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<keyword id="19898109" type="General" weightage="100" keywordseo="Paytm" source="keywords" meta.keywordsubtype="org" meta.entityname="Paytm" meta.hostid="261" meta.entityid="Paytm">Paytm</keyword>'s parent company, <keyword id="20253123" type="General" weightage="20" keywordseo="One97-Communications" source="keywords" meta.keywordsubtype="org" meta.entityname="One97 Communications" meta.hostid="261" meta.entityid="One97 Communications">One97 Communications</keyword>, declared its Q2FY25 results today, announcing a one-time, exceptional profit of Rs 1,345 crore during the quarter, thanks to the sale of its entertainment ticketing business. The company's PAT (profit after tax) stood at Rs 930 crore. Notably, without this windfall gain, Paytm's finances would still be in red, with the company racking up losses worth Rs 415 crore. Paytm was in red in the year-ago period as well, incurring losses worth Rs 290.5 crore. This windfall profit also improved Paytm's EBITDA by Rs 388 crore on a QoQ basis. The company's revenue also saw a slight uptick of 10.5% quarterly to Rs 1,659 crore, as opposed to Rs 1,501 crore in the previous quarter. But on a year-on-year basis, Paytm's revenue dipped significantly by 34%. The company also announced that it has entered into a DLG (<keyword id="23641220" type="General" weightage="20" keywordseo="Default-Loss-Guarantee" source="keywords">default loss guarantee</keyword>) model for its merchant loans of about Rs 225 crore with SMFG India Credit. Under this arrangement, Paytm will be first in line to take a hit in case of a loss that emerges from borrowers defaulting or skipping their payments. "Following the regulatory framework and the emerging market practice, we see increased willingness from lenders to partner and allocate more capital in the default loss. The DLG model will help to increase disbursements with the existing partners and expand partnerships with new lenders for the loan distribution,” said the company in its earnings release today. The company's revenue from its payment business also inched up 9% on a quarterly basis, along with its revenue from <keyword id="19976433" type="General" weightage="20" keywordseo="financial-services" source="keywords">financial services</keyword>, which also grew by 34% QoQ. At present, Paytm's total merchant subscriptions stand at 1.12 crore, with the company garnering 3 lakh new merchants during the quarter. During the previous quarter, Paytm's <keyword id="20253122" type="General" weightage="20" keywordseo="gross-merchandise-value" source="keywords">gross merchandise value</keyword> (GMV) also inched up by 5% on a sequential basis, which experts anticipate will continue in the coming quarters, just as India braces for the festive season. Per its release, Paytm aims to achieve <keyword id="23641219" type="General" weightage="20" keywordseo="EBITDA-profitability" source="keywords">EBITDA profitability</keyword> (before ESOPs) by the fourth quarter of this financial year. However, investors remained unimpressed with Paytm's performance, with its share slipping by around 3.96% during the day to trade at Rs 697.20. The stock has a YTD (yield-to-date) of 7.91% during the year.

Paytm declares Q2 results, earns Rs 930 crore as windfall gains by way of sale of ticketing business to Zomato

Small and medium enterprises (<keyword id="20086849" type="General" weightage="20" keywordseo="SMEs" source="keywords">SMEs</keyword>) are driving a major surge in <keyword id="21881529" type="General" weightage="100" keywordseo="job-applications" source="keywords">job applications</keyword> across key sectors, with more than 35 million job applications recorded in the first eight months of 2024, according to a report by jobs and professional networking platform apna.co. The growth is fueled by rising demand in sectors like BFSI (Banking, Financial Services, and Insurance), BPO (Business Process Outsourcing), and hospitality. The report highlights that the surge in job applications is largely for roles such as Sales &amp; Marketing Managers, Accounting Technicians, Telecallers, Back Office Executives, and Business Development Associates. These positions are critical for the expansion of businesses in these sectors, and the growing demand reflects a strong upward trend in hiring. "SMBs and MSMEs employ more than 110 million people, making them the backbone of our economy. Their success is crucial for our nation's journey towards achieving a USD 5 trillion economy," said Nirmit Parikh, Founder &amp; CEO of apna.co. Parikh emphasised that the demand for skilled workers in these sectors is expected to continue growing, creating vast opportunities for <keyword id="20019820" type="General" weightage="20" keywordseo="job-seekers" source="keywords">job seekers</keyword> across India. <h2>Major growth in Tier-2 and Tier-3 cities</h2>An interesting trend noted in the report is that over 55% of the total job applications for SMB roles came from tier-2 and tier-3 cities, including Jaipur, Indore, Ahmedabad, Lucknow, Kochi, and Bhubaneswar. As businesses expand into these cities, the talent pool is evolving to meet the growing demand, fostering a symbiotic relationship between employers and job seekers. Out of the 35 million job applications received, 14 million came from women, marking a 30% year-on-year increase in female participation. Women are increasingly taking on roles across diverse fields like finance, accounts, marketing, and graphic design, reflecting their rising involvement in the workforce. As SMEs and MSMEs continue to grow, the <keyword id="19972727" type="General" weightage="20" keywordseo="employment-opportunities" source="keywords">employment opportunities</keyword> they generate are set to further contribute to India’s economic goals, fueling progress toward the USD 5 trillion economy target. (With inputs from PTI)

Small businesses generated 35 million job applications till Aug 2024, 14 million were from women: Report

