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Category Archives: Financial Independence

What is the Financial Independence Retire Early (FIRE) movement? –

Posted: July 5, 2020 at 10:04 am

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The Financial Independence Retire Early movement, or FIRE, is a group of people trying to gain financial independence by amassing enough wealth and cutting their expenses so that they can retire extremely early. Many FIRE proponents are looking to retire in their 30s or 40s.

So how do people in the FIRE movement achieve their goal, and what are the drawbacks?

The FIRE movement centers on taking control of your finances, and proponents focus less on increasing their earnings than on spending less. FIRE participants focus on two areas, which are really two sides of the same coin:

By saving and investing their money, participants grow an amount of money that can generate enough income to sustain their lifestyles. They use detailed spreadsheets and financial plans to model out how theyll be able to meet their needs based on their income and the rate of return they can expect from their savings and investments in stocks or stock funds.

To meet their goals, FIRE participants must take on extra risk by investing in stocks, and that means understanding how the stock market works and having a brokerage account. They wont be able to rely on the low returns and absolute safety of a bank account to amass their fortune.

And by spending less, they reduce the level of savings they need in order to retire early. While some FIRE critics say that FIRE participants live a too-frugal lifestyle to reach their goal, many proponents say that theyre not making extraordinary sacrifices. In fact, they say by spending on what they really love that they actually derive more enjoyment from those things. Plus, they enjoy moving toward independence, when they can do what they truly love.

But however they approach it, FIRE participants see the lifestyle as a way to spend their time doing what they really want to do rather than what society tells them they should want.

Because of their desire to retire early, many participants wont be able to take full advantage of employer-sponsored retirement plans such as a 401(k). They may or may not be able to take advantage of plans such as an IRA, depending on whether they earn income in retirement. Instead, theyll need to save in taxable accounts or in accounts such as a Roth IRA, both of which offer access to cash (at least at some level with the IRA) without any penalties.

Financial independence is not something that usually drops in your lap, and the FIRE movement works hard to achieve its dream, thinking years out instead of whether they should buy that new car this year. The movement is also really supportive of members who have started the journey, and members provide spreadsheets and other tools to help each other.

This social solidarity helps FIRE participants realize that there is a community that values what theyre trying to achieve, making it that much easier to do.

While these savers are all classified in the FIRE movement, there are many different subsets of the movement. Theyre all striving for the ultimate goal, but participants have different objectives and approaches, based on what they see as valuable and the sacrifices theyre able to make.

But they can be divided into some key groups based on their approach:

And FIRE participants can also be divided into how they want to spend their independent lifestyle:

In both cases, these new retirees now with financial independence can do what they really want without worrying about where their money comes from. Not only do they have their emergency funds stocked with cash, they know where next years income is coming from, too.

Criticisms of the FIRE movement generally fall into one of two key categories:

Some early retirees, for example, may assume that they could generate the kind of returns that investors saw in stocks in 2019, when the S&P 500 rose a whopping 29 percent. Thats well above the markets long-term average of about 10 percent annually. Or perhaps some may rely on their ability to pick stocks and have had a few lucky years.

Critics also say that FIRE participants are not factoring in the longer-term costs of major expenses such as health care and housing, which have continued to increase substantially. Plus, leaving the workforce may create an employment gap that many employers will view negatively. For sure, staying out of the workforce will ding the amount of Social Security income you can draw later in life, and thats when those on a fixed income may most need the money.

These are all relevant concerns, but many in the FIRE community say they have considered these scenarios and have planned accordingly. They may cite their financial models as proof that they have been realistic, pointing to detailed projections of their income and expenses.

In any case, a major decline in stocks, which typically occurs as part of a recession, will stress-test these plans and forecasts, and may challenge the security of many early retirees.

The FIRE movement has attracted a lot of attention in recent years some of it negative. Yet its hard to see how people consciously spending their money and time on what they truly love is anything but a net positive, even if it does have some costs along the way.

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Are You Independent Yet? Financial Self-Sovereignty and the Decentralized Exchange – Cointelegraph

Posted: at 10:04 am

Helicopter parents. They never let their kids out of sight. They fret at the possibility of any potential danger, striving to protect their snowflake charges from harm, reassuring the child so they know just how special, precious and helpless they are and that they can never, ever fail.

Of course, this backfires horrendously, resulting in what we see today: leaders who are entitled silver-spoon-fed adolescents conditioned to require constant coddling not to mention the fact that their parental stimulus packages have taught them that everything in life is free. Including bailouts. Money please!

And who are they really protecting anyway? Kids are resilient. Its adults who struggle with change.

As the United States celebrates Independence Day, I ask the question: Do you feel independent?

Or is your government a helicopter parent, standing over your shoulder and second-guessing every financial decision you make?

Youre reading Cointelegraph Magazine. So Ill make an educated guess.

Its time for a change in your relationship. Its time your government allowed you to grow up.

For Americans, Independence Day is supposed to be about hot dogs, fireworks, and the celebration of the birth of a new nation founded on principles of freedom and equality.

Obviously, that was pre-COVID. Now were asking to unhuddle our masses through social distancing, and while we may still yearn to breathe free, were on physical lockdown as well as suffering increasingly draconian financial oversight from a variety of acronymed bodies.

The tools of decentralized trade, however, may yet overcome the tyranny of our financial system, enabling a reformation of economic interaction that steers us away from centralization and toward more just and equitable means of controlling our own financial futures.

The first stage of this growing up process, Barney Mannerings, co-founder and CEO of decentralized derivatives exchange Vega Protocol explains, came about through the creation of Bitcoin: a peer-to-peer network that enables the permissionless and trustless exchange of value.

This early step in the democratization of money was followed by the tokenization of assets and the decentralization of a range of financial tools. The next step, he feels, is the decentralized exchange. Such exchanges allow peer-to-peer trade without the need for any central intermediators to hold our hands and ensure our safety.

DEX (decentralized exchange) technology allows participation on equal footing with the bigwigs, Mannerings says. Users need no longer be railroaded into a prescribed batch of menu offerings from a select group of dominant companies; instead they can access a smorgasbord of investment choices to suit different appetites for risk and reward.

Mannerings explains that some centralized services allow users to take positions with low or no fees because they pick up money on the flipside for helping their clients to bet against the crowd.

