By the time we reach our 50s and 60s, we finally realize that the best way to become a millionaire in retirement is to start investing 10% of everything you make in your 20s. Now, if someone could just invent a time machine so that we could go back and give ourselves a good talking to, we would be set!
Unfortunately, time being the tricky thing that it is, we are stuck with our past financial decisions and can only look to the future. But, beyond doubling-down on saving, what can we do to improve our financial situation in the years leading up to (and during) retirement?
The answer is simple… we just don’t want to admit it. The only way to create true wealth, when you don’t have decades to let compound interest do its work, is to start a business.
The good news is that many of us have tangible skills that we can use to build a profitable business. We also have a rolodex (remember those?) filled to the brim with business contacts, old colleagues and personal acquaintances. And, compared to the teenagers who are living on Ramen noodles, while they build their next app, we are positively flush with cash.
So, why, if we have so many things going for us, do so few older adults take the plunge and start businesses. Through my conversations with hundreds of men and women over 50, I have identified 4 excuses that hold us back. I hope that sharing them here will help you to have the confidence to build something great.
There is an old saying that “if you do what you love, the money will follow.” This is only half true.
Choosing a business idea that you are excited to work on every day is essential. Otherwise, you are likely to burn out and quit in the first year. But, by itself, passion isn’t enough. You also need to have a product or service that makes other people’s lives better.
In other words, building a profitable business is about finding the sweetspot between what you love and what others are willing to pay for.
In a previous article, on our sister site, Sixty and Me, I gave 6 questions that anyone can use to generate business ideas. I’ve included the questions here, but, I also encourage you to read the original article, which goes into much more detail about each.
What business skills have you acquired to date?
What are you passionate about? Or, what activities do you look forward to?
What do your friends, family members or colleagues ask you to help them with?
What do people who share your passions struggle with?
What problems have you always wished someone would solve?
What are other people already being paid to do that you could do better?
Like our younger counterparts, many potential entrepreneurs and small business owners think that starting a company is all about getting funded. And, who can blame them? Spend 10 minutes on a site like TechCrunch and you could be forgiven for believing that VCs (venture capital companies) are handing our $10-million checks like T-shirts at a technology conference.
The truth is that the vast majority of startup ideas are never funded. And those that are funded usually have some kind of traction before the best companies are willing to back them. So, if you are waiting for someone to fund your idea, you will likely be waiting for a loooooong time!
Even if you have a background in IT or development and want to create a software or app company, the startup costs that you will face are literally 100 times less than just a decade ago. And, if you can’t find $5,000 – $10,000 to get started with your company, it was probably never going to work out.
Besides, the majority of older adults that I talk to don’t want to start technology companies. More often, they want to make money from the skills that they already have, as a consultant or freelancer. And, if all you need is a simple website and some business cards, financial freedom could be just a few $100 (and a ton of sweat, blood and tears) away.
Well, if you really feel that way… you probably ARE too old to start a business, but, not because of the number of candles on your birthday cake. You are not being held back by how old you are. You are being held back by how old you feel!
Think you’re too old to start a business? Tell that to Leo Goodwin, who started GEICO at age 50. Or, Harland David Sanders, who founded Kentucky Fried Chicken at age 62. Or, Wally Blume, who started Denali Flavors in his 50s.
Better yet, tell the thousands of Baby Boomers who start successful consulting business or open a franchise every year that you are “too old to start something new.” I hope that they can convince you better than I can that age really is just a number.
For some people, self-esteem isn’t the problem; it is the feeling that they have worked for long enough and that now, in “retirement” or “semi-retirement,” they are ready to relax.
Whenever someone gives me this excuse, my response is always the same… “give it time!” Most of us approach retirement after decades working for someone else. Some of us loved our jobs, but, most didn’t. The hours were long and the rewards “just ok.” Is it any surprise that the idea of working any more (even for ourselves) is about as enticing as a trip to the dentist’s office?
For the first year or two of retirement are what I call the “honeymoon phase or retirement.” This is the time when most people travel a bit (if they can afford it), spend time with the grandkids, read and catch up on their hobbies.
But, for many of us, something strange starts to happen in the third or forth year in retirement; we start to miss working. We don’t necessarily miss our old jobs, but, we do miss feeling important, connected to others and needed. And, boy do we miss having a little extra cash in our pockets at the end of the month!
Now, I’m not saying that starting a business is for everyone. All I’m saying is that you might want to assume that you will want to do some extra work in retirement, even if you plan on relaxing in the first few years.
Let me give you a quick example. As most people approach retirement age, they just can’t help sharing their plans with their friends and co-workers. But, as I wrote in a previous article, making a big deal about your retirement can close off potential revenue streams in the future.
So, even if you never plan on returning to the business world, you might want to act like you do. Stay in touch with your colleagues and business partners on LinkedIn. Do a little part-time consulting, even if it is just for a few hours a week. Read the trade journals occasionally, even if it is just to smile at all of the BS that you don’t need to put up with anymore.
Basically, stay engaged, just in case you want to work again at some point in the future.
There is a reason that older entrepreneurs tend to be more successful than their younger counterparts. We have the skills, contacts, money and experience necessary to succeed. The only thing holding ourselves back is… ourselves.
If you are 50 years old today, you might have 40-50 more years on this planet. You are not “old!” You are just getting started.
How you choose to give back is up to you, but, if you have the time and skills, I would highly encourage you to at least consider starting a business.
This is one of the best ways to shape the world in your image and to ensure that your grandkids have a better shot at the American Dream than you did!
Have you ever thought about starting a business after 50? Did you make it happen? If so, how would you describe your experience starting a business? If not, what held you back? Let’s have a conversation!
Tags Small Business