The generative AI provides more <keyword id="20069513" type="General" weightage="20" keywordseo="opportunity" source="keywords">opportunity</keyword> to the Indian IT sector contrary to the believe of being a threat, highlighted a report by Nuvama Wealth Management. The report noted that although AI <keyword id="19901571" type="General" weightage="20" keywordseo="technology" source="keywords">technology</keyword> may initially disrupt the sector, especially in terms of business operations and billing models, the long-term benefits far outweigh the risks. "We, on the contrary, expect the Indian IT industry to come out stronger from the <keyword id="19906101" type="General" weightage="100" keywordseo="Gen-AI" source="keywords">Gen AI</keyword>-led disruption. We dig deep into various facets of Gen <keyword id="20037918" type="General" weightage="20" keywordseo="AI-adoption" source="keywords">AI adoption</keyword> for enterprises and find that Gen AI would create a mammoth incremental opportunity for <keyword id="20617562" type="General" weightage="20" keywordseo="Indian-IT-services" source="keywords">Indian IT services</keyword>," said the report. The report noted that as more enterprises adopt AI, the need for services such as upgradation of legacy code and data readiness for AI integration will increase, offering Indian IT firms new streams of revenue. The report mentioned one of the most significant opportunities lies in the modernization of <keyword id="21835113" type="General" weightage="20" keywordseo="legacy-systems" source="keywords">legacy systems</keyword>, particularly core banking systems (CBS). It stated that many <keyword id="19912054" type="General" weightage="20" keywordseo="financial-institutions" source="keywords">financial institutions</keyword> still use mainframe systems and outdated programming languages like COBOL. Gen AI enables automated code modernization, which will drive a major demand for Indian IT services to upgrade these systems, creating a long-term revenue stream. "Since most non-Indian (read European) do not have the scale to hire and deploy employees with the ability to code in COBOL (not to mention supply crunch)--they have ceded this opportunity to <keyword id="21817095" type="General" weightage="20" keywordseo="Indian-IT-Services-companies" source="keywords" meta.keywordsubtype="org" meta.entityname="Indian IT Services companies" meta.hostid="261" meta.entityid="Indian IT Services companies">Indian IT Services companies</keyword>" said the report. The report specifically highlighted the "upgradation of legacy code" as a key area of opportunity for IT companies as businesses prepare their systems for AI integration. Gen AI is expected to create new service lines for Indian IT companies, including AI-based <keyword id="19945906" type="General" weightage="20" keywordseo="customer-service" source="keywords">customer service</keyword>, fraud detection, predictive maintenance, and knowledge processing. These AI-driven solutions will allow IT firms to offer higher-value services to clients, boosting revenue and profit margins. "Indian IT companies have always repositioned themselves to continue to do what they do best--service customers. That has provided them with the longevity they have commanded for multiple decades now. We do not see that changing this time as well" the report added. Comparing Gen AI to "a hammer looking for a nail," the report suggested that the technology's applications are still being discovered, but its potential is undeniable. Looking ahead, the report forecasts a strong start to FY25 for Indian IT companies, with growth driven by an optimistic outlook for the Banking, Financial Services, and Insurance (BFSI) sector, increasing technology spending, and large deal ramp-ups.

Gen AI to unlock a "mammoth incremental opportunity" for Indian IT services: Report

Prime Minister Narendra <keyword id="19899684" type="General" weightage="20" keywordseo="Modi" source="keywords">Modi</keyword> on Friday said the government is making necessary <keyword id="20861068" type="General" weightage="20" keywordseo="policy-changes" source="keywords">policy changes</keyword>, like removal of <keyword id="20279287" type="General" weightage="20" keywordseo="Angel-Tax" source="keywords">Angel Tax</keyword>, to promote the <keyword id="19945816" type="General" weightage="100" keywordseo="fintech" source="keywords">fintech</keyword> sector, even as he asked the <keyword id="19962476" type="General" weightage="20" keywordseo="regulators" source="keywords">regulators</keyword> to take additional measures to check cyber frauds which can have a crippling impact on startups. Lauding the fintechs for democratising <keyword id="19976433" type="General" weightage="20" keywordseo="financial-services" source="keywords">financial services</keyword>, Modi said the sector, which has attracted USD 31-billion investment in the last 10 years, has played a key role in denting the parallel economy. The Prime Minister was addressing the Global Fintech Fest (GFF) 2024, jointly organised by the Payments Council of India, the National Payments Corporation of India and the Fintech Convergence Council. He said the domestic economy and the capital market are in a celebratory mood at a time when the nation is also going through a festive period. Modi underlined that the government is making all necessary changes on the policy level to assist the fintech sector and gave examples of doing away with Angel Tax, allocating Rs 1 lakh crore to encourage research and innovation in the country and implementing the Digital Personal Data Protection Act. Broadly, fintech refers to entities utilising technologies for providing financial services. Expressing the need to put an end to <keyword id="19901142" type="General" weightage="20" keywordseo="cyber-fraud" source="keywords">cyber fraud</keyword>, he urged the regulators to take major initiatives to boost digital literacy. It is equally important to ensure cyber fraud does not come in the way of the growth of fintech and startups in the country, Modi said. In his speech, the Prime Minister also cautioned about the dangers of a parallel economy for the world. Fintech, he said, has played an impactful role in denting such a system and credited the emergence of transparency. He said that digital technology has introduced transparency in India and gave the example of the implementation of Direct Benefit Transfer used in hundreds of government schemes that has prevented leakages in the system. "Today, people can see the benefits of aligning with the formal banking system," he said. Modi further said the trinity of Jan Dhan, Aadhaar and Mobile have broken down the mentality of 'Cash is King' and made way for approximately half of the <keyword id="20004116" type="General" weightage="20" keywordseo="digital-transactions" source="keywords">digital transactions</keyword> in the world taking place in India. "India's <keyword id="19900911" type="General" weightage="20" keywordseo="upi" source="keywords">UPI</keyword> has become a major example of fintech in the world," he said, adding that it has enabled 24X7 banking services in every village and city in all weather conditions. Underlining the role of fintech in democratising financial services, the Prime Minister gave examples of readily available loans, credit cards, investments and insurance. He said that fintech has made access to credit easy and inclusive, and gave the example of PM SVANidhi scheme that has enabled street vendors to avail collateral-free loans and further expand their business with the help of digital transactions. "Sustainable <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword> is India's priority today," he said and emphasised that the government is creating robust, transparent and efficient systems to strengthen financial markets with advanced technologies and regulatory frameworks. About 800 speakers, including policymakers, regulators, senior bankers, industry captains, and academicians, from India and other countries are participating in the fest.