Look at Robinhood, he says. They make money by selling your order flow to some hedge funds. They dont even make money off charging you a fee, they make money because the hedge funds want to know what youre doing so they can make money. That means youre not playing the same game as everyone else and youre not on an even footing.

With a DEX, everyone gets the same information, the same tools for risk, and a range of tools that are normally hidden from people in traditional markets, Mannerings says. This theoretically offers a stronger guarantee of fairness without the possibility of front-running.

Mario Blacutt (often writing as Berzeck) is the founder of the Nerve Network and the decentralized exchange NDEX. He explains that DEXs can offer unique opportunities for new projects as well as investors. Small projects with strong potential can be listed on decentralized exchanges without having to wade through a slow application process, and without paying large entry fees that can be unreasonably demanding especially in the early stages of a projects development.

There are a lot of stories of smaller, good projects that do not maximize their potential because they never get the opportunity to be listed. We wanted to break that pattern and offer smaller projects the opportunity to be listed for free on our exchange.

Its not just centralized exchanges that stand in the way of financial autonomy, either. Governments have been known to meddle in pocketbooks from time to time too. Mannerings explains that its Like what happened in Europe after the financial crisis; some governments took money off some of the wealthiest people to help pay for things. When they decide thats going to happen, or that you cant spend it a certain way, or that they want to freeze your money, you suddenly discover its not really yours. You dont really have that full control.

The individuals power over their own finances has essentially been granted (or withheld) at the whim of banks, financial institutions, and governments. Kain Warwick, founder of the Synthetix asset platform, explains that its only in the last few years that this has begun to change. The promise of decentralized self-sovereign tech is being realized, which is exciting.

If you have your funds in the bank, PayPal, Venmo or other centralized services and they decide they dont like what youre doing, they can just cut you off, Warwick says. Youre guilty until proven innocent. Censorship-resistance is a critical feature of decentralized platforms, he continues. Thats one of the huge promises of Bitcoin originally that you could make payments anywhere over the Internet and you didnt need to rely on some third party as an intermediator.

Loi Luu, co-founder and CEO of Kyber Network, seconds this message of financial independence. With Kyber, users can make connections on the blockchain that are fully transparent and permissionless. Regardless of where you are, whats your background, you can always interact with Kyber, because its fully powered by blockchain. This has the added advantage of making trading safer, easier, and more accessible, he says.

And its all about user choice for Alex Wearn, co-founder and CEO of IDEX. The teams goal is to build an exchange that has the same user experience as centralized offerings, but doesnt require you to hand over control of your private keys. Users can choose their own custody solution, whether it be hardware wallets for retail clients or large-scale custodial solutions for institutional needs. Its really all about giving users that choice and catering to their needs rather than forcing them into a one-size-fits-all option of the exchange holding funds.

Warwick explains the problem of centralized crypto custody. We see it every day. Someone puts value into a centralized service or to a custodial platform and they lose access to their coins. If you dont have the private key to your assets, then youre relying on someone else to keep them safe. In some cases thats fine, but ultimately, the ability to have control of your own assets, to make that decision for yourself to have full self-sovereignty, is where the power comes from.

Its time for governments to treat us like adults, Mannerings says. Users should be able to evaluate their risks and choose products and services that offer freedom and control.

Loi Luu advises users to be their own advocates throughout this learning process and to approach the newfound tools with caution. Controlling your own wealth is good if you know what youre doing, as in, you know what is required to be fully in control of your wealth, you know how to keep your private keys safe, you know how to do a backup, and you know which site is a phishing site, so youre not falling for scams. But if you dont have enough knowledge or technical background, controlling your own wealth on blockchain might be risky.

Berzeck explains its a pillar of the blockchain technology ethos:

You own your money, but you have to be aware of the responsibilities of owning your own money. You have to be careful with that freedom.

This transition to greater individual monetary responsibility will take time, he says probably more than we want to believe it will. He suggests it will take at least a generation to change societys ingrained mindset about how banking and money works today.

Mannerings worked in traditional finance, which he admits offers technologies that are incredibly useful but deeply inaccessible to those on the outside. In his line of work, managers would sell derivatives to small companies but were buying them from a different desk, in a chain of buyers and sellers who all skimmed profits in additional layers of transactions. The size of the difference between the market price and what these people were getting it for was huge. That was a problem but there wasnt an obvious solution until the crypto stuff came along.

Vega co-founder Tamlyn Rudolph witnessed this privilege of access during her time in traditional markets. When she was trading, she was able to register directly and trade on her own account, unlike most people. She saw the huge discrepancy between her own knowledge and access to the market compared to the paltry offerings her family and friends accessed.

A decentralized platform puts tools into the hands of the people, Rudolph says. With the Internet of Value, parcels of risk can now be swapped around, allowing users to carve out risk for themselves. Own your own financial risk, be able to understand it, carve out what you dont want, and take on other peoples risks that you want to help with.

Berzeck speaks from an entirely different experience, having lived under what he describes as a corrupt regime in Bolivia until a recent coup began to change things for the better, he says. Many bought the socialist dream, he recalls, but it followed a catastrophic path similar to the one Venezuela faces now. It works at first but long term, it always fails. Its been proven again and again in many different countries. The president of Bolivia, Evo Morales, enforced the heavy centralization of markets, controlling every aspect of the financial system ostensibly for the protection and safety of the people, Berzeck says.

Cryptocurrency offers the exact opposite of overbearing governments, he suggests. Banks closed my accounts because they wanted to protect me Ive seen firsthand what total centralization and control can do to individuals. Thats why I value the kind of freedom that blockchain offers.

The future is looking very bright for the DEX movement, Loi Luu says. The Kyber Network has enjoyed an incredible eight to ten times growth year-over-year due to massive expansion in DeFi and related applications. When DeFi grows, Kyber grows, he says. The ease of use of decentralized applications has improved significantly in the last couple years, too.

Both Luu and Berzeck caution that decentralized solutions wont take over completely any time soon. Both solutions will co-exist, with centralized solutions remaining the main regulated on- and off-ramp for fiat to crypto interaction. Berzeck explains, We should be aware that centralized exchanges and DEXs will coexist and probably complement each other. We should not try to artificially accelerate the process. The technology just isnt there yet.

Synthetixs Warwick agrees. Its still very high friction to use a DEX, he admits. A user may choose to use a DEX, but its not the solution for everyone. I think thats coming. With scaling and other things were seeing, we will get to a point where the status quo moves to DEXs.

