Would you want your child to start his own business?

[Orchidflower]

This was a question on tv's "Are you Smarter than a Fifth Grader?" The question was something like:

What is the #1 profession that the majority of parents want their children to have:
1. Doctor
2. Start their own business (or Have their own business)
3. Accountant

Well, the correct answer was "Start their own business" or have their own business.

Why, I wonder after working for myself for well over 25 years, would parents want their children to start or have their own business?

Is the public not in reality about the sacrifices that you have to make when you run a business--assuming you can even make it successful? Are they not aware that most businesses fail within the first 3 years? Yeah, I did okay, but by working like a dog and making alot of personal sacrifices which leads to a pretty unbalanced life really (work-work-work).

I was so blown away by the supposed correct response to this question, I thought I'd ask the board here and see what your reaction was to why any parent would want to foist that responsibility on their child (not to say I didn't enjoy it and reap the rewards, but just saying...)? Plus, remember working for yourself means no benefits, no security, no paid holidays, no pension, no expense account, heck...no insurance unless you pay for it yourself...and no Big Brother standing there at your back if you screw-up at all.

What happened to the philosophy of "working for a company and get a good pension" mentality after WWII? Gone with the wind today? Looks like it.

My response to the question was "Doctor," but guess that isn't the dream job it used to be thought of today. Maybe high insurance rates for physicians have scared people off?

Boy! Have times changed since I was a kid when my mother/stepfather (Depression kids and WWII generation people) used to preach to get with a good company to get a good pension. Looks like that's gone for sure. Has anyone else noticed this cultural shift in America? Looks like 'ole Bob Dylan was right: Times they are a'changing.....

 

[CuppaJoe]

I'm surprised by that "answer" also, OrchidFlower. My former, highly successful employer said that his extended family was very concerned about him because he was in business for himself instead of having a corporate or government job.

I thought your thread title would be about paper routes or lemonade stands.

 

[cardude]

I made good money off of our small business and I used to tell our kids that owning their own business would be a great way for them to make money and become FI. The past couple of years have changed my tune however. We closed our 70 year old family business last year after sales fell off the cliff and costs kept rising. We were always LBYMers when we owned the business the past 15 years, so we were able to FIRE on schedule.

I think it is going to be much tougher on people who want to open a small business over the next few years due to higher taxes, more government regulation and resultant higher costs, and because of a generally sluggish consumer still trying to dig out of debt. I now tell our kids they need to study to be law so they can know the rules, and maybe write the rules if they want to get into politics! I've got lawyers in the family but have not consulted them about this. Probably should.........

 

[Orchidflower]

And, unfortunately, we are so over-lawyered now that they have made the LSAT's even harder than they were before....AND way too many law school grads today are finding out that they can't make that much money once they get out if they aren't picked up by the top firms. Did lots of homework on this the past couple years. Not the winner it was in my generation when, if you had a law degree, you pretty much could guarantee making a good living. Now...now so much.

 

[FUEGO]

I'd probably advise my kids to get a steady government job and collect the benefits of that. Maybe get a side hustle like many government employees have to make a buck on the side. Save what you can in the meantime, and retire at 48-49 after 28 years of service, plus another couple due to vacation/sick leave that is unused.

Or just whatever they want to do that makes them happy. I would probably not advise them to go into law unless they really wanted to.

 

[plex]

And, unfortunately, we are so over-lawyered now that they have made the LSAT's even harder than they were before....AND way too many law school grads today are finding out that they can't make that much money once they get out if they aren't picked up by the top firms. Did lots of homework on this the past couple years. Not the winner it was in my generation when, if you had a law degree, you pretty much could guarantee making a good living. Now...now so much.

Agreed, there are some small exceptions (like patent law with a popular tech background), but for the most part a law degree isn't much better than an undergrad degree now (especially when you consider the $30-45K/year tuition). I told my younger brother not to go into law unless he does extremely well on the LSATs (which is the hardest test I have ever seen, by far).

 

[cardude]

And, unfortunately, we are so over-lawyered now that they have made the LSAT's even harder than they were before....AND way too many law school grads today are finding out that they can't make that much money once they get out if they aren't picked up by the top firms. Did lots of homework on this the past couple years. Not the winner it was in my generation when, if you had a law degree, you pretty much could guarantee making a good living. Now...now so much.

OK, so what do we tell the kids to study in college these days? What do you study if you want to go after a good paying government job?

