There are a lot of Baby Boomers (born 1946 to 1964), and about 50 years ago, most of them started their first grown-up jobs. Now, the oldest of the Boomers have begun to retire with only about 33% of them still working at all and only 16% still working full-time.1 And those 76 million baby boomers control a huge amount of wealth–$7 trillion by some estimates.2
Although Boomers as a group have a lot of untaxed cash and other assets, they also have far longer average lifespans than their parents, making retirement a difficult proposition when faced with the possibility of outliving their individual nest egg. Furthermore, a lot of Boomers just don’t want to quit being engaged in some kind of work. Still others are itching to explore more creative or entrepreneurial ventures.
Accordingly, a few really smart people and I sat down and thought up 6 different things you can do when you decide to exit your current 9-to-5 grind. This is that list:
- Go spend your money. Travel, take naps, putter around the garden, visit the grandkids. Re-tire. Expensive? Perhaps. And yet still cheaper than some of the other alternatives I will describe in a moment.
- Volunteer. Work for no pay. Help out. Put the skills you have accumulated over a lifetime to helping others with no monetary reward. About the same cost as #1, but maybe more interesting.
- Get a part-time job. There you go. Like 15% of the older Boomers, you can stay engaged but not too much and make a little cash to help stretch out the old retirement income to boot. Let someone else have the headaches and just show up at the job less than 35 hours per week.
- Change full-time jobs. Now this one gets kind of interesting as there are a few ways to do this other than hold down the same of job you’ve held for a lot of years. Simply making such a change may liven things up, not to mention keeping employment benefits and delaying drawing any retirement until you absolutely have to. Getting this done may mean just taking the same job for a different company, getting a different job for the same company, or it might mean changing contexts altogether by joining a small business that can really use the skills you gained during your time in Corporate America. There are a lot of recruiters out there looking for someone with your skills from the large corner office to work for their smaller scale clients. Think: less stress.
- Buy a job. This one also comes with some choices.
a. One way to buy a job is to get involved with a multi-level marketing (MLM) sales organization. Often sold as “running your own business,” this is effectively just a commissioned sales job with a lot of the road ahead already laid out for you.
Unfortunately, there are a lot of scams and pyramid schemes dotting the MLM landscape that are mainly designed to separate you from your share of the $7 trillion in retirement funds controlled by your cohort. And even the better ones are not necessarily going to net you the amount of money earned by those in levels above yours.
Finally, you had better be able to sell icewater at the North Pole because there is a lot of competition for customers just pitching your product in your level–not to mention all of people selling in all of the other levels and branches of your organization. Sadly, many people engaged in MLM end up with a garage full of aging product and a slightly thinner bank account. But there are still worse fates.
b. For example, you could “invest” in a franchise. Now I begin by saying, there are “good” franchises (like the ones that insist you work for them for two years before agreeing to sell you one), and there are “bad” franchises (like the ones that only care about the balance in your bank account and your willingness to sign contracts).
Perhaps needless to say, there can be a lot of problems with becoming a franchisee but, if done properly, franchises can protect you from some of the downsides of MLM, i.e., lack of territories, lack of a proven market, lack of a physical location. Most franchises, however, are really capital intensive and, whether you are making money or not, there is usually a hefty fee due to the franchisor along with lease payments to landlords and loan payments to banks and vendors every month for years. So by the time you learn whether your business is really going to work, your upfront capital outlays, initial fees, leases due to third-parties, bank loan payments, and monthly franchise fees can drain you of an embarrassing amount of money. (Think: hundreds of thousands or millions of dollars).
While often sold as “a turn-key operation” that “practically runs itself,” the truth is franchises are a lot of hard work like any new business. And don’t count on having a lot of spare cash after paying all those fees to be able to delegate the work to hypothetical employees.
So if you don’t have the passion for the product and the work, don’t do the deal. Despite what you may be told, it is not always possible to just buy the expertise you need and you will almost certainly be working in the business yourself even if your franchise agreement doesn’t require that you do.
c. You could buy an operating business. Although this may sound like the greatest risk of the three “buy a job” options, in reality, there are many ways to limit that risk if you do it right and several distinct advantages over franchising.
First, (unless the business you are buying is a going franchise) NO FRANCHISE FEES. Why pay someone over and above the ordinary costs of running a business for consultation, the privilege of using the name, and maybe the right to buy some napkins or something?