Darren Liu, lead developer of Binances DEX solution, Binance Smart Chain, says technology tends to move in waves, with DeFi currently drawing the most attention and activity. The Binance Smart Chain offers new tools for DeFi that he says will enable more users to join the trend.

For true mass adoption to happen, Berzeck says its all about what works for users. If it reduces costs to clients, they will be interested in it.

Thats what companies want. They dont care about dogmatic things. They dont even care about decentralization. The only thing they care about is to reduce costs and increase income.

So, we give them a way to reduce costs and prove that blockchain technology is able to reduce costs for them. Thats the way we should face this problem of how to increase mass adoption.

Banks and financial institutions still hold the monetary keys in the form of liquidity, Mannerings explains. Money is controlled in just a few places, giving those parties the power to run the show. That power is almost accidental. They were in the right place at the right time, they have support from regulators, but theyre fundamentally not doing anything super-special.

Its probably one of the reasons why finance has been less disrupted by the Internet than most other aspects of the modern economy, he suggests. Yes, you can go on online banking, but the actual conduits of money have not changed much as a result of the Internet, just the way you present it to users.

Its waiting for this decentralized technology where you can say, we no longer need a bank, we no longer need an exchange to sit in the middle as an organization controlling this. Theres a protocol that sits in the middle and satisfies all the different players, and now all the people who might want to trade can get together and say hey this is a thing we want to trade now and they can trade. And they dont have to trust each other, they can put up their margin on a decentralized protocol.

They can do that without asking someones permission and without enriching those guys in the middle.

Kybers Luu is excited to see this transition taking place. You really feel the freedom. The fact you can do a loan and then contribute to some asset management protocol blockchain within one or two minutes without waiting for weeks to get approval from banks or financial institutions, its just mind-blowing.

Were all familiar with the concept of helicopter money, in the wake of the massive economic stimulus packages (bailouts) of 2009 and 2020. Free markets arent free. Theyre coddled by the Fed, given sugar by tax-cutting politicians, and only one billionaire Chamath Palihapitiya seems to have the adulting skills to suggest that we should just let the failing companies and executives learn by failing.

Who cares? Let them get wiped out. Who cares? They dont get to summer in the Hamptons? Who cares?

It all traces back to those helicopter parents that end up doing their child a disservice in the name of safety. Theres a tendency to assume people need to be protected from themselves. Mannerings says. The problem is the more you go down that route, the more it looks like they needed protecting.

When everyone is told that every financial product in the world is safe and one turns out not to be safe people will lose funds, resulting in the clamor to control and regulate even more, he says. Its a well-worn road that leads to totalitarianism.

Mannerings compares a night out bowling to a day out skiing as an analogy for financial awareness. You go bowling, you dont expect it to be dangerous, he says, you just go have fun and get drunk and its fine. But if you go skiing, you know its dangerous, and so you treat it with the right respect. You might take lessons, start easy and avoid difficult runs until you are ready.

Its not that the people who go skiing are smarter than the ones who go bowling, its that they understand what the risks are and because they know they are risks, the vast majority of them properly evaluate what they can do, and dont do things they shouldnt.

The same is true, he says, of finance. Stop treating people like babies and educate users with greater access to information.

I think youll find people dont need anywhere near as much babying as some people like to make out, if you arm them with information.

Independence Day is a great time to reflect on that. Americas been founded on the very idea of freedom Youve got to trust your citizens and give people that freedom. And they wont let you down.

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This single mother started with $20,000 and is now an early-retired millionaire heres one thing that helped her – MarketWatch

Posted: at 10:04 am

Jackie Cummings Koski has been a member of her local investment club for 11 years and is now on the board of directors but when she first started out, she had little money to her name and no clear path to financial freedom.

Koski joined the club so that she could improve her knowledge about investing, but it was also where she was able to openly talk about her divorce and find meaningful ways to provide security for herself and her young daughter. Each fellow member became something of a mentor to her, and the discussions were inviting. It was all very uplifting, she said.

Joining the investment club, along with following a budget and spending well under her means, has made the former saleswoman financially independent. In the last 11 years, the single mother has gone from $20,000 in her 401(k) at the time of her divorce to $1.3 million, and shes now a financial counselor to others. She reached financial independence at 46, and retired three years later.

See: This early retiree found her calling during the COVID-19 pandemic

Mentorships, whether one-on-one or in a group, can be crucial to achieving goals. Connecting on a personal level helps. When Koski works with her clients, including high-school students and those in underserved populations, she talks about growing up in rural poverty, with a single father who had a sixth-grade education and was raising six children.

All of those things play into how hard it was in the very beginning, she said. Going from poverty to financially independent thats a path that most people Im working with can get and connect with.

The FIRE movement, short for financial independence, retire early, has no shortage of inspiring stories about people who cut their spending in half, downsized their homes or took on numerous jobs to save as much as possible. But not everyone can follow that path. Some FIRE bloggers may also not be aware of the subtle advantages they had growing up, such as starting out in a middle-class family or living in an area with public transportation to get to the library or a job.

Koski has followed a few of the mainstays of the FIRE movement, however, such as slashing spending and investing much of the rest. As a sales representative at LexisNexis, her salary varied from year to year with an average of about $80,000, but she spent between $40,000 to $45,000 a year and put the rest away.

The early retiree pointed out that this wouldnt be possible everywhere she lives in Ohio, where home prices are not nearly as high as some major hubs like New York City or San Francisco so her mortgage, taxes and insurance amounted to about $1,000 a month. Still, she was careful with her money. Shed buy a luxury vehicle, but one that was three to five years old and with a price tag half of what it was when it was new. She worked only a few miles away from home, so gas wasnt a huge budget item. She didnt deprive herself of spending on food, and would go out to eat for lunch or dinner.

I didnt design my life to live off of $45,000, she said. I backed into it and discovered that my expenses were $45,000. At the same time, she was maxing out all of her investment accounts, including her 401(k), individual retirement account and a Health Savings Account.

Immersing yourself in an environment that supports the same values and goals is important. Koski was the first in her family to graduate college, and didnt have many sources for advice about finances when she was starting out so she figured it out on her own. By changing my environment, I was exposed to different things, she said.

