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The <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords">Reserve Bank of India</keyword> has imposed <keyword id="21834852" type="General" weightage="20" keywordseo="monetary-penalties" source="keywords">monetary penalties</keyword> on three Non-Banking Financial Companies for <keyword id="20170050" type="General" weightage="20" keywordseo="non-compliance" source="keywords">non-compliance</keyword> with directions of <keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword> on <keyword id="20200326" type="General" weightage="100" keywordseo="housing-finance-companies" source="keywords">housing finance companies</keyword>. As per the official statement from RBI on Friday, it has imposed a monetary <keyword id="19899183" type="General" weightage="20" keywordseo="penalty" source="keywords">penalty</keyword> of Rs 5 lakh on <keyword id="23068625" type="General" weightage="20" keywordseo="Godrej-Housing-Finance" source="keywords">Godrej Housing Finance</keyword> Limited, Rs 5 lakh on <keyword id="20389260" type="General" weightage="20" keywordseo="Aadhar-Housing-Finance" source="keywords">Aadhar Housing Finance</keyword> Limited, and Rs 3.5 lakh on Housing and Urban Development Corporation Limited. These penalties by the regulator have been imposed in the exercise of powers conferred on RBI under the provisions of Section 52A of the <keyword id="20200606" type="General" weightage="20" keywordseo="National-Housing-Bank" source="keywords">National Housing Bank</keyword> Act, 1987. As per RBI, the statutory inspection of these companies was conducted by the National Housing Bank (NHB) with reference to their financial positions as of March 31, 2022. The RBI stated that based on the supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the companies advising them to show cause as to why a penalty should not be imposed on them for their failure to comply with the RBI directions. After considering the companies' replies to the notice, oral submissions during the personal hearing, and additional submissions made by them, the RBI found that Godrej Housing Finance Limited failed to obtain two independent valuation reports before sanctioning certain loans of Rs 75 lakh and above. For Aadhar Housing Finance Limited, the RBI stated that the company charged interest on loans for a period prior to the date of the actual disbursement of the loan/issuance of the check to certain borrowers, in contravention of RBI directions on the 'Fair Practices Code.' The penalty on Housing and Urban Development Corporation Limited has been imposed because the company failed to undertake risk categorization of its customers during the financial year 2021-22, did not put in place a system for periodic review of risk categorization of accounts, and did not create a floating charge on the assets invested by it in terms of Section 29B of the NHB Act, in favor of its depositors, and register the same with the Registrar of Companies.

RBI imposes penalties on three housing finance companies for non-compliance with directions

