Reco McCambry, CEO @ Novae, a black-owned fintech providing greater access to credit, capital & entrepreneurship for underserved communities
With the prospects of deportation-related labor shortages, AI-induced layoffs and rising inflation and tariffs, it’s shaping up to be a challenging year for consumers and businesses.
While some U.S.-based companies hope to gain business as imported goods become more expensive, continued increases in food, housing and healthcare prices could mean most Americans spending less across the board on non-essential goods and services.
I think this makes this an especially important time for consumers and businesses to leverage financial technology to level the economic playing field. In fact, I believe so strongly about this that I wrote a whole book about it.
I’d like to take a moment to share key insights on this topic, highlighting the most impactful benefits of financial technology for everyday people, along with advice on how to make the most of them.
1. Closing The Financial Knowledge Gap
To me, the first and most important benefit of financial technology is its ability to close the knowledge gap. Similar to points made by Robert Kiyosaki in Rich Dad, Poor Dad, technology can help educate people whose parents never taught them how to build credit and wealth.
Many mistakenly believe that “financial education” refers to things like budgeting and that it is essentially limited to telling people “don’t spend so much money.” But the reality is far different.
Financial education entails teaching people how the systems of credit and ownership work and how you can buy the same products and services for effectively way less money. Once one understands how credit scores are determined and how these can determine the prices and interest rates you’re offered by sellers, it becomes possible to make strategic choices that lead to lower prices and the beginning of generational wealth.
Financial education won’t magically lower the prices at the grocery store, but once you’ve mastered its principles, it might allow you to get a much better deal on housing, cars and even get funding to start your own business.
2. Breaking Barriers To Funding And Credit
One of the most powerful end goals of financial education is access to financing. It’s a little-known fact, for example, that wealthy people who start businesses regularly don’t actually invest any of their own money. Instead, because they have financial education, they are able to obtain large business loans at low interest rates, which enable them to become owners and build generational wealth.
I’ve found that many people, even many existing business owners, don’t know that they are eligible for business financing or assume they wouldn’t qualify. A good business credit course can spell out exactly how to become eligible for high-limit, low-interest business loans and credit cards.
City, state and local governments, as well as private think tanks, make grants available for businesses that meet specific needs within their communities. This is money you don’t need to pay back, which governments and foundations create to support missions like economic development, the arts and the building of eco-friendly infrastructure.
No matter what business you’re in or where you are located, I think it’s worth seeking out grant search engines and looking for grants you may qualify for today.
Grants often also exist for students, artists and community service organizations that need financial support. Take advantage of the emerging technology of grant search engines and look to see if you qualify for any grants today.
3. Transforming Income Into Lasting Wealth
One of the first things you learn in financial education is that owning assets is the way to build generational wealth. Most ordinary people will never save up $500,000 or $1 million from their paychecks—but it’s surprisingly easy to end up in possession of a home or business worth $500,000 or $1 million if you obtain good financial education and play your cards right.
If you can build excellent personal and business credit, I find that receiving a five- or six-figure mortgage or business loan is well within reach on an average American salary. Once you own assets, their value appreciates along with inflation. This means that whenever housing prices or the cost of goods goes up, the value of your property or your business that produces goods goes up in accordance with the market.
This is why ownership can be so important in the path to generational wealth. Renting housing and being paid a salary requires you to keep up with the cost of inflation out of your own personal finances; owning housing and owning a business cause your wealth to grow in accordance with inflation.
Of course, there’s more to building a $1 million business than just securing the initial business loan. Building a profitable business is hard, but technology has expanded access to the ways you can run a profitable business in industries from fintech to direct sales.
I believe that the best such programs come with one-on-one mentorship from experienced business owners, giving you a huge advantage over people who are trying to figure out how to turn startup capital into profit without mentorship.
I hope this article can bring you some hope in what may otherwise be a daunting time. With U.S. trade policy up in the air and grant funding and loans for many industries being in flux, many consumers and business owners alike have found this to be a very anxious time.
I think that’s all the more reason to take action now and take matters into your own hands. Go find a good financial or business education program facilitated by the power of fintech.
The information provided here is not investment, tax, or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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