Also see: Im a 32-year-old stay-at-home mom, and my husband earns $150,000 a year. Will I ever be able to enjoy a retirement?

The COVID-19 crisis has the potential to worsen future retirement security, and in some cases has already deteriorated Americans current well-being, but people may be able to use this time to learn more about money and their own personal finances, Koski said. People can turn to the internet, books or maybe even an investing club (socially distanced, of course) to learn more about saving, budgets, investing and personal finance topics.

Savers can also use this time to reflect on whats working financially, what isnt, what goals theyd like to achieve and dig into why they behave the way they do with their money. Breaking down what it would take to reach that goal is an eye-opener. For example, Koski tells students and aspiring investors that saving $50 a week for 40 years can get someone to $1 million.

Youre not going to be saving or investing unless in your mind you believe it will make a difference, she said. It may take a while to really get your head around things like me, but it happens, and when it does, it is very, very powerful.

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This single mother started with $20,000 and is now an early-retired millionaire heres one thing that helped her - MarketWatch

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Advising Clients Interested in FIRE – TheStreet

Posted: at 10:04 am

Part of the job of a financial adviser is focused on helping clients achieve financial independence and to accumulate a sufficient amount of resources to fund the retirement lifestyle they desire. Arising out of the 2008 financial crisis, the FIRE movement - which stands for financial independence, retire early, has caught the attention of many, from Gen Xers to millennials.

Here are some thoughts on how to advise clients who might be embracing the goals of the FIRE movement.

The FIRE movement embraces the goals of achieving financial independence at a relatively early age and then retiring early. Both the FI and RE parts mean different things to those trying to achieve FIRE as the saying goes.

The premise of FIRE is that by slashing expenses and saving and investing a very high percentage of their income, these folks can achieve financial independence and be able to retire at a much younger age. This might be as much as 70% of more of their annual income that goes toward saving for retirement. FIRE disciples hope to accumulate enough to retire early and live off of their nest egg. How early is early? Ive read about some folks pulling the plug in their 30s and 40s, and in some cases in their 20s.

As with any client, you need to help them define what financial independence means for their situation and what early retirement means. Often, early retirement doesnt mean a total cessation of work for FIRE disciples, but rather it means retiring from the 9-to-5 daily work grind. There are many FIRE folks who earn money writing about their experiences on blogs, discussing them on podcasts, providing coaching to others looking to achieve financial independence and selling courses on the topic. Others may use their exit from being an employee to pursue self-employment of other types in areas of interest to them. Others do truly retire in the traditional sense as well.

Regardless of your clients goals, it's important to work with them to define the amount needed, when it is needed and how it will be invested both before and after their retirement -- whatever that looks like.

A concern for those retiring at a more traditional age, in their 60s, is whether or not they will outlive their money. Given current life expectancies, the financial aspects 20 or 30 years of retirement funding takes planning. A retirement that might last 40 or 50 years (or even longer) takes a ton of planning.

Its important to ensure that clients looking to go the FIRE route, in whatever format they choose in terms of total or partial early retirement, understand the stress that the normal ebbs and flows of the financial markets over a long time horizon will put on their retirement savings. Asset allocation for these clients will need to focus on growth potential within their level of risk tolerance.

In advising clients looking for an exit from the corporate world at an early age as part of their FIRE goals, there are some issues that these clients need to consider. Some of these include:

Health insurance is always a consideration for anyone leaving the conventional workforce prior to Medicare eligibility. If the client is a married couple and only one spouse is going this route, they could use the other spouses employer healthcare plan if that spouse will remain employed. Otherwise it's important that the client consider what they will do to cover this necessity, a serious illness without adequate insurance can be financially devastating.

For clients who have been using tax-deferred retirement plans such as a 401(k) to accumulate funds for their early retirement, they will need to have a plan to tap these accounts early if needed. Money in a traditional 401(k) or IRA will be subject to both taxes and potentially a 10% penalty if tapped prior to age 59. Roth accounts do allow the withdrawal of contributions if certain conditions such as the five-year rule are adhered to.

Overall, the issue of where the money will come from to support their needs once they leave their job is a huge planning issue that you can help these clients with. Which accounts should they tap first? If they are going to be doing something that generates income, will this income be enough to meet their needs?

The FIRE movement is exciting and appealing for many people these days. Like anything else in the financial planning realm, successfully achieving a very early retirement takes planning. For any clients looking to go this route, your expertise and perspective can be crucial to their success.


Advising Clients Interested in FIRE - TheStreet

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How Prince Harry and Meghan Markle Are Spending Their First Fourth of July in America –

Posted: at 10:03 am

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Prince Harry and Meghan Markle have a whole new set of holidays to celebrate now that they're living in the United States and that, obviously, includes, the Fourth of July. Thanks to the coronavirus pandemic, however, most traditional Fourth of July activities, like barbecues and big, community fireworks displays, are off the table.

So how are the Sussexes planning to celebrate their first Independence Day together in America? Royal expert Katie Nicholl says the couple will be keeping things low-key and enjoying some family time with their one-year-old son, Archie Harrison.

"I think he is just about walking," Nicholl told ET Online of Archie. "He's a very happy little boy, he's loving life in L.A. and they are still staying at Tyler Perry's house. I'm told they haven't found their forever home yet, they're still looking. They really do love that family time and they've had a lot of that recently. They both feel very grateful for that time they've had at home with Archie, watching him achieve all of those milestones."

Even though Harry and Meghan are loving the quality time they've been spending with Archie, Nicholl says they're getting antsy to get back to workespecially now that they're working toward financial independence following their step back from royal work.

"They do need to make money," Nicholl explained. "They've been in L.A. since March, they left the royal family at the end of March, and as yet, they haven't actually earned anything."

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Early Retirees Were Supposed to Be Able to Depend on Rental Income. What They Should Do Now. – Barron’s

Posted: at 10:03 am

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Using rental properties to generate passive income has been a popular strategy in the financial independence, retire early movement. The coronavirus pandemic is threatening it.

Many property owners have seen their rental streams dry up or slow as unemployment has surged and businesses have closed, leaving landlords with tenants unable to pay, either in part or in full. While more households paid their rent in May as unemployment benefits and stimulus payments kicked in, the level of delinquencies is still elevated and landlords are having to adjust to the disrupted income streams.