<ul class="summary-list"><li>This post originally appeared in the Insider Today newsletter.</li></ul>Welcome back! A 72-year-old VC investor still runs four marathons a year. He spoke to BI about <a target="_blank" href="https://www.businessinsider.com/training-tips-for-older-runners-from-72-year-old-marathoner-2024-10">how he fits the training into his busy schedule</a> as he tries to run 100 marathons before he turns 100.In today's big story, a final look at the impact a Harris or Trump presidency <a target="_blank" rel="noopener" href="https://www.businessinsider.com/election-preview-consumer-outlook-how-trump-harris-housing-taxes-2024-11">will have on your finances</a>.What's on deck:<ul><li>Markets: A survey exclusively shared with BI shows how a slice of Wall Street <a target="_blank" href="https://www.businessinsider.com/wall-street-election-predictions-professional-investor-survey-2024-11">thinks the election will go</a>.</li><li>Tech: Nvidia is replacing Intel in the <a target="_blank" rel="noopener" href="https://www.businessinsider.com/intel-struggles-qualcomm-deal-chip-industry-turmoil-2024-9">Dow Jones Industrial Average</a>.</li><li>Business: We spoke to more than 750 people about <a target="_blank" href="https://www.businessinsider.com/cant-find-job-unemployment-applications-retirement-mba-age-competition-openings-2024-11">their struggles finding a job</a>.</li></ul>But first, let's go over it one more time.If this was forwarded to you, <a target="_blank" href="https://www.businessinsider.com/subscription/newsletter/insider-today">sign up here.</a><h3 id="7fa5f018-5b05-4a37-a8dc-d3f89138bcb3">The big story</h3><h2 id="5fd547b9-ec52-41fc-8e08-4f4b27dd8097">The White House and your wallet</h2><div type="image" title="Trump and Harris." height="1743" width="2323" msid="114952573" hostid="261" sizebytes="392138"></div>On the eve of election day, we're offering a final breakdown of how both candidates might affect your wallet.Business Insider ran a <a target="_blank" href="https://www.businessinsider.com/election-preview-consumer-outlook-how-trump-harris-housing-taxes-2024-11">five-part refresher series</a> last week examining how the policies proposed by Vice President Kamala Harris and former President Donald Trump impact US consumers.With little middle ground between the two candidates, there are a wide range of implications. Let's get into it:<a target="_blank" href="https://www.businessinsider.com/market-impact-presidential-election-scenarios-trump-harris-stocks-bonds-crypto-2024-10">Investing</a>: The corporate tax rate is the major difference between the two sides that'll likely have the biggest impact on markets. Trump's plan to reduce the rate, which stands at 21%, is viewed by most as beneficial for corporate earnings. Harris wants to raise the corporate tax rate, which would likely have the opposite effect.<a target="_blank" href="https://www.businessinsider.com/cost-expensive-goods-price-impact-presidential-election-scenarios-trump-harris-2024-10">Cost of things</a>: Both candidates are looking to keep leveraging tariffs, but Trump's policy is much more aggressive. His broad-based 10%-to-20% tariff on most imported goods will ultimately make those products more expensive, according to most economists. When it comes to grocery prices, Trump previously said he'd restrict food imports to boost local farmers. Harris wants a federal ban on price gouging, but that'd only be applicable during national emergencies.<a target="_blank" href="https://www.businessinsider.com/housing-affordability-supply-impact-presidential-election-scenarios-homebuyers-harris-trump-2024-10">Housing</a>: Harris wants to boost construction, with a goal of adding 3 million new housing units during her first term. The former president views his immigration plan — deporting millions of people from the country — as a way to address the housing shortage. Banning mortgages for immigrants living in the US illegally is another way to lower demand, according to Trump.<a target="_blank" href="https://www.businessinsider.com/tax-cut-tariff-plan-outlook-presidential-election-scenarios-harris-trump-2024-10">Taxes</a>: Trump is expected to expand on the tax cuts he established in 2017. The highest earners in the country, those in the top 0.1%, would see a tax reduction of nearly $280,000 whereas middle-income Americans would get a $1,000 break on their taxes, according to one analysis. Harris' proposals will favor lower-income earners, although she's promised to not raise taxes for anyone making below $400,000. She does support a minimum income tax for billionaires.<a target="_blank" href="https://www.businessinsider.com/childcare-costs-presidential-election-scenarios-parents-paid-leave-harris-trump-2024-10">Childcare</a>: Both candidates have discussed increasing the amount of the child tax credit, which currently provides up to $2,000 per child. Harris has also zeroed in on childcare costs, promising to cap those expenses at no more than 7% of families' income. Neither candidate has suggested funding childcare facilities or boosting hiring, which is a key issue for the industry.<h3 id="77f31a4c-8462-4e3d-a71f-838cb79493fb">News brief</h3><h2 id="1fcd294b-3f53-425f-9f20-4093e8623b59">Top headlines</h2><ul><li>Harris leads Trump by three points in a <a target="_blank" rel="noopener" href="https://www.businessinsider.com/harris-trump-iowa-polling-lead-swing-states-2024-11">new poll in GOP-leaning Iowa</a>.</li><li>TGI Friday's <a target="_blank" rel="noopener" href="https://www.businessinsider.com/tgi-fridays-files-for-bankruptcy-2024-11">filed for Chapter 11 bankruptcy</a>.</li><li>Scoop: Gwyneth Paltrow's lifestyle brand Goop <a target="_blank" href="https://www.businessinsider.com/gwyneth-paltrow-goop-lays-off-employees-pivot-beauty-food-fashion-2024-11">conducted another round of layoffs</a>.</li><li>In an all-hands, Intel CEO addresses employee concerns about <a target="_blank" rel="noopener" href="https://www.businessinsider.com/intel-chips-act-funding-all-hands-meeting-2024-11">the US election and CHIPS Act funding</a>.</li><li>WATCH: How Elon Musk is reshaping American politics. <a target="_blank" rel="noopener" href="https://www.businessinsider.com/elon-musk-reshaping-american-politics-ahead-of-2024-elections-2024-11">A conversation with Politico and BI</a>.</li><li>How a free meal cost an investor <a target="_blank" href="https://www.businessinsider.com/how-a-free-meal-cost-an-investor-his-retirement-savings-2024-10">his retirement savings</a>.</li><li>The China threat and the EV slowdown — <a target="_blank" href="https://www.businessinsider.com/auto-industry-faces-trouble-in-china-ev-slowdown-2024-11">2 takeaways from a busy few weeks in auto news</a>.</li><li>Record producer Quincy Jones has <a target="_blank" rel="noopener" href="https://www.businessinsider.com/quincy-jones-dead-obituary-2024-11">died at 91 in his home in Bel Air</a>.</li><li>The US dollar is jittery, and it's not <a target="_blank" rel="noopener" href="https://markets.businessinsider.com/news/stocks/us-dollar-presidential-election-fed-interest-rates-china-npc-stimulus-2024-11">only because of the presidential election</a>.</li><li>The Navy's top ballistic missile interceptor comes with a heavy price tag, <a target="_blank" href="https://www.businessinsider.com/us-navy-top-interceptor-missile-heavy-price-tag-low-procurement-2024-10">but the US can't afford to go to war without it</a>.</li></ul><h2 id="8120060b-ae66-48dc-b149-f0489a30ffa2">3 things in markets</h2><div type="image" title="Photo of Wall Street with American flags" height="1333" width="2000" msid="114952577" hostid="261" sizebytes="241826"></div><ol><li>These investors give the slight edge to Trump. A survey of some of SumZero's investor community, which includes small hedge funds and family offices, found 53% believe <a target="_blank" href="https://www.businessinsider.com/wall-street-election-predictions-professional-investor-survey-2024-11">Trump will win the election</a>. That follows other signals the finance world is sending that it views Trump as the favorite, including European stocks trading at a discount due to concerns over tariffs.</li><li>Interest rate cuts are back. The Fed will announce Thursday what it plans to do with rates, with <a target="_blank" href="https://www.businessinsider.com/interest-rate-cuts-federal-reserve-election-jerome-powell-inflation-jobs-2024-11">most traders expecting a 25-basis-point cut</a>. After that, there's one more chance for the Fed to cut rates in December, although JPMorgan's strategy chief said a Trump win <a target="_blank" href="https://www.businessinsider.com/trump-win-fed-pause-rate-cuts-easing-jpmorgan-david-kelly-2024-11">could give the central bank pause</a>.</li><li>Wall Street analysts are scratching their heads over Comcast's potential reorg. The company's president suggested it might spin out CNBC and MSNBC into a new firm while retaining NBC and adding a partner to its steamer. On paper the move makes sense, but analysts question how the cable networks could survive by themselves and <a target="_blank" href="https://www.businessinsider.com/comcast-cable-network-spinoff-peacock-partnership-deal-wall-street-analysis-2024-11">who would be willing to team up with Peacock</a>.</li></ol><h2 id="f4b54806-7f81-450c-ba32-92560d4fae9b">3 things in tech</h2><div type="image" title="Jensen Huang" height="3526" width="5289" msid="114952576" hostid="261" sizebytes="532426"></div><ol><li>A monumental swap. S&amp;P Dow Jones Indices announced Nvidia will replace Intel in the Dow Jones Industrial Average index, which looks to project the most relevant picture of the US economy. It shows <a target="_blank" rel="noopener" href="https://www.businessinsider.com/intel-struggles-qualcomm-deal-chip-industry-turmoil-2024-9">how far Intel has fallen from relevancy</a>, and raises questions about the future role it'll play in computing and AI. BI's Emma Cosgrove explains <a target="_blank" rel="noopener" href="https://www.businessinsider.com/why-nvidia-replacing-intel-dow-jones-industrial-average-explained-2024-11">why it's such a big deal</a>.</li><li>Everything we know about the Apple Intelligence rollout. Some of Apple's long-awaited AI features rolled out last week, including a new Siri interface and enhanced Messages. However, other features unveiled at WWDC in June won't be available until 2025. We've got <a target="_blank" href="https://www.businessinsider.com/apple-intelligence-features-rollout-timeline-iphone-16-2024-9">an estimated timeline of the rest of the releases</a>, based on what Apple experts and the company have said since WWDC.</li><li>Some Democratic political advertisers are still betting on X. Though Musk's ownership has shifted the platform's political stance, <a target="_blank" href="https://www.businessinsider.com/democratic-political-advertisers-using-elon-musk-x-twitter-2024-11">a small number of Democratic ad campaigns still see opportunity</a>. Montana Sen. Jon Tester and Texas Rep. Colin Allred are among the Democrats still hanging on tight to X.</li></ol><h2 id="9260fa45-d397-4b3c-b4f8-4bb193976216">3 things in business</h2><div type="image" title="Fish with price tags." height="3000" width="4000" msid="114952579" hostid="261" sizebytes="975922"></div><ol><li>Endless options are ruining e-commerce. The allure of online shopping was the ability to compare a variety of options from the comfort of your home. But what happens when there are literally tens of thousands of products to choose from? Information overload, choice paralysis, and <a target="_blank" href="https://www.businessinsider.com/online-shopping-ecommerce-comparison-burnout-too-many-choices-overwhelming-decision-2024-11">extremely frustrated shoppers</a>.</li><li>The great American shoplifting spree. Regular Americans are shoplifting everything from tape measures to blocks of cheese, and they don't feel particularly bad about it. Some of these opportunists view it as a way of fighting back against <a target="_blank" href="https://www.businessinsider.com/middle-class-shoplifting-retail-theft-crime-stealing-stores-2024-11">goods that are unjustly expensive</a>.</li><li>The biggest woes of finding work. BI spoke to over 750 people who have struggled to find a job, from older workers just shy of retirement to eager recent graduates. They shared what they're most frustrated with, including fake job postings, competition from AI, and the feeling of <a target="_blank" href="https://www.businessinsider.com/cant-find-job-unemployment-applications-retirement-mba-age-competition-openings-2024-11">being shut out from some careers</a>.</li></ol><h2 id="9f5d80ac-3466-429f-a50a-2ffbb70c65ff">What's happening today</h2><ul><li>Fox Corp, Goodyear, Marriott, and other companies report earnings.</li><li>Boeing's unionized workers vote on a new pay offer.</li></ul>The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. Ella Hopkins, associate editor, in London. Amanda Yen, fellow, in New York. Milan Sehmbi, fellow, in London.

