Saturday, August 18, 2018

Mr Virgin Movie Review: A collection of stale jokes

Out of the three Nepali movies that were released this week, Mr Virgin, because of its trailer, looked promising. But like all movies, it too failed to live up to the hype.

The movie revolves around three men: Dhal Bahadur (Gaurav Parihar), Pavitra Prassad (Bijay Baral) and Kumar Kancha (Kamal Mani Nepal), all of whom are in the mid-thirties are yet to ‘lose their virginity’. After getting poked at by a Chumman Lal (Bhola Raj Sapkota) the three friends decide it was time they made make him eat his words.

The next night they decide to get laid, and in search of girls they visit Thamel, where they meet a taxi driver Pyasi Mohan (Rabindra Jha) who instead of helping them, takes advantage of the trio.

The first half of the movie is average. Director Bisharad Basnet tries to lighten the mood with humour but fails to entertain the audience as all the funny bits were already on the trailer. The jokes were clichéd and inappropriate, especially those involving transgenders.

While the joke kept the audience seated during the first half, there was nothing worth watching in the second as the movie slowly started to lose the audience. The half failed to explain the gist of the movie or the characters which makes the film confusing and not as funny as the makers though it is.

The presentation of the story in both the halves made some in the hall leave their seats.

Parihar, who is known to play serious roles, is poor in the film which makes the audience question his reason to accept such a film. He doesn’t look comfortable in his role which questions his versatility as an actor too.

Baral is another character that has disappointed. He comes out fake and doesn’t seem to have understood his character. His few dialogues like ‘I’m so excited’ and ‘I’m so confused’ are funny but apart from that, there is nothing worth noting about his acting. Nepal, however, has tried to make sure he does his character justice, but the poor script doesn’t help.

Mariska Pokharel, who plays the role of an escort, is another character portrayed in an odd manner. Her acting is strange and the way in which her character is introduced is abrupt. Her concluding scene is just as abrupt which makes the audience question why was she even in the movie.

The only person who has done his role justice is Rabrindra Jha, who plays the role of a taxi driver. His unique dialogue delivery is sure to tickle everyone’s funny bones.

The reason why the actor’s performance is so poor is down to the director who has done his job amateurishly. There is no continuity between scenes and sequences which confuses the audience. The story was unique and could have been presented in a different manner. But even with such a good cast, Basnet failed to entertain the audience.

The background score is poor and the editing is below par. The dialogues, in the end, are too loud.

For a comedy movie, Mr Virgin does not make the audience laugh. Its inappropriate jokes and clichéd dialogue makes the audience cringe throughout the two hours. Overall the movie is a poor watch.

“I am so disappointed.”


Run Time: 130 minutes

Director: Bisharad Basnet

Genre: Comedy

Cast: Gaurav Pahari, Bijay Baral, Bholaraj Sapkota, Mariska Pokharel

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Practical Goal Setting for Finance and Personal Success

Marcus writes in:

I was really intrigued by your goal setting process. Could you walk me through that in more detail?

Quite honestly, I wasn’t sure what Marcus was referring to until he pointed me at this little section in my article early this week about the battle against scarcity:

In a very practical way, the most useful tool I’ve ever found for figuring out what I really valued and turning them into practical goals is the “three morning pages” journaling routine, where I sit down with a notebook and strive to fill three pages of it with whatever comes into my brain. This often turns into an exploration of what I truly care about and what I can do to manifest that in my life, which sets the stage for practical goal setting with goals that are really meaningful to me. When I have goals that are truly meaningful to me, I am strongly motivated to achieve them and I tend to hold onto the results of successful thirty day challenges if they help me move toward that goal in a real way.

I’ve written about goals before on The Simple Dollar – this article about SMART goals in personal finance is probably the best one – but all of those articles start off with the assumption that you already have some sort of goal in mind and you’re just honing it into something that will be successful.

When you step back and think about it, that’s really the fourth or fifth step in the process. A great goal doesn’t just spring out of nowhere. There’s actually a chain of things that go on before you even have any semblance of a goal, and it’s usually because of stumbles in that process that people wind up with goals that don’t really match up with what they want out of life.

So, let’s walk through all of this from the start, step by step.

Step 0 – Live Life

A good personal goal comes from the way you live your life, nothing more, nothing less. This is the core of every good personal goal – it emerges from the patterns of your daily life.

This might seem like an obvious beginning, but many people come into goal setting without having done this. They hear about some idea pitched somewhere that appeals to them in some way and decide that this new thing they just learned about is their goal. They dive into it and then it fails, as it inevitably will.

That’s because good goals are rooted in the reality of your life and your experience and who you are as a person, and that’s different from everyone else on Earth. You can’t just wholesale take on a goal that someone else came up with because it sounds good at the moment, because it doesn’t come from you.

Live your life. Don’t pay any attention to what others say and what goals they think you should have for yourself. Live life fully, but with your eyes wide open.

That brings us to the true first step…

Step 1 – When You Notice Something You’re Not Happy With, Don’t Ignore It

Eventually, we all notice something we’re not happy with in our lives. For some, this comes really easy, because we’re immensely dissatisfied with some part of our life. For others, it can be harder, as a generally content person might find it hard to find some real form of discontentment in their life.

Although I’m generally content with my life, I can name several things I’m unhappy with. I am unhappy with my weight (though I’m in a better place that I used to be). I am unhappy with my flexibility. I am unhappy with the state of organization in my office. I am unhappy with how my free time is divided up.

At this point, it’s simply noticing that there’s a problem of some kind in my life. I don’t have any sense of a goal at all, just that there’s something that’s not where I want it to be.

In my own financial journey, I could see this starting to happen about a year before my own financial meltdown. I wrote about it in my journal about nine months before things really moved into crisis mode. Right there, I was already noticing the problem, but the issue then was that I didn’t move on to the next step until things got significantly worse.

In general, once you’ve noticed something you’re unhappy with, the next step is to give it some serious thought.

Step 2 – Think Through the Problem

Once you have a sense that there is something in your life that you’re genuinely unhappy with in a lasting way, you still shouldn’t jump straight to a goal.

A goal at this point would be just a Band-Aid on top of a serious wound. It’s a quick “fix” but it doesn’t really fix the problem in any meaningful and lasting way. The Band-Aid is likely to fall off and not help at all or even make things worse.

Instead, the best approach here is to give yourself some time to think through the problem. I use three key tools for this.

Step 2a – Spare Thoughts

Whenever I have some spare moments in my life, like when I’m driving somewhere or I’m waiting in a line or something like that, I consciously turn my thoughts to what’s going on in my life. I think about things I’ve noticed that I’m unhappy with and I toss them around a little. (I also often visualize upcoming situations and try to come up with a great way to handle them, or replay recent situations and try to figure out how to handle them better.) In general, I’ve tuned my spare thoughts to be self-reflective in a way that I think will make me into a better all around person.

The approach I often like to use with this is what I call the “five whys.” I think about something I’m unhappy with in my life. Why am I unhappy with that aspect of my life? I spell out that reason. Well, why does that make me unhappy? And I answer that. I do this until I’ve asked “why” five times, and usually the final answer is something that’s got me a bit emotionally agitated, but it’s usually something that’s really close to the root of the problem.

This was a thought process running through my head quite a lot during my financial low point. I felt very on edge about everything, and it was through asking lots of “whys” that I was able to burrow down to the core problem, which was that I was failing my family and my own future.

Step 2b – Homework

Another key aspect of thinking through a problem is to study the problem in detail, discovering what others have done to successfully deal with that issue in their life and what researchers have found about good ways of addressing the problem.

For me, this usually involves checking out many books from the library and reading most of them and browsing the rest. When I’m trying to bear down on a specific problem in my life, I become a voracious reader.

What I find, though, is that the more I read and the more I think about a problem, I often find myself changing directions a little bit because I begin to discover that the actual problem that needs solving isn’t exactly what I initially thought that it was.

Step 2c – Freeform Journaling, or “Three Morning Pages”

A strategy I’ve been using in the last year or two that works incredibly well for piecing through life’s problems (and other intellectual problems, like figuring out where I stand on a political issue or working through a new idea) is called “three morning pages,” which I learned from the writings of Julia Cameron.

“Three morning pages” is a really simple idea. In the morning, just set aside an hour or so, open up a notebook, grab a pen, and start writing whatever comes into your mind. What happens is that the focus and time it takes to write down one thought often leads to the next thought that sensibly follows it, and so on, which usually ends up leading to greater understanding and a good conclusion. It’s kind of like the “five whys” that I do in my head, but more freeform.

At first, I was really skeptical of devoting this much time to a journaling practice in the morning, but I came to realize that this was an incredibly effective way of “sharpening the axe.” The process almost always left me feeling clearheaded and refreshed, and it almost always helped me integrate the things I was thinking about and the things I was learning into some really powerful conclusions.

What I’ve found is that this “three morning pages” practice often ends up being part of a feedback loop. I’ll end up thinking about some of the conclusions I’ve drawn and then that ends up fueling more reading, which ends up fueling more morning pages. Eventually, I end up reaching a really firm conclusion about what the problem actually is, but it usually takes some cycles of reflecting, reading, and journaling.

I view this as moving from just slapping on a Band-Aid to actually evaluating the disease and figuring out what’s wrong.