Removed Angel Tax, taking policy measures to promote fintech sector: PM Modi

<ul class="summary-list"><li>Small business owners are on the brink of a prosperous era, economist Phil Powell says.</li><li>The Federal Reserve is expected to cut rates, the economy is growing, and productivity is increasing.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/entrepreneurs-small-business-owners-share-challenges-of-starting-company-2023-10">Small business owners</a> have reasons to stay optimistic.With the economy still growing and the Federal Reserve expected to <a target="_blank" class="" href="https://www.businessinsider.com/fed-rate-cuts-labor-market-federal-reserve-jerome-powell-unemployment-2024-8">cut interest rates</a> next week, economist Phil Powell told Business Insider that small businesses are on the precipice of an era of <a target="_blank" class="" href="https://www.businessinsider.com/gdp-gross-domestic-product-second-quarter-2024-us-economy-2024-7">prosperity and growth</a>."There are bright days ahead, but it's not going to be frantic," Powell said. "It's going to be a nice, steady, incremental improvement."Powell, who is the executive director of the Indiana Business Research Center and a business economics professor at Indiana University Kelley School of Business, said <a target="_blank" class="" href="https://www.businessinsider.com/boomer-entrepreneur-started-business-be-own-boss-consulting-part-time-2024-8">small business owners</a> should not expect relief overnight, but gradually, they should start to feel easing financial pressures, such as more affordable credit.Fed Chair Jerome Powell <a target="_blank" class="" href="https://markets.businessinsider.com/news/interestrates/powell-hints-at-near-term-interest-rate-cut-the-time-has-come-for-policy-to-adjust-1033718618">signaled on August 23</a> that it was time for the central bank to cut the Federal Funds rate, which has remained between 5.25% and 5.5% for over a year. This has spiked the interest rates small business owners are paying on new mortgages, credit, and loans.According to the <a target="_blank" class="" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">CME FedWatch Tool</a>, there's a roughly 75% chance that the Federal Open Markets Committee will decrease interest rates by 25 basis points and a 25% chance the Fed will decrease interest rates by 50 basis points.Powell said that small business owners are poised to benefit regardless of the size of the cut and should remain hopeful about future growth."Falling interest rates are going to make credit easier to acquire," Powell said. "If you're a small business, whether you need a loan for a capital investment or a loan for working capital, it's going to be easier to acquire, steadily."<h2 id="4365bdec-7a60-4f9a-8f5f-283ee993e9e1">The brightening economic outlook goes beyond interest rates</h2>Entrepreneurs have filed a record 19 million <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://home.treasury.gov/news/featured-stories/small-business-and-entrepreneurship-in-the-post-covid-expansion#:~:text=The%20post%2Dpandemic%20economy%2C%20with,since%20the%20end%20of%202020.">applications</a> for new businesses in the past four years, and business applications remain elevated above pre-pandemic levels.Additionally, small businesses created 71% of net new jobs since 2019, according to the <a target="_blank" class="" href="https://home.treasury.gov/news/featured-stories/small-business-and-entrepreneurship-in-the-post-covid-expansion#:~:text=The%20post%2Dpandemic%20economy%2C%20with,since%20the%20end%20of%202020.">Treasury Department</a>. While the small business economy can be volatile, and applications don't always translate into successful projects, according to Powell, well-managed businesses are in for an era of stable growth.In fact, Powell is bullish that small businesses are poised for a productivity boom like in the 1990s when there was a surge in tech startups surrounding the development of the internet.Powell said that similar to the 1990s, the US economy has seen strong year-over-year growth in corporate profit, stock market growth, and increases in labor productivity.Business labor productivity in the second quarter was up <a target="_blank" href="https://www.bls.gov/opub/ted/2024/productivity-increased-2-7-percent-from-second-quarter-2023-to-second-quarter-2024.htm#:~:text=Nonfarm%20business%20sector%20labor%20productivity,hours%20worked%20rose%200.7%20percent.">2.7% year-over-year</a>, which is an overlooked yet positive sign for economic growth, Powell said. He also said <a target="_blank" class="" href="https://www.businessinsider.com/how-use-ai-save-time-work-best-ways-use-chatgpt-2024-9">AI will further contribute</a> to a productivity boom if entrepreneurs can learn to use it to <a target="_blank" class="" href="https://businessinsider.com/how-use-ai-same-time-work-chatgpt-claude-jasper-2024-9">save time</a>.Powell said solid economic growth is another positive sign for small businesses. According to the <a target="_blank" class="" href="https://www.bea.gov/data/gdp/gross-domestic-product#:~:text=Gross%20Domestic%20Product%20(Second%20Estimate,Preliminary%20Estimate)%2C%20Second%20Quarter%202024&amp;text=Real%20gross%20domestic%20product%20(GDP,the%20calculation%20of%20GDP%2C%20increased.">Bureau of Economic Analysis</a>, real GDP increased 3% year-over-year in the second quarter of this year.To be sure, many small businesses aren't feeling the relief yet. According to the National Federation of Independent Businesses, <a target="_blank" class="" href="https://www.nfib.com/surveys/small-business-economic-trends/">small business confidence</a> dipped in August. Yet, Powell said the economic data points to brighter days ahead despite the dip in optimism."The economy is much better than it feels, but our emotions lead us astray in terms of our impressions, even as business owners," he said.Economic indicators <a target="_blank" class="" href="https://www.businessinsider.com/us-economy-outlook-data-points-to-soft-landing-no-recession-2024-9">point to a soft landing</a>, and small business owners who are struggling with high rates just need to make it through these next few months, Powell said."What they should be fearful of is that they're going to get too pessimistic, and they're going to make emotional business decisions, and they're going to lose out on what could be several years of upcoming prosperity driven by right now," he said.Sean Higgins, an associate professor of finance at the Kellogg School of Management at Northwestern University, similarly told Business Insider that interest rate cuts could be particularly positive for small business growth.He said small businesses tend to be more credit-constrained, so changes in interest rates are particularly influential for business owners' management decisions."They are often the ones that can be more affected by or benefit more once rates come back down, relative to larger businesses," Higgins said.Higgins said that interest rate cuts from the Federal Reserve would create access to cheaper credit, enabling small business owners — whether tech startups or mom-and-pop shops on Main Street — to invest further in growing their businesses or funding expenses.Are you a small business owner who has experienced a recent change in sales or hiring? This reporter wants to hear from you. Please reach out at <a target="_blank" class="" href="mailto:jtowfighi@businessinsider.com">jtowfighi@businessinsider.com</a>