Here's a final breakdown of how both presidential candidates might affect your finances 

It may not feel like it yet, but the housing market's <a target="_blank" href="https://www.businessinsider.com/housing-market-ice-age-higher-home-prices-fewer-sales-inventory-2023-5">Ice Age</a> is finally thawing.Would-be buyers and sellers have found themselves stuck over the past couple of years. For-sale signs stood frozen in front yards as home shoppers balked at prices. Wild swings in mortgage rates discouraged almost everyone from venturing out into the market. Many <a target="_blank" href="https://www.businessinsider.com/economy-housing-market-mortgage-buying-car-interest-rates-new-jobs-2024-3">felt as if they had no option but to stay put</a>. But when I talk to housing experts these days, they speak cautiously of a shift in the weather, a warming in store for American real estate.Green shoots are popping up everywhere. The typical borrowing rate for a 30-year home loan is near the lowest it's been in two years, which could nudge more sellers to emerge from hibernation. The pool of available homes on the market is larger than at any point since the early days of the COVID-19 pandemic. While the median home price nationwide is up by 3% to 5% compared with a year ago, that's actually within the range that economists typically look for in a well-balanced market. If things keep trending this way, we should expect to see this coming spring, the time of year when transactions typically pick up, that more people are ready to get moving again.Would this mean we're back to normal? Definitely not. Things may be more stable than they were during the peak of the home-trading frenzy or the depths of the slowdown, but that doesn't mean the housing market's problems are solved. It'll be hard for both buyers and sellers to shake off the pessimism of the past few years, especially when budgets are stretched so thin and home prices remain so high. That reality shouldn't obscure the encouraging signals, though. As I wrote earlier this year, a <a target="_blank" href="https://www.businessinsider.com/denmark-mortgage-rates-lock-in-effect-home-buying-selling-easier-2024-5">gummed-up housing market</a> — the Ice Age I was talking about — is good for nobody. In half a year's time, we may be looking at a healthier one.There's a tendency to look at housing in binary terms: Is it a better time to be a seller or a buyer? But a lot of people fall into both camps; most sellers have to turn around and purchase another home to live in. Recently, this fact of life has created what Skylar Olsen, Zillow's chief economist, calls the "musical chairs" problem: People can't jump up and find a new home if their neighbors aren't making similar moves, so everyone's stuck in their seats.A big reason Americans find themselves trapped in place is what's known as the "lock-in effect." When mortgage rates hit multidecade lows during the pandemic, millions of people were able to snag or refinance their way into cheaper monthly costs. But starting in the spring of 2022, the rate for a typical mortgage soared, more than doubling from those pandemic-era lows. While it's come down from a two-decade peak last October, the prevailing loan terms are still about twice as expensive as they were back in 2021, which means a buyer could have to pay hundreds of dollars more each month toward interest than they would have a few years ago. A lot of people don't want to give up a good deal, so they don't make a change unless they absolutely have to. One paper from the Federal Housing Finance Agency suggested that the lock-in effect prevented a whopping 1.3 million home sales between mid-2022 and the end of 2023. A mere 2.5% of America's housing stock traded hands in the first eight months this year, according to Redfin, the lowest rate in at least three decades and 31% lower than in 2019.The recent drop in the typical rate for a 30-year loan — from about 7.2% in early May to 6.1% in early October — won't erase the lock-in effect, but it's an encouraging sign for buyers who have been grasping for anything that could ease the burden on their wallets. Even after a <a target="_blank" class="" href="https://www.businessinsider.com/mortgage-rate-increase-since-federal-reserve-cut-interest-rates-housing-2024-10">uptick in the last few days</a> following the unexpectedly strong jobs report, more interest-rate cuts from the Federal Reserve, which signaled last month that it was <a target="_blank" href="https://www.businessinsider.com/fed-rate-cut-explained-inflation-labor-market-conditions-outlook-recession-2024-9">turning its focus away from battling inflation</a>, could further bring down mortgage rates, <a target="_blank" href="https://www.businessinsider.com/personal-finance/mortgages/how-does-fed-impact-mortgage-rates">though there's not a direct connection between the two</a>. Fannie Mae, for instance, predicts the rate for a typical home loan could end next year at 5.7%. That'd be within spitting distance of what the experts at John Burns Research and Consulting, a housing-research firm, call the "magic mortgage rate." Among homeowners and renters who said they planned to use a mortgage to purchase their next home, 47% told the firm in September that they'd be willing to sign up for a rate between 5% and 5.49%. Even if rates continue their downward trajectory, changes in mortgage payments typically take about six months to show up in home-sales activity, Ralph McLaughlin, a senior economist at Realtor.com, told me. So movement now could set the stage for a stronger uptick in sales next spring. Fannie Mae has also predicted that the total number of sales will be up by 10% in 2025 compared with this year, with most of that increase coming in the second half of the year.<div type="image" title="house for sale sign" height="1414" width="2121" msid="114076822" hostid="261" sizebytes="84578"></div>While mortgage-rate movement can be a helpful guide for future activity, to get a full picture of what's actually happening in the real-estate market, you need to look at two data points: inventory, or the number of available homes on the market, and new listings, or the number of homes hitting the market. Olsen, the Zillow economist, likens inventory to a swimming pool and new listings to the spigot that keeps water flowing — as with any pool, too full or too empty is a problem. A balanced market is one in which there are enough new homes to meet the demand from buyers, but not so many that prices plummet. We're still a long way from refilling the pool of homes on the market: Inventory in September was down by about 23% from pre-pandemic levels, according to Realtor.com. But there is clear improvement taking place here, too. The number of active listings in September was up by 34% from the same month a year ago, increasing to its highest level since April 2020. The number of homes newly listed for sale in September was also up by 11.6% from last year. By slowing down home sales, higher rates have given inventory time to build back up from pandemic lows — homes are lingering on the market longer with fewer buyers, so the pool's water level has steadily climbed.More homes to choose from, lower mortgage rates — that's a "powerful combination," said Lawrence Yun, the National Association of Realtors' chief economist, adding that sales should move higher in the coming months as a result. Buyers can take heart in another data point, which is that far fewer homes are being snapped up as soon as they hit the market. According to the housing-data firm Altos Research, there were about half as many "immediate sales" in late September as there were in 2022. "It looks like that frenzy is finally gone," Altos' president, Mike Simonsen, said in a recent video update. The baseline expectation for the spring, the Redfin economist Chen Zhao told me, is a modest uptick in sales and new listings. Most economists don't expect mortgage rates to fall dramatically, meaning sellers will slowly start to reenter the market as they decide it's time to make a change. New listings this year increased by about 5% a month on average compared with the same months in 2023 — you might expect to see that climb a little next year, Zhao told me, to maybe 10% year-over-year growth. The total number of homes on the market each month tended to be about 10% or 15% higher than last year, but you might see that rise to 20% or 25% when you compare 2025 with this year. This is the housing's version of a soft landing; there won't be dancing in the streets, but it would be a marked improvement from the past couple of years."Even though the housing market is recovering, the recovery is going to be very slow," Zhao told me. "We're not going to see anything like the activity that we saw in 2021 or 2020 — or even 2019, 2018 — for a while."Still, if buyers are feeling better about their prospects, that should grease the wheels of America's housing market.It is important to note that forecasts are just forecasts. There's a lot that could change in the next year. The <a target="_blank" href="https://www.businessinsider.com/hiring-slump-professional-white-collar-jobs-recession-high-salary-2024-4">strength of the job market</a> is a big question mark — people won't move if they don't feel sure about their next paycheck. There are huge regional differences to consider here, too. Builders have finished a lot more new housing in Sun Belt states in the lower half of the US, for example, which has made it harder for homeowners there to sell at their desired prices than for their counterparts in the Midwest or the Northeast. Affordability is still a huge pain point. An August survey by Fannie Mae suggested consumers were feeling remarkably optimistic about the future of mortgage rates, but only 17% of respondents said it was a good time to buy a home. Any one of these issues could chill the market and slow America's exit from the Ice Age.That said, it's impossible to ignore the signs of a shift underway. Mortgage rates are a key piece of the equation. I'll also be keeping a close eye on inventory and the pace of new listings hitting the market, which should heat back up starting around February and March. But all this focus on the numbers can obscure the simple fact that people have to move for all kinds of reasons that have nothing to do with a few digits and a percent sign.I recently spoke with Mark Palim, the chief economist at Fannie Mae, who left me with a salient piece of advice: "Leave timing the bond market to the hedge-fund guys." In other words, trying to predict mortgage rates — and buying or selling a home accordingly — is a fool's errand. Budgets matter, absolutely, and monthly payments are a crucial consideration for any buyer. But buyers and sellers should remember that their home isn't just an investment vehicle or a bet on where the economy is headed. At the end of the day, you have to live in it."All sorts of things can happen," Palim told me. "Rates may move. Home prices may go up, home prices may go down. But would you be happy living there for a while? Does it meet your needs?"<a target="_blank" rel="" href="https://www.businessinsider.com/author/james-rodriguez">James Rodriguez</a> is a senior reporter on Business Insider's Discourse team.

