Or Introduction to Women’s Financial Independence. 

“Girl, you need learn how money works” – No one ever said that to me.  Not a topic that was ever mentioned where I a come from. No financial management concept was ever introduced to me while I was growing up. Frugality? Yes, but it was however an essential part of life in the young economy of a Lithuania that had just gained its independence from Soviet Union.

What is wealth? How does one  build it? These are the questions that I have recently started to ask myself. Sometimes it seems that men have inbred answers to those questions. From the time of the cavemen the responsibility to take care of the tribal members was in the hands of men. However, the twenty first century brings so many new challenges (even before taking the recent hiccup caused by COVID-19 into consideration), and one of them is the responsibility to support yourself as a woman. I would like to take this opportunity to explore the topic of Women’s Financial Independence (WFI) and if it is a new term for you let’s explore it together.

It doesn’t matter if you are a teenager looking for your purpose in life and asking yourself existential questions, or if you are successful businesswoman. It doesn’t matter if you are in the most amazing, loving and caring relationship with your partner. It doesn’t matter that you LOVE your job. Money is your freedom, and this is the single most valuable thing you can actually buy. 

What is Financial Independence?

As J. L. Collins simply puts it, financial independence is when you can live off 4% of your investments per year. The four percent refers to Bengen’s Rule. You can read more about in Diana Dinu’s article. Reading and researching possible investments in stocks, bonds, investment strategies can very quickly get boring. My favorite book to fall asleep is written by famous John C. Bogle, the “Common Sense of Mutual Funds” and I’m on page 25 of approx. 800. This is with all due respect and admiration for Mr. Bogle whose investment principles are used for Financial Independence, Retire Early (FIRE) movement.

Technically, financial independence (FI) is the ability to support your living expenses without formal employment. The term “ability” comes in different shapes and forms for each of us. Once you achieve this status you can call yourself financially independent. 

Time is the only resource that we all are running out of. The best we can do is to stop wasting it. We have limited time to be with our loved ones, limited time to do things that are meaningful, and to enjoy ourselves. Let’s stop wasting it and start living it. My concept of FI is freedom to choose how I want to spend my time. For the majority of my life I was keen on living for others and felt selfish dedicating a minute to myself. If the work that you do is not giving you 100% satisfaction maybe it is time to ask yourself: Why am I doing this? Maybe you should work on something you are truly passionate about – be it a project somewhere in Tahiti researching sharks, but your 9-5 working schedule is preventing you from doing it? Or if you feel that your relationship is not right, or fulfilling, or respectful, maybe it is time to create your path to freedom? The choice is yours to make, and the sooner the better. You know. Time – the limited resource. 

The FIRE movement community is extremely innovative & creative when it comes to the ways of achieving FI. However, the geniality is in its simplicity. The following 5 steps will help you reach financial independence: 

1.     Spend less money than you earn.

2.     Eliminate unnecessary expenses.

3.     Pay off your debts.

4.     Work towards FU money.

5.     Invest the surplus.

Before examining these five steps it is important to make sure that your life’s philosophy is in line with your goals. Understanding how to climb those steps might be a long learning curve, but first and foremost, you need to want to be FI and understand why you are motivated to achieve this. What are you core values? Do you value your time with your family or a Channel lipstick? Late mornings in bed with coffee, or Valentino shoes? I am sure there are ways to get exciting shoes and not work for it (i.e. inherit money), but then you don’t need to read this article. 

Spend less money than you earn.

Sounds simple, however, with impulse buying, credit cards, fashionable retail therapy, you can easily lose track of your spendings and get you lost in numbers. How much money have you spent last month? Last year? How much do you spend on manicures, groceries, car maintenance? You can’t control what you don’t measure.  For example, from 01/01/2019 to 31/12/2019 I have calculated that 57.3% of my yearly income was spent on household costs (mortgage, insurance, maintenance, home improvements), 14.3% on food & drinks, 10% savings, 4.8% on personal care and 4.5% on car maintenance, and a few other items. Every bill was accounted for. There are a variety of options to track your spendings, but for me the most convenient one is a mobile application called “iXpenselt Lite”. It is not complicated, and tracking your expenses is not as hard as it looks at first sight. I capture my expenses weekly, and then do a monthly review. Monthly reviews do not necessarily describe the picture accurately, so it is a good idea to do a recap once or twice a year. From the numbers detailed above, you can see that the majority of my spendings are on my apartment. I pay for my mortgage and I save an additional amount to reimburse my mortgage as early as possible (partial repayment). I have cut out numerous expenses in order to increase my savings capacity and improve my mortgage pay-off rate. This is my primary goal. Once you understand where the money is going, you can find a way to reduce the unnecessary expenses.