Even so, Brent Sutherland, a certified financial planner and founder at Ntellivest, believes its still a good time to be invested in rental properties. Sutherland is an adherent to financial independence and owns rental properties himself, so he offers these tips for managing real-estate investments during this economic downturn.

Be honest with your tenantsand your lenders. Whether dealing with tenants who cant pay, or your mortgage broker, Sutherland recommends opening up lines of communication early.

If you havent already, reach out to tenants and ask them if financial hardship will prevent them from paying their rent. If yes, consider working with them to create a payment plan for when they do go back to work, or offer rent forgiveness for a period of time, contingent on the tenant signing a lease extension. Vacancy is a top concern for rental property owners, Sutherland says, so confidence in having tenants in the future may be worth low cash flow now.

If reduced rental income has made mortgage payments difficult or impossible to make, talk to your lender as soon as you can. All federally backed mortgages are eligible for forbearance during the crisis. Lenders may be willing to offer forbearance or loan modification for loans that arent federally backed, as well, given the magnitude of the economic crisis.

Dont panic, but reassess. Downturns are a natural part of the economic cycle and can be a good opportunity for investors to reassess their assets. If an investor cant sleep at night knowing whats happening with their investments, its likely they were in the wrong asset mix to begin with, Sutherland says.

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He urges investors to avoid a fire sale of their properties if they can help it. However, once market volatility has stabilized you can give your investment strategy and risk tolerance an honest evaluation. At that point, he says, if you realize you no longer want to take on the risks of rental property ownership, you can pursue the sale of your properties in favor of other investments.

Sutherland believes rents will rise again as the market starts to recover and social-distancing measures allow people to start working again. In the meantime, the advisor says people may need to find ways to replace lost rental income, including taking up a freelance side gig or selling less volatile securities, such as bonds, in order to have more cash on hand.

Make the most of current conditions. One positive aspect of the current downturn is that interest rates are at historic lows, making borrowing cheaper than ever before.

For those whove already built up equity in a property, taking out a home equity line of credit, or Heloc, could help cover living expenses for a while, if necessary. That Heloc could also be used to make improvements to a rental property thats sitting vacantsprucing it up to add to its rental or resale value in the future.

For those looking to increase their holdings, desirable properties may be newly within reach for those with the extra cash to buy them. Not only are interest rates low right now, home prices in some areas could also fall. That combination can be a boon for a savvy investor, Sutherland says. I rather welcome downturns. This is where better investments can be had.

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FTSE 100 crash! Here’s why I’d buy cheap shares in July to get wealthy in retirement – Yahoo Finance UK

Posted: at 10:03 am

Were halfway through the year and what a six-month period it has been for most FTSE 100 investors. The pandemic has had a significant impact on equity markets. Following the initial rapid falls in broader indexes in February and March, many shares have since come back to recover some of their losses.

I believe the current volatility is likely to be a near-term headwind. Most economies, as well as FTSE 100 shares, will improve in due course, possibly sooner than later. In the past, stock markets worldwide and in the UK have created massive wealth for long-term investors. They are likely to do so in the future, too. Lets take a closer look.

Market crashes, in general, provide an opportunity to buy FTSE 100 stocks at cheaper valuations. Therefore, investors with a long-term horizon should do their due diligence to identify stocks with strong fundamentals, growth potential in their respective markets, and robust cash flows.

For example, let us assume you had invested 1,000, 10 years ago, in July 2010, in several FTSE 100 shares. Below, Id like to show you how much your investment would be worth now, based on a buy-and-hold strategy and share price appreciation:

Put another way, a modest investment in a range of companies would have meant a sizeable capital appreciation. And these numbers hold despite the market drop since early 2020

If history were to repeat itself, we could expect many FTSE 100 shares to make new highs within the decade. And if there is another market crash in the rest of the year, or at a later date, seasoned investors realise that it means the opportunity to buy solid companies at a discount. And that would mean the road to greater wealth in later life.

Warren Buffett is one of the worlds most renowned investors. One of his famous quotes is, Be fearful when others are greedy and be greedy when others are fearful. In other words, those investors who buy shares when others are selling en masse are likely to do well in the markets.

I expect the stocks whose names and metrics I have listed above to do well in the coming years, too. Therefore Id look to buy the dips.

We mostly invest for future goals, such as saving for a deposit on a home, for retirement, or simply gaining financial independence. As part of your investment aims, are you looking for defensive names that are likely to provide stable returns coupled with dividends?

Then there are several other FTSE 100 stocks Id consider buying as well. I believe theyd help ready my portfolio for whatever comes next.I regard AstraZeneca, BAE Systems,British American Tobacco,GlaxoSmithKline, National Grid, Pennon Group,Unilever,andVodafoneas solid picks for a long-term personal portfolio.

Finally, investors who dont have the time or expertise to keep track of individual stocks can invest in FTSE 100 trackers or liquid exchange-traded funds. For example, theiShares UK Dividend UCITS ETF is a basket of the 50 highest-yielding stocks from the FTSE 350 Index. Such a dividend-oriented ETF could be appropriate for most portfolios.Another ETF to consider could be the FTSE All-World ETF, tracking the performance of a large number of stocks worldwide.

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tezcang has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline and Unilever. The Motley Fool UK has recommended Halma, Hikma Pharmaceuticals, and Pennon Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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To Drive Financial Inclusion, Businesses and Nonprofits Must Come Together, Says This Executive – Triple Pundit

Posted: at 10:03 am

For Theresa Bedeau, senior manager for community development banking at Capital One, the racial wealth gap is not some distant concept its personal.

I grew up in New York City, in the Bronx, and I understood the impact of lack of financial inclusion in my own community, she says. My neighbors lack of economic mobility was not due to any individual shortcomings, but the reality in which we had to navigate our world, which had unequal access to opportunity. Her firsthand knowledge of how financial barriers can limit peoples prospects has made Bedeau a champion of driving financial inclusion among communities that often go underserved.

Indeed, the racial wealth gap has limited opportunities for people of color in the U.S. for generations and it persists even as other socioeconomic gaps narrow. The wealth gap between black and white families grew from about $100,000 in 1992 to $154,000 in 2016 and research indicates it could grow even wider in the wake of COVID-19.