Small business owners could be poised for a 1990s-like boom

<ul class="summary-list"><li>Harris has proposed expanding the small business tax deduction ten-fold, from $5,000 to $50,000.</li><li>Five female entrepreneurs told BI that many small business owners aren't aware of the plan.</li></ul>Ashley Storck, the 26-year-oldfounder of a digital marketing firm in Madison, Wisconsin, is part of nearly a dozen professional organizations. Only one of them, she said, reached out to inform her about Vice President Kamala Harris' proposal to <a target="_blank" href="https://www.businessinsider.com/kamala-harris-small-businesses-tax-breaks-cut-red-tape-2024-9">increase the small business tax deduction tenfold</a>.Storck considers herself very engaged in Democratic politics — she's been to the White House and introduced President Joe Biden at an event about <a target="_blank" href="https://www.businessinsider.com/where-student-loan-forgiveness-stands-borrowers-legal-challenges-biden-relief-2024-10">student loan forgiveness</a> — but she doubts that many entrepreneurs in her critical battleground state know about Harris' small business policies.With the <a target="_blank" class="" href="https://www.businessinsider.com/what-you-need-to-know-about-kamala-harris-opportunity-economy-2024-9">economy</a> as the driving issue this election, Harris has introduced a slate of policies targeted toward entrepreneurs,<a target="_blank" href="https://www.businessinsider.com/harris-tax-deduction-plan-small-business-startup-cost-2024-10"> including her plan to expand the small business tax deduction from its current $5,000 to $50,000</a>. Under the proposed legislation, new entrepreneurs could take advantage of the $50,000 deduction right away or a few years after launching, to help lower taxes once they start turning a profit.Rhett Buttle, the co-executive director of Small Business Roundtable and a former business advisor for Biden, previously told Business Insider that the expanded deduction would be particularly helpful for women and people of color who have a harder time accessing capital. But BI spoke to five female <a target="_blank" class="" href="https://www.businessinsider.com/silicon-valley-billionaires-investors-kamala-harris-mark-cuban-reid-hoffman-2024-8">entrepreneurs</a>, all of whom said many people aren't aware that the proposal even exists.Neither Hama Hinnawi, 46, nor Patricia Oswald, 55, had heard of Harris' pitch before speaking to BI. Owners of a fashion brand and company that sells powered drying racks respectively, they are both members of the Women's Business Development Center and doubted many of their peers are aware, either. Hinnawi even said she called the company that deals with her tax returns to see if any of them knew about it — they didn't."There isn't one place that you can go to learn all this stuff about small businesses," Hinnawi told BI. Oswald thinks that small business advocacy organizations and financial institutions that provide loans should send the word out about candidates' proposals.Anne Zimmerman, 71, co-founded one such organization, Small Business for America's Future, in addition to her Ohio-based accounting firm for small businesses. She said that there's not enough news coverage of specific proposals for current and aspiring entrepreneurs, whom the proposal would help."You've got to drill down and find it yourself," she told BI about the legislative details. The entrepreneurs she advises are hungry for policies that directly impact their operations, but Zimmerman said most don't read past the headlines to learn about the specifics.Given her political involvement, Storck trusts that she would have learned of Harris' proposal eventually. But she worries that the same doesn't go for everyone else in her state and wishes campaigns would reach out to key community stakeholders, like chambers of commerce."Especially in rural Wisconsin and with those small businesses that aren't as politically engaged, it's 100% possible that they're not being sent this information or even aware that this is a policy she's proposing," Storck told BI. Harris is struggling with rural voters in Wisconsin and the other <a target="_blank" href="https://www.businessinsider.com/kamala-harris-names-tim-walz-vice-president-pick-minnesota-2024-7">Blue Wall battlegrounds of Michigan and Pennsylvania</a>.And in deep-blue Chicago, Taylor McCleneghan, 36, had heard of Harris' plans, but generally doesn't think there's enough educational outreach about the tax rules for small business owners. McCleneghan, who owns a product development company, is a member of multiple small business advisory groups and considers herself relatively well-informed. Still, she struggles to understand the thicket of financial questions entrepreneurs face."Navigating tax implications for starting a business when you don't have any family or friends who are entrepreneurs or you're starting completely self-funded with very little — that literacy is still a major hole," she said. McCleneghan is a lifelong Democrat, but she has family members who are entrepreneurs and support Trump. All, she said, could benefit from knowing more about what politicians are offering by way of support."I think all, regardless of size or regardless of political leaning, have leaned on government services to get their business going," she said.Whether the target audience knows about Harris' promise or not, it remains just that — a promise. Should she win the election, Congress would need to pass legislation to turn her expanded tax deduction idea into a reality. Despite the prevailing congressional gridlock, four tax and small business experts that BI previously spoke with said local entrepreneurship is a rare point of potential bipartisan agreement."I'm not a political economist, but I think it is very hard for a traditional, small C conservative Republican to go back to their home district and say, 'I voted against things that will help you open a business,'" Mary Hansen, an economics professor at American University, said.

Many of the small business owners Harris is targeting say they've never heard of a key economic proposal

<ul class="summary-list"><li>Harris has proposed expanding the small business tax credit from $5,000 to $50,000.</li><li>Experts told BI the proposal would shift the timing of deductions and isn't all that pricey.</li></ul>Patricia Oswlad, 55, and her husband have spent years building up their retirement fund. But when Oswald decided to launch a small business in the fall of 2022, the couple liquidated some of their assets to fund the company, throwing their financial planning to the wind.With fewer than five weeks until Election Day, Vice President Kamala Harris is <a target="_blank" class="" href="https://www.businessinsider.com/kamala-harris-small-businesses-tax-breaks-cut-red-tape-2024-9">making a targeted pitch to entrepreneurs</a> like Oswald, who are burdened by startup expenses. She even mentioned a key proposal in her opening answer at the presidential debate: expand the small business tax credit 10-fold, from $5,000 to $50,000.In a pamphlet on her economic plan, dubbed the <a target="_blank" class="" href="https://www.businessinsider.com/what-you-need-to-know-about-kamala-harris-opportunity-economy-2024-9">"Opportunity Economy,"</a> Harris explains that she would let business owners take advantage of the $50,000 tax deduction right away or a few years after launching, to help lower taxes once they start turning a profit. The proposal, <a target="_blank" class="" href="https://www.businessinsider.com/harris-added-policy-website-before-trump-debate-venture-capital-startups-2024-9">like many of her others</a>, would need <a target="_blank" class="" href="https://www.businessinsider.com/kamala-harris-senate-races-ted-cruz-rick-scott-2024-9">congressional</a> approval.Oswald told Business Insider the credit would have been "invaluable" in getting Brisa Systems, which offers powered drying racks, off the ground.<h2 id="7006e4c2-613d-4eb9-8fc4-ad020faacaad">Harris' proposal shifts the tax timeline for entrepreneurs.</h2>Tax experts told BI that enacting the credit would mean a change in timing more than anything else. Under current law, small businesses can deduct up to $5,000 in expenses immediately and must deduct any future expenses against their income over 15 years. Harris' proposal would let entrepreneurs deduct more money quickly.Owners have expenses before even launching their business, and the deduction would help cover those costs.Rhett Buttle, the co-executive director of Small Business Roundtable and a former business advisor for President Joe Biden, told Business Insider that startup costs accumulate in three primary areas: marketing, basic equipment, and hiring.For Oswald, most early costs have been in manufacturing and intellectual property services. Taylor McCleneghan, who launched her product development company, Small Shop LLC, in 2018, named inventory and marketing as the biggest upfront costs. Both women are based in the Chicago area.<div type="image" title="Kamala Harris at a campaign event about small businesses" height="3439" width="5159" msid="113963121" hostid="261" sizebytes="769310"></div>Brett Theodos, a senior fellow at Urban Institute who specializes in small business loans, told BI that entrepreneurs would "love" to be able to deduct more of those expenses right away. Moving up the timeline would, he said, make many feel less strapped for cash from the very outset.And there's another potential upside, according to Garret Watson, a senior policy analyst at the nonpartisan Tax Foundation. Small businesses would likely benefit from getting the deduction more quickly because of inflation, he said.Many entrepreneurs are psyched about the effort. Theodos struggled to think of a reason why they wouldn't want this, and Buttle said that those he works with are overwhelmingly excited about the plan.McCleneghan, of the Small Shop, said having access to a $50,000 tax deduction early on would have allowed her to do better long-term planning. With the expanded tax deduction, Oswald said she might not have had to divest retirement funds or take out lines of credit."Getting money in the hands of entrepreneurs sooner is going to allow them to hire, to get equipment, to get a space, to pay off some debt, to pay themselves," Theodos said. "So it's meaningful to allow them to accelerate the deduction of startup expenses."But while small business owners may jump at the opportunity for more early cash flow, where this money would come from is more unclear. McCleneghan herself acknowledged that the details seem hazy.<h2 id="af50011b-34e9-4f5e-9a3b-b001ea7f148b">Despite the flashy numbers, the proposal likely wouldn't have a significant impact on the federal budget.</h2>Though $50,000 sounds like a big-ticket promise, the experts BI spoke to said Harris' proposal actually wouldn't make a big dent in the federal budget. The Tax Foundation, where Watson works, examined cost estimates from prior expansions and found that the proposal would cost about $24.5 billion over 10 years."Relative to the federal government's budget and spending, it's very small," Watson said. "This $25 billion number is in the context of a tax plan for the Harris campaign that would raise about $5 trillion over 10 years. So you're talking about orders of magnitude more money on the tax hike side."<div type="image" title="Kamala Harris and Mike Johnson during the State of the Union speech" height="4000" width="6000" msid="113963120" hostid="261" sizebytes="522916"></div>Some of the loss, he said, stems from the likelihood that certain entrepreneurs will use the deduction and then go out of business. Since the proposal changes when businesses can deduct rather than how much they deduct, it will cost some money, but not "big money," Theodos said.And the proposal could help spur growth, if it becomes law. According to a study from the <a target="_blank" class="" href="https://www.pewresearch.org/short-reads/2024/04/22/a-look-at-small-businesses-in-the-us/">Pew Research Center</a> published in April 2024, small businesses employ nearly half of the country's private sector employees.Theodos called small businesses "essential" for the US economy, and Buttle said they're a<a target="_blank" class="" href="https://www.businessinsider.com/harris-sec-ftc-khan-gensler-crypto-regulation-biden-warren-2024-9"> crucial source of innovation</a>. But the tax experts said the full potential economic impact of the proposed expansion is still up in the air."The question is, will this significantly contribute to a startup boom or really change the needle there or move the needle there? I think that's a reasonable question. It's up for debate, particularly because this is such a narrow provision," Watson told BI, while noting that giving businesses deductions is generally a good policy.If the policy did spur more development, though, Mary Hansen, an economics professor at American University and co-director of the nonpartisan Institute for Macroeconomic and Policy Analysis, said it would eventually have a net positive impact on government revenue.As of now, Harris' promise is just that — a promise.Should she win the election, Congress would need to pass legislation to turn her expanded tax deduction idea into a reality. Despite the prevailing congressional gridlock, all of the experts BI spoke with said small businesses are a rare point of potential bipartisan agreement. Watson predicted that lawmakers would likely tie the proposal to their actions on the expiring 2017 tax provisions.<div type="image" title="Kamala Harris and Doug Emhoff go shopping to support Small Business Saturday" height="3788" width="5973" msid="113963117" hostid="261" sizebytes="2365956"></div>Should Congress ever pass the expanded tax deduction, all startups and small businesses would access the same amount of money — but the experts told BI that some would feel the impact more than others. Entrepreneurs with less initial cash flow would disproportionately benefit from the change, they said.Buttle said it would help women and people of color who have a harder time accessing capital. The Pew Research study found 61% of small businesses are majority-owned by men and, as of 2021, 85% were majority-white owned."We're talking about community businesses, micro-businesses, businesses where the founder doesn't have as much net worth," Theodos told BI. "Everybody can benefit from $45,000, but the question is, who is that making the critical difference for?"

