May 18, 2020
By Mitchell Jones
Marc Andreessen wrote an article that caught my attention, particularly for its passionate closing salvo. He said “Our nation and our civilization were built on production, on building. Our forefathers and foremothers built roads and trains, farms and factories, then the computer, the microchip, the smartphone, and uncounted thousands of other things that we now take for granted… There is only one way to honor their legacy and to create the future we want for our own children and grandchildren, and that’s to build.”.
I agree with him. It is time to build. When I think about the breadth of progress and inventions our country has built that Andreessen mentions, one innovation is conspicuously absent — our financial system. It was, is, and always will be at the core of what makes America quintessentially America. Many of our best inventions (roads, planes, the internet, mortgages) are either financial in nature or were funded by our robust financial network.
That system, while impressive for how long it has lasted, needs significant reform. 1 in 3 Americans has $0 saved for retirement, income inequality has grown at a staggering pace, the majority of millennials are making less than their parents were at the same age, healthcare, housing, and education costs have skyrocketed, women still make many cents on the dollar fewer than men for the same jobs, as do Black and Latinx folks compared with their white counterparts.
Many of the largest inequalities in American life — be it socioeconomic, race, or gender — are peddled through money. It is not my goal to simply condemn our entire financial system, but to underscore Marc’s point. Let’s build to improve it where we can, and continue fighting for structural changes in the places where we cannot.
Which brings me to the purpose of this piece — to officially introduce Lendtable.
My journey through life as a young Black man from the west-side of Dayton, Ohio to the echelons of great academic and corporate institutions has forced me to grapple with why so many people are financially “stuck”. One of the most salient and formidable barriers to mobility in this country is financial access. I understood this firsthand back in 2013 when I came home from my investment banking internship eager to make sure my parents were saving and investing effectively. While they had been saving all their money, I discovered that the way they’d been doing it put them tens (possibly hundreds) of thousands of dollars behind where they otherwise would have been.
My parents are not an outlier. They were not saving and investing effectively, but neither were my friends from home. Neither were my friends from college. No one was. The impact of a lack of financial access cuts across many demographics, and its effect on health, quality of life, and opportunities compounds over time. It is the problem that inspired me to search for answers through tech-powered financial solutions — otherwise known as fintech. I strongly believe through tech we can democratize access to services, knowledge, opportunity, and mobility in ways that current institutions do not.
My good friend and now co-founder Sheridan saw the same thing — an impending wave of fintech impacting the world. From payment processors like Stripe, to robo-advisors like Wealthfront and Betterment, to APIs for banks like Plaid, the past decade was a resurgence of innovation for our financial system. It is now easier than ever to get a bank account, send money to family, or start investing for the first time ever.
All of these innovations were important steps forward, but the core problem remained. The average American family was still not financially better off than they were before any of these great tools and innovations existed. No products have yet bridged the gap of helping people build long term wealth.
Wealth building is challenging for many Americans, not because they are unaware that they should save and invest their money, but because they are faced with a painful dichotomy: either save money and forgo paying for immediate concerns like debt, rent, and healthcare OR take care of current financial needs, but at the expense of building long term wealth. Otherwise known as “the liquidity problem”.
Nowhere was this pain more clear to us than through 401(k) matches. 401(k)s, the primary vehicle most Americans depend on for retirement, are not only underutilized but free money, through an employer match, is constantly left on the table. An employer match is a contribution made by your employer to your 401(k) retirement account when you put money into it. For example, some employers will put in one dollar for every dollar you contribute. This can result in thousands of additional dollars of income, but only if you have enough money to spare for your contribution.
1 in 4 Americans does not get their 401(k) match resulting in more than $24 billion in potential employer contributions going unmatched. We have heard hundreds of stories from a spectrum of backgrounds. From young professionals not making enough to both pay their student loans and save for the long term, working parents who put their children’s needs before their retirement, newlyweds paying off their house down payment and mortgage, older couples coping with strenuous healthcare expenses, the stories are as diverse as they come. There is a uniting fabric across each of these stories; people do not have enough money to both meet their day-to-day needs as well as create a nest egg for the future. Rightly so, they choose their immediate needs over their long term ones.
We are building Lendtable so those folks no longer have to make that painful choice. They can have the ability to pay their student loans or buy clothing for their children and also have thousands of dollars in their 401(k). They can make the right choices today and ensure protection tomorrow.
In the future, we look to unlock even more opportunities where money is being left on the table and build products that help people capitalize on the wealth they have generated through our service.
We will work tirelessly to do our part in building a more inclusive financial system — one that is forward-looking and utilizes technology where it can be helpful. We are energized to hear the stories of our users firsthand and help them take one of the first steps toward building their brighter future.
We are Lendtable and we help people take advantage of their 401(k) match. If you or anyone you know is leaving free employer match money on the table, you can sign up at lendtable.com.