The Housing Ice Age is thawing

<ul class="summary-list"><li>Excel is a Zyn competitor with branding straight out of Wall Street's hustle culture.</li><li>Aimed at 'productivity pioneers,' it's the brainchild of Soylent cofounder John Coogan.</li></ul>A new nicotine pouch brand is looking to stand out in a buzzy market, with branding that seems plucked from an episode of "<a target="_blank" class="" href="https://www.businessinsider.com/industry-season-3-bankers-true-story-mickey-down-konrad-kay">Industry</a>" and tailor-made for Wall Street's "grindset" bros.<a target="_blank" class="" href="https://excelpouches.com/products/pouches-five-pack">On its website</a>, Excel targets "productivity pioneers.""Consume to increase shareholder value," reads the outside of the minimalist black and white cans. A pack of five is priced at $30.Excel's is-it-ironic-or-not branding makes sense, given the growing popularity of synthetic nicotine pouches among <a target="_blank" href="https://www.businessinsider.com/zyn-pouches-become-popular-some-workers-2024-3">office workers wanting a boost</a>."Starting Excel was the next logical step in continuing my life's mission of productivity at all costs," said John Coogan, the creator of Excel and a Los Angeles-based entrepreneur and <a target="_blank" class="" href="https://www.youtube.com/@JohnCooganPlus">YouTuber.</a>Largely seen as a safer alternative to dip, vaping, and cigarettes, market leader Zyn said it shipped roughly 385 million cans of its nicotine products in the US in 2023, <a target="_blank" href="https://www.businessinsider.com/zyn-nicotine-pouches-huge-increase-us-shipments-2024-2">up 62% year-over-year</a>.<div type="image" title="John Coogan sitting in an armchair and holding a newspaper with a can of Excel nicotine pouches." height="963" width="1284" msid="113551338" hostid="261" sizebytes="85418"></div>In addition to the corporate world, the pouches have also found loyal devotees <a target="_blank" href="https://www.businessinsider.com/chuck-schumer-nicotine-zyn-republican-right-wing-2024-1">within certain circles of the political right</a>.Tucker Carlson, for instance — who has said the product "frees your mind" — is launching his own brand in November. He's calling it Alp, which he's positioning as a more <a target="_blank" href="https://www.wsj.com/business/tucker-carlson-interview-nicotine-pouch-2327797c?mod=hp_lead_pos8">masculine alternative</a> to Zyn.<h2 id="c50690c3-7c31-427a-8243-d441778d69a0">The brainchild of a Soylent cofounder</h2>Coogan told BI he cofounded <a target="_blank" href="https://www.businessinsider.com/soylent-drinkers-tech-meal-replacement-food-millennials-genz-2022-5">Soylent,</a> a beverage and snack brand, "so that people would no longer need to leave their desk."Coogan — who also serves as an entrepreneur-in-residence at Founders Fund — cofounded nicotine startup <a target="_blank" class="" href="https://www.businessinsider.com/soylent-founder-new-startup-nicotine-gum-help-smokers-quit-2019-1">Lucy Goods</a> in 2016, and it closed a <a target="_blank" class="" href="https://www.prnewswire.com/news-releases/lucy-closes-10-million-in-series-a-funding-to-create-safer-nicotine-products-301010029.html">$10 million Series A</a> funding round in 2020.Lucy houses several sub-brands, Coogan said, with others on the way.Lucy's first product was nicotine gum, and it also vends a <a target="_blank" class="" href="https://lucy.co/products/breakers?variant=41460834468026&amp;selling_plan=711622842">Breakers</a> brand whose nicotine pouches contain a flavor capsule. "More for the Montauk season than the office," he said.Excel was founded in 2022.The branding for Excel — which straddles a fine line between earnestness and parody — was developed by Los Angeles-based creative studio Day Job, which has worked with clients including Colgate and sauce startup <a target="_blank" class="" href="https://www.businessinsider.com/guides/kitchen/fly-by-jing-review">Fly By Jing</a>.In an email interview with BI, Day Job cofounder Rion Harmon said the branding was inspired by Wall Street's hedonistic heyday."We've all heard of storied output derived from cocaine in the 80's," Harmon said of decreasing productivity levels today. "We felt an obligation to find a solution."Coogan likened Excel to "American Psycho," a satire that he said has been "rightly embraced by finance bros as a style guide.""We hope that Excel will quickly enter the Wall Street canon," Coogan said, "to sit alongside Patrick Bateman, Gordon Gekko, and many other icons."

A new Zyn competitor is marketing its nicotine pouches to the finance bros

<ul class="summary-list"><li>Buying a house right now is difficult for a whole bunch of reasons, Dave Ramsey said.</li><li>But some people can't afford one as they waste money and rack up debt, the radio host said.</li></ul>Buying a house has become <a target="_blank" href="https://markets.businessinsider.com/news/commodities/home-prices-outlook-housing-market-affordability-crisis-inventory-supply-shortage-2023-8">especially hard</a>, but some people can't afford one because they're mismanaging their money, personal finance guru Dave Ramsey says."It is mathematically tough right now, it is economically tough. But I think more than those two, it's psychologically tough right now because there's just this perception, this dark cloud over the subject of buying a house right now," he said on a <a target="_blank" href="https://www.youtube.com/watch?v=o2H20kz4nsY&amp;t=1s">recent episode</a> of "The Ramsey Show."House prices have surged to record highs, and the interest rate on a typical 30-year fixed-rate mortgage has jumped from below 3% in late 2021 to around 7%, fueling an <a target="_blank" href="https://markets.businessinsider.com/news/stocks/housing-market-unaffordable-mortgage-home-prices-rates-fed-mba-finance-2023-6">affordability crisis</a>.People are also spending more on basics like food, fuel, and rent thanks to high inflation — and paying more each month for their car loans, credit cards, and other debts after the Federal Reserve raised interest rates to curb rising prices.Ramsay's point is that consumers face a <a target="_blank" href="https://markets.businessinsider.com/news/stocks/big-short-michael-burry-jpmorgan-consumer-inflation-rates-banking-crisis-2023-4">painful combination</a> of lofty home prices, more expensive mortgages, steeper living costs and debt payments, stagnant wages and layoffs in several industries, and ongoing recession fears.The result is that for many people, it feels harder than ever to save enough money, secure sufficient financing, and plunk virtually their entire net worth into a single asset, even if they plan to live in it.<h2 id="d97b8b58-ed1a-43c7-b709-47b3177ac46a">Overspenders can't complain</h2>Despite those challenges, the talk show host and author called out people who make bad financial decisions and then complain they can't afford a house."You're <a target="_blank" href="https://www.businessinsider.com/consumer-spending-us-economy-outlook-inflation-recession-fed-interest-rates-2024-2">spending money you don't have</a>, to do crap you don't need to be doing, and you go in debt to do it," he said."You're sitting there with stinking car payments around your neck, a bass boat payment, and paying for last year's Disney vacation on your credit card, and you can't figure out why you can't afford a house," he said. "Well I just told you why you can't afford a house: Your stinking overspending."Ramsey advised people against making a home purchase until they've paid off their debts and built an emergency fund that covers three to six months of expenses.He recommended they make a 20% down payment if possible, never take on a mortgage with a monthly payment exceeding 25% of their take-home pay, and stick to a fixed-rate mortgage that protects them from rate increases, as they can refinance if rates fall.<h2 id="b5ea0254-e953-436c-b1e2-38f2a17b72e7">Blessing, not a curse</h2>Ramsey also urged prospective buyers to account for closing costs and ownership expenses like home insurance, maintenance, and utilities."I want the house to be a blessing, not a curse," he said. "When you are broke and in debt, don't have an emergency fund, and sign up for a mortgage payment you can't afford, that is not smart real estate. That's going to slow down your wealth building, bring anxiety to your home, stress to your relationships."Ramsey also cautioned that many people's wages have risen less slowly than prices and interest rates, which means "you can probably no longer afford the home you thought you were going to get."He said the upshot is that buyers will probably have to compromise on things like the neighborhood and commuting distance to the city if they want to secure a home in their price range.It's worth noting that some people have found success in buying a home by <a target="_blank" href="https://www.businessinsider.com/ignoring-dave-ramseys-advice-buy-my-home-2024-3">ignoring Ramsey's advice</a>, and others have rejected his gospel of debt-free living as <a target="_blank" href="https://www.businessinsider.com/personal-finance/gen-z-dave-ramsey-advice-doesnt-work-today-2024-2">outdated and unrealistic</a>.Yet the financial expert's principles will surely remind others of <a target="_blank" href="https://markets.businessinsider.com/news/stocks/who-is-warren-buffett-berkshire-hathaway-stocks-investing-wealth-philanthropy-2023-5">Warren Buffett</a>, the legendary investor who preaches prudence, frugality, and careful risk management when it comes to money.