Kamala Harris' tax plan for small businesses sounds like it will cost a lot of money — it won't 

<ul class="summary-list"><li>French authorities charged Telegram CEO Pavel Durov with multiple crimes this week.</li><li>Telegram's finances reveal a $108 million loss on $342 million of revenue last year, the FT reports.</li></ul>This week <a target="_blank" href="https://www.businessinsider.com/telegram-ceo-pavel-durov-charges-questions-free-speech-censorship-2024-8">French authorities charged Telegram CEO Pavel Durov </a>with multiple crimes. But in the months before that, he was telling people he might take his company public, and floated a <a target="_blank" href="https://www.ft.com/content/8d6ceb0d-4cdb-4165-bdfa-4b95b3e07b2a">$30 billion valuation</a> for his messaging/social media company, which boasts more than 900 million users.Now the <a target="_blank" href="https://www.ft.com/content/242552a9-4280-46c0-9d61-bcf6ccd14400">Financial Times</a> says it has gotten a look at Telegram's 2023 finances, and those numbers make it very hard to imagine the company could convince people it's worth anything like $30 billion — even if its founder and CEO wasn't looking at jail time.The big headline numbers: Last year Telegram lost $108 million on revenue of $342 million, according to the FT. It's not uncommon for fast-growing consumer tech companies to be money losers when they go public. Twitter did that in 2012, and <a target="_blank" href="https://www.businessinsider.com/why-reddit-loses-money-ipo-research-development-revenue-2024-2024-2">Reddit did it this year</a>.The bigger red flag for Telegram is the reported makeup of its business: While it makes a modest amount of money from conventional social media vectors — advertising and premium subscriptions — it makes 40% of its total from crypto services, the FT reports. It operates a digital "wallet" where users can store crypto coins and the like, and it sells digital collectibles, like usernames, to its users. And that business seems to run primarily on Toncoin, a cryptocurrency originally built by Telegram.The whole setup, as the FT notes, makes it seem like Telegram is "a crypto firm with a sideline in messaging." Telegram didn't respond to a request for comment.You can build a real business as a crypto trading hub, and that can be quite valuable: see <a target="_blank" href="https://finance.yahoo.com/quote/COIN/">Coinbase</a>, currently worth some $45 billion.But asking investors to decide if Telegram is a social media company like Twitter, a messaging app like Whatsapp, or… something else, fueled by a semi-obscure digital coin, would be a real ask.And that's before you get to the issue of Durov's proposed valuation, and Telegram's very modest existing business, which don't sync up at all. Coinbase, for instance, eked out a small profit last year on revenues of $2.9 billion. Twitter, prior to Elon Musk's 2022 purchase, had been worth around $25 billion, and was doing around $5 billion a year. Reddit, currently worth $10 billion, did $800 million last year. It's really hard to see how Telegram's $342 million stacks up to those.Presumably any bankers working Telegram's theoretical IPO would play up the idea that while Telegram's top line is fairly modest, it is doing all of that with a teeny tiny staff of about 50 people. And that would give the company the ability to produce truly magnificent margins, one day, as the business matures.But that will be a much harder sell after this month.<a target="_blank" href="https://www.businessinsider.com/pavel-durov-arrest-france-what-is-telegram-explained-2024-8">While we still don't fully understand the French case against Telegram</a>, it seems to center around the company's deliberate policy of doing almost zero moderation, and an alleged unwillingness to comply with government requests to fight illegal behavior on the platform.Durov has said Telegram's no-moderation, no-compliance stance is a political/theological one. But it also has a real business component: As every big social network has learned, keeping an eye on what happens on your platform, and dealing with regulators who want a say about that, is a very expensive proposition that involves paying lots of humans. Right now, Durov doesn't have to worry about that.But if Durov wants to placate the French government — and maybe others who are looking at similar charges — he may very well have to agree to change the way he runs his business and hire a lot more people.Who knows? Maybe that would make it more valuable in the long run. But it would definitely ding the company's P&amp;L in the near-term.