Eliminate unnecessary expenses.

We all have little guilty pleasures.  A pair of earrings, or two… Two pairs of shoes… Clothes and dresses that you have lost count of, or else the number is somewhere in the hundreds. Do we really need all that? Our shelves and cupboards are overcrowded with little shopping souvenirs that are only gathering dust and cute accessories that have never been worn. Every purchase has to bring some value. If it is sitting in a cupboard and is not being used – sell it. If the clothes haven’t been worn for a year – donate them.

Another  option for reducing expenses is to do it yourself (DIY). For example, I choose to do haircuts and haircoloring myself which allows me to save approx. 80% of the hair salon costs. Having said that I will go once a year (or on a special occasion) to have a professional stylist fix the mess I have accumulated during the year. The more you read about the FI community the more you understand how wonderful and creative people are. You can learn so many tricks just by watching YouTube. This is incredibly inspiring and encouraging to start your FIRE journey!

Pay of your debts

Debts are a burden. They represent a moral and legal commitment, and the best favor you can do to yourself is to never have one. Liability of debt is THE opposite to freedom. More often than not debts come with terms and conditions that you can’t overlook otherwise it will just become heavier. Some literature suggests that there are good debts, such as students’ loans, mortgages, etc. However, the decision to have any debt needs to be made with great consideration, careful estimates, and in-depth researches. If you have several debts, such as credit card debt, car loan, mortgage, personal loans – list them out. Understand each of those payment terms, interest rates and repay them one by one in the logical order (i.e. prioritizing the highest interest rate). Once you have paid them back – stay away from making new ones! This may prove to be a challenge in itself. 

What is FU money?

In other words, it’s your cash fund. There is no exact science as to what amount of FU money you should keep, but some literature estimates that you should save something like: from six months  up to a couple years of your salary. Life is unpredictable and you do not know when it will throw you a punch or two. This extra money put aside will allow you to support yourself between jobs, career changes, sabbatical breaks or quit the job you feel is not fulfilling. 


By now you have looked at your income and expenses. You have identified the areas in which you tend to overspend and filled the gaps. You have identified the best ways for you to manage your  debts and established your re-payments plan.  Welcome to the paragraph for grownups. 

In a nutshell when corporations decide to go public and become publicly traded (usually to raise capital for future expansion) you can purchase a small piece of that company, called stocks (shares). The money you have saved (after paying living expenses, debt, etc.) is yours to invest. This means you can choose to purchase stocks of companies that look promising and which are expected to increase in value. If and when that happens you can decide to sell the shares/stocks you bought at a profit. However, to pick and choose the companies that will go up in value can be compared to gambling.  One of the most successful investment gurus is Warren Buffet, and since you don’t have his expertise, don’t try to pick individual stocks. Many expensive brokers and investment portfolio managers will insist that they can do it for you. If their last name isn’t Buffet hang up the phone. 

There are different tools available for investment. You can invest in real estate, commodities (such as gold, silver, gas, oil, etc), stocks, bonds, cryptocurrencies, etc. It is important to familiarize yourself with the different investment forms and choose the ones  you understand best. Personally, I prefer tangible assets, and my choice of investment is real estate. 

Investment in stock (bonds, mutual funds, etc..) is an extremely complex subject. You could start gathering piles of books, researches, articles, blogs and YouTube videos  – enough to give you reading material for several lifetimes. However as discussed, earlier remember time is a  limited resource and several lifetimes is not an option. Thanks to John C. Bogle and FI community who generously shares ideas to a simpler path to wealth (simple doesn’t mean easy), there are some rules of thumb for investment:

·       Don’t time market (trying to predict when stock prices will go up or down);

·       Don’t try to pick individual stocks;

·       Avoid expensive brokers and high management fees;

·       Don’t pay attention to day-to-day market swings.

