According to a recent Prosper Insights & Analytics survey, more than 55% of adults 18 and older feel they are not saving enough to meet their future financial needs and 64% are unsure of their financial security.

Even millennials and high-income Gen Z don’t always set themselves up for long-term success because they lack the resources and tools to optimize their finances. Playbook wants to change that. Their app aims to help young people achieve “financial freedom” by maximizing their tax savings and other overlooked aspects of their financial life.

I recently had the opportunity to speak with Playbook Founder and CEO David Hegarty about the problems his company solves and the company’s place in the rapidly changing fintech ecosystem. Read the full interview here.

Gary Drenik: Tell me about your background and what led you to launch Playbook.

David Hegarty: Playbook is the app I wish I had in my twenties. I moved to the US from Ireland in my twenties. I was lucky enough to have a well-paying job and to save a lot of money. My parents had given me a good education in finance, but the quirks of the American system were new to me and I didn’t understand anything about 401Ks, IRAs, etc. I hate to admit it, but as an MBA grad from a prestigious school working at Microsoft, I still didn’t know enough to go after my 401K game. It was “free money”, and I was literally turning my nose up at it.

It took me 20 years to get “smart” about my finances. Unfortunately, that’s 20 years of missed compound benefit opportunities. I wish there was a way for me 40 year old to tell me 20 year old how to do smart things with my money. Since I can’t do that, I did the next best thing. I founded Playbook, an app to empower all 20s and 30s to do smart things with their money.

Drenik: Why did you decide to focus specifically on high-income youth? What makes this group unique?

Hegarty: Let’s start with a definition: what does it mean to be rich? Alexander Graham Bell (yes, the phone one) defined wealth as when you can stop working, and the money from your investments allows you to live comfortably for the rest of your life.

The beautiful thing about this definition is that it is possible for all of us. This means that wealth is not a function of how much you earn, but rather how much you save. Someone who earns $1 million a year and someone who earns $100,000 a year become “rich” at exactly the same time if they save 20% of their income.

It’s true, the more you earn, the easier it is to save. But I think that’s the wonderful opportunity that high-income young people have. If they are smart with their money in their 20s and 30s, they could be financially free in their 40s.

Drenik: What are the biggest mistakes young high-income people make with their finances? How do you solve them?

Hegarty: Biggest mistake? Thinking about retirement accounts incorrectly and not taking advantage of tax opportunities. It’s hard to beat the market, it’s much easier to beat the taxman. For example, if you invest through a Roth IRA, you can avoid capital gains taxes and increase your return on investment by 15-35%. The fact that the government limits the amount you can deposit into these tax-advantaged accounts is the surest sign of a good thing. They don’t want you to have too many!

Picking stocks is sexy, and wading through the tax code on the weekends is a drag. This is why most people focus their efforts on choosing investments. Let Playbook take care of the tax part, so you can focus on your investment strategy.

Drenik: How do younger generations view savings and retirement compared to older generations? What’s different here?

Hegarty: It is a difference between necessity and opportunity. The perspective of the older generation was that saving for retirement was a necessity to ensure comfortable golden years.

Now, younger generations see an opportunity to be smart and financially savvy, achieve financial freedom in their 40s/50s, and give themselves the option of early retirement. It’s not necessarily that they don’t want to work, they just don’t want to feel the pressure of overwhelming work. Financial freedom gives them options: they can quit the job they hate, they can work 6 months a year and travel, or they can spend more time with their kids. Financial freedom allows them to live their best life.

Drenik: What area of ​​consumer fintech do you see the most opportunity and potential? What excites you about the future of space?

Hegarty: A tectonic shift is happening right now in consumer credit. Very large incumbents don’t resonate with the next generation of users. They don’t resonate for three main reasons. First, their process was built on pen and paper. They are not technology driven. Second, when you’re tech-driven, it’s really hard to create a great product. And the new generation has a very high bar for the product experience. Third, these incumbents don’t speak to users the way millennials want them to be spoken to. They are too old, too corporate, too masculine, too intimidating, too corrupt.

We are in the early stages of huge changes in finance. These old incumbents will be replaced by new companies that harness the power of technology and DeFi more efficiently. But just like the Internet revolution that preceded it, the big winners won’t be the companies that over-index cutting-edge technology. the really the big winners will be companies that humanize new technologies, make them easier to understand, and fit effortlessly into users’ lives today.

Drenik: Thanks, David, for sharing more information about Playbook. It’s clear that there’s still a lot of work to be done to help people become more savvy with their finances and savings, but it’s promising to see a new generation of mainstream fintech startups up to the challenge.