"most Americans can't pay a $400 expense" is commonly quoted (particularly in pitch decks!) but NOT TRUE.

The media went crazy misinterpreting a study from the Fed.

It came from the stat "only 60% of Americans would pay an unexpected $400 expense with cash equivalent."

Another 28% of Americans would put it on a credit card that they pay back over time, or borrow money from a friend, or sell something to cover it. It's not that they *can't pay.*

Only 12% of Americans could not cover an unexpected $400 emergency expense in any way.

Further, 76% of American households have at least $400 in liquid assets -- it's just that a portion of them, even though they have the cash, would still choose a non-cash way of paying for an emergency $400 expense (presumably so they can keep the cash available to them.)

this is the graph that caused all the confusion

you gotta read the study: https://www.federalreserve.gov/publications/files/2018-report-economic-well-being-us-households-201905.pdf

basically if you're pitching me a lending startup because 40% of Americans "can't" cover a $400 expense, you're actually just competing to be one of the options that Americans could use to cover a $400 expense and perpetuating the hardship they face to do so