A Note About Step 2 – Recognize the Internal Value

Most people care in a relatively shallow way about a lot of things, but they really only care about a few things (beyond their basic needs) enough to really take action on them. Think about how people profess how much they care about a political issue, for example, and then can scarcely “find the time” to even vote, let alone do campaign work or run for a local position.

Here’s a key truth for you: if a goal is not intrinsically tied to one of those things you truly care about on a deep level, it’s probably not going to succeed.

I was aware of my personal finance problem for most of a year, but it took the connection of that problem to something I cared enough about for me to take action – namely, my child’s future and my self-identity as a good father. If not for that, I likely would have kept pedaling in place, frustrated about my finances but not really changing anything about my behavior.

Why is it hard? Usually, we adopt behaviors we don’t like in some ways because we do like them in other ways, and when the habit is established, it’s very hard to break. We have to value something different more than the path we’re currently on plus the effort needed to change it. That’s not easy, especially when we already like aspects of the path we’re on.

That’s not easy. We all care about a lot of things, but very few things meet that threshold, and without that threshold, it’s hard to set a goal that requires major changes in life.

You have to recognize that achieving a goal means giving up something in your life right now. Achieving a goal means you’re devoting some resource in your life to that goal, whether it’s money, time, energy, or something else. That resource is currently being used for something else, probably something you value at least a little.

Part of the reason for carefully thinking about a goal and working through it is to uncover whether or not you really care about something enough to actually make change in your life or whether it’s wishful thinking. For most of us, that means it has to tap into something truly more important and urgent than the reasons why we already spend our time, money, and energy.

Simply adopting a goal isn’t enough. You have to know why you’re adopting that goal, and that’s why the homework and the journaling and the thinking is so important. You have to understand the why.

Step 3 – Stating the Basic Goal

At some point, a switch will flip and it will begin to feel more “right” to actually start making a change in your life than to let things be as they are. That’s when you’re ready to actually develop your goal, and the first step is stating that goal.

This might seem obvious, too, but it’s actually harder than you might think. Most goals that people set for themselves aren’t all that useful – they’re really strong notions that pack a powerful personal punch, but they don’t really lead to any sort of action.

For example, you might want to “get your finances in order,” but what does that even mean?

Start by thinking about what you want to be different in your life as compared to how things are right now. That should be the core of your very basic goal. “I am currently X. I want to be Y.”

For example, you might say “I am currently in debt. I want to be free from debt.”

Or you might say “I am currently overweight. I want to have a normal weight.”

Or you might say “I am currently a bad father. I want to be a good father.”

A good goal starts by distinguishing where you’re at from where you want to be. That way, the change that you need to make becomes clear and then you can start revising that goal into something meaningful.

Step 4 – Making the Goal SMART

A good goal is one that sets you up for something clear that you can do each day to move toward the goal. One way to massage your goal in this fashion is to use the SMART rubric. SMART is an acronym for five elements that a good goal should have.

Spacific means that it is extremely clear what it is that you want to do. Simply stating your goal should make it abundantly clear what it is that you want to accomplish.

Your goal should answer five questions – what? why? where? who? which? Sometimes, some of these questions are assumed, but you should make them either as clear as possible or else rely on them as a very obvious assumption (“where” is often assumed, for example).

A goal of “I want to get my finances in order” can be made specific by “I want to eliminate my family’s debt load and set up an automatic plan to save enough to comfortably retire.”

Measurable means that the line between success and failure is immediately clear and usually represented by a number.

For example, with the finance goal above, the “measurable” is already there for part of it – a total debt of zero. The other part probably depends on some calculations – maybe you need to be automatically putting aside 15% of your salary for retirement to say you’ve succeeded. That’s clearly measurable.

Achievable means that it’s a goal you can actually pull off if you work hard at it. It doesn’t rely on things happening that are outside the possibility of your current life.

Debt repayment is an achievable goal for most people. On the other hand, becoming a billionaire isn’t an achievable goal for most people because it requires things that are outside what they have and what can easily be acquired. All the effort in the world won’t make you a billionaire unless you add a great idea, a bunch of skills, and a ton of luck.

Realistic means that it’s actually achievable within the constraints of your life. Everyone’s life is different – something might be achievable for a lot of people, but it’s not realistic for some of them.

A perfect example of this is a goal that is something you could pull off if you didn’t have kids or a husband or a job, but it’s essentially impossible to do with those things gobbling down resources (time, energy, money) in your life.

A good way to check whether a goal is realistic is to think about the people in your life that will be affected by your goal. Will they be able to “flex” enough to make room for the changes needed for you to achieve your goal? What will that require out of them?

Time-limited means that you’re setting a deadline for yourself to achieve that goal, which gives you some constant pressure to work on it. This time limit should be realistic, of course, and within what’s actually achievable (though pushing the edge of what you think you can handle can be a good motivator).

For example, someone who’s losing weight might shoot to lose 1.5 pounds a week for a year, which adds up to a 75 pound weight loss in a year.

When a SMART goal comes together, I find it useful to start constructing a plan almost immediately, and that plan comes from a series of questions. I ask what I can do in a series of timeframes to complete this goal or move forward on it.

What can I do in the next 12 months to achieve this goal?
What can I do before the end of the year to achieve this goal?
What can I do in the next three months to achieve this goal?
What can I do this month to achieve this goal?
What can I do this week to achieve this goal?
What can I do this weekend to achieve this goal?
What can I do today to achieve this goal?

I ask those questions over and over again, almost on a daily basis, which moves us into step five.

Step 5 – From Goals to To-Dos and Reminders

Almost all of the goals I set for myself are made up of some combination of two elements. They consist of to-dos, which are very specific actions that I need to take, and reminders, which are changes in behavior that I need to maintain in my life.

For example, if my goal was to read 20 books on a topic in a year and take notes on them, I would add an item to my to-do list, a repeating to-do that would tell me to read for an hour each day with my notebook and pen beside me. I constantly look at my to-do list throughout a given day and strive to empty it out most days. Having a to-do list that I don’t have to actively think about during the day is a great thing. (Unsurprisingly, my “three morning pages” often clarifies today’s to-do list, adding things and removing others.)

Other goals don’t work quite as well with specific to-dos. For those, I use reminders – more specifically, I use the “triggers” technique that I learned from Marshall Goldsmith’s book of the same name. Each morning, I run through a list of “triggers” – ongoing behavioral changes I’m wanting to work on in my life – and think about how I’m going to nail each one today. In the evening, I give each one a score from one to ten based on how well I pulled it off that day. Almost all behavioral goals I have wind up on this list of triggers.

Going through my trigger list makes up two of the items on my daily to-do list, to be done early in the morning and in the evening.

Again, these to-dos and triggers all spring forth from that series of questions I ask myself about that goal. When that goal is set in a SMART format, I start answering a cascade of questions about it that breaks it down into what I need to do today to move that goal forward, and those things are either to-dos (on my to-do list) or behaviors (on my trigger list).

Step 6 – Even SMARTER – Evaluate and Readjust

Forming a good goal is great. Starting out on the journey to achieving it is great, too. To-dos and triggers are the nuts and bolts of it. But that’s not enough. Your goal will never go perfectly according to plan, ever, and success comes from constantly evaluating and readjusting your goal.

For me, this loops back to the journaling I mentioned early in this post. I do evaluation of my goals constantly in my thinking and in my three morning pages. Is this goal going well? Is it going poorly? What do I need to adjust, if anything?

I usually try to give a goal a month in its current implementation before I make changes. Quite often, the first few weeks don’t show any real results and I want to give it some time. Meditation as a daily practice, for example, didn’t show me any real results for the first three weeks, but now it’s a daily practice of mine; without giving it a month, I would have missed out.

Once a month or so, I go through my ongoing goals carefully. Is this going the way I want it to go? Why or why not? I also re-ask all of those goal breakdown questions and make sure all of the answers still make sense for me.

Again, this seems like extra work at first glance, but this kind of thing is the definition of sharpening the saw. Spending some time making sure that you’re doing sensible things and that you’ve got the tools you need to do them and that everything is in place almost always makes the whole task go far easier, and usually it ends up taking way less time and energy (even including the prep work) than just going about it in a haphazard and unconsidered way. Appreciating the power of sharpening the saw is one of the biggest steps forward I’ve made in my life in the past few years. If you spend time setting yourself up to knock things out of the park by thinking them through and getting ready for them, you’re going to end up with better results in less overall time and with less overall effort than you would have by just attacking them head on without any prep work.

Final Thoughts

I wish I could say that I had packaged all of this together so neatly during my own financial turnaround, but the truth is that my own turnaround was a lot more haphazard than this. I spent a long time sensing that there was a problem without really delving into it until I almost stumbled completely off a financial cliff, then I fell into a panic mode of homework and haphazardly throwing different tactics at the wall to see what stuck.

It worked solely because I was driven by something I cared deeply about – my sense of responsibility to my own future and that of my child. That pushed me to keep stumbling forward, but it was a stumble for a long while.

Knowing what I know now, the whole process would have been much smoother and much more efficient and less trying in places. If I had worked through the above process as soon as I began to sense something wrong, I would have been in a much better financial position much faster.