It might be your fault you can't afford a house, says finance guru Dave Ramsey

<ul class="summary-list"><li>Jolie Steele is a mom of two kids, who are 11 and 8.</li><li>She knew she wanted a divorce but was scared to make the leap because of her finances.</li></ul>This as-told-to essay is based on a conversation with <a target="_blank" href="https://www.joliesteele.com/">Jolie Steele</a>. It has been edited for length and clarity.I got <a target="_blank" class="" href="https://www.businessinsider.com/celebrities-who-married-young-kim-kardashian-millie-bobby-brown-2023-4">married very young</a>, soon after I turned 22. Over 12 years of marriage, my ex and I grew apart until I knew we had reached the divorce cliché: irreconcilable differences.Despite my certainty, I felt very trapped and very scared. My husband was a physician and <a target="_blank" class="" href="https://www.businessinsider.com/wife-earns-more-than-husband-2018-10">the main provider</a> in our house. I owned a consignment shop but was making essentially no money. For a while, I wasn't sure I could leave the marriage because the finances were too daunting.Finally, I worked up the courage. My <a target="_blank" class="" href="https://www.businessinsider.com/separate-finances-marriage-success-2024-9">husband and I separated our lives and our finances</a> two years ago. Since then, I've been focused on rebuilding financially after divorce. <h2 id="37002e00-291d-4798-bf42-f345dc66cbb4">I cut my spending drastically</h2>We worked with a <a target="_blank" class="" href="https://www.businessinsider.com/getting-divorced-advice-attorney-2018-12">mediator to facilitate the divorce</a>. Our agreement included spousal and child support, which means I now have access to 40% of our combined income from the previous years. It was a drastic change, and I felt stressed at the start.I adjusted my s<a target="_blank" class="" href="https://www.businessinsider.com/change-spending-habits-overconsumption-save-money-2024-9">pending habits</a> immediately. Luckily, I had some savings but didn't want to touch them. Instead, I cut expenses. I canceled my gym membership and every subscription I had. I became the "no" queen, telling the kids we couldn't go to Wendy's for dinner or shopping at Target. The weeks the kids were with their dad, I ate whatever was on hand — like tuna and half-good produce — to save money on groceries.<h2 id="620d805e-1695-4ea3-a3dc-99f8a7b1267e">I put aside my ideas of what I should do</h2>I made those changes, but I was still hanging on to my idea of what life should look like. I was used to living a cookie-cutter, picture-perfect life. I now joke that I was kind of a snob. Doing something unconventional felt uncomfortable, but I realized I'd have to get uncomfortable to make my new life work.<h2 id="1a4dfe0b-8bed-4902-9ea8-6a95a4e3b0de">I used my house creatively</h2>As soon as I got divorced, I closed my <a target="_blank" class="" href="https://www.businessinsider.com/how-to-consign-your-clothes-online-2017-12">consignment shop</a> because I couldn't afford the monthly rent. I continued the business online, however, and converted my walk-out basement into a work area. I hosted pop-up sales, where my dedicated customers could shop in the basement space.I also started renting out a room in our home (exclusively to women, for safety reasons). I rented to traveling healthcare workers and now host a college student. That rent covers about one-third of my mortgage. I told my kids that we had plenty of space, so we were going to host people who needed to travel for work. For them, I didn't frame it in terms of making money.<h2 id="df3f12fe-ed25-438f-bb3b-b7b4d7d979c7">I started pursuing career options</h2>Although I always worked in some way, my work was seen as a hobby that always came second to my husband's career. I sacrificed a lot of my prime years and career trajectory because, at the time, I felt it was a worthy sacrifice for my family and our home life. Looking back, I was shooting myself in the foot because I had little traditional job experience to re-enter the workforce.I applied for many jobs and started side hustles. I did freelance writing and created a paid Substack newsletter about divorce that generated a few hundred dollars each month.<h2 id="f07aac57-ed19-41a4-ab0c-230f56a88b9a">I said no to the wrong job</h2>Eventually, I was offered a full-time, in-person e-commerce position. The financial stability was tempting, but I turned it down because I didn't want to spend even more time away from my kids.Instead, I took a financial risk and spent money to become a<a target="_blank" href="https://www.joliesteele.com/coaching"> life coach</a>. In the first few months, I made significantly more money than I would have in the role I turned down.<h2 id="43bbf72a-36b5-4090-a3f9-5296a56fba58">I'm ending spousal support early</h2>Receiving spousal support has become contentious as my life moves forward after divorce. At this point, I feel like it's more harm than help, so I'm negotiating an early end to those payments.I am not entirely certain what life will look like without those payments. But over the past two years I've learned I can trust myself to provide for my family. I would rather pay the financial price and follow that self-trust than deal with contention.

Being a mom of 2 with almost no income during my divorce was terrifying. These are the steps I took to rebuild my finances.

<ul class="summary-list"><li>The Fed's interest rate cut will ease financing conditions for homebuilders, analysts told BI.</li><li>But other issues will keep supply constrained, from material costs to labor shortages.</li></ul>The Federal Reserve's rate cut will surely impact the housing market, but its effect likely won't affect arguably the most important part of the equation: keeping affordability tight. To be sure, elevated borrowing costs are partially to blame for the affordability crisis plaguing US home buyers, and lowering them will offer relief.Rates soared to multi-decade highs a year ago, and further reductions in the Fed's benchmark rate should help bring borrowing costs down over time. However, it'll also add to the supply-demand imbalance, as more buyers are lured off the sidelines by cheaper mortgages. Pressures will rise for <a target="_blank" class="" href="https://www.businessinsider.com/us-housing-affordability-home-shortage-market-construction-population-cities-zillow-2024-6">new housing construction to meet demand</a>, but financing is still tight for home builders, stifling momentum to bring more housing online.According to the National Association of Home Builders, manufacturing loans climbed from near 5% lows to 13% since March 2022."The more immediate effect for housing from the rate cut is going to be seen in the builder and the land developer loan conditions," Danushka Nanayakkara-Skillington, NAHB's associate vice president of forecasting, told Business Insider.But how this translates into a much-needed supply boost is a different story, and there are factors the Fed cut won't fix.Lingering uncertaintiesFor instance, Nanayakkara-Skillington noted that material pricing, from drywall to steel mill products, has weighed heavily on homebuilders since the pandemic.While <a target="_blank" href="https://markets.businessinsider.com/news/commodities/lumber-prices-plunge-home-building-season-demand-falls-flat-2024-6">lumber costs</a> have normalized, she expects a <a target="_blank" href="https://www.nahb.org/blog/2024/08/canadian-lumber-tariffs">recent tariff hike</a> on Canadian wood to increase prices in the coming months.Tariffs on Chinese transformers — which NAHB considers a "<a target="_blank" href="https://www.nahb.org/advocacy/top-priorities/material-costs/transformers">sorely</a>" needed component delaying housing projects — have caused prices to jump 73% in the last four years, she said.There are also shortages to consider. Nanayakkara-Skillington cited that 57% of surveyed homebuilders say there are not enough lots to build on, adding pricing pressure to the available supply.Urban Institute senior fellow Michael Neal told BI that local regulation is needed to remedy this issue. Zoning challenges should be addressed to unleash lot availability, he said, while inspection costs and timelines should be reduced.But the biggest issue is a lack of skilled workers, Nanayakkara-Skillington said. "Because we lost about a million construction workers during the Great Recession, we still lack that. So we need people desperately to come into the trades," she said, citing that there are about 250,000 open jobs right now.Nonetheless, the Fed cuts should improve homebuilder sentiment in the coming months after a period of declines amid high borrowing costs, both analysts said. Dim views on existing homesWhile it's difficult to forecast when the housing market will come back into balance, much depends on whether lower rates entice homeowners to start selling.According to Fitch Ratings, that's unlikely for now.Since most owners hold a mortgage rate well below the current 6% level, mortgage rates will need to fall significantly lower to boost supply, which will only happen if the Fed keeps cutting. The rating agency noted that about 24% of outstanding mortgages are priced above 5%, meaning that homeowners will stay put until rates hit that level. This won't happen until 2027, Fitch said."While new home inventory has grown by 29% since the start of the pandemic, improving the supply of existing homes, which are approximately 80% housing sales, is necessary to improve prices and housing market activity," the agency said.At the same time, easing Fed policy might not stir housing activity for another reason, Neal said."Part of the Fed's decision, I think, reflected concerns about whether or not people will have jobs," he noted. "At the same time, if you think rates are going to fall today, do you think rates are going to fall tomorrow?"This thinking might cause people to delay further, he said.Wherever supply comes to stand, a knock-on effect of lower rates and higher builder sentiment may be felt in the stock market. In the past three of five rate cutting cycles, the bank noted that homebuilder shares outperformed the S&amp;P 500 in the three-months following the first cut.