People sometimes are emotional, self-oriented, greedy and fearful. This is completely understandable if your whole life savings are invested in the market which can suddenly experiences a massive panic and a sudden crash. Historical data of stock markets can be traced back to  the last 100 years. Due to the mass panic and lack of confidence in the stock values,  the stock markets have experienced several major crashes, such as The Wall Street crash of 1929, Black Monday in  1987, The great recession of  2008, The OPEC crash in  2020 and the infamous Coronavirus crash in 2020. It takes a lot of courage to hold on to your investments throughout these events and weather the fluctuation storms. However, history teaches us that the stock market does eventually bounce back. As my dad loves to say: “In the end everything will be ok and if it is not ok, it is not the end of the world.”

To manage these challenges in an easier way, in 1975 John C. Bogle came up with the idea of creating the world’s first index mutual fund. Instead of actively managing (i.e. buying – selling individual stocks) & charging high costs, the index fund will imitate the index performance over the long run thus achieving higher returns with lower costs. The most commonly known performance index in the United states is the S&P 500 (Standard and Poors 500). This index measures the stock mark performances of the five hundred largest capitalization (value) companies listed on the stock exchanges in the United State. In other words, instead of picking one company (out of 500) and hoping that its value will increase, you can just invest in the index mutual fund that will leverage the performance of all of 500 companies. John C. Bogle founded the Vanguard Company which is now one of the most respected and successful companies in the investment world. Interestingly Vanguard is client owned. As a client-owner, you own the funds that own Vanguard. This creates a feeling of confidence because clearly your success is tightly correlated with Vanguard’s success. 

Let me repeat that it is fundamentally important to understand that there is no investment without risk. Wether you invest in stocks, commodities or real estate – each and every choice comes with a certain amount of risks. Saving cash under your mattress also has a level of risk. Even if you are not afraid of someone stealing it, inflation will affect it for sure. The average cash return over time is 3.5% a year before inflation, and the average after inflation has historically been 0.6%.

The kind of investment which will give you a moderate return in exchange of a moderate amount of risk are the bonds & bonds funds. Bonds can be both domestic and international. Having both in your portfolio helps spreading the risk. It has been estimated that the (U.S.) bonds have an average of 5.5% return before inflation (2.5% after inflation.)

Stocks & stock funds are much more volatile. While stocks can also be international and/or domestic they are much more sensitive to price fluctuations due to the poor performance of certain companies and economies. The average stock return is estimated at 10.2% before inflation (7.1% after inflation).

It is difficult adequately compare returns of privately held individual real estate investment with stock market. According to National Association Realtors (U.S.) from 1987 to 2009 the average appreciation of the existing homes increased by 5.4% (before inflation). 

There is no single rule as to how to structure your portfolio. However, depending on your investor’s profile (your age and  how risk averse you are,  you can diversify your portfolio. If you are young and in a wealth accumulation mode and have strong money earning potential, you can afford to take higher risks and aim at a higher potential return. When you switch to a  wealth preservation mode, you can decide to re-balance your portfolio and have 80% bonds and 20% stocks. Women in general are risk-averse, but too little risk might be a problem too. If you tend to never accept  any risk, it will hinder the growth of your portfolio. It is important to evaluate how much risk you can tolerate and invest accordingly.  

Source: Vanguard. Best and worst calendar-year returns from 1926 through 2014. Stocks are represented by the Standard & Poor’s 90 Index from 1926 to March 3, 1957; the S&P 500 Index from March 4, 1957, through 1974; the Wilshire 5000 Index from 1975 through April 22, 2005; the MSCI US Broad Market Index from April 23, 2005, to June 2, 2013; and the CRSP US Total Market Index thereafter. Bonds are represented by the S&P High Grade Corporate Index from 1926 to 1968; the Citigroup High Grade Index from 1969 to 1972; the Barclays U.S. Long Credit AA Index from 1973 to 1975; the Barclays U.S. Aggregate Bond Index from 1976 to 2009; and the Spliced Barclays U.S. Aggregate Float Adjusted Index thereafter.