Another advantage of this process is that it has often kept me from diving into major goals that won’t end up panning out. I often care about something and want to work on it, but I realize that I don’t care enough to take on the changes in my life and those around me that it would require. Recognizing that early on has saved me from feeling like a failure about not achieving some ambitious goals that I cared about but not deeply enough.

If you have this nagging sense that something is “wrong” in your life – your finances, your relationships, your health, your career, whatever – start working through this process, right from the top. Start by “sharpening the saw” and thinking about what’s actually wrong, and when you’ve figured that out, try to transition it into a goal and see whether or not it fits into your life. It might turn into a life-changing goal, but even if it doesn’t, the process will bring you to a better place where you understand the realities of your life much better than before, and that’s well worth it.

Good luck!

The post Practical Goal Setting for Finance and Personal Success appeared first on The Simple Dollar.

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Friday, August 17, 2018

How Does a Target Retirement Fund Actually Work?

Tim writes in:

Question for the Mailbag: how exactly does a target retirement fund actually work? Every time I read about it it makes less sense.

This did start off as a question in the mailbag, but the answer became so long that it seemed sensible to give Tim’s question its own article.

Let’s start off talking about risk and reward.

There are a ton of different investment options out there. They differentiate themselves in a bunch of different ways. Some are really low risk, but don’t offer much return, like a savings account. Even in the best online savings account, you’re going to earn only 1% to 2% a year, but there is essentially zero chance of losing money.

Over the course of 10 years, an investment like this might see returns each year of 1.5%, 1.5%, 1.5%, 1.5%, 1.5%, 1.5%, 1.5%, 1.5%, 1.5%, and 1.5%, giving an average of (you guessed it) 1.5%. While the average is pretty low, notice that there is no individual year where money is lost. There is no time in which it is “bad” to have to rely on your investment, because this investment is as reliable as can be.

As you start adding risk, you generally start adding more return, like, say, VBTLX (the Vanguard Total Bond Market Index Fund), which offers a better average annual return (around 4%), but has a chance of losing money in a particular given year.

Over the course of 10 years, an investment like this might see returns each year of 4.5%, 3.3%, 4.8%, 4.9%, 4.5%, 4.3%, -0.5%, 4.7%, 4.8%, and 4.7%, giving an average of 4%. The annual returns are fairly consistent, but note that -0.5% year. In that year, the investment lost money, and there will definitely be years like that over the long haul.

Those lower-than-average years – and particularly those losing years – are problematic. Let’s say you’ve had a run of above average years and you’ve decided you have just enough money in your investment to make retirement work. Then, as soon as you retire, that investment spends the next year losing money, throwing off your math entirely and making retirement look real dicey. While it’s not too bad in the case of this investment, the riskier you get, the more likely this scenario is to happen. Those year-to-year variations are often referred to as volatility – an investment is volatile if it has a lot of those variations.

Let’s add some more risk and look at the Vanguard Total Stock Market Index (VTSMX). It has an average annual return since inception of 9.72%, which seems sweet, right? Let’s look closer.

Let’s look at the last 10 years of annual returns for it in reverse order: 21.05%, 12.53%, 0.29%, 12.43%, 33.35%, 16.25%, 0.96%, 17.09%, 28.70%, and -37.04%. Three of those ten years are worse than a savings account. One of them involves losing more than 37% of your investment.

This investment is even more volatile. Consider that you’re just starting your retirement and you have your money all in this investment and you hit one of those 40% loss years. That’s going to change the math of your retirement drastically. You’ll be pulling money out to live on as the market drops, which means that you will have depleted a much higher percentage of your retirement savings than you should in a single year and you’ll probably have to do that for the next two or three years while you wait for the market to rebound. This leaves you with a permanently depleted retirement savings, which either means very lean living late in life or a return to the workforce.

Want to see what that looks like in numbers? Let’s say you have $1 million invested in this and you retire, deciding to withdraw $50,000 a year to live on. That’s 5% a year, which is pretty risky, but you believe in that long term average return. Well, during the first year, the investment loses 40% of its value. It drops to $600,000… but you took out $50,000 to live on, so it’s actually just $550,000. Going forward, if you take $50,000 a year out of that, you’re going to go bankrupt in about 15 years (if not sooner, depending on volatility).

You can keep adding more and more risk and get a higher average annual return, but the key word here is average. You can look at things like the VSIAX (the Vanguard Small-Cap Value Index Fund), which has a very high average annual return but is primed to take an absolute beating the next time the stock market declines, meaning it’ll lose a large percentage of its value as those businesses struggle during an economic downturn (causing some investors to sell) and other investors flee to safer investments. You eventually reach investments that are tantamount to gambling, like cryptocurrency, which is so volatile that you might triple your investment or lose half of it in a month or two.

So, what’s the message here? If you have a lot of years before you retire, you want your money in something pretty aggressive that has really good average annual returns, but might have a few individual years that are really rough. If you don’t need the money anytime soon, those individual bad years don’t really matter to you – in fact, they’re kind of a blessing for you because it’s cheaper to buy into an investment when the market is down.

As you start getting close to retirement and actually retiring, those individual years start to become much more important. Unless you have a very large amount in your retirement account, you can’t afford one of those big down years that are somewhat likely to eventually happen with an aggressive investment. If it happens, you’re going to be right back in the workforce.

The solution, then, is to be aggressive with your retirement investments when you’re young and then, when you approach retirement, move your investments to less aggressive and less volatile investments that you can rely on more.

The best way to start understanding what a target-date index fund does is to look at some people who are on the road to retirement.

Angie is 25 years old. She’s not intending to retire for 40 years. Because her retirement is so far off, she can afford quite a lot of risk in her retirement savings. She can afford to invest in things that have a pretty good average annual return that’s paired with the risk of enormous loss. She might put her money into the Vanguard Total Stock Market Index and/or the Vanguard Small-Cap Value Index Fund. Her goal is to build as much value as she can over the next 40 years and chasing a high average annual return is the best way to do that.

Brad is 45 years old. He’s not intending to retire for 20 years. He’s probably still going to be pretty aggressive, but the idea of going less volatile might start popping up in his head. He still wants a very high average annual return, but there will come a point soon where he needs to make some changes.

Connor is 60 years old. He’s thinking of retiring in five years. He’s got almost enough to retire in his retirement savings. At this point, he really can’t afford to have everything in an aggressive investment that might drop 40% of its value. So, he might leave some of it in stocks, but the rest might be moved to bonds. His average annual return might be lower, but he’s no longer running the risk of losing 40% of his entire retirement savings.

Dana is 70 years old. If her retirement savings keeps growing in a slow and stable fashion, returning just a few percent per year but not losing a bunch of value in any given year, she’ll be fine. She probably wants to be mostly in the Vanguard Total Bond Market Index and maybe even have some in a money market fund (akin to a savings account with very little risk).

As you can see from these stories, as you get older and closer to retirement, it makes a lot of sense to gradually shift your investments from highly aggressive investments to more conservative ones. The issue, though, is how does one know when to start making those transitions? Furthermore, will you remember to do it, and to do it right? Those aren’t easy questions for individuals saving for retirement. It’s not entirely clear when to do this or how to do this, and many individuals aren’t going to put in the research and time to do it. People just want to put away the money and then have money when it’s time to retire.

That’s where target retirement funds come in. They do this automatically.

Let’s look back at 25 year old Angie. She aims to retire in about 40 years. So, theoretically, she wants to choose a pretty aggressive investment to put her retirement savings into. However, when she’s in her late forties or early fifties, she might want to begin slowly making things more conservative, and this gets even more true as she reaches retirement age and then retires. She doesn’t want a nasty shock when she’s old.

That’s what a target retirement fund does automatically. If Angie is 25, she’s going to retire sometime around 2060, so she might buy into a Target Retirement 2060 fund with her retirement savings. Right now, that target retirement fund will be really aggressive, but as the decades pass and the 2040s arrive, it’s going to slowly become less aggressive, and in the 2050s, it becomes even less so. It cuts out the volatility in exchange for a lower average annual return as it gets closer to its target date.

How does it do that? A target retirement fund is just made up of a bunch of different funds, and as time passes, the people managing the target retirement fund slowly move money out of some of the funds inside of it and move it into other funds.

So, for example, a Target Retirement 2060 fund might today be made up of 50% VSIAX and 50% VTSMX – in other words, it’s really aggressive, entirely invested in stocks, and some of those stocks are small companies that will either grow like gangbusters (big returns) or flame out (big losses). That’s okay for now – volatility is completely fine when you’re that far from retirement. What you want is a big average annual return over the next 25 years or so.

However, at some point down the road, probably in the mid-2040s, that fund will start becoming less aggressive. The money within the fund will be moved by the fund managers into things like bond funds or real estate, things that don’t have quite so high of an average annual return but aren’t going to see years of big losses, either.

By the time 2060 rolls around, all of the money in that fund will be in pretty safe stuff, which means you can rely on that fund to be stable in retirement.

That’s what a retirement fund does: It’s made up of a bunch of different investments that are gradually moved from highly aggressive things to less aggressive things as the target date approaches. When the “target” year is many, many years in the future, the fund will be really aggressive and really volatile, aiming for big returns over the next two decades at the cost of some really rough individual years. As the “target” year gets closer and closer, the fund gets less and less aggressive and less and less volatile, becoming something you can rely on.

