Planning to work till 70 or when you drop dead is not the answer
Knowing that we will naturally age and will not be able to perform as well over time, what can we do about it now?
This comment by a reader sums it up, “I ask the guys over 50 – would you be willing to work for the minimum wage to prove yourself – to grow into a better role. Would you be willing to do tough jobs, on commission jobs or what have you to get your foot in the door – are you hungry, fearless, a warrior. That is what the other people who are younger are. None is going to do you a favour because of your age – you have to make it happen” (Sydney Morning Herald, March 2016)
Unless we are willing to become “hungry” and “fearless” employees as we get older with age, we will never be able to keep up with younger employees. It will definitely come a time when we will have to quit the Rat Race to enjoy our families, to enjoy our accumulated wealth, and to take it easy.
The key question is this: Can you quit the Rat Race altogether?
Unfortunately not, at least for most people.
More than half of Americans have less than $1,000 in savings in 2017. (GoBankingRates, September 2017)
7 out of 10 Australians do not expect to have enough to retire on and 28% had a lot of debt. (SuperReview, March 2016)
And about one-third of U.S. households earning at least $75,000 annually and 1 in 4 earning at least $100,000 are living from pay period to pay period. (CBS News, April 2015) A startling one in two working Australians is living from payday to payday. (ABC, February 2016)
Without a choice, most employees get entrenched into the Rat Race and stay there until they retire (or when they retire). They get stuck in dead-end jobs just to pay off their debts and to survive day-to-day.
Close to two-thirds of babies born today are expected to live to 100.
Caught between a rock and a hard place, if an older employee can work up to 70 or 80 years old, then they should be able to maintain their current lifestyle and pay down their debts.
We know that 23% of Americans with jobs said they planned on being septuagenarian employees and 40% of those planning to work into their 70s feel stuck in their jobs. (Bloomberg, June 2016)
As the first generation hits the century mark, more people are likely to be working into their mid-70s and even 80s before they retire. (The Australian, April 2016)
There’s one problem, unfortunately.
This entirely assumes that older employees are healthy and can still contribute effectively to their employers.
What happens if they fall sick?
What happens if they are physically incapable of working due to an accident or disability? Or for whatever reason?
If older employees cannot find an employer who is willing to retain or hire them, then they will not be able to work into their mid-70s or even 80s, even if they planned or wanted to.
Plans and reality are two different things.
Plans are great if employees are in control over their destiny.
So, how much control do you have over your job, over your destiny, or even over your future income and employment?
What can older employees do now?
If you are a Gen X or a Baby Boomer, it comes down to two choices.
Do nothing, OR start a side business now whilst in employment well before retirement.
If you choose to start a side business, it’s not a side business that trades time for money where the money is only generated directly from your efforts. This means that if you do not work in the business, the money will not be generated and there’s no income for you.
You may start off on your side gig by trading time for money, at least for the short term. You do this to educate yourself on the topic of running a business and generating income for yourself.
Ultimately, it’s about owning a business system that continuously generates passive income for you even whilst you sleep. The key thing here is that you work on the business, at your own time freedom, under your own terms, where the money is generated automatically.
If you decide to do nothing, consider this.
You will most likely be made redundant by your current employer in preference over younger and cheaper employees. There’s enough news around that supports this fact.
Your performance will definitely deteriorate over time because of natural ageing. You will find it hard or difficult to move to another higher paying job because of age discrimination in the workplace.
That’s the fact of life. Embrace it and take mitigation actions now.
It’s not a question of if, but a question of when.
There are so many factors beyond your control that you cannot leave it to chance.
In fact, there are 135 reasons why employees are at risk.
Taking control over your current income streams is important. You will never know what the future holds. Things may change tomorrow.
If you do decide to start a side business now whilst in employment, it’s an effective back-up or contingency plan for you and your family. It’s good risk management on your part. It’s an insurance policy, so to speak.
With hard work now (it’s delayed gratification), when your side business becomes profitable, you are no longer fearful of being made redundant. There’s lower job insecurity stress.
You have control over your income, your job, and your employment.
The additional money earned from your side gig will supplement your current employment income, as you build up for business.
With the additional income from your side business, you have the freedom to do the things you have always wanted to do. You have additional money to invest or set aside for your future retirement.
When you are made redundant or you voluntarily decide to retire, your side business will now generate the main source of income for you. It’s also an ’employment’ for you. There’s no need to find another job, at least immediately.
In short, it’s about making a start to future-proofing your income streams now, rather than waiting until it’s too late.
It does take time to build up a business that is profitable. It will not happen overnight. That’s why it’s important to start now, well before retirement.
Is starting a side business for everyone?
Each one of us has different personalities.
There’s the die-hard employee who just loves working for people. They are the ‘career employees’. They will never start any type of side business on their own.
Then there’s the budding entrepreneur. They have always wanted to start their own business at an early age. They can’t see themselves working for anyone.
For most of us, we fit somewhere in between these two extremes, the die-hard employee and the budding entrepreneur.
Here’s the rub.
Given the ever-changing work environment that we find ourselves in now, it’s a matter of time when we are told or find that our jobs will no longer exist. It’s already happening. (Entrepreneur, September 2017)
There’s so much talk about the future of jobs and whether the job functions we currently do will actually exist in the future. Find out here whether your current job will exist in the future.
There are risk-free strategies for starting side businesses.
There’s no expectation for anyone to quit their jobs now.
In fact, salaries earned could be invested to build up the side business over time.
For Gen Xs and Baby Boomers, being risk-averse people, they want to find a safer path to business ownership.
From there, decide which idea you want to try out.
Everything starts with small steps in the right direction.
In conclusion
Knowledge is only potential power; action creates results.
Knowing the current trends impacting your future is knowledge. The only way to change your current situation is by taking action using the knowledge you already know.