Telegram's reported finances reveal a pretty small business with an uncertain future

New Delhi [India], May 20 (ANI): A recent Certified Practising Accountant (CPA) Australia survey has revealed an overwhelming optimism among <keyword id="21735155" type="General" weightage="100" keywordseo="Indian-small-businesses" source="keywords">Indian small businesses</keyword>, with 84 per cent anticipating continued growth in 2024, significantly surpassing the market average of 70 per cent. Despite global <keyword id="20413867" type="General" weightage="20" keywordseo="economic-uncertainties" source="keywords">economic uncertainties</keyword>, 80 per cent of Indian respondents remain confident about the local economy's prospects for 2024, well above the survey average of 65 per cent. This buoyant outlook has been on an upward trajectory since 2022, highlighting the resilience and dynamism of India's small business sector. <keyword id="21735156" type="General" weightage="20" keywordseo="CPA-Australia-survey" source="keywords">CPA Australia survey</keyword> showed a rise in the growth rate of Indian <keyword id="390673" type="General" weightage="20" keywordseo="small-businesses" source="Orion">small businesses</keyword> from 73 per cent in 2022 to 77 per cent in 2023--the highest since 2019. Indian small businesses are riding a wave of optimism and growth, according to <keyword id="21735157" type="General" weightage="20" keywordseo="CPA-Australia" source="keywords" meta.keywordsubtype="org" meta.entityname="CPA Australia" meta.hostid="261" meta.entityid="CPA Australia">CPA Australia</keyword>'s latest annual Asia-Pacific Small Business Survey. The survey reveals that over three-quarters of Indian small businesses reported growth in 2023, surpassing pre-pandemic levels and making India's small business sector one of the most dynamic and fastest-growing in the Asia-Pacific region. Prafulla Chhajed, a CPA member of CPA Australia in India, emphasized the critical role of Micro, Small, and Medium-sized Enterprises (<keyword id="19910977" type="General" weightage="20" keywordseo="MSMEs" source="keywords">MSMEs</keyword>) in driving India's economic success. Chhajed said, "Micro, Small and Medium-sized Enterprises (MSMEs) are making a significant contribution to India's economic success. Not only is India's rapid economic growth and improving business environment boosting their confidence, support from the government ranging from digitalisation to access to funds, is assisting businesses to recover from the pandemic." He further said, "India's small businesses are enthusiastically improving their performance through innovation, adopting technologies, and building connections with overseas markets. 'Good staff' was nominated as the top positive factor that benefited India small business performance in 2023. It explains why Indian respondents have been so willing to add new employees over the past two years". "This year the pace in jobs creation by small businesses is expected to slow, although remain high in comparison to other markets. This is most likely due to a combination of factors including increasing levels of automation and rising labour costs," he added. However, Chhajed cautioned that the pace of job creation might slow down due to rising automation and labor costs, though it will still remain high compared to other markets. The survey highlighted several challenges faced by Indian small businesses, including increasing costs, competition, and cashflow difficulties. Staff and material costs were particularly detrimental in 2023, rising slightly from the previous year. To cope with these expenses and support growth, 68 per cent of small businesses sought external funding last year, though this figure dropped 20 percentage points from 2022. This year, 81 per cent plan to seek finance, despite tougher financing conditions. Only 42 per cent of respondents found it easy to secure funds in 2023, a sharp decline from 69 per cent in 2022. This trend is expected to continue, with just 43 per cent anticipating ease in accessing funds this year, down from 64 per cent previously. "Difficulty in accessing finance is a common challenge for small businesses worldwide. Though government loans like <keyword id="20151906" type="General" weightage="20" keywordseo="pradhan-mantri-mudra-yojana" source="keywords">Pradhan Mantri MUDRA Yojana</keyword> (PMMY) helps to foster entrepreneurship by offering financial support, MSMEs should not solely rely on borrowing to fund their long-term development, particularly in a high-interest rate environment", Chhajed explained. A significant number of Indian small businesses focused on managing costs and cash flow last year. Among the technologies they invested in, accounting software was particularly popular, with 23 per cent adoption. Professional advice was also sought frequently, with 34 per cent consulting accountants and 38 per cent seeking advice from friends and family. "Indian MSMEs are very competitive in many areas such as digitalisation and innovation, now they should focus on cost management and cashflow to increase their financial return. It's wise to use accounting software to control cost and analyse financial performance regularly. Further, financial experts like qualified accountants may provide professional advice to small businesses to manage technical issues like taxation and improve financial performance", Chhajed suggested. Indian small businesses also show a strong inclination towards innovation and global expansion. Leading the 11 surveyed markets, 34 per cent of respondents expect substantial revenue growth from overseas markets this year, significantly higher than the survey average of 19 per cent. Additionally, 44 per cent plan to introduce new products or services, compared to the market average of 29 per cent. Chhajed said, "The Indian government has established good platforms to bolster our MSMEs' global expansion, for example, international trade fairs for MSMEs. He added, "They could leverage these opportunities to connect with overseas customers and promote their novel products globally. Besides, our thriving digital economy also fosters MSMEs' innovation and revolution in the digital era." The survey gathered insights from 4,222 small businesses across 11 Asia-Pacific markets, including 505 respondents from India, providing a comprehensive overview of the region's small business landscape. (ANI)

84% of Indian small businesses anticipate robust growth in 2024: CPA Australia survey

New Delhi [India], July 12 (ANI): <keyword id="20043730" type="General" weightage="20" keywordseo="Jio-Financial-Services" source="keywords" meta.keywordsubtype="org" meta.entityname="Jio Financial Services" meta.hostid="261" meta.entityid="Jio Financial Services">Jio Financial Services</keyword> has received the nod from the <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> (<keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword>) to convert into a <keyword id="20871282" type="General" weightage="20" keywordseo="Core-Investment-Company" source="keywords">Core Investment Company</keyword> (CIC) from a Non-Banking Financial Company (<keyword id="19938496" type="General" weightage="20" keywordseo="NBFC" source="keywords">NBFC</keyword>). The company in an official statement on Thursday stated that "Further to the disclosure dated November 21, 2023, the Company has today received from the Reserve Bank of India approval for conversion of the Company from Non-Banking Financial Company to Core <keyword id="19895437" type="General" weightage="20" keywordseo="investment" source="keywords">Investment</keyword> Company." According to the Reserve Bank of India, a CIC is a specialised NBFC with an minimum asset size of Rs 100 crore. The RBI's circular dated December 20, 2016 stated that, a CIC's main business is the acquisition of shares and securities with certain conditions. One of the conditions stipulated by the central bank is that the CIC holds not less than 90 percent of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies. The transition from an NBFC to a CIC involves several key changes in the company's operational framework. As a Core Investment Company, <keyword id="2003276" type="General" weightage="20" keywordseo="Jio" source="Orion">Jio</keyword> Financial Services will primarily focus on investments in and the management of its subsidiaries companies. The transformation to a CIC structure would enable Jio Financial Services to delineate the financials and operations of each subsidiary, to provide better value discovery for investors. Unlike typical NBFCs, CICs are non-deposit taking financial companies that have their assets predominantly invested in the equity shares, preference shares, or debt instruments of their group companies. As a CIC, the company gains greater operational flexibility. It can now focus on core investment activities without engaging in other financial services. The CICs can explore different sectors and diversify their investment portfolio. This flexibility allows them to adapt to changing market conditions. The shares of the company also surged more than 1.5 per cent during the opening session on Friday, and stands at Rs 353.25 at the time of filing this report. (ANI)