Rate cuts might make it cheaper to buy a house, but they won't fix the US housing market's biggest problem 

<ul class="summary-list"><li>This post originally appeared in the Insider Today newsletter.</li></ul>Happy Independence Day! I'm Jordan Parker Erb, filling in for Dan DeFrancesco.Former President Donald Trump seems to think President Joe Biden's campaign is over, and he can barely contain his excitement, <a target="_blank" rel="noopener" href="https://www.businessinsider.com/trump-barely-contain-glee-biden-campaign-implosion-2024-7">per a leaked video</a>. But Biden vowed again on Wednesday that he is <a target="_blank" rel="noopener" href="https://www.businessinsider.com/biden-crashed-call-with-staff-said-no-pushing-me-out-2024-7">not dropping out of the race</a>. It comes amid reports that White House staffers are being told to go heads down and "<a target="_blank" rel="noopener" href="https://www.businessinsider.com/joe-biden-white-house-staffers-heads-down-execute-debate-2024-7">execute, execute, execute.</a>"In observance of the US holiday, we have a shorter edition of the newsletter. We'll be back in full force tomorrow.In today's big story, we're looking at <a target="_blank" rel="noopener" href="https://www.businessinsider.com/women-dating-finance-guy-confessions-pros-cons-2024-7">why it's such a good time to be a finance bro</a>.If this was forwarded to you, <a target="_blank" href="https://www.businessinsider.com/subscription/newsletter/insider-today">sign up here.</a><h3 id="0183891e-1bee-48f2-bdc5-4b3223a6542a">The big story</h3><h2 id="9cba1389-8670-4423-b141-5129ba9798b1">ISO: A man in finance</h2><div type="image" title="man in suit, Wall Street background with hearts" height="874" width="1178" msid="111494068" hostid="261" sizebytes="43662"></div>It's cool to be a finance bro — for now.Thanks to <a target="_blank" href="https://www.tiktok.com/@girl_on_couch/video/7363742421588512043?embed_source=121374463%2C121442748%2C121439635%2C121433650%2C121404359%2C121351166%2C121331973%2C120811592%2C120810756%3Bnull%3Bembed_name&amp;refer=embed&amp;referer_url=www.billboard.com%2Fbusiness%2Frecord-labels%2Fman-in-finance-tiktok-sound-creator-label-deal-1235692123%2F&amp;referer_video_id=7363742421588512043">a song in a viral TikTok video</a>, finance bros have entered a period of resurgence. If you're even remotely online, you'll recognize the lyrics: "I'm looking for a man in finance. Trust fund. 6'5. Blue eyes."The video, posted by user Megan Boni, has raked in around 54 million views since being uploaded. It's become a cultural touchstone for the summer, seemingly telling viewers it's officially acceptable to be a man in finance — and if you can date one, that's even better. (Though some women say <a target="_blank" rel="noopener" href="https://www.businessinsider.com/women-dating-finance-guy-confessions-pros-cons-2024-7">it's not all it's cracked up to be</a>, writes Business Insider's Maria Noyen.)But that wasn't always the case for Wall Streeters.Before moving to New York City, I was impervious to bankers and their various quirks. But it didn't take long to discover that finance bros were often the butt of the joke. I quickly learned to knowingly roll my eyes at the swarms of Patagonia vests in downtown Manhattan.The finance-bro revival has benefited, at least in part, from America's short-term memory. Following the 2008 financial crisis, working on the Street wasn't viewed with such high esteem. Plenty of Americans felt resentment toward financial workers, blaming them for the economy's meltdown.In the years since, attention has shifted to a new cohort: <a target="_blank" href="https://www.businessinsider.com/openai-sam-altman-new-era-tech-villian-chatgpt-safety-2024-5">tech bros</a>. They're easy to poke fun at for their meme-worthy antics (I'm looking at you, <a target="_blank" href="https://www.businessinsider.com/photos-mark-zuckerberg-surfing-with-tons-of-sunscreen-memes-2020-7">Mark Zuckerberg's sunscreen</a>).And they can also be easy to hate when employing dubious or flat-out criminal business practices. (<a target="_blank" href="https://www.businessinsider.com/theranos-founder-ceo-elizabeth-holmes-life-story-bio-2018-4">Elizabeth Holmes' Theranos</a> and <a target="_blank" href="https://www.businessinsider.com/sam-bankman-fried-sentenced-prison-ftx-alameda-research-2024-3">Sam Bankman-Fried's FTX</a> are recent examples.)So finance bros may be enjoying a moment in the cultural sunshine — but it likely won't last forever.<h2 id="f0c94eee-2726-469e-9d0c-3f41bde00c30">In other news</h2><ul><li><a target="_blank" rel="noopener" href="https://www.businessinsider.com/voters-world-elections-against-ruling-parties-analysis-2024-7">Forget right or left. Voters are sick of whoever's in charge</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/biden-and-democrats-cant-decide-blame-for-disastrous-debate-2024-7">Biden and the Democrats can't decide what to blame the disastrous debate on</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/study-ozempic-linked-to-rare-cases-of-blindness-2024-7">Patients on Ozempic are developing a rare form of sudden blindness, doctors say</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/kevin-costner-horizon-box-office-numbers-break-even-2024-7">Kevin Costner's self-financed movie was a box-office flop. Experts say he's 'going to lose a lot of money.'</a></li><li><a target="_blank" href="https://www.businessinsider.com/piece-of-evidence-can-now-scuttle-trump-hush-money-conviction-2024-7">Just 1 piece of evidence could scuttle Trump's hush-money conviction and force a time-sucking retrial</a>.</li><li><a target="_blank" rel="noopener noreferrer" href="https://www.businessinsider.com/iphone-apple-new-battery-life-how-long-improvement-why-2024-7">Hey, Apple! We want much more battery life in the new iPhone 16</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/democratic-megadonor-biden-misplaced-trust-cabal-of-aides-2024-7">An influential Democratic donor says Biden has 'misplaced trust' in a 'cabal' of 3 top aides</a>.</li><li><a target="_blank" rel="noopener" href="https://www.businessinsider.com/saks-neiman-marcus-tie-up-with-amazon-fend-off-lvmh-2024-7">Two luxury rivals are joining forces — and Amazon is getting in on the action</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/biden-debate-prep-started-at-11-and-included-afternoon-nap-2024-7">An 11 a.m. start time and an afternoon nap: Report reveals Biden's debate prep schedule</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/vintage-photos-coney-island-fourth-of-july">Vintage photos show what Coney Island's 4th of July celebrations used to look like</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/review-popular-chef-best-coleslaw-recipe-photos">I tried coleslaw recipes from Guy Fieri, Ina Garten, and Sunny Anderson, and the best one called for raisins and apples</a>.</li><li><a target="_blank" rel="noopener" href="https://www.businessinsider.com/hawk-tuah-girl-viral-fame-meme-plans-merch-hailey-welch-2024-7">'Hawk Tuah Girl' has our attention. Next, she would like our money</a>.</li></ul><h2 id="b11d3064-9709-4991-8d21-b57fe434eb94">What's happening today</h2><ul><li>The UK general election will be held. The Conservatives led by Rishi Sunak — who called the election amid a downpour in May — face an uphill battle to defend their seats.</li><li>Nathan's Fourth of July Hot Dog Eating Contest will go on without its longtime star, Joey Chestnut. Chestnut <a target="_blank" href="https://www.businessinsider.com/nathans-eating-contest-joey-chestnut-plant-based-hot-dogs-2024-6">was barred from competing due to a sponsor conflict</a>.</li></ul>The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. Amanda Yen, fellow, in New York.

