— Interview by Emily Santos
Emily is a social producer and brand strategist. Since graduating from Columbia College Chicago in 2018 she has been sharpening her craft in the digital space.
Ramona Ortega is the Founder & CEO of My Money, My Future, a financial tech company geared towards assisting millennials, specifically, women and minorities how to gain financial control of their lives. Through a series of content and tools used to help minorities through financial literacy, My Money, My Future is a leading force in showcasing resources that cover how to budget, plan, and grow your finances. As a seasoned entrepreneur with an extensive background in the financial services industry hear from Ramona as she shares her reason for creating My Money, My Future, the importance of talking about money to your children, and the benefits of being a Latinx Founder.
Explain the value of multi-generational wealth.
Multi-generational wealth is essentially an aspect of financial planning or personal finance (#legacybuilding) that is geared toward passing down stable, significant financial resources to future generations. Financial products such as trusts, life insurance, investment accounts, 529 plans are used to protect and grow assets for future generations. The racial wealth gap is, in essence, the result of the absence of multi-generational wealth in communities of color.
Latinx and African American families have significantly less wealth than white families and this has been a persistent and pervasive problem, despite overall wage growth and more people of color graduating from college. Structural racism, bias, and other prejudices have contributed to the racial wealth gap.
The median wealth for black and Latinx families was $17,600 and $20,700, respectively, compared with white families’ median wealth of $171,000 in 2016.
40% of Black households report good or very good credit compared to 65% of White households
Payday loan industry grew from women earning around $30,000
Nationally, white college graduates have more than seven times the wealth of black college graduates and four times the wealth of Latinx graduates, and white single parents have approximately twice the wealth of two-parent black and Latinx households.
Latinas in the United States are typically paid just 53 cents for every dollar paid to white, non-Hispanic men).
Financial institutions have promoted predatory practices in communities of color, including charging higher fees and interest rates for home, car and personal loans, including the practice of red-lining. Communities of color have less intergenerational wealth transfers that provide economic security and protect them from burdensome debt. Communities of color are less likely to have assets like a home, retirement, investment and savings account to turn to when experiencing financial hardships. Communities of color turn to costly debt, struggle to pay it back and in turn, experience lower credit scores.
Benefits/challenges of being a Latinx Founder
Part of building a successful tech company is the ability to “know your customer,” and to solve a “real” problem. I know my customer better than any of our competitors and I know for a fact we are solving a real problem, not only from a policy perspective (racial wealth gap) but from a practical viewpoint (no other Fintech company is focused exclusively on providing a comprehensive personal finance platform to this demographic. My intimate knowledge of my market gives us a competitive edge or moat in marketing and building brand loyalty.
The challenges are many, including the fact that BECAUSE of the racial wealth gap we have few resources for capital. The friends and family around and Angel investors are a critical part of early capital. These are people who have enough “economic security” to write a $10-25K check. There is a lot of risk in being an investor so only people who can afford to lose the money invested in startups. We just don’t have the numbers yet. So I have to raise money from people who very little knowledge about our community or why this solution (product is needed).
What advice do you have for entrepreneurs looking to take their start-up to the next level?
Make sure you are solving the right problem for the right audience and create something that is tech enables and scalable.
Then think about these things:
Dig deep, understand your strengths-weaknesses and what kind of life you desire, what is your driving force and most importantly, are you ready for a marathon, entrepreneurship is not for risk-averse people.
What inspired you to create My Money, My future?
Through my research, I realized that the wealth gap is not just about a lack of access to financial services, but about institutional barriers, trust and values. On one hand, Latinos’ traditional values are not aligned with their financial behaviors and on the other, financial institutions are not trusted within the community and their marketing efforts have failed to fully understand the nuanced financial behaviors and beliefs of communities of color. I was inspired to find an answer to closing the racial wealth gap by using technology to scale a solution. Policies need to change but that takes time and political force. With the rise of Fintech, I saw an opportunity to do good and do well. There was a white space in the market and given my career trajectory, with experience as a policymaker, journalist, and corporate attorney, if not me, who? My Money My Future Inc. was launched in 2016 to be the trusted financial brand for multicultural millennials. Our goal is to help a new generation make smarter money decisions and build wealth. Through our digital magazine Finance Unfiltered and Money Made Simple web app, MMMF produces culturally specific content and guidance based on a set of common experiences, language, beliefs, and behaviors. We build trust by distinguishing our content from a one-size-fits-all model and delivers it through a trusted channel of partners. We are innovating and disrupting the 18 billion dollars financial service industry and creating value to our customers and our users.
Explain the importance of financial literacy in the Latinx community?
People don’t buy what they don’t know or what they don’t trust. Financial services (and their products) have a bad rap for all the reasons I stated above. This is why we have built financial education into the app- right there when you are making a financial decision. So if you want to know about a 529 Plan, we are going to explain what it is, when and how to use it, and then connect you to the right products. Financial literacy is about learning the rules of the game. Confidence is built when people have an understanding of the thing they are doing and that’s why our motto is money made simple.
This is not about dumbing down complex financial decisions but about clearly and simply explaining something and making it relevant to our user's experience. This is what wealth management for 99% looks like.
What advice do you have for parents who are thinking of introducing money management to their children?
Start young, talk about money, it’s valued, explain things like banking and credit cards in their early teens. Talk to them about concepts like debt, compound interest, and interest rates.
Why are millennials imperative to closing the racial wealth gap?
We focus on millennials because they are the most diverse generation ever and they will be the cultural bridge to Gen Z and baby boomers. Millennials are super curious, educated and want to be empowered. They want information explained to them so they can make their decisions-they don’t want a financial manager telling them what to do. They also have enough time on their side to build multi-generational wealth.
More importantly for us, millennials care about the companies they engage with, they care about the mission and the messenger. They want their dollars to count and as a mission-driven company, this is an opportunity for all of us to make a difference in a very traditional industry like financial services.