Second, (same caveat) NO FRANCHISE RULES. Why give someone the right to take away your business if you don’t do things by their book?
Third, you aren’t starting a business from nothing. There are usually going to be assets of the business you can borrow against to pay the cost of the deal.
Fourth, the business already has a proven market niche. You don’t have to pray the work will come in. It already is coming in. You just have to not screw it up.
Fifth, you can contract with the current owner and key employees to remain on for a while after the deal is concluded—no training necessary. In fact, they will train you if you ask nice (and make it part of the deal).
Sixth, if you are clever, you may even be able to repackage and sell off any parts of the business you don’t need or like. In short, there is no substitute for a track record.
- Start-up or join a new venture.
Now this can be a bit riskier and not just for the obvious reasons, i.e., the risk of losing money. Sure, there is sometimes an initial capital cost, although lean start-up principals (if adopted) can help limit those costs until you are sure your new enterprise has legs.
No, one real risk of starting a venture when you have the ability to write your own checks is that you will decide to stay with your new baby “just a little while longer” even though the market is telling you what any sensible (or less financially-advantaged person) would clearly read as a “get out while you caaaaaaan!” Of course, the other real risk is that you bail on an actual great idea too soon because you think it isn’t working or just lose your nerve.
Wait. Did I just say the risk is both staying too long and leaving too soon? Yep. Only usually not at the same time. Allow me to explain further.
A lot of people have great ideas without the first notion of how to implement them at all, let along turn them into the next Facebook. While entrepreneurship is all sexy and cool right now, for most people it’s a pipedream. Regular people usually don’t have either the stones or skills for turning nothing into something or else they are simply deluded.
A lot of successful business people are simply deluded. They think because they worked their way up one ladder, those skills are generally transferrable to “business-at-large” and that couldn’t be further from the truth. For despite appearances, a startup isn’t really “business” the way you—the soon-to-be retiree/transitioner—have experienced it ever before.
In startup, there is no order. There is no structure. There is no plan. There are no rules. What there is is just plain old hard work, luck, perseverance, negotiation, exhaustion, talent, humility, connections, insight, frustration, adaptability, total lack of pride, and pain. Lots and lots of pain. Oh, and very little pay. Unless it works. But then you never know how much pay there will be or if it will last or who it may belong to. Fun, no?
This nearly lethal combination of factors that go into making a startup work is precisely why most people have the good sense to avoid such an exercise. In fact, if you’ve managed to hold down a job your whole life, there is a better than average chance entrepreneurship isn’t for you. Real entrepreneurs usually have pretty short attention-spans and don’t paint inside the lines, therefore, the climbing of ladders is usually not for them.
So, while starting up a new venture is technically an option, it is likely not going to work out for you unless…
…you find a different way to participate in the fun without being the guy in charge of standing in fire and facing down bullets. “How?” you should likely ask. Simple. Be the grown-up in the room.
See? For years, you have become a paragon of corporateness. That’s how you’ve earned those promotions and achieved any degree of success through performance reviews. Well, for later-stage startups hoping to transition to anything resembling something a venture capitalist or Wall Street would invest in, those attitudes of yours are actually a highly sought-after commodity.
Hell, those crazy kids will even give you a C-suite title (which combined with $5 will get you a mochaccino down at the Starbucks). But hey, you will have been CFO of something before you die, right? And that’s what really matters.
In exchange, you will provide for people who usually don’t conform to normative behavior some semblance of structure, a glimmer of insight perhaps into where they will be growing next. The upside is that if you don’t like the founders, most of the people you work with initially won’t be there for more than a few years anyway. Their plan is to cash out and do the start-up thing all over again.
Still, there you will remain, the chief of something in a continuing enterprise with the pride of knowing you helped make it all happen along with bitching stock options and an increasingly steady paycheck.
You go, you entrepreneur you! Just don’t do it from the ground up and you should be okay.
Who knows? Maybe one day you’ll even be able to retire.
1 Frank Newport, “Only a Third of the Oldest Baby Boomers in the U.S. Still Working,” January 26, 2015, Gallup (http://www.gallup.com/poll/181292/third-oldest-baby-boomers-working.aspx).
2Mark Kennedy, “The Great Retirement Boom is happening now,” June 22, 2015, Times Free Press (http://www.timesfreepress.com/news/business/aroundregion/story/2015/jun/22/great-retirement-boom-happening-now/310847/).