Why Almost Everyone 50+ Should Start a Side Business… It’s Not for the Reason You Think!
Like many – dare I say MOST successful entrepreneurs – I started my side business way before I left my corporate career behind. Already in my early 60s, I could see that my days of working for a large company were numbered. At the same time, I wasn’t in a hurry to give up my steady paycheck.
Instead, I did what many entrepreneurs of all ages decide to do – I used my steady income to fund my dreams and prepare for a lifetime of financial freedom in “retirement.” I started a side business before it was too late.
It’s a good I didn’t quit my day job because my new business, Sixty and Me, lost money for the first two years. It broke even in year three and finally started bringing in a predictable profit after that.
Now, almost 5 years after starting Sixty and Me, I am convinced that almost everyone over 50 should start a side business before leaving the comfort of their career behind. That said, my reasons for this advice may not be what you think.
Why Most People Want to Make More Money in Their 50s and 60s
Most of us reach our 50s with less money in our retirement accounts than we hoped. As a result, there is a rush to squirrel away as much money as possible before the iron doors of retirement close behind us.
So brainwashed have we become by the way that retirement is portrayed in the media that we genuinely believe that 20-30 years of solitude are an inevitable and natural part of life.
With this mentality, it is not surprising that most people see retirement as a destination and do everything that they can to save more money. This is also why many people look for additional work after 50… they are terrified that their money will “run out.”
In my opinion, this is not the most important reason to start a business in your 50s. For starters, optimizing for short-term gains may cause you to avoid businesses that require an investment to get off the ground. At an extreme, you may simply end up finding a second job instead of investing in yourself.
To be clear, I’m not saying that saving more money for retirement is a bad thing. Far from it! I’m simply saying that saving skills is just as important, if not more important, than saving money.
In other words, while starting a side business in your 50s or 60s can help to fund your retirement directly, the bigger long term benefit is having a source of purchasing power, purpose and passion in the years to come.
The 3 P’s of Starting a Side Business After 50
Most of us worry that retirement will be too short. The reality, according to most of the seniors that I have spoken to is that retirement is long!
I’m not just talking about the fear that we will outlive our money. I’m also talking about the struggle that many older adults face to find meaning in their lives once their careers end and their kids leave the house.
In my opinion, there are three reasons that all older adults should at least consider starting a side business.
Increasing Your Purchasing Power
No matter how you look at it, saving enough money to keep you comfortable for 20-30 years of retirement is tough… really tough!
Consider this, if you manage to save $500,000 extra for retirement and invest it in something “safe,” like CDs (certificate of deposits), you might expect to make $833 per month in income. That’s at 2% interest, which is by no means guaranteed!
Now, $833 per month in extra income is nothing to sneeze at. At the same time, it is not going to have us living a life of luxury either!
On the other hand, do you think that it is possible to make $1,000, $5,000 or even $10,000 a month, working part time in retirement? Of course! That is as long as you have your own business.
I’m not going to go into all of the ways that you can make additional money in retirement here. That’s a topic for another article. All I will say is that the seeds of financial freedom in retirement are planted in the final decades of your career.
Don’t wait! If you have an idea for starting a business and you can launch it without risking your current job, go for it! You have nothing to lose and everything to gain!
Achieving a Sense of Purpose
A lack of financial resources is not the only problem that we face in retirement. With our careers behind us and our children living across the country (or the world, in my case!) many of us find ourselves lacking a sense of purpose in retirement.
While there are notable exceptions, most older adults that I know tend to start businesses that leverage their specific skills or industry knowledge. This allows them to continue to contribute at a time when their previous employers think that they no longer have anything to add.
Trust me when I say that nothing will make you happier in retirement than feeling that people still need you. Please do not “go gentle into that good night.” Share your passions with the world. Hire and mentor young people. Shatter aging stereotypes. Continue to believe with all of your heart that you are important. You are!
Living Your Passions
As Tim Ferriss, author of The 4 Hour Workweek, said, “The opposite of happiness is not sadness, but boredom.” When it comes to retirement, I couldn’t agree more.
Let’s be honest, by the time we reach our 50s or 60s, most of us know what we enjoy… and what we dislike. While the advice to “follow your passions and the money will follow” is overly simplistic, there is some truth to the idea that examining your unique passions is a great place to start when starting a side business.
Starting a business while you are still receiving a regular paycheck buys you time to find the “sweet spot” where your passions and other peoples’ needs meet.
When you are living on a fixed income, you are more likely to take “whatever you can get” than to start something truly meaningful.
Not everyone will be able to create a business that focuses, even in part, on something that they are passionate about. But, when it does happen, it is a beautiful thing to see.
Don’t Wait to Start a Side Business. Do it Now, While You Still Can!
While it is possible to start a business in retirement, my experience is that most people don’t. I’m not sure why this is. Maybe we start to believe that retirement really is about “taking it easy.” Or, maybe we are scared to dip into our retirement savings once they are our sole source of income. Whatever the reason, it is much more likely that you will start a business in your 50s or 60s than in your 70s.
If you are considering starting a side business in your 50s or 60s and aren’t contractually limited by your current employer… I say GO FOR IT!
Like me, you will probably find that your path to business success is long and winding. But, at the end of the day, isn’t this the point? Shouldn’t “retirement” be about who we can become than who we were? I say YES!
Are you thinking about starting a side business in your 50s or 60s? Or, have you already started a side business? What did you learn from the experience? Please join the conversation!