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Investing your retirement funds
Old 06-04-2013, 01:13 PM   #1
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Investing your retirement funds

I am curious what other people think as they are building their nest egg. The trouble is that the more money we save, the more I want take that money and start my own business. My wife is extremely cautious and the idea of taking those hard fought savings and gambling with it, is just about sacrilegious. How reasonable is it to think a business will succeed if you are starting it without debt? Is a high debt load the primary reason for failed businesses, or is it really about how well it is managed? I have no idea how well I could manage a business, and have no idea what business to start, I just know we both hate our jobs.

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Old 06-04-2013, 01:32 PM   #2
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Originally Posted by justlikebike View Post
I have no idea how well I could manage a business, and have no idea what business to start.
So your wife is exactly right: this would be gambling with your retirement funds.

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Old 06-04-2013, 01:35 PM   #3
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Hating your job is not sufficient grounds to start a business. As you noted, entrepreneurship is a highly risky enterprise, and not everyone is cut out for it. The failure rate of new businesses is very high, even when they start with a good idea, passion and commitment.

I have a good friend whose DH left megacorp some years ago to start his own business. He is very smart and has a unique product. He has faced many challenges, including his tendency to trust too easily. Their paid off home has been remortgaged, they live very frugally, my friend suffers from depression brought on by the stress of it all, and they will never retire.

A relative developed a new biotechnology method during his PhD. He has put over a decade of extremely hard work into his company, and the venture capitalists are scavenging it. He has walked away and is now in consulting.

Successful entrepreneurs can take ER and there are some of them on this board. Some of them become successful after several failures early in life. There are many failed entrepreneurs out there. Overall, it is a risky path to take if ER is your goal. I agree with your DW.
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Old 06-04-2013, 02:50 PM   #4
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I recommend that anyone considering starting a business read a book or two that will provide a look at the reality of business ownership. Way back when we read "In Business for Yourself" by Bruce Williams, In Business for Yourself: Bruce Williams: 9780812840117: Books, and it convinced us that we weren't ready yet and would be happier working in an established company.

I'm more entrepreneurial now, but I probably still won't start a company because, in my opinion, you need to be ready to commit 100% (i.e. be ready to lose everything) to have a great chance at succeeding. I'm so close to retirement now that the risk/reward doesn't work.

One thing you might want to explore the possibility of moving to a more entrepreneurial environment. That is what I'm in the process of doing right now and it feels like a weight is being lifted off even though my responsibilities (and potential stress) will greatly increase.

Also, don't even think about it until you have a solid business plan. Having it vetted by someone with business and/or start-up experience really helps also. Your local chamber or university should be able to help with this.

Finally, don't rule out buying an existing business. It seems that your situation is more about not working for others than starting a business from scratch.

Good luck!
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Old 06-04-2013, 06:47 PM   #5
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Originally Posted by braumeister View Post
So your wife is exactly right: this would be gambling with your retirement funds.

According to the Small Business Administration, 56% of small businesses fail during the first four years. It is not something I would do with one's retirement money.
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debt, invest, savings, self employment

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