Man, times have certainly changed. I never thought I'd tell the kids to work for the government.

 

[REWahoo]

Will the world ever run out of need for bean counters? Maybe advise your kids to get an accounting degree.

 

[FIREd]

I think many people would answer that because they believe that creating their own business is the only road to real financial success (just check out the number of books selling that idea). Of course there are plenty of success stories to support their view (and plenty of failure stories glossed over as well). Building a business from scratch is the American way after all. People working out of their garage, finding the next big thing and building a multi-billion dollar business empire. Working for the man and saving money seems so tedious and unglamorous... Would would wish that kind of life on their kid?

 

[aaronc879]

I don't know the exact stats but I read somewhere that the largest % of self-made millionaires are people who own their own business. So parents wanting that for their children is not a surprise to me. I wouldn't push my kids to do it though because of high downside risk. As others have said, a good government job with secure pension is probably the best bet.

 

[tinlizzy]

Last I knew, owning an auto junkyard was the most profitable small business in the US. The richest guy in Iowa is (could be was) Kurt Hames - he sells and owns mobile homes and mobile home communities. Wonder how many parents thought of these 2 businesses when they said they dream of a business for their child - lol.

 

[aaronc879]

Will the world ever run out of need for bean counters? Maybe advise your kids to get an accounting degree.

I was always into numbers and math so my parents wanted me to be an Accountant. Unfortunetly I flunked out of college. If I could take classes that just related to Accounting then that would be great but the good accounting jobs require a 4-yr degree(at least) with all the general classes included and that doesn't work for me.

 

[MuirWannabe]

While I get your point about the trials associated with owning your own business I'm not really surprised by that answer being the most popular choice. I think most people see that as a route to financial success and independence. As you point our rather well from first hand experience that is not as easy as it sounds. But still, it is a good route if it works and nice to dream about for those of us shackeled to megacorp. Working for megacorp may provide some degreee of financial success but it rarely provides financial independence. And it comes with all the control negatives so often recited on this site.

Ironically, the second best choice of doctor is really a job that is often "owning you own business". Many doctors (or maybe most) are self employed running their own practice. So I'm not sure how different those two choices really are. My brother is a private practice docotr. He owns his own business.

 

[cardude]

Will the world ever run out of need for bean counters? Maybe advise your kids to get an accounting degree.

Good idea. I sure hated accounting in college and it's not too glamorous, but that degree does make sense financially if you can get into it. I guess it's like knowing the rules and language of business, but without having to actually run the business.

My college roommate got his degree in accounting and started out with one of the Big 8 firms (back in the day) when he graduated. I'll never forget when he got his offer letter in the mail from Price Waterhouse (I think) for something like 40K per year. We had never seen so much money so we drank beer for weeks celebrating his achievement. He paid. I didn't get a big offer with my marketing degree, and I ended up selling cars.

 

[FUEGO]

Engineering still seems pretty solid, although it can be very challenging academically. There are decent paying government jobs for civil engineering at least.

Otherwise, biomedical engineering or electrical/computer science/computer engineering seem to pay better (more private employment I would think).

 

[FUEGO]

Medical field seems like a winner too. 2 year nursing degree gets you a solid job with decent income if you can handle the work. Med school would definitely boost the income a lot, but you also have to deal with an extra 6+ years of education plus 4 more years of low paid training before you start making the big bucks (which may not be all that big versus what a nurse would earn with 10 years experience). Over the course of a typical 30+ year career, getting the MD would clearly pay off. For kids that are FIRE oriented (who knows if any of ours will be??!!), something with quicker payback would seem to make more financial sense, particularly if we, as a society, want to level the playing field income wise via social spending and taxation policies.

My five year old is torn between being an astronaut, a ninja, a secret agent (or maybe she said sneaky asian??), and a teacher. Seems like teacher would be the safest bet.

I'm reading Taleb's Fooled by Randomness right now, and he makes Dentistry sound like a sweet gig in terms of securing a stable and recession-proof income source. Maybe dental hygienist is analogous to nurse in this case (quicker payback).

 

[RonBoyd]

Is the public not in reality about the sacrifices that you have to make when you run a business--assuming you can even make it successful? Are they not aware that most businesses fail within the first 3 years? Yeah, I did okay, but by working like a dog and making alot of personal sacrifices which leads to a pretty unbalanced life really (work-work-work).

Yeah, like becoming a doctor is a skate in the park.