What is Financial Independence for Woman?

During the last decade of my corporate career, I have realized that discrimination of women is so deeply rooted in our societies that it will take decades before we can enjoy equal opportunities and equal pay with men in any chosen country, field or industry. According to Word Economic Forum it will take 202 years to close the pay gap between men and women. It is important that every woman takes this challenge in her own hands. One of the strongest tools we have is education and our freedom derives greatly from our financial independence. In a recent article Mike Jelinek also had identified that women are underpaid (for every dollar a man earns, on average a woman is paid 54 cents), need to save more than men (because of longer life expectancy) and have less time to save (due to the pregnancy or part time work).

This means that women have to be smarter. Seven out of 10 millennial women admit they have never been taught to manage money – compared to 42 per cent of men and as a result woman today are in less control of their finances (Janmohamed, 2019). It is mandatory to educate ourselves. Start with the “homework list“ (see below). Read it and find what resonates with you and what suits your goal. 

There is no shame in admitting that you don’t know anything about finances and getting help. It will be your first step towards WFI. All the best athletes, actors and musicians work with trainers and coaches. In my experience the FIRE community is the most open and helpful in advising on how to achieve FI. Enlist in the ChooseFI podcast or their YouTube Channel. Join your local FI community. For example, the Middle East chapter has a SimplyFI community based in Dubai. The advice they share can truly be life changing for you. It can also teach you how to save money and offers various entrepreneurial and side hustles ideas.

Most importantlY you need to know that YOU CAN do it. Women are the most resourceful and creative beings on earth, and we get even better at it when we are together. If our goal is the same, the compounding support to each other will grow exponentially.


  1. 1. Thee Simple Path To Wealth By Jl Collins
  2. 2. Playing With Fire: How Far Would You Go For Financial Freedom? By Scott Rieckens
  3. 3. Your Money Or Your Life By Vicki Robin And Joe Dominguez
  4. 4. Meet The Frugalwoods: Achieving Financial Independence Through Simple Living By Elizabeth Willard Thames


  1. 1. Diana Dinu “Financial Planning. How much should you save for retirement?” https://www.unitedadvisersgroup.com/much-save-retirement/ 
  2. 2. J.L. Collins webside: https://jlcollinsnh.com
  3. 3. Money Mustache: https://www.mrmoneymustache.com
  4. 4. Choose FI: https://www.choosefi.com 
  5. 5. Ken Little, Dealing With Downturns and Upturns in the Stock Market: https://www.thebalance.com/the-stock-market-will-fall-dramatically-some-day-3140953 
  6. 6. Mike Jelinek “Guide To Financial Independence For Women” (https://www.thesimpledollar.com/financial-wellness/guide-to-financial-independence-for-women/ )
  7. 7. Shelina Jahnmohamed “Financial independence remains a challenge for women all over the world” (https://www.thenational.ae/opinion/comment/financial-independence-remains-a-challenge-for-women-all-over-the-world-1.890772
  8. 8. Research Financial Strategies “Financial independence for women” (https://www.rfsadvisors.com/six-steps-to-financial-independence-for-women/
  9. 9. ChooseFI Yutube (https://www.youtube.com/channel/UCD48MgOLoqfPml3C31PhXqA
  10. 10. J.B. Maverick “Average Annual Returns for Long-Term Investments in Real Estate” (https://www.investopedia.com/ask/answers/060415/what-average-annual-return-typical-long-term-investment-real-estate-sector.asp)
  11. 11. Kristina McKenna “Is It Just A Myth That Real Estate Is A Better Investment Than Stocks?“ (https://www.forbes.com/sites/kristinmckenna/2020/02/21/is-it-just-a-myth-that-real-estate-is-a-better-investment-than-stocks/#184bbf2f1808
  12. 12. Michael Bluejay “Long-term real estate appreciation rate in the U.S.”  (https://michaelbluejay.com/house/appreciation.html
  13. 13. Laura D’Andrea Tyson “An Economist Explains Why Women are paid less” (https://www.weforum.org/agenda/2019/03/an-economist-explains-why-women-get-paid-less/  )