Broker Check
The After-50 Entrepreneur

The After-50 Entrepreneur

October 02, 2019

The After-50 Entrepreneur

LFG Marketing | October 2019


From the headline-grabbing business stories, you might conclude that entrepreneurial success in the United States is spearheaded by under-30 tech geeks who develop new apps using algorithms and artificial intelligence. You would be mistaken, at least about their age.

“Successful entrepreneurs are middle-aged, not young,” according to Age and High-Growth Entrepreneurship, an April 2019 paper co-authored by professors from MIT and Northwestern, with assistance from the US Census Bureau. “We find that age indeed predicts success, and sharply, but in the opposite way that many observers and investors propose. The

highest success rates in entrepreneurship come from founders in middle age and beyond.”

Statistically, the difference between younger and older entrepreneurs is substantial.

  • A 50-year-old entrepreneur is almost twice as likely to start an extremely successful company as a 30-year-old.
  • A 60-year-old startup founder is 3 times as likely to found a successful startup as a 30-year-old – and is 1.7 times as likely to found a startup that winds up in the top 0.1 percent of all companies.

Older entrepreneurs aren’t a rarity either. The Kaufmann Foundation, a non-profit organization that promotes start-up business development, reports that…

“Older adults are a growing segment of the U.S. entrepreneurial population. Individuals ages 55 to 64 have gone from making up 14.8 percent of new entrepreneurs in 1996 to 25.5 percent of all new entrepreneurs in 2016.”

Observers point to three factors as drivers for increased entrepreneurial activity in later life.

  1. Longevity. As lifespans have increased, many individuals find they are still healthy and capable, and want to continue working. In what were once considered “retirement years,” these individuals are fashioning second careers, both for personal fulfillment and economic profit.
  2. Necessity. The loss of a job spurs many people to start new businesses. This is particularly true for older people, who may have a harder time finding new work, but are more likely to have the financial resources and professional credentials to consider a start-up venture.
  3. Experience. Even as companies attempt to replace older, highly-compensated employees with younger workers at lower salaries, there a high demand for industry-specific knowledge and experience. For older individuals, this can mean opportunities for work as an independent consultant for one or more employers in the marketplace.

If You Prepare, You Can Embrace the Possibilities

Even though we know the only constant in life is change, there is a tendency for all of us to plan our lives as if our tomorrows will be much the same as our todays; same job, same house, same spouse. But suppose you knew there was a good chance you might face an entrepreneurial opportunity or necessity in the next ten years.

  • Would you still commit most of your long-term savings to an employer’s qualified plan?
  • Would personally-owned life and disability insurance be better choices than employer-sponsored group policies?
  • Would you improve your liquidity and ensure access to credit (such as establishing a home equity line) to cover periods of fluctuating income?
  • Would you maintain your current lifestyle or reallocate some of your discretionary dollars to increase your cash reserves?

Obviously, the answers to these questions depend on your circumstances. But when you consider your health, ambition, skills and accumulated assets, it might be prudent to lay the financial groundwork to improve your chances for success should you become an after-50 entrepreneur.

Pursuing an entrepreneurial opportunity late in life could be a fulfilling and profitable closing chapter in the story of your career. A start-up after 50 could be an ideal platform for working longer or transitioning to a phased retirement. And many older entrepreneurs find that the format suits them; they have more control over their lives, and a chance to maximize the value of their accumulated skills and experiences.

Lifetime Financial Growth, LLC is an Agency of The Guardian Life Insurance Company of America® (Guardian), New York, NY. Securities products and advisory services offered through Park Avenue Securities LLC (PAS), member FINRA, SIPC. OSJ: 244 Blvd of the Allies, Pittsburgh, PA 15222 (412) 391-6700. PAS is an indirect, wholly-owned subsidiary of Guardian. This firm is not an affiliate or subsidiary of PAS. 2019-87106 EXP. 09/2021 This newsletter is prepared by an independent third party for distribution by your Representative(s). Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed reliable, please note that individual situations can vary, therefore the information should be relied upon when coordinated with individual professional advice. Links to other sites are for your convenience in locating related information and services. The Representative(s) does not maintain these other sites and has no control over the organizations that maintain the sites or the information, products or services these organizations provide. The Representative(s) expressly disclaims any responsibility for the content, the accuracy of the information or the quality of products or services provided by the organizations that maintain these sites. The Representative(s) does not recommend or endorse these organizations or their products or services in any way. We have not reviewed or approved the above referenced publications nor recommend or endorse them in any way. The title of this newsletter should in no way be construed that the strategies/information in these articles are guaranteed to be successful. The reader should discuss any financial strategies presented in this newsletter with a licensed financial professional.