That’s why, for people who aren’t really involved in managing the nuances of their own retirement savings, a target retirement fund with a target year pretty close to their retirement year is a really solid choice. It just manages that gradual shift for you without you having to lift a finger.

Good luck!

The post How Does a Target Retirement Fund Actually Work? appeared first on The Simple Dollar.

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New law will bar recruitment companies from mobilising individual agents

Kathmandu, August 17

The government is preparing to amend the existing foreign employment law, which will effectively restrict rights of recruitment companies and protect aspiring migrant workers’ rights.

Whereas the companies will be barred from employing and mobilising individual agents, they will be allowed to open branches at the district level if they want to expand their business.

The government is currently mulling over the bill to amend the existing Foreign Employment Act. If the Federal Parliament endorses the bill as it is now, the ‘manpower agents’ who are blamed for their deception will lose their legal right to practise the business.

Till the date, the government has been distributing licences to such  agents after collecting a collateral of Rs 200,0000.

Stakeholders had been lobbying for such a provision since a long ago.

On the other hand, recruitment companies owners had also demanded the provision of mobilising agents as they vilified the image of their business.


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Thursday, August 16, 2018

Gyanendra Malla launches Arsenal Nepal’s official t-shirt

August 16, Kathmandu

In an event held at Carnival Restro & Meetings Bar, Thapagaon, Arsenal Nepal Supporters Club unveiled official members T-shirt for the season 2018/19. Nepal’s National Cricket team Vice-Captain Gyanendra Malla was present to unveil this season’s kit in the presence of Arsenal Nepal’s Officials.

Talking at the event, Malla said, “Its pleasure to be a part of this wonderful family, felt privileged and proud. Arsenal Nepal is doing a wonderful job in trying to bring all the Nepali gooners under one roof, and I hope to be more events in the future.”

He was presented with the official membership card and T-Shirt by Arsenal Nepal President Nabin Chitrakar.

Chitrakar and Arsenal Nepal wished him best wishes for his involvement in Nepal’s Asia Cup Qualifiers to be held in Malaysia this month.

Arsenal Nepal is an official supporters club of Arsenal FC, London, established in 2009 and has been conducting regular screening, yearly futsal tournaments along with various other activities.

Chitrakar also announced the date of the sixth Annual General Meeting which will be held on 8 September.

The officials announced that an Arsenal Nepal banner will be displayed at the home of Arsenal, Emirates Stadium this year.

Chitrakar added, “the banner which has to up to the standard of Arsenal FC will be printed in London. The funds for the banner will be included in the membership fee.” On the occasion, the official website of Arsenal Nepal, www.arsenalnepalofficial.com  was also launched.

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Building Workplace Relationships in a Difficult Environment

Tanya writes in:

I started a new job on June 1. I work in an office setting with 20-25 other people. In the year or so before I started, there was a big “conflict” where a poisonous former employee kind of dismantled the office culture and got everyone to split into factions and many of the people in the office wound up not on speaking terms. While it’s not that bad any more, the office is still a pretty frigid place. No one really talks to anyone outside of work requirements and most people seem to be either just doing their job, browsing websites, or counting the minutes until they can leave. Most people eat lunch at their desks and occasionally they eat out in pairs and that’s it. On the first day several people said hello to me but since then almost no one has spoken to me aside from work tasks.

I want to break through this and start building some good professional relationships but I don’t know where to start. Most conversations don’t seem to go anywhere, like people are afraid other people will overhear as our office is an open floor plan. It’s really weird and most of the advice I’ve seen doesn’t give any insight as to how to handle this. Thoughts? I like the way you handle things.

So, first of all, I believe that good strong positive relationships with at least some of your coworkers is a very valuable thing. Having those relationships makes the workday more pleasant, gives you someone who you feel comfortable solving problems with, and also gives you someone who can potentially help you at a later stage in your career. It is well worth the time to build these kinds of relationships because they will pay off in terms of stabilizing your current job, potentially helping you line up for raises and promotions, and supporting your career later on.

I’ve been in wonderful open office environments where everyone gets along well, and I’ve also been in “cold” environments like the one Tanya is describing here. In both cases, I’ve managed to build relationships with coworkers, some so strong that they persist more than a decade after I switched jobs and career paths.

Here are ten strategies I would use if I were in Tanya’s position, in an office environment with very little camaraderie.

Make Cookies

This is a great initial strategy that you can do any time that almost always works well. Just make a big batch of homemade cookies and bring them into work and offer them to everyone. “I made this batch of cookies to share. Do you want one?” Keep the recipe simple – just straight up chocolate chip – so that they’ll appeal to the maximum number of people. Here’s a great simple chocolate chip cookie recipe.

This is a strategy that a friend of mine that I’ll call Jane uses to incredible effectiveness. Whenever she goes to a meeting, she brings a box of her cookies with her half the time. She brings them to her workplace. She brings them to dinner parties.

Why? She directly told me once: “Cookies are conversation starters.” They get people to let down their guard just a little bit and start communicating. Almost everyone can eat a cookie without any allergen issues, so that’s usually not a worry, and a small cookie is tasty and isn’t going to nuke anyone’s diet. Then, there’s something about munching on a cookie that just opens people up for conversation like nothing else.

Just make a big batch of cookies, enough for everyone in your office to have a couple, and take them to work the next day. Just say loudly to everyone that you made a big batch of cookies to share and walk around sharing them with people. While you might not get instant conversation, what you’re likely to get is a bit of warming towards you, and that will make many of the other strategies listed here.

Don’t want to make cookies? Find something else you’re comfortable making that’s easy to share. At my last office workplace, one new person brought in a slow cooker full of rømmegrøt (a Norwegian pudding that tastes like a liquid cinnamon roll if you put a bit of cinnamon on it) and everything needed to eat it. She set things up and invited everyone to come and try some. There are few things in the world that are a better icebreaker than food.

Identify “Linchpin” People

Spend some time watching and observing your coworkers and figure out who among them seems to have the most positive interactions with others. Is there anyone in your office who seems to get a bit more of a response than others from conversations? Is there anyone who more consistently eats out with others, and eats with different people in pairs (as Tanya describes)?

Look for at least one person that matches this description, and ideally find a few that do.

This requires time and observation. You’re going to need to watch and listen for at least a few days to figure out who’s who in your workplace.

The people you are looking for are the linchpins in what remains of the professional network in your workplace. They’re the ones that have good relationships with at least a handful of others at work and, although the workplace might not be all that it could be, these are the people that go beyond simply sitting at their desk all day and seem to have at least some connection to others.

These are the people you start with.

Invite a “Linchpin” to Lunch

Once you’ve identified a few “linchpins” that others seem to hold in positive regard, invite one of them to lunch. Just be honest – say you’re trying to understand the dynamics of what’s happening in the office and you’ve seen that this person seems to have a good connection with a lot of people and that this person will probably have some insights.

Pick up the tab for that lunch. While there, get that person’s take on what’s going on in the office. Who are the people that are helpful and collaborative? Who are the people who aren’t?

Then, do the same for everyone you identify as a “linchpin.”

What you’ll eventually learn is that there will be a subset of people who are consistently defined as good collaborators and good people, and a (likely) smaller subset of people who are consistently defined as bad collaborators and bad actors.

In general, it’s a good idea to actively start building relationships with those people who are being collectively identified as good collaborators and good people.

The problem with a “cold” office like Tanya describes is that it’s very hard to pick up on cues at work to identify who’s who. That’s why identifying the people who are strong social connectors and then blatantly asking them for help can be really useful. In a normal workplace, you can usually figure out for yourself over time who the good and bad actors are, but in a cold office, you may need help.

Talk to Your Supervisor about Collaborative Work

While the “linchpins” – the good social connectors – are great people to know and have positive relationships with, you’re also going to want to have a reason to work closely with the people who are good collaborators and all-around good people.

The way to do that is to jump into projects with them, if at all possible. If you can, identify what projects those people are working on and, when there’s an opportunity, get involved with some of those projects so that you have more opportunity to work with good collaborators.

Pay attention in meetings and other forms of workplace communication. Look for projects or other opportunities that give you a chance to work with the good collaborators, and then jump on those projects and opportunities. Don’t be afraid to directly talk to your supervisor about them, either.

I’ll give you a personal example of this. Over time, I learned that one particular person that I used to work with – we’ll call him Trevor – was a really good team player and almost always helped projects to succeed by identifying what needed to be done and who could do it. Even when he wasn’t a project lead, he was kind of a natural leader and many issues just went straight through him.

I made an effort to get involved in a project with this person so that we would have to work together. We clicked – he helped me and I helped him more times than I can count. A decade after I left that job, I still talk to Trevor.

Engineer “Grassroots” Fun, Not Organized Fun

Many offices that are “cold” will have “fun” activities that try to bond people together that often fall flat because they feel forced. That doesn’t mean that the idea of having a shared fun activity isn’t a good one – it is – but that the execution is bad.

The fun activities that really work well are the ones that come from the people themselves, not from management.

I’ve seen several things that work well in office environments, but one of the best things I’ve ever seen is a fantasy football league. I’ve seen a fantasy football league, organized by one of the people in the office, make a huge difference in terms of bonding people in that office on multiple different occasions.