A May study from the International Monetary Fund examined how past pandemics, such as SARS, H1N1 and Ebola, affected wealth disparities. They found that these pandemics raised income inequality overall and hurt employment prospects for those without advanced degrees. This is consistent with recent findings from the National Bureau of Economic Research: Within the bottom fifth of U.S. income earners, who are more likely to be black or Hispanic, 35 percent lost their jobs during the first two months of the pandemic, compared to 9 percent in the top fifth of earners.

Along with holding communities of color back from opportunity, McKinsey estimates the racial wealth gaps dampening effect on consumption and investment will cost the U.S. economy $1 trillion to $1.5 trillion between 2019 and 2028 or 4 to 6 percent of the projected GDP by the end of this decade.

Those numbers are real, Bedeau says. By acknowledging that, we can see that we have a lot of work left to do. Conversations around racial equity can be hard to have, but theyre necessary.

Businesses, particularly those in the financial services sector, have a clear role to play in delivering financial inclusion and empowering more people economically, but they cant go it alone. To drive maximum impact, companies must not only partner with nonprofit organizations and community groups, but also listen to them and value their guidance as experts in what their neighborhoods need, Bedeau says.

Financial inclusion is so much more than owning a bank account. Its about being active participants in the wider financial community and how people want to manage their financial lives, she explains. Part of the way we build trust between a financial institution like ours and the community is to partner with community groups. We have a shared commitment, working with organizations that support entrepreneurship and business ownership. Financial inclusion also begins with savings and a journey toward financial independence and wealth generation for communities that are generally underserved.

A 2017 survey from the FDIC (Federal Deposit Insurance Corp.)showed that 20 percent of households are underbanked or underserved, and 40 percent of Americans cant cover a $400 emergency expense. As COVID-19 continues to disrupt lives and livelihoods, these issues are becoming even more pronounced. Nearly half of Americans are worried about the pandemics impact on the economy and their financial lives, and 53 percent of lower-income adults reported having trouble paying some of their bills in April.

A wide variety of people might face barriers to financial empowerment from students uncertain about how they will fit into the modern workforce, to seniors struggling to understand online and mobile banking, to aspiring entrepreneurs looking to bootstrap their businesses.

The focus of Capital Ones nonprofit partnerships is to reach all of these groups. We have strong, deep relationships with community organizations, Bedeau says. What I love is that we work with these organizations in our daily work. Connecting with them helps ensure that our products and tools are meeting the needs of the community and addressing the challenges they face.

Building greater capacity for financial inclusion is essentially about a commitment to economic justice, she continues. Take, for example, Capital Ones work with the Long Island Community Foundation to close the racial wealth gap in the borough, with the potential to add a $24 billion boost to the local economy. The partnership is community-led so that it can be responsive to local needs. That is really reflective of the way we approach our community partnerships, Bedeau says.

Founded in Queens, New York, in 2008, Grameen America builds on the legacy and proven model of Nobel Peace Prize Laureate Muhammad Yunus. His revolutionary but simple idea is that all people can lift themselves out of poverty through their own entrepreneurial spirit.

Grameen America, a longtime Capital One partner, provides microloans starting at no more than $2,000, along with financial training and support, to its members. As part of the program, members open free savings accounts with commercial banks, including Capital One, and make weekly deposits.

The target population is women who live below the federal poverty line, for whom the mainstream financial system is often out of reach. The women Grameen serves previously had few options for accessing capital, and most lacked bank accounts and had little to no credit history.

Grameen Americas programming has expanded to 15 U.S. cities, disbursed $1.42 billion in loans and served 129,000 women. For more than a decade, Capital One has been supporting Grameen Americas microloan programs in New York City, Houston, Miami and New Jersey, along with technology and capacity-building initiatives to help scale and empower more low-income women entrepreneurs. And theres a huge demand for that support, with an $87 billion gap in financing for small businesses.

The women in Grameen Americas program use their microloans to launch a wide range of small businesses everything from selling empanadas out of a shopping cart to a full-fledged restaurant and business storefront, says Alethia Mendez, vice president of operations and program strategy for Grameen America.

A key part of Grameens approach is its peer-to-peer lending model. A cohort of five women, who are known to each other through friends and the community, make lending decisions collectively, forming a trust network, Mendez explains. This helps encourage responsible financial practices and repayment.

The more than 99 percent repayment rate is a testament to the power of the cohort and those individuals who society might not consider credit-worthy, she says. One of the biggest influencers is that they dont want to let each other down. These are women who are friends, trusted individuals from their community, so in a sense they have created a bond of accountability.

For Bedeau, what makes Grameen America so impactful is that they listen to what people on the ground say they need.

Their recipe is quite simple: Meet the women where they are [and] connect them with the right financial products and services, she says. "At the core of what they do is understanding peoples needs and how they want to live their lives. For many of these women, it might be the first time theyve opened a savings account. Working with Grameen America presents a great opportunity for us to build a relationship with these women and support them in their goals to build wealth for themselves, their families and their communities.

There is a huge demand for more solutions like these. The number of women running businesses has doubled over the past two decades. But in the U.S., women are the recipients of only 4 percent of all small business loans, and the lending gap is even wider for women of color, as TriplePundit has previously reported.

Fundamentally, we believe that both the private and public sectors have a responsibility to do more and to be intentional about this type of support, Mendez says. Capital One has been a strong partner and supporter, from a programmatic as well as a philanthropic and funding perspective. These partnerships advance financial inclusion for the women they serve and also build our own capacity as an organization, so we can be strong for the hundreds and thousands of women we work with.

This article series is sponsored by Capital One and produced by the TriplePundit editorial team.

Image credit:Christina @ via Unsplash

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The Hope and Struggles of Bhutan’s Women Vegetable Vendors – The Diplomat

Posted: at 10:03 am


Located just below the main town in Thimphu, on the bank of Wang Chhu, Centenary Farmers Market bills itself as the biggest vegetable market in Bhutan. Outside the market, especially on weekends, taxis and private cars congest the roads, struggling to find a parking space. The two-story market is divided into two sections: the ground floor sells vegetables imported from India, while the first floor displays local organic produce. The market is just 12 years old. It was inaugurated in 2008 by Princess Ashi Dechen Yangzom Wangchuck to celebrate the monarchs centenary reign. The market site, within its small life time, has witnessed a gradual change from the previous several seasons, and so also for the vendors there. In this short essay, we offer a peek into the lives of women vendors at the Centenary Farmers Market.