It's cool to be a finance bro — for now

<ul class="summary-list"><li>Some American workers are encountering an unpleasant surprise when they reach <keyword id="25452" type="General" weightage="20" keywordseo="retirement" source="Orion">retirement</keyword>.</li><li>Murky provisions slash <keyword id="19966945" type="General" weightage="100" keywordseo="social-security" source="keywords">Social Security</keyword> for people who work in both the government and private sector throughout their careers.</li></ul>Patrice Earnest, 66, expected to have much more money for retirement. But after her husband died, she checked her <a target="_blank" class="" href="https://www.businessinsider.com/retirement-savings-social-security-baby-boomers-without-savings-401k-poverty-2024-8">Social Security survivor benefits</a>. The total: $0. "It's absolutely stunning," Earnest said. "My husband worked all his life since he was 16 bagging groceries, and that Social Security was something we had planned to have in our retirement." Earnest won't see a penny of the benefits her husband worked for — and it's due to her work history, not his. She's one of a few million Americans who see cuts to either their own Social Security benefits or to their <keyword id="44080" type="General" weightage="20" keywordseo="survivor" source="Orion">survivor</keyword> benefits when a spouse dies because they have a career history that includes both government and private sector jobs. The idea is to ensure public servants with pensions don't get overly generous retirement benefits, keeping people like Earnest from receiving full benefits from both a government pension and Social Security. But like many people affected by this, Earnest was caught by surprise — throwing her retirement budget for a loop. The two provisions at play here are the Windfall Elimination Provision and the Government Pension Offset, or <keyword id="19921812" type="General" weightage="20" keywordseo="wep" source="keywords">WEP</keyword> and GPO for short. They typically affect middle-class workers in select states who spent some time in a public-sector job, such as teachers, firefighters, and police officers, with government pensions and no Social Security taxes. The measures reduce Social Security benefits accrued during private-sector work to compensate for the state or local government pension benefits. Even a short time with a pension can trigger cuts to Social Security that workers might have earned in a private sector role. WEP reduces a worker's own Social Security benefits, while GPO applies to spousal or widower benefits like those Earnest expected to collect. "Certainly, I could use the extra money owed to me to pay the bills that I thought we could with a two-income household," she said. Right now, the provisions are part of a political firestorm over how the US should care for its older workers, with Social Security <a target="_blank" class="" href="https://www.businessinsider.com/when-will-social-security-benefits-run-out-retirement-crisis-boomers-2024-5">already imperiled</a> and many retirees struggling to pay their bills. On September 19, a bipartisan bill to eliminate WEP and GPO received the number of signatures needed for a vote in the <keyword id="19910021" type="General" weightage="20" keywordseo="house" source="keywords">House</keyword>. While supporters of WEP and GPO say they're necessary for ensuring equity, critics say they're applied unevenly across states and professions, sometimes resulting in benefit calculation mistakes. Those advocating for eliminating the provisions say they also hurt middle-class government workers the most. <h2>Unpredictable cuts to Social Security benefits make it impossible to plan for retirement</h2>The provisions can end up slashing your Social Security payments by up to half if you have a government pension, whether you were planning on survivor and spousal payouts or your own checks from time spent in the private sector. Workers with a private-sector 401(k), on the other hand, are not barred from collecting full Social Security. <keyword id="23551078" type="General" weightage="20" keywordseo="jane-roth" source="keywords">Jane Roth</keyword>, 74, a widow in New Haven, said she may have reconsidered becoming an educator if she had known about the provisions. <keyword id="20163067" type="General" weightage="20" keywordseo="roth" source="keywords">Roth</keyword> worked in the private sector before becoming a teacher. Because she pulled money out of her teacher retirement fund after six years of teaching to help finance life with a child, she said she has to work six extra years before cashing out her full pension. She's still teaching and has another 14 years before she can receive her full pension. In the meantime, she can't afford to live off the $32,000 she gets annually through her late husband's Social Security survivor benefits. If she retired now and started receiving her partial pension, she'd get even less because the GPO would kick in and zero out her survivor benefits. "What are my choices? Do I retire with a partial pension and lose 100% of my Social Security survivor benefits, or do I work until I am 88?" Roth said. "We are not asking for a handout. This is our money. They took our money and said this will be waiting for you upon retirement, and it's not." WEP and GPO were instituted in the 1980s to make retirement income more equitable, as many believed <a target="_blank" class="" href="https://www.businessinsider.com/how-retirement-of-peak-boomers-could-affect-economy-social-security-2024-4">workers with governmentpensions</a> had an advantage over Social Security recipients. But even pensions have become less of a sure economic bet, with <a target="_blank" class="" href="https://www.brookings.edu/articles/teacher-pensions-systems-are-increasingly-underfunded-making-teachers-vulnerable-and-salaries-less-attractive/">returns less funded</a> and many states <a target="_blank" class="" href="https://www.urban.org/sites/default/files/publication/101700/how_have_teacher_pensions_changed_since_the_great_recession_0.pdf">cutting back the benefits</a> they offer to teachers. "Essentially, it's a substitute," <keyword id="23551077" type="General" weightage="20" keywordseo="karen-smith" source="keywords">Karen Smith</keyword>, a senior fellow at the Income and Benefits Policy Center at the Urban Institute, said. "The reason they don't pay Social Security is because they have this alternate pension." Today, however, major criticisms center on the uneven application, <a target="_blank" class="" href="https://oig.ssa.gov/assets/uploads/a-13-20-50970.pdf">rampant errors</a>, and <a target="_blank" class="" href="https://www.aft.org/news/retirees-advocate-fairness-retirement-benefits">poor communication</a> with those impacted. WEP and GPO impact teachers in 15 states, while state, county, and municipal employees are penalized in 26 states. An audit by the Office of the Inspector General for the Social Security Administration <a target="_blank" class="" href="https://oig.ssa.gov/assets/uploads/a-13-20-50970.pdf">found</a> that WEP and GPO were two of the "leading causes of improper payments" in the system. According to <a target="_blank" class="" href="https://scottweisbenner.web.illinois.edu/RESEARCH/PAPERS/JPEF_Brown_Weisbenner.pdf">a 2013 paper,</a> the WEP reduces benefits disproportionately for lower-earning households in some<a target="_blank" href="https://scottweisbenner.web.illinois.edu/RESEARCH/PAPERS/JPEF_Brown_Weisbenner.pdf"> cases</a>. The Bipartisan Policy Center wrote in a July paper that limitations to WEP calculations resulted in "an imprecise approach to adjusting Social Security benefits." Many who support WEP and GPO, whether in their current or modified forms, say the math still has merit, as those affected by the provisions tend to be better off. The Social Security Administration reported the average monthly check as of July 2024 is about $1,783. Meanwhile, <a target="_blank" href="https://crsreports.congress.gov/product/pdf/RS/98-35/60">nearly half</a> of WEP-affected Social Security beneficiaries had pensions above $3,000 a month in 2023. Proponents of the provisions argue that because of how Social Security <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/what-is-social-security">calculates benefits</a>, a worker who spent a short period of time in the private sector and the rest of their career working toward a public pension <a target="_blank" class="" href="https://www.urban.org/urban-wire/getting-rid-social-security-offsets-teachers-flunks-equity-test">could end up</a> getting a proportionally larger Social Security benefit than a worker making the same amount of money in the private sector for their whole career. Additionally, canceling WEP and GPO could worsen Social Security's financing, moving the depletion date for funds from 2035 to <a target="_blank" class="" href="https://www.businessinsider.com/when-will-social-security-run-out-pay-full-benefits-plan-2023-3">2034 or sooner</a>. According to the Urban Institute, this could disproportionately benefit those with higher incomes who have 401(k)s or other private retirement accounts. But some of those workers on the other end of the provision disagree. "I had a 76-year-old lady call me up. She taught for 40 years and retired, but recently her husband passed away. She lost all his earned benefits, and she's going to wind up either selling her house or lookfor a part-time job," said Janis Hernandez, a retired teacher in Louisiana, who sits on the communications committee for The National Task Force to Repeal the WEP and GPO. <h2>The future of WEP and GPO</h2>The Task Force <a target="_blank" href="https://ssfairness.org/gpo-wep-faq/">notes</a> that 83% of those penalized by the GPO are women, many of whom took time away from their careers to raise children and thus have less in Social Security than their spouses. Many impacted by the GPO also can't fully calculate their reductions until their spouse dies, like Earnest. Critics of the programs also note that there is no similar means testing for private-sector retirement plans. "If somebody is in the private sector and they've got a good 401(k), you don't tell them, 'Oh, we're not going to give you your Social Security,'" Louisiana Sen. Bill Cassidy, a Republican who's focused on Social Security solvency, told BI. WEP and GPO are front and center in Congress this month when the House of Representatives votes on the bipartisan <a target="_blank" href="https://www.congress.gov/bill/118th-congress/house-bill/82">Social Security Fairness Act</a>, which aims to eliminate both provisions. An alternative to eliminating the provisions completely is simplifying the formula for calculating Social Security benefits, which the Bipartisan Policy Center found would be less costly over time. As the Center on Budget and Policy Priorities finds, there's "widespread support" for a more proportional formula to calculate the amount these provisions shave off. But right now, any action on Social Security or altering those provisions may be a long shot, especially with the presidential election looming. Anne <keyword id="20223028" type="General" weightage="20" keywordseo="mcleod" source="keywords">McLeod</keyword>, 68, said the provisions can be punitive. In her 20s, McLeod worked various part-time and lower-paying clerical roles, all of which paid into Social Security. She then taught in New Orleans for 28 years and worked part-time jobs after school hours. She's retired now and gets $67 monthly in Social Security — $500 less than she would've gotten sans WEP. She gets $2,910 monthly in state retirement, and she creates and sells artwork for extra income. While she and her husband are up to date on their bills, they simplified their lives by selling their house and renting because it's cheaper. "It's almost like a punishment in a way because we chose to be educators or firemen or policemen," McLeod said. "They said you get a good enough retirement from the state, so you'll be OK not getting all your Social Security." Correction: October 1, 2024 — An earlier version of this article provided the wrong figure for Jane Roth's Social Security survivor benefits.