It’s pretty easy – just suggest to the people in your office that you’re looking for some people for a fantasy football league and it’d be nice to actually have some players in the office so that they can negotiate trades directly when needed. Managing a league using the tools at ESPN or Yahoo is easy; the software does pretty much all the work for you. This gives you a strong communication channel with others in your office without being a direct demand on their time or attention.

Another way to do this is to ask for some kind of collaborative help that’s really easy for other people to pull off. Maybe you’re trying to make a collage and need some old magazines – just ask coworkers if they can bring in some old ones. Maybe you’re making a t-shirt quilt and want some old t-shirts – again, just ask coworkers to bring some in. The purpose of this isn’t so much the stuff you collect, but in the collaboration and connection that comes when they do.

Take Advantage of What You’ve Got

These efforts are going to build to situations where you’re engaged in meaningful conversation with a coworker. When that happens, use every conversational tactic in the book to make that conversation into a positive.

I have something of a checklist that I’ve been working with my kids on in order to help them be better at conversations, so that you both get value out of it and both end up in a more positive place. Here are some of the highlights.

Stop thinking about what you’re going to say next, and instead listen to what they’re saying and respond to that. Quite often, in conversations, people spend the time when other people are talking simply formulating what they’re going to say next. Rather than doing that, listen to what the other person is saying and respond accordingly.

Ask questions, and mostly only offer statements when asked. This is such an effective conversation tactic when you’re uncertain. Just ask questions, listen to the answers carefully, and ask good follow-up questions. In general, the only time I offer up statements in conversations where I’m not surrounded by good friends is when I’m trying to articulate a conclusion or I’m answering a question that I’m asked.

Have a reason to follow up. The best conversations leave some sort of trail that you can follow up on, whether with more information or some other form of support or simply a check-in on how something is going. The key is to remember to follow up. I usually make a note of many conversations reminding myself to do just that, and it’s through that pattern of following up that relationships are built.

Listen. That’s the key. Listen. Don’t fill things up with your words. Listen. Pay attention. This is the core.

Avoid Negative Gossip Like the Plague

If you encounter anyone saying negative things behind another person’s back, avoid it like the plague. If you’re in a conversation, don’t agree with what’s being said and instead wait for the conversation topic to change or change it yourself. If you’re nudged into offering input, just say something neutral, like you haven’t really seen that behavior or that it’s not a big deal, and move on.

Quite often, the negative talk you do about someone behind their back gets back to them and will poison any relationship you might have with them. Furthermore, some bystanders will begin to see you as a negative person and someone who shouldn’t be fully trusted.

Yes, some negative gossipers manage to build circles of similarly negative people around them. Those groups are almost always disastrous in the workplace, and if you find such a cabal, it’s probably a good idea to move on to a new job as discreetly and quietly as you can.

How does this come up in a “cold” office? It’s likely that when you meet with some of the “linchpins,” you’ll hear some negative gossip about people. Don’t assume it to be true. Instead, just don’t participate and seek out others to build relationships with.

Be Appreciative of Help

Through the above methods, you’ll probably come into some situations where someone helped you with something at work, whether it’s direct help with a work task, really good advice about something, or help with something outside of work (like bringing in something for a personal project at your request).

Be appreciative of that help. For me, nothing quite beats a handwritten thank you note and a small gift, like a bundle of cookies in cellophane or something like that.

Go to the store and buy a bunch of blank thank you notes. Look for situations where someone really helped you out, with advice or with collaborative work or with helping with a personal project, and write that thank you note. Including a little gift with that note – something small, but something clearly tied to their interests (and probably consumable) – is always a good idea.

The format is simple. Just write their name – “Dear Jeff,” – followed by a direct thanks for what they did – “Thank you for giving me such useful advice last month.” – and how that thing really helped you – “It helped me figure out what steps I need to make in my career.” – and a final appreciation – “I really appreciate it!” – and a signature – “Yours truly, Trent”. That’s all you need to do, just do it in your own handwriting.

Devote Some of Your Day to Building Relationships

Over time, you will start building relationships with people. One good way to keep building those relationships over time is to maintain regular direct one-on-one contact with people. Don’t just broadcast to the room, but connect with people individually.

There are lots of different ways to do this. One great way is to connect on social media by following them on Facebook or LinkedIn or Twitter, then following up on some of their content with a “like” or a comment or an answer to a question they’re posing. If they don’t use social media, shoot them an email once in a while sharing something you thought they might find interesting or just checking up on how they’re doing. Stop by their desk when there’s a good opportunity just to check in on them. A regular one-on-one lunch or small group lunch is a good idea, whether it’s a lunch outside of the office or you just go off somewhere to brown bag together somewhere nearby.

Put aside some time each day to do these kinds of things. Keep those relationships alive and nurture them a little. It’s like watering a garden. It doesn’t take a whole lot out of you, but it’s essential for keeping those things alive and growing.

Produce Good Work

This is the foundation of everything else I’ve written in this article. Produce good work and a lot of these things will be much easier. If you produce good work, people will recognize it. If you’re reliable and get things done when you say you will, people will recognize it.

You’ll build a positive professional reputation in the office, which is far better than a negative reputation formed from not getting things done.

Don’t pass the buck. Do what you’re expected to do, and if you need help, give some help, too. If you fall into a pattern of handing your work off to others, resentment will build and your office will be colder than ever.

What if you’re struggling mightily with something? Ask for help. You are far better off asking for genuine help with a problem you’re having than to just push it off or not finish it. Make it clear that you don’t want someone to do it for you, but instead help you get to the point where you can do it yourself.

Produce good work, and be a good collaborator. You’ll never, ever go wrong with that.

Final Thoughts

It takes time for these things to work. It won’t happen overnight or even in a month or two. Thawing a cold office takes time.

Having said that, thawing a cold office is something that is really beneficial for everyone – not just you, but literally every person in that office. The ability to build good workplace relationships that you can rely on when work needs to be done or life intervenes is a incredibly valuable thing for anyone to have. These tactics will help get that process started, but don’t expect magic results overnight. You’ve got to give it time.

Good luck!

The post Building Workplace Relationships in a Difficult Environment appeared first on The Simple Dollar.

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Nepal Medical Association postpones protest



Kathmandu, August 16

Leaders of the Nepal Medical Association, who are protesting various provisions of the new civil code set to come into effect from tomorrow, have put off their protests for two weeks.

The association, which had earlier called on members to submit their licenses to the central office, had threatened to go on strike if its demands were not met.

The association has demanded that a provision in the new law, which can be used to put a doctor behind bars for five years failing to save a patient, be amended. The association wants the law to make provisions for an expert committee to examine cases of medical negligence.

The protest was put off after the government assured the doctors that the said provision would be amended in two weeks. The doctors have threatened to return their licenses to the medical council if their demands are not met.

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Handling Insurance on an Old or Historic Home

Insuring an older or even historic home is a profoundly annoying task up to the point that you need that insurance.

I live on a two-acre farm that dates back to 1851 and still includes a chicken coop, goat shed, potting shed, potato shed, smokehouse, outhouse, well house, detached garage, and 5,000-square-foot German-style barn. It is one of Oregon’s original homestead farms and is just blocks from where pioneer Joseph Meek first settled in 1841. It sits on just two acres of the original 640, but it is both an Oregon and national historic site.

It is also very fragile. On April 7, 2017, a storm came through the area with sustained winds of 60 miles per hour or more. That wind got into a small opening along the southwest corner of the barn and peeled a section of the barn’s western wall right off. It took siding, windows, and beams, but it was also strong enough to push one of the barn’s corner beams right off of its concrete support, exposing a whole lot of rot beneath. Immediately after seeing the damage, I called out insurers at USAA.

Four years earlier, that company was not all that keen on insuring us. My wife is part of a military family, and she tried to get a mortgage through USAA, only to be told at the last minute that the company wouldn’t insure a farm. However, since her family had used them for homeowners insurance for decades, we asked them for similar considerations.

They sent an inspector to the property and had no problem insuring the home itself. The outbuildings, however, gave them some concern. They demanded we apply new paint to the goat shed and smokehouse to prevent water damage. They also wanted us to re-shingle the roof of the potato shed, which was in desperate need of repair. Finally, they asked us to build a fence around a set of stairs that led to a basement dug beneath the house in the early 2000s, saying they wanted us covered in case “some neighbor kid” came onto the property and fell into the stairwell. We obliged, sent pictures, and received word that they’d cover the house and all the outbuildings.

This was not necessarily a given. A friend in Quincy, Mass., had gone to USAA for insurance on his 1920 Colonial home, but was denied when the Texas-based company read the inspector’s report that found old knob-and-tube wiring. My friend later went with a New England-based company that was unfazed by that particular feature.

But USAA did right by us and sat in the background during five years of relative silence on the farm as we paid roughly $1,500 a year in premiums. After the windstorm, however, they recommended we find a contractor who would be familiar with the kind of property we were repairing. We’d just spoken with the Restore Oregon historic preservation group and had brought them on a tour of the barn a few months before. After I called them in a panic, they recommended five different companies and individuals for the job. Of those, just one — Arciform in Portland — was available to do the work.