According to the International Labor Organization (ILO), at least 2 billion people, constituting about 61.2 percent of the worlds working population, are absorbed in informal sector employment today. These workers, who enter the informal economy owing to the lack of economic opportunities and other means of livelihood in the formal economy, mostly reside in developing countries. While there are competing claims with regard to the role of informal sector employment in helping to reduce poverty and inequality in the global economy, it cannot be denied that the sector continues to be a refuge for many.

The informal sector covers a wide array of unorganized economic activities in commerce, agriculture, construction, manufacturing, transportation, and services. In Bhutan, according to the Labor Force Survey Report 2018, 73.6 percent of the labor force is currently engaged in the informal sector, mainly comprising individuals with low education, rural area migrants, and poor households. Further, within the sector, almost three-quarters are involved in agriculture-related employment.

While on one hand, the informal sector provides jobs and reduces unemployment, in many cases the jobs are low-paid and guarantee little or no security.

In Bhutans capital, Thimphu, farmers from different parts of the country come to Centenary Farmers Market to sell their produce. The market houses about 400 stalls, providing self-employment to both the farmers and vendors alike. Numbers indicate that these sellers are largely women. But why have so many women conglomerated in the market?

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There are two recurring reasons to account for this, which these women themselves cite. First, women are traditionally expected to perform care-work, provide food to the family, do household work, and other feminine tasks. And this spills over to the kind of work they do. I think Bhutanese always have had this culture of females doing these kinds of work, Tshering said. Regular office works entail fixed (and often long) work hours, and other rigid obligations, and the women who enter the market overcome a lot of barriers and have many obligations. The informal sector gives them a flexible work schedule: both a time to perform their traditional gendered activities, and also a time to earn some money in the hours they can afford to spare.

Second, barriers in education also lead women to this option. While their male friends and siblings go to school, girls were expected to remain home and take care of younger siblings or the elderly. This inequality in access to education continues to date. In 2018, the adult (15 years and older) literacy rate in Bhutan for men was 75 percent, while for women it was 57 percent. This leads to more women being disqualified from formal sector employment, both in the public and private sectors.

Entry into the market has, however, empowered many women, at least to a certain extent. These women have made the best use of the opportunities the Centenary Farmers Market has in store for them.

A study conducted by the National Centre for Women and Children showed that violence against women is not uncommon in Bhutan. The report shows that one in every three ever-partnered women experienced an incidence of violence at least once in their lifetime, and more than 50 percent of those women (meaning one in every two) experienced violence twice or more. One of the three main causes of this intimate partner violence was financial stress in the family. To address the issue, the report recommends financial independence for women.

While a lot of research advocates for full financial independence for women to be empowered, these women have a different insight to offer. My husband consults me about our childrens education; he has to I also contribute, Pema said. We also discuss our saving strategies, and our monthly spending, she added. Merely being a part of the financial decision-making process of and in the family had empowered women, and lowered the chances of being victims of violence.

Many of the women in the market are prime breadwinners in their families, and some supplement their male counterparts incomes. Irrespective of their contributions, these women report displaying a great deal of autonomy in their marriage after becoming vendors and starting to earn money. They also started to schedule their own work time, and could decide what to do on their days off.

This said, not much has changed, however, in terms of sharing their household work. While a few of them report greater gender equality at home, many talk about the pile up of household chores on their day off. I have to wake up very early in the morning, sometimes as early as 3:00 AM when I have a lot of vegetables to carry to the market, Lhamo said. and every day, before I leave for work, I have to prepare breakfast and pack lunch for my kids and husband. Even so, these women articulate a greater feeling of satisfaction and confidence, stemming from the contribution they make to their familys finances.

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The testimonies of the women are now laced with strain. While selling vegetables does give them some financial income, for many women, it is not very substantial. Our survey revealed that the average income for each vendor is just about 44,000 Bhutanese ngultrum ($590) a year. This translates into a low lower-middle class income (Bhutans median income, according to the National Statistics Bureau, is about Nu. 200,000 a year).

For the past few years, their average income has been dwindling, as our survey also revealed. The women vendors reported a drop in their real income. They fear it might drop even further with the regular pay hikes in the government sector, and the increase in competition in their market. But on any given day, they have very few options to choose from. Many of them feel selling vegetables was the only job they could do. There are too many vegetable vendors in the market, and that makes profit making difficult. But as an uneducated person what other option do I have? We have to rely on this type of work to earn our living, Pema sighed.

A common grievance among women vendors was the increase in the number of vegetable vendors in the market and adjacent areas, and consequently the reduction in profits over the last few years. More than any other policy suggestion even more than improved sanitation, accessibility, and storage they want the governments intervention in keeping the number of vendors as it is, or even reducing it. Many of them feel licensing vegetable vending would help solve their problem.

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Interestingly however, some of the women reasoned that there were problems with that approach as well: Even if vegetable vendors needed to get a license to sell at the Farmers Market, many who cannot obtain a license would simply skirt the issue by selling their vegetables somewhere else. The state then, in an effort to help the vendors in the Farmers Market, will also have to inconvenience sellers of the secondary informal sector.

The city of Thimphu had already witnessed a similar attempt at this. When the Thimphu Thromde (a second-level administrative division in Bhutan) banned vegetable vending in Norzin Lam (one of the streets in Thimphu), rather than complying with the direction, these secondary informal sector vendors and their supporters retaliated, calling the Thromde antiGNH (Gross National Happiness). This outcry was apparently quite loud on social media. These vendors comprised of individuals who could not get a permanent selling location in the Centenary Farmers Market, and as a result resorted to selling their produce in the streets.

Increasing the stakes is the steady increase in competition coming from department stores, shopping marts, and/or e-commerce, with doorstep delivery now in fashion. On every intersection and streets in the city, big shops are now selling vegetables; and customers who otherwise come to us find it more convenient to buy their vegetables from there, Tenzin said. These shops have made life very convenient for customers who need to do grocery shopping quickly and in lesser amounts, she added. Many of these shops have staff on payroll, pay regular taxes, and keep established lines of supply and distribution. The costs of having these components is offset by the volume of trade and profit margins from other products the shops carry. They very easily outperform the informal sector in pricing their products.

Now with the COVID-19 crisis, and the accompanying changes in market scenes, what changed for these women?

Bhutan is among the few countries that has handled the COVID-19 situation with sufficient care. To date, there have been only 77 cases (mostly from students and returnees), of which 62 have recovered, and zero deaths. Yet, businesses did not go unaffected, and especially informal businesses.