Jio Financials gets RBI nod to become Core Investment Company

<ul class="summary-list"><li>Four therapists shared what their clients from different tax brackets discuss in sessions.</li><li>Money can be a source of stress for both those on lower incomes as well as the <keyword id="20766455" type="General" weightage="20" keywordseo="ultra-rich" source="keywords">ultra-rich</keyword>. </li></ul>We may think getting that big promotion with a hefty pay rise would solve all our problems, but would it? As Business Insider learned from interviewing therapists with clients across the socioeconomic spectrum —from <a target="_blank" class="" href="https://www.businessinsider.com/alices-dinks-henrys-fires-economy-guide-2024-6">ALICEs to HENRYs</a> and beyond — while it's easy to see why having a low income can cause stress — particularly with <a target="_blank" class="" href="https://www.businessinsider.com/wealth-inequality-so-bad-will-take-230-years-end-poverty-2024-1">growing wealth inequality</a> — rich people have their own worries. So what are people across the tax brackets discussing with their therapists? <h2>People on low incomes</h2>Anna Nathanson, a licensed clinical social worker and therapist based in New York, runs a website called Low-Cost Therapy NYC. She said that "financial instability really eats at people's souls." It affects not only people's physical well-being but also their interpersonal relationships and self-worth, which is linked to money for many. Clients might talk about <a target="_blank" href="https://www.businessinsider.com/personal-finance/rules-spender-saver-relationship-build-wealth-2021-9">arguing about money with their partner</a>, job hunting, having to rely on friends for childcare, or how their income affects their self-esteem, Nathanson said. She has also helped patients work through chronic trauma responses, such as depression or nightmares, that they have developed from repeatedly not having their basic needs met. <div type="image" title="A couple sat, arguing." height="1414" width="2121" msid="114215104" hostid="261"></div>Dr. Ashley Castro, a New York-based clinical psychologist who started Healwise, an affordable and accessible therapy nonprofit, said: "Poverty brings with it so many different kinds of stress." She added: "There is a lot that's out of their control that can be difficult emotionally. It's just a reality that life can be tough if you don't have a lot of money." <h2><keyword id="23623471" type="General" weightage="20" keywordseo="ALICEs" source="keywords">ALICEs</keyword></h2><a target="_blank" href="https://www.businessinsider.com/alice-living-paycheck-to-paycheck-without-government-assistance-snap-medicaid-2024-5">ALICEs</a> (Asset Limited, Income Constrained, Employed) are people who earn enough to sit above the federal poverty line but struggle with the cost of living. <div type="image" title="A birds-eye view of a woman typing on a calculator and looking at her bills" height="1414" width="2121" msid="114215097" hostid="261"></div>Traci Williams, a psychologist and certified financial therapist in Atlanta, said that people with little money can end up overspending and getting into debt because they might be "trying to live a life that they desire for themselves that they cannot yet afford." On the other hand, people who have become ALICEs — for instance those who have lost wealth or grew up in financially stable homes butdon't make as much as their parents — may develop <a target="_blank" href="https://www.businessinsider.com/personal-finance/money-anxiety-scarcity-mindset-generational-trauma-2022-6">scarcity mindsets</a>, Williams said. As such, while some ALICEs will discuss in therapy their need to hoard money others talk about wanting to "live it up" and spend recklessly when they are able, she said. <h2>HIFIs</h2><a target="_blank" href="https://www.businessinsider.com/americans-feel-financially-insecure-wont-stop-luxury-shopping-millennials-genz-2024-5">HIFIs</a> (<keyword id="23623474" type="General" weightage="20" keywordseo="high-income" source="keywords">High Income</keyword>, Financially Insecure) earn a high salary, but spend so much they end up living paycheck to paycheck. Just over half of people who make $100,000 or more live paycheck to paycheck, a 2023 report by PYMNTS, a data-analytics company, and LendingClub, a financial-services company, found. <div type="image" title="A woman in a green jumper, looking out a window and away from her phone." height="1086" width="1629" msid="114215098" hostid="261"></div>"That is not because they don't have enough, but it's often because they are overspending or not financially aware," Williams said. This may be due to the <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/what-causes-inflation">increased cost of living</a>, which has contributed to many people's <keyword id="22941859" type="General" weightage="20" keywordseo="financial-insecurity" source="keywords">financial insecurity</keyword>, she said. Many of Williams' clients say they also feel pressured to spend above their means in order to keep up with the lifestyles of their peers that they see on social media. <h2><keyword id="23623470" type="General" weightage="20" keywordseo="HENRYs" source="keywords">HENRYs</keyword></h2>Some <a target="_blank" href="https://www.businessinsider.com/henry-student-loans-six-figure-income-millennial-gen-z-retirement-2023-11">HENRYs</a> (High Earners, Not Rich Yet) might seem wealthy to others, but still worry about having enough money, Williams said, because "it's all relative." She gave the example of higher-earning clients who <a target="_blank" href="https://www.businessinsider.com/personal-finance/investing/how-to-invest-in-stocks">invest in stocks</a> and worry markets could crash at any time, despite that being unlikely. <div type="image" title="A stressed men looking a stock market graph on a laptop." height="1414" width="2121" msid="114215100" hostid="261"></div>HENRYs who didn't grow up with much money might tell Nathanson that they feel guilty being wealthy, she said. They might also talk about feeling uncomfortable receiving gifts because they don't feel deserving, she said. Or they may feel the reverse and have an unnecessary scarcity mindset. Such people often talk to Nathanson in therapy about feeling "really <a target="_blank" href="https://www.businessinsider.com/young-people-are-developing-money-dysmorphia-2024-7">nervous about spending</a> anything and feeling like they can't indulge in any way." Two HENRYs in a couple, meanwhile, might want to discuss tension in their relationship if they have different ways of thinking about shared wealth, she said. <h2>Ultra-high net worth individuals</h2>"The stereotype is that rich people problems aren't real problems, that they're just in therapy talking about really inconsequential trivial things," Castro said. "But my patients have real issues and they genuinely struggle." Dr. Paul L. Hokemeyer, a licensed marriage and family therapist and clinical consultant to <a target="_blank" href="https://www.businessinsider.com/what-ultra-high-net-worth-investors-are-buying-family-office-2024-6">ultra-high net-worth people</a>, based in Colorado, agreed with Castro. "At the core, people of wealth suffer from the same mental health and relational issues as the rest of humanity," he said. <div type="image" title="A man and woman sit far apart in a fancy apartment." height="1414" width="2121" msid="114215106" hostid="261"></div>For example, Hokemeyer helps people who feel "objectified" and "vilified" because of their wealth; who feel pressure to use it in productive ways; and who deal with the "highly stressful and chaotic" process of starting a business. Well-off children and teens, meanwhile, must often deal with the expectation that they will get into <a target="_blank" class="" href="https://www.businessinsider.com/extreme-moves-gifts-parents-use-get-kids-into-prestigious-preschools-2020-6">elite educational institutions</a> with intense workloads, Castro said. The pressure to achieve can cause problems with perfectionism and anxiety disorders, as well as depression from a lack of downtime and fun. Williams said that she sees a lot of guilt and hopelessness in her wealthier clients, because they realize they can't make as big a difference in the world as they would like to. And, as people live longer, she said that some worry about not having enough money to sustain their lifestylesas they get older. Wealth can also cause issues within families, she said, with disagreements over wills, estates, and spending on vacations. According to Hokemeyer, "wealth can be both a blessing and a curse," but, at the end of the day, "emotions are emotions, pain is pain." Correction: October 16, 2024 — An earlier version of this story misspelled the first name of a psychologist and financial therapist in Atlanta. Her name is Traci Williams, not Tracy. An earlier version also misstated the name of a financial-services company. It’s LendingClub, not LendingCompany.

