Retire Early
Lifestyle
Retirement; like your parents, but way cooler
In 1991 Billy and Akaisha Kaderli retired at the age
of 38. Now, into their 4th decade of this
financially independent lifestyle, they invite you
to take advantage of their wisdom and experience. |
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Men - Women
Their Comparative
Saving for Financial Independence
Billy and Akaisha Kaderli
Is the world financially
stacked against
women?
Why
do women lag in retirement savings as compared to men?
Are
women at a disadvantage for reasons too numerous to list? Is it sexism? Are
females not good savers? Big spenders? Is it really true that women get paid
less for the same work performed? Is the world financially stacked up against women?
I
read lots of articles noting all the reasons that “women have it harder”
than men when it comes to saving for retirement. Regularly listed are the
following:
-
The
difference in men’s and women’s wages, also affecting their
Social Security
amounts later - but the articles don't give honest insight into why the
wages vary. This leads the reader to conclude that it's sexism that
determines pay.
-
Women
often live longer than their spouses “forcing” them to live on one SS check
instead of two - However, by women living longer, this gives more time for their investments to
compound.
-
Women
take off work to raise children or to
become a
caregiver to a family member,
thus affecting their career path earnings. See the tools offered below which
- if used - stay-at-home-moms and caregivers can become financially
independent.
Think outside the box
I
don’t enjoy reading articles that tell me “statistically,” I’ll be settling
for less and that I don't have options. Or that “according to the numbers” somehow, I am doomed to a
mediocre savings rate and career path. Or because I am a woman,
I'm going to have it tougher in life - across the board.
So,
let’s think outside the box for a moment.
First things first – education and career choice
It’s
called OPEH.
OPEH
is an anacronym for Occupation, Position, Education and
How many hours
worked a week. These four things affect a person's income far more than
one's gender.
And we,
as women, have choices in all of these categories.
Occupation
Georgetown University composed a list of the best paying college majors and
the percent of men and women majoring in those fields.
The
highest paying majors were Engineering, Math and Science.
Men
dominated these job choices, so their career path was set to earn a good,
solid wage with upward mobility.
The
lowest paying majors were those in Psychology, education, and social
services. Women dominated these fields, so their career path was set
to earn
less than the above-mentioned choices that males made. These different
career choices limited their upward mobility within their jobs.
We
women
have a choice as to what field we want to excel in, and we need to choose wisely.
Position
Teaching young girls the value of STEM courses (Science, Technology,
Engineering and Math) will place them in careers where they will earn more.
Upward mobility in STEM careers is greater and this will translate to better
earnings on their future bottom line.
Education
Within those STEM fields, males tended to gravitate towards a specialty or
training that paid better. In other words, males once again made different
choices for their focus. Nothing is stopping us from making these
same choices.
Our
brains are every bit as good, wouldn't you agree?
Hours worked per week
Even
within the same job categories - and this is important here - one of the things that differentiated male
workers from female workers was the willingness of male workers to put in
more hours per week on the job. Males were more inclined to be on call or be
at the office any time the firm might call them.
Two other things separated
the male workers from female workers - 1) men were willing to take on
hazardous jobs and 2) they were willing to relocate in order to advance
their careers.
If an employer wants someone on
call, working many hours a week, and willing to relocate for their own
advancement, we women can choose otherwise, but there is a financial
consequence to that choice.
The
effects of OPEH need to be explained to female children early in life. If
they want to place themselves on an even playing field in their careers they
can do so. At least they would know
the options they face, and in this way they can make more objective decisions
about their futures.
But wait! There’s more!
Ok,
ok, so your daughter is more artistic, or leans toward community involvement
and verbal skills. Is she pre-destined to never become
financially independent?
This
is where you as a mother, father, aunt or friend can teach these young girls
about how to
invest
early in their lives. And the earlier the better.
The earlier you start saving, the
better your returns - Chart by Fidelity.com
They
need to learn how to save and why, and to take advantage of any
employer-sponsored savings plans. Teach them about the
power of compounding interest, and to become familiar with
the language
of finance. This will pay off
exponentially. If they learn to
track
their spending from a young age and they know where their money is
going, they will become the master of their financial future.
Money
doesn’t care what gender you are or what color you are, it works the same way for everyone.
Once
you learn how to
create a money machine and how to keep yourself out of
debt, you have some powerful bases covered.
Additionally, help this child list her skills. Have her know what she is
able to contribute to any company or relationship and teach her how to
construct friendships and alliances so
she can build personal capital.
Often, it’s who you know that can give you a leg up in the world. Teach
self-sufficiency, and independence.
Help her become the director of
her life, not a victim. In this way, perhaps she will become an
entrepreneur. Owning your own business is a well-known path to creating
wealth.
These tools are the great equalizer
(no matter what career she chooses)
and will be able to move your child forward toward a
financially stable future. Women who have chosen to be
stay-at-home-moms can still be
financially independent if they utilize these above-mentioned tools.
Yes,
it is being done. Today.
One last thing
I say
this all the time, and while it’s not a popular idea, it needs to be placed
into the mix of valuable instruments that a young woman can use to her
advantage.
Of
the four categories of highest spending in any household,
the cost of housing is the highest. Have her use
this
knowledge to her advantage.
New
research shows that those who are saving significant amounts for their
financially independent future, slash their
housing costs.
It's the number one thing they do that separates them from the herd.
The
biggest house is not always the best use of capital.
You
can cut out your lattes every day and pack your lunch to work, but that will
only reap you a small yearly amount. Paring down an expensive mortgage
(which can be a liability) can save you thousands during this same time
period. In this way, she can
move quickly to her financial goals.
The effect of
parents on teaching children about finance
Parents remain THE top source of financial advice for most women. Even after
graduating from college, a low percentage of women say they feel equipped to
manage their finances.
Today, 88 percent of women say more financial education would provide them
with greater confidence in directing their money.
Help
your child build a foundation for financial independence. Help her to invest
as early as possible, and compounding will do the rest. Even if she
takes off time to have a family, her
money
will continue to work for her.
After
all, isn't financial self-sufficiency what it's all about?
Additional
Resources and tools
Calculators, Worksheets - Tools and calculators to analyze your
monetary situation in all areas of living.
Financial
Education - Forums, newsletters, sites to learn about investing,
articles about money, market quotes
Our Retirement Issues Page - Up
to-date information on retirement, travel, medical tourism and lifestyle.
For more on
Retirement Topics,
click here and
here
About the Authors
Retire
Early Lifestyle appeals to a different
kind of person – the person who prizes their
independence, values their time, and who doesn’t
want to mindlessly follow the crowd.
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