Robert Pozen

MIT Sloan Senior Lecturer Robert Pozen

MIT Sloan Senior Lecturer Robert Pozen

From MarketWatch

It’s true for everyone: despite our best intentions, we often fail to accomplish what we set out to do. When it comes to retirement investing, millions of Americans do not meet their own declared saving goals for retirement.

As a result, almost one-third of the U.S. population has no retirement savings at all,while many others will fall well short of what they will need for their Golden Years.

A solution can be found in the field of behavioral economics, which suggests ways tohelp Americans start saving. It seems that saving is a lot like dieting — small changes can help you reach your goal.

For example, many studies have shown that being automatically placed in a savings plan dramatically boosts participation by employees — even if they can opt out.

These studies show that when an automatic savings plan is introduced with an opt-out, 60% to 70% of employees remain in the plan. This may seem like a technical nuance, but there is a big difference between opting in by completing an application versus choosing not to opt out.

A plan designed to take advantage of this behavior is called an automatic IRA. In the same way that many people fail to start saving, those placed in an automatic IRA simply fail to stop saving by withdrawing from the plan. Automatic IRAs help people build their savings using the power of inertia.

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We Put Financial Advisers to the Test–and They Failed — Antoinette Schoar

MIT Sloan Professor Antoinette Schoar

From The Wall Street Journal

The world we live in asks us to make an abundance of financial decisions every day. These range from the inane, such as whether to risk a parking ticket when you stop for one minute to drop off your dry-cleaning; to the highly complex, such as which funds and investment products to pick for your retirement savings.

All of these decisions require risk-return tradeoffs. Unfortunately, while people have many opportunities in life to perfect their strategy concerning parking tickets, the same is not true for the complex and all-important decisions of how to invest retirement savings. By the time you learn whether a retirement strategy was the right choice, it is usually too late to change it.

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VC investment slowdown: an important test for equity crowdfunding — Christian Catalini

MIT Sloan Professor Christian Catalini

MIT Sloan Professor Christian Catalini

From The PE Hub Network

In 2015, venture capitalists invested $58.8 billion in the United States, topping the figures for the previous two years by a substantial margin. In 2016 investors have been substantially more cautious, and if the current slowdown is a course correction rather than a blip, it will also be an important test for the nascent equity crowdfunding market.

Many equity crowdfunding platforms have sprung up, including AngelList, FundersClub, Wefunder, OurCrowd andSyndicateRoom.

To succeed, these two-sided markets need enough good investors to be attractive for entrepreneurs to post their ventures, and enough high-quality ventures to be worthwhile for investors to spend time and capital on them. If early-stage capital becomes tougher to obtain, only platforms that are surfacing high-quality deals and matching them efficiently will be able to keep growing.

Lead-Crowd Syndication

A particularly interesting feature within the equity-crowdfunding world involves syndication between the crowd and a lead investor. Platforms that have introduced syndication, like AngelList and SyndicateRoom, have done it to address the problem of information asymmetry.

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Twitter Chat recap with Georgina Campbell Flatter — #MITIdea2Impact

Georgina Campbell Flatter, MEng (Oxon) SM, is the Executive Director of the MIT Legatum Center for Development and Entrepreneurship at MIT and Lecturer in Technological Innovation, Entrepreneurship, and Strategic Management at the MIT Sloan School of Management

Georgina Campbell Flatter, MEng (Oxon) SM, is the Executive Director of the MIT Legatum Center for Development and Entrepreneurship at MIT and Lecturer in Technological Innovation, Entrepreneurship, and Strategic Management at the MIT Sloan School of Management

The MIT Legatum Center for Development and Entrepreneurship together with the MIT Sloan Office of International Programs (OIP) will bring together entrepreneurs, policymakers, and philanthropists from around the world next week to accelerate global change through innovation-driven entrepreneurship – a powerful mechanism for alleviating poverty and generating prosperity.

MIT Sloan Experts participated in a Twitter chat with Georgina Campbell Flatter MS MEng, Executive Director, MIT Legatum Center for Development & Entrepreneurship, Lecturer in Technological Innovation, Entrepreneurship, and Strategic Management and  Chris Stokel-Walker, a dynamic writer for The EconomistThe Guardian and The New Statesman.

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Join Georgina Campbell Flatter for a Twitter chat on accelerating global change through innovation-driven entrepreneurship and finance

mit_london_2016

On December 13 in London, the MIT Legatum Center for Development and Entrepreneurship together with the MIT Sloan Office of International Programs (OIP) will bring together entrepreneurs, policymakers, and philanthropists from around the world to accelerate global change through innovation-driven entrepreneurship – a powerful mechanism for alleviating poverty and generating prosperity.

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