From ALICEs to HENRYs, here's what people across the tax brackets discuss in therapy

<ul class="summary-list"><li>Michael Johnston was making six figures in a remote job he enjoyed when his second child was born.</li><li>He fell in love with <keyword id="23944982" type="General" weightage="20" keywordseo="full-time-parenting" source="keywords">full-time parenting</keyword> and his wife, a successful editor, was keen to keep working.</li></ul>This as-told-to essay is based on a conversation with Michael Johnston, 41, a <keyword id="23944981" type="General" weightage="100" keywordseo="stay-at-home-dad" source="keywords">stay-at-home dad</keyword> who lives in Old Orchard Beach, Maine. Johnston's financial claims have been verified with documents. It has been edited for length and clarity. I graduated from Boston University in 2006 with a degree in mechanical engineering. I then got a job in the semiconductor industry. The role allowed me unlimited creative freedom and had crazy big budgets. Life was good. A few years into this amazing job, things shifted. The 2008 recession hit, and though I survived layoffs, everything changed. Money dried up for creative projects, and suddenly, I was doing paperwork all day. After my wife Maddie finished school, we wanted a fresh start. We moved coasts onto a ranch in California. I found a new role at KLA Corporation, in manufacturing, with much less paperwork. When my wife told me she was pregnant, I had a steady job with a manageable workload, but I traveled frequently to China, Taiwan, and South Korea. I was grateful for the income when our son Lincoln was born. <div type="image" title="Dad with baby in a carrier." height="4032" width="2268" msid="114981391" hostid="261"></div><h2>The impossible task of pandemic parenting</h2>Like many parents, March 2020 was a very difficult period for my family of three. Lincoln was around three years old, and suddenly my world narrowed to just four walls during lockdown. Instead of traveling and working in the office, my role was being permanently on the phone. I had meetings the entire day and would try to get my actual work done in the evening. Calls from around the world pushed late into the night. At some points, I worked almost 24 hours a day. Maddie, Lincoln, and I tried to maintain daily family life while we kept up with our careers. Now we were both fully remote, so we bought a beach house in Maine in 2020 and left California in 2021. But that wasn't the only reason we were moving back closer to home: our second baby was on the way. <div type="image" title="Michael Johnston and his kids." height="3357" width="1888" msid="114981168" hostid="261"></div><h2>Crunching numbers on <keyword id="21017792" type="General" weightage="20" keywordseo="paternity-leave" source="keywords">paternity leave</keyword></h2>I fully intended to go back to work after paternity leave. I was making six figures doing work that I loved — prior to the pandemic shift — and my team was great. But over 12 weeks of leave, I fell in love with being a full-time dad. If I was up at 3 a.m. I was comforting a sleepless kid, not fielding international calls. It was some of the best times we'd had as a family. My wife has a successful career in editorial work, and we began examining whether we could afford to be a one-salary family. We'd spent our early career days digging out of student and credit card debt from moving around. Right before kids, we'd finally paid off our debt, which was tough even with two incomes. Moving back to Maine was a major savings opportunity. We streamlined our spending on our mortgage, rental property, two cars, and everything else it takes to run a family in California. We no longer had to pay for flights back, preschool or daycare. We dug into what life would look like on one income, and my financial projections showed it was doable in Maine. We walk the kids to school and don't have a pricey commute. We no longer pay for any day care — a drastic change from the insanely California options at around $2,000 for one child. Maine also has free breakfast and lunch at school. <h2>Deciding to stay home</h2>It came down to how we viewed our work. After maternity leave, my wife was excited to see her coworkers and jump back into her job. I saw work as a means to an end. My future wasn't ever really tied up in my workplace. I'd missed so much of my first child's youngest years that I was determined not to repeat that with my second. On the work front, I'd used my degree for 17 years and accomplished what I wanted to. A week or two before the end of my leave, I set my team up for success and gave my boss my two weeks' notice. <div type="image" title="Michael Johnston and his family." height="1690" width="2253" msid="114981165" hostid="261"></div><h2>Settling into full-time dad life</h2>The first few months were awesome. We knew we'd made the right choice. I walked the kids to school every day and got to experience small moments I'd previously been too busy to enjoy. I did have misconceptions about stay-at-home parenting life. I thought I'd renovate our 1954 Airstream during naps. Instead, I get up at 5:30 a.m., make lunches, have a cup of coffee for 15 minutes in peace, and then get everyone ready for school. Once my oldest is at school, my new mission is potty training. I'm lucky to grab a shower during naptime. I clean and reset the house for the evening, getting dishes under control and dinner started. My wife and I always split the cores, her taking the mental labor of organizing school and social life comms and I did more physical chores. This is now just more official – I manage school runs and all the household tasks. When others find out I'm a stay-at-home dad, they always ask: "When are you going back to work?" Maybe I will, maybe I won't. If I do, I'll have different boundaries. I spent too long wrapped up in my job. We are trained to graduate, get a good job, work that job forever, then retire at 65. I plowed along for long enough. Now I know a corporate job isn't a mandatory trajectory. It was a choice. I'm happy doing something different. Correction: November 8, 2024 — A previous version of this story misstated that the Johnston family didn’t have a car. They do have a car in Maine.

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