Corona has affected all of us, and to me as a vegetable vendor, Sonam said. Bhutan cannot produce vegetables on large scale, and we import a lot of vegetables from India via Phuntsholing. But the government has imposed restrictions on importing certain vegetables; with the limited local [Bhutanese] suppliers, it has become increasingly challenging for us to maintain stock.

Already under strain, faced with competition coming from both within and outside the sector, the COVID-19 crisis has aggravated these womens situation. Many of their earnings are halved, and their work time has been reduced (although this was set to change starting July 1). The public panic and stay at home campaign has decreased the number of customers they get on a normal day.

Despite their plight, for these women, their hopes are relentless. Even if I earn less, Tshering maintained, I will continue doing this.

Roderick Wijunamai teaches in the Department of Social Sciences, at Royal Thimphu College. Kinley Yangchen is a student of Political Science and Sociology at Royal Thimphu College.

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Posted: at 10:03 am

Lets clarify at the outset that Single by Choice: Happily Unmarried Women! is not as some would immediately assume a book of angry rants spewing venom against men. Instead, this anthology of essays, edited by Kalpana Sharma, is about that bizarre concept unthinkable in our part of the world: freedom of choice as applied by women to their own lives.

Nowhere are women more limited for choice than on the subject of marriage. From a very early age, marriage is pushed as the end goal for almost every girl, as the defining moment when she can start to experiment with, and experience, life. Want to wear make-up (for many of my generation, at least)? Do it after marriage. Want to travel? After marriage, with your husband. Want to live on your own? Heres hoping you can after marriage.

Its not surprising then that, for most of the essayists, remaining single was a choice they made after experiencing a little bit of life. As they dove headfirst into fulfilling careers and enjoyed the financial independence it brought, as they grew more mature and observant, as their parents eased up with what will people say?, the pot simmering with marital possibilities kept getting pushed to yet another backburner, until it eventually fell off the stove altogether.

Sports journalist Sharda Ugra gets it spot on. Having built a comfortable life, with her own apartment and freedom to do whatever she wants, whenever she wants, she asks a very pertinent question of Marriage itself: What is it you offer me in exchange for turning away from this life?

Standard answers pour in: security (not always; married women are routinely threatened with eviction by husbands and in-laws), companionship (husbands do die, even the most loving ones), and children to safeguard against loneliness in old age (until they move away). Social validation is a very important factor: marriage is seen as an achievement, cementing the fact that a woman was pretty enough, desirable enough and valuable enough to be acquired by a man.

A book of essays presents the other side of the story, heart-warming and funny accounts of women evading the pressures of settling down

Fairly weak arguments, really, but alas, so deeply rooted.

As for counterarguments, the first would probably be that women who choose to remain single must have some raging vendetta against men. The actual case is far different. Several writers mention wanting or having had long-term relationships with kind, caring and sincere men, but almost all are aware that once marriage is formalised, the dynamics of a relationship change. This is not hostility towards men, but towards typified gender roles which are strengthened within the institution of marriage.

It is not a question about domesticity either, of mad, career-driven harpies who refuse to cook and clean. These women cherish their homes and speak of the joy they get from cooking and taking care of their houses, their families and their friends. Perhaps it is an aversion to having their domesticity dictated by someone else. They must exchange how they want to live, with how they must live.

For men, it would be similar to being a seth, as opposed to working for a seth. As Laila Tyabji, chairperson of an NGO for womens empowerment, writes in Being Single is Not Being Solitary: life on my own terms seemed increasingly delightful and, gradually, the compromises and adjustments of marriage seemed more and more claustrophobic. She goes on to point out that this does not mean celibacy, adding, My idea of bliss became a lover who lived down the lane.

The second argument would be placing the greater good above individual choice. The pursuit of individual choice is often considered detrimental to the fabric of society and, more often than not, is not expected of women. Journalist and author Freny Manecksha writes in Happily Unmarried Ever After about campaigns in the Parsi community, encouraging marriages and procreation. The goal was to raise the numbers of a dwindling community, and it involved denouncing single Parsi women as selfish for not wanting to become baby-making machines. The women towards whom these campaigns were aimed rightfully laughed in the campaigners faces.

Most of the 13 essays in the book are heart-warming and funny accounts of young women evading the pressures from family of settling down. In Slouching Towards Singledom, magazine editor Aditi Bishnoi sketches a hilarious image of her parents creating a marriage profile for her. Others write of finding one tactic or the other to delay or avoid meetings, keeping at it long enough to limbo-dance their way out from under the marriageable age bar that grows comfortingly closer with each passing year.

But, as human rights activist Asmita Basu writes in Im Not in Transit, the point is not to glorify a single life or denounce all marrieds. Each state has its unique advantages and disadvantages. And so, Single by Choice presents the other side of the story, too, with several essays taking note of the pitfalls of never having been in a conscious coupling.

There is, of course, social ostracisation at a wedding celebration, Manecksha is not allowed to participate in a Parsi fertility ritual of planting a mango sapling. There are workplace issues, where a single woman is not given the same considerations as married women who have husbands and children and so can claim social legitimacy.

Then, most importantly, there is the difficulty of finding a place to live and being allowed to live there in peace. In Single And Free, copy editor Sherna Gandhy writes of single women having to endure suspicious glances from watchmen, neighbours, and of being seen by the censorious as being fast a sentiment echoed by Tyabji as well as doctor and professor Vineeta Bal, whose every visitor to her university campus housing man, woman, young, old is scrutinised, the implication, again, being that the lady of the house has by virtue of being unmarried no virtue to speak of. In Dalit writer Bamas essay Uphill Flows the River, being a single woman in her village is such an anomaly that her neighbours advertise to all and sundry that I live alone, and by doing so, put my safety in jeopardy.

Essentially, what it all boils down to is this: women are tired of being told how to live and some of them are finding the courage to do something about it, by not doing what is expected. They have nothing against marriage, but they dont see it as the right option for them. And thats all they ask, for the freedom to live as they please.

The reviewer is a member of staff

Single by Choice: Happily Unmarried Women!Edited by Kalpana SharmaWomen Unlimited, IndiaISBN: 978-9385606229152pp.

Published in Dawn, Books & Authors, July 5th, 2020

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