includes not just college, but all the continuing education courses and at-work training seminars we have taken over the years.
MORE LIFE EXPERIENCES
The main advantages we over-50s have over our younger brethren are far more extensive experiences in life and in work. This greater experience, especially when combined with more schooling and training than the youngsters have, means that we simply know more, largely because we have faced and dealt with far more situations and problems than they have. Problems that are new and seemingly unsolvable to young people have already been faced and solved by their gray-haired counterparts.
In my day, younger people were more respectful of their elders; in the corporate world, we deferred to their more extensive knowledge and experience. Today, it is the opposite. We live in a culture that worships youth. Once you hit 50, it’s extremely difficult to get hired, which is one reason why starting your own business is such an attractive option. In your own business, you can confidently put your knowledge and experience to work without having to prove anything to a boss who can’t conceive of life without the Internet.
MORE WISDOM
All of your life experience makes you a wiser person. You know more because you have done more and seen more. Problems that seem insurmountable to the kiddies have already been faced and solved by their elders. We possess more common sense and can draw upon a much larger storehouse of experience. We are less impetuous and more deliberate and thoughtful. Ironically, although we have fewer years left to us, we act more slowly than young folks, who always seem in a terrible hurry. At least, that has been my experience.
“Wisdom is usually learned and earned through major experiences in life, both good and bad,” writes Lauraine Snell in her book, Start Your Own Business After 50 or 60 or 70 (Bristol Publishing, 1990).
INCREASED ABILITY TO SEE THE BIG PICTURE
Snell lists additional reasons why the over-50 crowd has the advantage in starting a business.
•Older people were raised in an age where a strong work ethic was ingrained.
•Most people over 50 have been through multiple recessions, so they have learned how to survive tough times.
•Older people understand the principle of delayed gratification. They don’t expect to make a million dollars or have dozens of customers their first year in business.
•Usually by sometime in our 50s, the children have gone off and we live in an empty nest, which means we can concentrate on our business without the distraction of raising kids.
•“Many beginning older business owners have already been successful in their lives as business owners, managers, or employees,” writes Snell, “so they have greater business knowledge and a proven track record compared with younger entrepreneurs.”
FINANCIAL CONSIDERATIONS
If you’re over 50, you have more money issues to consider when starting a business than a younger person does. Many people in their 50s and older have considerable retirement savings, which could be a financial advantage to starting a business. They can afford to take some of this capital and invest it in a business, whereas 20- and 30-somethings are just starting out in life and have little or no savings.
If I wanted to launch a business with $100,000 start-up costs, I could do it without venture capital or loans. Yet, on the TV show The Shark Tank, you see people giving away 10 to 50 percent of their entrepreneurial ventures to investors who in exchange pay them relatively modest five-figure investments.
Of course, the flip side to that advantage is that those of us 50 and older also have to be more careful with our money. People in their 20s and 30s, many of whom are single and without children, can simply afford to take more risk than middle-aged folks, whether it’s making investments or starting a business—even though they typically have less money. They can be more fearless, as they know that if their business tanks, there are still decades ahead to make up the loss and try again. Their peak earning years are either at hand or still ahead of them, and when you are 20 or 30, you think you are immortal.
For those of us in our fifties or older, we are approaching retirement age, even if it’s not in the immediate future. We are past our peak earning years, yet with retirement approaching, our need for cash may be great. Therefore, we must be conservative with our money and investments. We cannot afford to risk it all on an uncertain business venture, and some of us may not be willing to give up the security of a 9-to-5 salary for the uncertainty of self-employment.
In March 2009, the financial crisis sent U.S. stocks to a 13-year low. Investors gave back $7 trillion in wealth and lost 22 percent of their retirement savings—adding to the degree of financial uncertainty for those at or near retirement age—forcing some folks to delay their retirement for years. A recent survey by the Employee Benefit Research Institute found that only 23 percent of workers plan to retire before age 65, down from 50 percent in 1991.
You’re probably going to live longer than your parents and grandparents did. Over the past 100 years, the life expectancy at birth has gone up 28 years, from 49 to 77 years of age, so it’s more difficult than ever to accumulate enough money in a traditional IRA to make sure you don’t outlive your retirement savings. But if you own your own business and set your own working hours and retirement age, you may also be able to count on more working years to accumulate those savings.
According to Kiplinger’s Personal Finance, you need at least a million dollars to retire these days. Most Americans don’t have anywhere near that: The average retirement account balance in the United States for men and women ages 55 to 69 is a mere $42,500.
But even if you do have a million dollars, stock market crashes, cyclical bear markets, and inflation can quickly eat into your retirement nest egg. Some experts now say you need two or three million to retire comfortably.
No wonder 95 percent of Americans rely on Social Security or other government programs to help them keep a roof over their heads during retirement! But when you have your own profitable business, you don’t have to rely on family members or Uncle Sam for support. You remain financially independent, able to support yourself in the lifestyle to which you have become accustomed.
WHAT BRINGS YOU TO THIS DECISION?
Let’s talk a bit about how you have made the decision to start a home-based business. If you’ve just retired and are now living on a pension, Social Security, or investments, that gives you some income on a continual basis, which is a big plus. That steady income gives you breathing time to put your business together without the pressure of finding money fast.
Others of you may have come to this decision because you were laid off or fired, or you have some other reason for needing to start an income-producing business quickly. In this case, you will probably need to move more quickly in setting up your business and won’t have the luxury of easing your way into the transition.
WORD TO THE WISE: CLAIM UNEMPLOYMENT
For those of you who just got fired or laid off, possibly because of your age, things will be a little rough if you do not have enough money put aside to live on for a few months until you get your business rolling. If that is the case, go online to file for unemployment immediately. If you get laid off today, file tomorrow. Every day you delay in filing your claim, you will lose that day’s money if you do get approved.
If you don’t get approved, then fight the decision. You will be notified about participating in a phone interview concerning what happened to you, and you will need to stand up for yourself and define the good job you were doing, particularly if you can show documentation to your interviewer. Your interviewer has the authority to override the employer and charge their account for money due to you. How you present yourself and your case makes the difference