They came out to have a look and told us their recommendations for fixing the corner post, a sill beam running across the front of the barn, the wall supports, siding, windows, and flooring that had been damaged by the storm. By April 17, USAA had an inspector out to our property and, by April 28, we received $5,000 to shore up the exposed barn and work up plans.

But just having an insurer by your side when fixing a building like this isn’t enough. There was constant communication through phone calls and through USAA’s claim site clarifying how much we had to work with from our outbuilding coverage ($53,300), what other coverage was available to us ($15,990 in multipurpose “home protector” coverage and debris removal costs), and what we could and couldn’t do. Arciform sourced lumber from a mill in Montana to match original saw patterns, attempted to use nails, bolts, and hardware similar to what was used on the barn (though the original square nails were hard to come by), and trenched out the ground around the barn to expose supports long covered by gathered soil.

The first payment, however, didn’t arrive until July. Unfortunately, because a payment of that size has to be mailed to the mortgage company first, endorsed, and then sent back to the contractor on the mortgage company’s timetable, we weren’t able to get onto Arciform’s schedule until fall. Even then the mortgage company demanded an inspection at the job’s halfway point before the first half of funds could be released, then again when work was 90 percent complete. We complied, and work reached the 90 percent mark in late November. We called in for our last inspection, it was performed and submitted, but a worker at the mortgage company in Cleveland flagged it for having lumber that didn’t look like the rest of the barn. After the inspector informed him that we could never paint the barn to look like milk paint and more than a century of weathering, he finally released the full payment to Arciform.

On January 8 of this year, USAA sent the project’s final payment. The mortgage company approved it and Arciform received its last payment. There was enough left over for Arciform to install a downslope dry well in front of the barn to collect drainage and ensure that water damage would never exacerbate damage from a windstorm again. It took roughly 10 months to get the barn back on its feet, and that was with a supportive insurer and the right personnel in place.

It could have been far worse with none of the above. We’re still with USAA today, but the experience gave me some insight into what my wife and I likely should’ve been looking for in an insurer and in coverage:

  1. It made us aware that any damage to the barn greater than that likely would’ve required more coverage than we had. USAA has expanded coverage, but we may consider shopping around for insurers who are similarly acquainted with properties like this one.
  2. It made us realize that we should have asked more questions about what our “other buildings” coverage actually covered. Did it cover complete restoration or did it cover basic repairs or replacement?
  3. It made clear that you should ask your potential insurer questions about their homeowners’ coverage before an inspector gets there. Are they familiar with older homes? Do knob-and-tube wiring or older outbuildings give them cause for concern?
  4. Finally, it made us aware of just what a precious resource we’ve been entrusted with and just how worthwhile it is to get that coverage right.

When my parents visited for Christmas, my stepfather went for a walk around the neighborhood and got lost. He flagged down a police car and described our farm to the officers. The officer driving the squad car told him to relay a message: That he was glad we saved the barn and that he and his family have driven by it regularly for decades. After my parents left, we received a Christmas card from neighbors a few blocks away thanking us for rebuilding the barn and telling us how many family photos they’d taken in front of it over the years.

While not every older home has that kind of support from the surrounding community, they all require at least a modicum of emotional attachment from the owner to make all of the maintenance and upkeep worthwhile. You’re insuring your home and perhaps that of your family, but you’re also insuring that your home’s legacy continues to the next owner. That’s something worth considering when you decide just how to insure that old house.

Related Articles:

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Wednesday, August 15, 2018

The Virtues of a Cheap Wedding

Several readers over the past week have shared a very interesting research article from Andrew Francis-Tan of NUS and Hugo Mialon of Emory University entitled ‘A Diamond is Forever’ and Other Fairy Tales: The Relationship between Wedding Expenses and Marriage Duration, which seems to have received some media coverage recently. The abstract of the paper gives the core idea:

In this paper, we evaluate the association between wedding spending and marriage duration using data from a survey of over 3,000 ever-married persons in the United States. Controlling for a number of demographic and relationship characteristics, we find evidence that marriage duration is inversely associated with spending on the engagement ring and wedding ceremony.

In other words, the paper concluded that the less a couple spent on the engagement ring and wedding ceremony, the less likely they were to divorce and the more likely they were to have a lasting marriage.

On a surface level, this makes a lot of sense. If a couple doesn’t spend extensively on a wedding, they’re going to have more money to establish a firm financial foundation for themselves. That’s going to take away some financial stress in the relationship. Dealing with a five figure debt from the get go, on top of things like student loans and car loans and so on, can put a great deal of financial pressure on a newly married couple, and given that money is the most common reason for married and cohabitating couples to fight, a big debt right from the start of a marriage seems like a prime ingredient to incite arguments and division.

This was the reason given by a family member of mine, who I’ll call Bill, who recently had a very inexpensive and casual wedding. Their reason was that their wedding was about the people invited, not about flowers and a fancy dress and a country club reception.

However, I think the story runs deeper than that, both for Bill and for weddings in general.

The fact is that there is quite a lot of social pressure to put on a big wedding. By default, people who are unsure about what their wedding will look like will be nudged by popular culture and their social circle to have a big social event for their wedding with dresses and flowers and beautiful decorations and a catered meal and an amazing location for the wedding and the reception… it goes on and on. Those expenses add up.

Now, everyone is a little different. Some people really want that big wedding. Others might feel rather indifferent. Some might actually want a very small and simple wedding. If you put two people together who have different views on what a wedding should look like, there’s bound to be conflict.

But who will win that conflict? The reality is, with social pressure and cultural pressure nudging people toward a big wedding, many couples will end up feeling almost herded that way. In other words, if two people are disagreeing on the size of a wedding, social pressure and popular culture will nudge that couple toward having a big wedding anyway. A big wedding is often the end result of two people who aren’t on the same page about a wedding.

On the other hand, a small wedding usually requires both partners to be on board with a simple ceremony. If they’re not, then cultural and social winds are very likely to blow them to a progressively bigger wedding.

So, my take on this paper is that a small wedding isn’t just indicative of a small bill, but indicative of a couple who has similar values and communicates with each other. A couple that chooses to have a small, inexpensive, simple wedding is bucking the cultural trend toward five figure weddings and perhaps bucking some social expectation as well, and that’s generally not something that’s going to happen unless the wedding couple has values that are in alignment with each other.

If you combine both of those factors, it’s not surprising to me that a much simpler and much less expensive wedding has a higher likelihood of resulting in lasting marital success than a lavish expensive wedding.

The thing to remember is this: both partners simply agreeing on an inexpensive wedding because they think it will bring success in their marriage isn’t the right path to follow. Doing that is a misunderstanding of the cause and effect relationship here, though it is a good sign of some sort of agreement in values.

What’s much more powerful is if both partners agree on a simple wedding because it reflects what they each want out of a wedding. It means that they have similar values in at least some ways, that they’ve communicated those values to each other, and that they stand together to have the kind of simple wedding that they want regardless of those pressures around them.

In other words, they have a simple wedding because it reflects their shared values and those shared values are what are likely to help ensure a lasting marriage, not the simple wedding itself.

So, what’s the take home lesson here? For me, the real lesson is that if you’re considering getting married, you and your partner are more likely to find success in marriage if your values point you to at least some common ground in terms of the ceremony and your communication is strong enough that you can work through any differences fairly and equally. A simple wedding is often the result of a process like that, as evidenced by how a simple wedding goes against many prevailing cultural and social ideas about weddings and thus the desire for a simple wedding must be coming from a process of shared values and communication between the couple. It’s those shared values and communication that makes the difference, not the wedding itself. (Plus, there’s the bonus of not having any financial challenges from the wedding to fight over.)

What’s the moral of the story? A cheap wedding won’t ensure marital bliss, but being on the same page in terms of values and being open with communicating with each other will go a long way toward achieving that bliss. The root of a good marriage is communication and values, and a low-cost wedding that reflects those shared values is a great sign.

If you’re thinking about getting married to a person, make sure that your values are in alignment and that there’s a real relationship there that’s more than just physical attraction. If you agree that a cheap wedding is the right move, that’s great and I’m all in favor of that. If you’re both in favor of a big expensive wedding, well, I won’t give it the financial seal of approval, but if you’re communicating clearly about it and you’re both on board with that plan, then that’s a good thing, too.

The thing to be wary about is when you’re not communicating or when you’re not in agreement on values and the other person won’t compromise (note that “completely giving in” is not “compromise” and isn’t healthy either). That’s a sure sign that you should take it slowly and be sure whether or not you actually want to go through with a wedding, inexpensive or otherwise.

So, how was Bill’s wedding? It was an extremely casual and low key affair. The reception was about as unpretentious as possible and it was mostly oriented around family and close friends. There was a lot of laughter, a lot of dancing, a very casual meal, and a lot of fun.

I think Bill and his wife will be just fine.

The post The Virtues of a Cheap Wedding appeared first on The Simple Dollar.

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Beam Review: Can You Really Earn Up to 4% With This Savings Account?

The average savings account paid out a measly 0.08% in interest as of August 2018, according to the FDIC. That rate isn’t enough to help you build real wealth; it’s not even enough to keep up with inflation. Yet, that’s what the average bank account is offering now, which means some banks do offer a higher rate of return — the best online savings accounts, in particular, routinely pay out 1% to 1.5% — while others offer even less.