The Social Security curveballs making retirement even more confusing

In a massive relief to those holding legacy, long-time investments in <keyword id="19895040" type="General" weightage="20" keywordseo="Real-Estate" source="keywords">real estate</keyword>, the government today moved an amendment, offering them a choice between the old and new methods of calculating long-term capital gains (<keyword id="6357448" type="General" weightage="20" keywordseo="LTCG" source="Orion">LTCG</keyword>) and paying whichever is the lower of the two as tax. Amidst representations from the real estate sector, and concerns that removing indexation benefits would lead to a surge in black money inflows in the segment, the government proposed the aforementioned changes. Last month, while presenting the Union Budget 2024 on July 23rd, 2024, <keyword id="6355261" type="General" weightage="20" keywordseo="Finance-Minister" source="Orion">finance minister</keyword> <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> had announced doing away with indexation benefit for all asset classes like real estate, gold and more. To soothe the blow, the FM had also lowered the LTCG from its previous rate of 20% to 12.5%. <h2> What was the condition before?</h2>Prior to Union Budget 2024, real estate investments would qualify for LTCG tax, provided they were held for more than 2 years, or 24 months. The LTCG tax payable would be 20%, along with indexation benefit. As the government noted in the <keyword id="123776" type="General" weightage="20" keywordseo="Finance-Bill" source="Orion">finance bill</keyword>, "indexation available under the second proviso to section 48 is proposed to be removed for calculation of any long-term capital gains which is presently available for property, gold, and other unlisted assets. This will ease the computation of capital gains for the taxpayer and the tax administration". Indexation allowed investors to factor in the impact of inflation on their investment over the years, thereby increasing the cost of acquisition, which reduced their capital gains and thus, lowered their overall LTCG tax liability. Here, the government considered the indexed cost of acquisition, rather than the original cost of acquisition, for calculating LTCG. Consider this: Manya purchased a property in FY 2002-03 for Rs 30,00,000. In June 2024 (FY24-25), she decided to sell it for Rs 80,00,000. Now, under the new <keyword id="22692992" type="General" weightage="100" keywordseo="LTCG-Regime" source="keywords">LTCG regime</keyword> (12.5% sans indexation benefit), her tax liability would come down to Rs 6,25,000 (12.5% of 50,00,000). But if she opted for indexation benefits, her indexed cost of acquisition would be calculated using this formula: Cost Inflation Index (CII)value for transfer/sale year/CII for purchase year, or 2001-02 (whichever is later) X cost of acquisition] = 363/105 X 30,00,000= Rs 1,03,71,428 (around Rs 1 crore) (CII values are issued by the government) This is the cost Manya would have to pay, if she were to buy the same property today. But since she sold her house for Rs 80,00,000, she incurred a capital loss of around Rs 20,00,000 and hence, would not have to pay any LTCG tax. Another change that budget announced was that all properties that were purchased prior to 2001 would be grandfathered. This meant that indexation benefits would be applicable to properties which had been purchased prior to 2001. <h2>What changes now? </h2>There are two major changes: 1. Going ahead, investors will have the choice to avail either of the two LTCG regimes-either pay tax on a lower rate of 12.5% (minus indexation), or pay LTCG at the rate of 20%, along with indexation benefit. They will have the freedom to pay taxes per whichever regime which reduces their tax liability. 2. The grandfathering clause, which was earlier set at 2001, will now be considered at 23rd July, 2024. This means that for any property (land or building) that was transferred or sold before July 23rd, 2024, taxpayers will have the option to choose between either of the LTCG regimes, and pay the lower of the two as tax. However, any property that has been sold after July 23rd, 2024 will continue to be taxable exclusively under the new LTCG regime i.e. taxable at 12.5% minus the benefit of indexation. The time period proposed in the budget for an asset to qualify as a <keyword id="22692993" type="General" weightage="20" keywordseo="Long-term-Capital-Asset" source="keywords">long-term capital asset</keyword> i.e. 36 months would also continue to apply. This benefit will only be applicable to real estate i.e. <keyword id="460692" type="General" weightage="20" keywordseo="Immovable-property" source="Orion">immovable property</keyword>. Transfer/sale of other assets such as gold will continue to attract 12.5% LTCG sans indexation benefits.

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