 

[RonBoyd]

Last I knew, owning an auto junkyard was the most profitable small business in the US. The richest guy in Iowa is (could be was) Kurt Hames - he sells and owns mobile homes and mobile home communities. Wonder how many parents thought of these 2 businesses when they said they dream of a business for their child - lol.

Like in "My Fair Lady." The father was a Dustman and one of the richest blokes in London.

 

[RonBoyd]

I don't know the exact stats but I read somewhere that the largest % of self-made millionaires are people who own their own business.

That was one of the main premises of "The Millionaire Next Door." Wasn't it?

 

[WhoDaresWins]

I learned quite early on that my kid was of the headstrong variety. It didn't really matter what we wanted, he would only apply himself to things he wanted to do. And he seemed very little influenced by peers for that matter, and even today seems to not care what other people think. His father was very hands off in trying to influence his career choice. I would jokingly tell him that I wanted to kvell to my friends in the nursing home about "my son, the doctor". He was always good in the sciences and ended up getting a duel degree in math and comp sci and then an MBA. So, in answer to the question about starting his own business, if he wanted to do it, he wouldn't care what I thought or even consult me on the matter. Of this, I am certain.

 

[haha]

So, in answer to the question about starting his own business, if he wanted to do it, he wouldn't care what I thought or even consult me on the matter. Of this, I am certain.

Join the club! Fortunately my sons have more sense than I do anyway.

Ha

 

[Moemg]

I always wanted my children to do whatever they wanted except when my daughter wanted to be a stand up comic and was not funny or when she decided to be a nurse because they make decent money only problem she faints at the sight of blood .

 

[e86s54]

Since my daughter is now considering a career (or at least a university degree) I have tried to help her see the big picture. It's not like it was when I was a kid and a degree assured you of a good life long job. Now I feel its perhaps a hindrance. I know a classical education is good, but I now feel like an ad-hoc eduction is where the rubber hits the road. So what do I mean? I became somewhat successful by starting a couple of businesses while working a technical job (telecommunications). I researched everything via the internet, much of it through blogs and forums and opened my latest business in something I knew little about. That is really where my $ came from or making the most money for time expended.

The second part has to do with being happy and having more control over your life. That's the tricky part.

Finally some observation over the three choices;

1-Doctor. I know many, some unhappy, not my kind of work.
2-Own business. Absolutely, for the biggest bang for your buck. However, one must choose a business that they are compatible with.
3-Accountant. My wife is (or was) and accountant. She never liked it, but I believe she missed the point that an account sees the nuts and bolts of a business. Too me that can be very interesting. Bookkeeping sucks

Not Listed but discussed...Lawyer. I remember working a few days for a University on their graduation. When all the lawyers got their degrees, the Registrar walk behind me and whispered "See all these grads...none will have jobs" Perhaps a little much, but point well taken. Then I watched my wife's good friend become a lawyer...needless to say, things didn't turn out like he had envisioned.

E86S54

 

[Koogie]

Sure.. if they can deal with the sacrifices

My small business (+/- 2M sales/yr) is what is going to allow me to retire (knock on wood) at age 39.

Would I want my (imaginary) child to start a small business ? Maybe but probably not. I have been (like many here) enthralled by FI and early retirement for a long time (15 yrs). Unless they had a similar passion and an interest (bordering on mania) with money, they shouldn't do it.

The hours have been long. Vacations for the last 9 years almost non existent (unless short and tied to a Crackberry). My personality has changed (I'm in a cutthroat business and you bring it home with you) and I know for a fact that the stress and hours have aged me and taken a toll on my health.

If they could, like me, start a business and work it for 10 years and get out... maybe. If they value their personal lives, leisure pursuits and a balanced lifestyle more than the concept of independence and not answering to anyone, no.

Sure it is the Western (not just American) dream but it comes at a price. Like someone else said, that is the part that gets glossed over on the frothy business shows and in the airhead business mags.

 

[e86s54]

Koogie,

This is where I believe you must have a business that is compatible with you (and your family). I think that's the 1st step in starting a business. There are some businesses that can be less stressful. I have worked full time and owned my own this business for 5 years (bricks and mortar, open 24/7). It has been very stressful at times, especially ate the start, but much better now. I have a family who are very active and I never miss any of my kids events, we go on vacation at least once a year and I am in home for dinner nightly. So it is possible.

On the other hand, my neighbors who are doctors, lawyers and engineers are always home late. Actually it seems that the ones who own their own biz have the most time.

E86