But one newer online bank has promised to change things up for consumers with an interest rate that’s much higher than they can get elsewhere, even online or in a certificate of deposit. With Beam Bank Accounts, eager savers can earn between 2% and 4% on the money they save up, the company has said. The 2% rate is guaranteed, but you’ll have to do a little work to get the higher rate. Is it worth it? We’ll let you decide.

How Does Beam Work?

By and large, Beam offers a bank account that has everything consumers should want — a higher than average rate of return, and no maintenance fees. Funds you deposit with Beam are insured by an FDIC-insured bank as well, so you don’t have to worry about losing money if the startup closes down or loses steam.

Speaking of “startup,” Beam is currently open for a private, invitation-only beta membership, though it’s accepting names for a waitlist. So, you can sign up to get started with Beam later on, but you can’t open an account quite yet.

When you do get a chance to open a bank account through Beam, you’ll need to link your account with that of another bank. Beam then sets up third-party access to your account, making it easy to move money to your Beam account when you’re ready.

From there, Beam promises a return of 2% APY, which is not bad at all. However, Beam offers the opportunity to earn a higher rate of return by being active in their app. Phillip Taylor of PT Money has been part of the private beta testing for Beam, and he says one way to interact with the app is to “accept free rewards” that can temporarily increase your interest rate. These rewards, called “Billies,” arrive in the evenings and can be claimed for a temporary boost to your APY. However, as Taylor notes, the increase is very short-lived: Your interest rate retreats to the normal 2% APY the next day. While Beam promises a potential return of up to 4% APY, Taylor says he has never received a return greater than 2.99% APY so far.

You can also boost your rate by referring other people to Beam, the app notes. How much? Nobody knows for sure, or for how long, so we’ll have to wait until Beam is fully released to find out more.

Other features of Beam:

  • Once you can open an account, you can keep up to $15,000 on deposit. This amount is slated to increase to $50,000 once Beam is released to the general public.
  • Beam promises unlimited fund transfers.
  • Beam is easy to access online, and your funds are FDIC-insured.

How Can Beam Afford to Pay More Than Other Banks?

In case you’re wondering how Beam can afford to pay higher rates than other banks, they address this question in their FAQs. Because they don’t have brick and mortar buildings, excessive executive bonuses, employee perks, or a huge advertising budget, they avoid a lot of the overhead costs many of their competitors face. This means they can pass the savings on to consumers in the form of a higher return on their deposits.

Beam also claims that traditional banks earn 4% to 5% on your deposits, despite offering you only paltry returns in exchange. CFA Sam Huszczo of SGH Wealth Management said this is mostly true, since rising rates over the past two years have helped banks boost their “net interest margin.”

Federal Reserve figures show all banks earning an average of 3.23% on deposits as of early 2018. That’s not quite the 4% to 5% Beam claims, but it’s close, and a lot higher than the average 0.08% banks return to their account holders. It’s also an average, meaning some banks are earning more. Either way, Beam says it can pay more interest because it’s not an average bank.

Should You Consider Beam?

If you have money in a high-interest savings account and you aren’t earning at least 2%, it can pay to get on the waitlist for Beam. Once the company opens to the public, you can deposit up to $50,000 into one of these accounts, and you could potentially earn more on your deposits if you engage with the app by accepting rewards and referring friends.

While it can pay to deal with a local bank that has a brick and mortar location, an account with Beam would be a great place to stash your emergency fund, a travel fund, or any budgeting overages you have throughout the year. Basically, any cash that’s earning less than 2% APY would be better off in a Beam account since that’s the lowest return you’ll receive. And since Beam isn’t charging any fees to keep your money with them, you won’t have to worry about any.

Why You Should Wait on Beam

Still, Beam isn’t perfect and you may wind up being disappointed with the end result. You have to engage with Beam regularly to earn higher than 2%, they note, whether that means taking the time refer friends or to accept rewards each evening. Let’s face it; most people don’t want to spend their free time playing with a banking app to earn interest each day. And, if the deposit limit is truly $50,000 once Beam becomes public, then this account is somewhat limiting.

Another potential downside is that, while Beam doesn’t charge any fees for their accounts, you may incur fees from your other bank when you make transfers to and from your Beam account. You should make sure to check whether you’ll incur any fees before you sign up — especially if you’re someone who likes to transfer money back and forth between accounts regularly.

For those reasons, you may be better off with a regular high-interest savings account. Fortunately, there are many that offer up to 1.85% APY on qualified deposits without requiring you to refer friends or jump through any other hoops. Most of us want to set our savings on autopilot so we can focus on other aspects of our lives anyway, right?

The Bottom Line

If you’re angling to earn as much as possible on your savings and have the time and desire to fiddle with an app every day, consider signing up for the waitlist so you’ll be notified when you can open an account with Beam. Since these accounts don’t have any fees and are FDIC-insured, you don’t have a lot to lose by trying it out. And you may find you don’t mind taking extra steps to earn a little more than 2% part of the time.

Still, you should read the fine print and make sure your existing bank account won’t charge you for transferring money into a Beam account. This bank offers rates that are hard to beat with no fees, but the devil is often in the details.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

More by Holly Johnson:

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One killed, 58 injured in Nuwakot bus accident

Nuwakot, August 15

A person died whereas 58 others have sustained injuries when a passenger bus fell off the road in Lamatar, Bidur Municipality-9 of Nuwakot district, north of Kathmandu, on Wednesday afternoon.

The deceased has been identified as Moti Maya Tamang (56) from Tupche, Bidur-7. She had breathed last while undergoing treatment at Kathmandu-based Grande International Hospital, according to DSP Bhim Lal Bhattarai. Critically injured in the accident, she was airlifted to Kathmandu.

Meanwhile, eight of 58 persons, who are more serious than others, are undergoing treatment at various health facilities of the capital. Others have been admitted to Trishuli Hospital in the district.

The bus (Ba 2 Kha 2804) heading to Kathmandu from Bungtang, Myagang Rural Municipality-2 of the district, had fell around 40 metres down the road while it was giving its way to a minitruck on the opposite direction.

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Tuesday, August 14, 2018

The Battle Against Scarcity

When I was growing up, money was scarce. My father worked in a factory some of the time and my mother was a stay-at-home mom, so even when he was working there wasn’t a ton of money, and when he was laid off… things got tight. My father was a jack-of-all-trades and a pretty good small-scale commercial fisherman on the side, so we managed to muddle through. Scarcity was a real thing, though, especially when I was younger. (My father eventually moved up into a pretty stable position that paid well when I was older because he was willing to take on some training for a more complex job that some of his coworkers wouldn’t do.)

In my own professional life, there’s never been a situation where there wasn’t enough money coming in to keep the bills paid and food on the table. Scarcity isn’t something I’ve had to directly face.

Even given that, there is still sometimes an underlying internal sense of scarcity. It’s that fleeting sense of scarcity that convinces me to clean my plate even when I’m no longer hungry, or to stock up on some staples to a comically absurd level, or to have a strong desire to buy something on sale that I don’t really need because it might not ever be nearly that inexpensive gain.

It’s an interesting problem, and it’s one that I’m not alone in facing. My closest friend (that I’m not married to) has echoed the same type of feeling before. He grew up without much money, too, and those same feelings sometimes tap on his shoulder. It’s a feeling echoed by a few readers, too.

The Problem of Scarcity

Scarcity is this overarching sense that there is “not enough” in your life. It’s often connected to money, but it can connect to things like physical possessions, relationships, food, and countless other things in life.

Often, that internal sense of scarcity comes from a situation in life where there genuinely isn’t enough of something to go around. Maybe you experienced a situation as a child where your parents couldn’t pay the bills, or maybe as an adult you couldn’t make ends meet. Perhaps there wasn’t enough food in the house to put a reasonable dinner on the table. Perhaps you spent your teen years longing for just one new video game but there was never a situation where you could actually have that game.

However, the scarcity mindset goes beyond those situations and creates difficulty and poor choices even when there is plenty in your life. I’m overweight, but there are still times when I feel a strong sense of food scarcity and eat more than I should, for example. Someone who had trouble making ends meet for a while because of almost no income might still feel strongly driven to spend their whole check out of a sense of “scarcity.” Someone might be driven to be unethical at work because of a sense of “scarcity” of good work positions, even when there are plenty of jobs to go around.

In this article, I’m going to mostly focus on financial scarcity mindsets, but much of what I have to say applies to scarcity with regards to things like food on your plate and other aspects of life.

The “Echo” of Scarcity

As I alluded to above, while genuine scarcity may be a fact of life for some, the real challenge for many people is the persistent mindset of “scarcity.” Often, it’s an “echo” of earlier experience where they faced some type of genuine scarcity and it embedded a sense of continuing scarcity in their mind even when there’s enough to go around.

This idea of “scarcity,” and the counterbalancing idea of “abundance,” is a core idea of Stephen Covey’s book The 7 Habits of Highly Effective People. In that book, Covey describes scarcity:

Most people are deeply scripted in what I call the Scarcity Mentality. They see life as having only so much, as though there were only one pie out there. And if someone were to get a big piece of the pie, it would mean less for everybody else.

The Scarcity Mentality is the zero-sum paradigm of life. People with a Scarcity Mentality have a very difficult time sharing recognition and credit, power or profit – even with those who help in the production. The also have a a very hard time being genuinely happy for the success of other people.

And then, later, abundance:

The Abundance Mentality, on the other hand, flows out of a deep inner sense of personal worth and security. It is the paradigm that there is plenty out there and enough to spare for everybody. It results in sharing of prestige, of recognition, of profits, of decision making. It opens possibilities, options, alternatives, and creativity.

Scarcity is centered around the idea that there isn’t enough of something to cover what everyone needs or wants, so in order to ensure that you have enough to cover what you need or want, you’d better use what you have as soon as possible and guard your territory. This holds true for virtually every kind of resource: money, time, relationships, grades, recognition, credit, food on your plate, and on and on and on.

Abundance is centered around the idea that there is more than enough of that something for everyone to have what they need or want. Thus, there’s much less need to spend all of your money unless there’s a reason or to clean your plate unless you’re actually hungry. There’s much less reason to “fight” someone else for a good grade because you can both earn an A.

The thing is, in our modern and abundant world, actual scarcity is a pretty rare thing. Most Americans earn more than enough money to cover their needs and many wants.

Rather, many Americans feel an artificial sense of scarcity, particularly financial scarcity. The reason is that, although they have no trouble actually covering their basic needs, the wants of the average American often vastly exceed their income level and thus there’s this sense that we just don’t have enough money to live the life we want to live. That’s scarcity thinking, and it leads directly to the kind of behavior Covey describes above: “[p]eople with a Scarcity Mentality have a very difficult time sharing recognition and credit, power or profit – even with those who help in the production.”

In other words, when people feel financial scarcity, they tend to spend all of their money and are greedy for more. You can see this as a broader American trend: the average savings rate of Americans hovers around 2.4%, and that includes things like people who only contribute to their 401(k) up to the employer match. Also, 78% of Americans live paycheck to paycheck. That indicates that a lot of Americans are living as though they’re in scarcity, even though most of them aren’t and many more wouldn’t be with a little financial discipline.

The problem, of course, is that our brains are shouting “scarcity!” even when it’s not really present. We have to spend this money now because we might not get to spend it when we’re older. We want this thing now because it might not be available later. In both of those cases (and many more), we’re driven to foolish personal finance behavior.

I’m absolutely guilty of “scarcity” thinking at times. “Scarcity” thinking has steered me to spend more than I should, to eat more than I should, and so on.

However, I’ve found that there are a number of things a person can do to shut down “scarcity” thinking (at least to an extent) and to help prevent the worst excesses of it.

Strategy #1 – Short Term Self-Discipline

The most powerful tool to fight back against a scarcity mindset is to directly show yourself that the scarcity you perceive isn’t the reality of things and that abundance is the true face of the situation. How do you do that, though, if your natural instinct is generally toward scarcity? You fight back against it with discipline.

The thing is, self-discipline over a long period of time is hard to maintain. Setting some kind of new “rule” for your life sounds noble, but it doesn’t often work over the long haul.

This is especially true here when you’re simply trying to show yourself that the real picture of things is abundance. You don’t need the long haul for that. You just need enough time to see that something you thought of as “scarce” is actually abundant.

For me, the most effective way of doing this is a thirty day challenge. I simply pick a new rule by which to live my life and do it for thirty days. Usually, the purpose of that rule is to simply try out a life change or to see if something works or is actually true for myself.

If you’re trying to impress the idea of financial abundance into your life, frugality and thirty day challenges go together like bread and butter. There’s a nearly infinite array of thirty day challenges that a person can take on that will show you that, by putting a restriction of some kind on your finances, you can still get by and meet your needs and core wants with plenty left over.

Some examples:

For thirty days, I will make all of my meals at home.

For thirty days, I will not buy any books and will use the library if I want to read one I don’t have.

For thirty days, I won’t buy anything online.

For thirty days, I will eat leftovers for lunch.

For thirty days, I will write down every single dime I spend.

For thirty days, the only beverage I will drink will be water.

For thirty days, I will make my own coffee at home or at work and not visit a coffee shop.

I think you’re starting to get the idea. Use a thirty day challenge to nudge yourself into some kind of spending restriction and then see how life actually is when you apply that restriction. When you take it off, life will seem abundant, and it’ll stay that way if you stick with the new initiative.

Strategy #2 – Cut Your Media Diet

By this, I generally mean that you should strive to spend less time watching television, browsing websites, flipping through magazines, and reading social media. Cut those things out of your life as much as possible.

Why? Almost all of those things subtly encourage you in countless ways to buy into the idea of scarcity. They constantly nudge you with the idea that you should want more and more things and that people who have those things somehow have an inherently better life and that your life is inadequate if you don’t have those things. Much of the news media tends to nudge you with the idea that things are dangerous so you better grab onto everything you can grab because there may not be enough to go around. Social media seems to revolve heavily around arguing and looking at the public face of others and desiring things you do not have.

All of those things encourage and perpetuate a scarcity mindset. All of those things nudge people to believe that other people have more desirable things, that the world is an unsafe place, and that you need to consume and grab onto everything you can if you want to be safe and desirable and interesting.

Turn it off. Turn all of it off. Cancel your cable. Delete social media apps from your smartphone. You’ll be so much better off and you’ll find it so much easier to move away from scarcity thinking.

Strategy #3 – Setting Big Goals

It becomes much easier to stick with these new initiatives, though, if you set big goals for yourself and have something you’re working toward. Without some kind of general direction for your actions, it can be very easy to become complacent and fall back on earlier scarcity habits. On the other hand, with a goal, there is a reason beyond mere appreciation of abundance to continue on with your thirty day challenges.

What is it that you want to achieve in your future? Do you want to be free from debt? Practicing frugality and using the proceeds to make your debt melt away is a powerful example of abundant thinking at work. Do you want to have a secure retirement? Practicing frugality until abundance feels natural makes it so much easier to kick up those retirement savings. Do you want to own your own home? The same thing is true. Do you want your children to be able to go to college without the full burden of student loans? Again, the same thing is true.

Goals are much, much easier to achieve if you’ve set the stage with abundant thinking rather than scarcity thinking. If you go into a goal with a perspective of scarcity and see this goal as just another demand on a limited resource pool, it’s always going to be hard to achieve it. On the other hand, if you go into a goal with an understanding that there will always be resources available for the important things in life, it becomes much easier to achieve big goals.

For me, goal setting comes down to spending time thinking deeply about what’s actually important in my life. What matters the most here? What really makes my life worth living? What do I really want out of my life, both now and in the future? That kind of thinking really helps you figure out what’s important to you and helps you set big goals. In a very practical way, the most useful tool I’ve ever found for figuring out what I really valued and turning them into practical goals is the “three morning pages” journaling routine, where I sit down with a notebook and strive to fill three pages of it with whatever comes into my brain. This often turns into an exploration of what I truly care about and what I can do to manifest that in my life, which sets the stage for practical goal setting with goals that are really meaningful to me. When I have goals that are truly meaningful to me, I am strongly motivated to achieve them and I tend to hold onto the results of successful thirty day challenges if they help me move toward that goal in a real way.

Strategy #4 – Automation

Another powerful tool I’ve found is that of automation. When I am feeling very far toward the “abundant” end of the scale in terms of how I feel about my finances, I often set up automatic savings and investments that reflect that sense of abundance. I set up savings plans that are pretty aggressive because I have this strong sense that I have more than enough in life.

At other times, when I’m not feeling quite as “abundant,” those automatic rules still take effect and I still keep saving for my goals in an aggressive fashion. If I were making the decision as to how much to save in that single moment, I might not save nearly as much, or might not save anything at all. Instead, because of automation that I set up when I was feeling very abundant, I’m still going to save at the much more abundant rate. That’s a big win for me over the long haul.

Couldn’t I just override that automatic savings strategy? Sure, but the reality is that leaving automatic savings plans alone is the path of least resistance, and we all follow the path of least resistance in most aspects of life until something becomes deeply onerous. In other words, unless I did a complete 180 and suddenly utterly hated that savings plan, I’m very much likely to just leave it in place and deal with it. I might internally grumble a bit about how much was being whisked away into other savings and investing accounts, but I’m not likely to change it – that would take effort, and the path of least resistance causes me to leave things alone.

Over time, I find that automation like this slowly nudges me to think in a more abundant way. I see that my life is still good, yet I’m also able to march right toward financial goals. That gives a strong constant sense that there really is enough money to go around, and finances in general seem less stressful.

Final Thoughts

The key to all of this is understanding that a big part of our desire to spend and our feeling of not having “enough” comes from a scarcity mindset, a mindset that many of us were forced to have as a child and one that media perpetuates in our adulthood.

In reality, the vast majority of Americans have far more than they need and far more than enough to cover their basic wants. The trick is to not become obsessed with all of those lesser wants and let that cloud you from all of the things that you already have in your life.

For me, the four above strategies help, but, at the same time, scarcity thinking and abundance thinking are a spectrum and we all slide back and forth along that spectrum over time. Those strategies are meant to just nudge you a little closer to the “abundance” end of the spectrum most of the time, which, in my experience, leads to far better financial and life choices.

Good luck!

The post The Battle Against Scarcity appeared first on The Simple Dollar.

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