U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 06-02-2009, 04:31 AM
 
Location: Conejo Valley, CA
12,476 posts, read 16,969,159 times
Reputation: 4304

Advertisements

Quote:
Originally Posted by Kaye02 View Post
So if someone takes out a loan to start it, it could cost them a ton if it fails. I'd say that's a pretty big deal to most. Then what? They're now in debt so they have to go back to working a job they hate even longer, than their original plan, to pay of the debt.
This is why I suggested they redirect their retirement contributions to save for the business. They can make the money actually work for them.

Also, business failure rates are over estimated even by the SBA. Its hard to measure business failure rates as businesses close for a variety of reasons many of which have little to do with actual "failure". The percentage of businesses that file for bankruptcy is actually rather low.

But, yes fear plays a role also. But the way people think of retirement is an important aspect. They would have the money to fund the business if they stopped contributing to such.
Reply With Quote Quick reply to this message

 
Old 06-02-2009, 05:04 AM
 
Location: Wouldn't you like to know?
9,113 posts, read 15,298,270 times
Reputation: 3661
Quote:
Originally Posted by user_id View Post


If the money is not used for retirement then its wasted and its really only one choice we are talking about here. The choice to "retire" at some particular age vs having to continue to work until you are unable to do so.
.
You don't have to use the money for retirement. You could spend it on your kids, or donate to charity. Again, not one size fits all, but most importantly it gives you a CHOICE.




Quote:
Originally Posted by user_id View Post
I'd much rather use the money to start a business that I can actual control than hope the market does what I need in order to "meet my financial goals". .
That's your choice. You are free to go that route. Downside is that if your business fails (like most do) then you have to look at plan b. I am in control (contrary to what you think) of my finances. Have a substantial nest egg built up, and are meeting my goals financially....

Many roads to Dublin. You have to find out what is successful for you.
Reply With Quote Quick reply to this message
 
Old 06-02-2009, 05:16 AM
 
28,383 posts, read 67,919,335 times
Reputation: 18189
u_i:

Start a religous order: arbyte.us: The Reality of Social Security Opt-Out
Reply With Quote Quick reply to this message
 
Old 06-02-2009, 05:30 AM
 
985 posts, read 2,300,613 times
Reputation: 722
Quote:
Originally Posted by user_id View Post
This is why I suggested they redirect their retirement contributions to save for the business. They can make the money actually work for them.

Also, business failure rates are over estimated even by the SBA. Its hard to measure business failure rates as businesses close for a variety of reasons many of which have little to do with actual "failure". The percentage of businesses that file for bankruptcy is actually rather low.

But, yes fear plays a role also. But the way people think of retirement is an important aspect. They would have the money to fund the business if they stopped contributing to such.
They'd still be losing money if their business went under, would they not? They'd lose all the money they spent on the business (both starting it and trying to build it up) that could have gone into retirement and end up having to work even longer to recoup it. Let's say someone starts a business and it's doing fine for 10 years, then the economy slumps and their business goes under. Financially speaking, anyways, they wasted 10 years. They now have to work longer to recoup the start up money plus the money they spent in the 10 years. If they had put money into retirement for those 10 years it is less likely that they would lose everything (assuming their retirement was diversified). Also, some people are just not big risk takers, whether it's money or life in general.
Reply With Quote Quick reply to this message
 
Old 06-02-2009, 05:30 AM
 
Location: Conejo Valley, CA
12,476 posts, read 16,969,159 times
Reputation: 4304
Quote:
Originally Posted by CouponJack View Post
That's your choice. You are free to go that route. Downside is that if your business fails (like most do) then you have to look at plan b. I am in control (contrary to what you think) of my finances.
You are in control? How so? You don't control a single market, at best you can try to diversify. Will that in the end work out for you? Perhaps, its up to the markets.

You have far more control over the returns from business than you do from returns in the market. Unless of course you have a crystal ball.

The failure rates of business are way overblown and is in some sense an unfortunate urban myth.
Reply With Quote Quick reply to this message
 
Old 06-02-2009, 05:36 AM
 
Location: Conejo Valley, CA
12,476 posts, read 16,969,159 times
Reputation: 4304
Quote:
Originally Posted by Kaye02 View Post
They'd still be losing money if their business went under, would they not? They'd lose all the money they spent on the business (both starting it and trying to build it up) that could have gone into retirement and end up having to work even longer to recoup it.
Sure, they may lose money. You may lose money in your retirement account too. Its a calculated risk. But an outright loss is unlikely.

Anyhow, they would have spent a few years on the business and would have to make up for it retirement wise by working more. But they would've got to do what they enjoyed for a few years, a sort of pre-retirement.

Quote:
Originally Posted by Kaye02 View Post
Let's say someone starts a business and it's doing fine for 10 years, then the economy slumps and their business goes under. Financially speaking, anyways, they wasted 10 years.
.
And what exactly stops them from contributing to their retirement during those 10 years? Suggesting they wasted 10 years is like saying someone wasted 10 years because they worked for a company that went under.
Reply With Quote Quick reply to this message
 
Old 06-02-2009, 05:52 AM
 
985 posts, read 2,300,613 times
Reputation: 722
Awww crap I just wrote a big long thing and I accidentally deleted it. Son of a gun This is what happens when I stay up all night. User_ID, I'll retype/reply later, I'm just too fudging annoyed with myself right now to do it lol
Reply With Quote Quick reply to this message
 
Old 06-02-2009, 07:05 AM
 
Location: Wouldn't you like to know?
9,113 posts, read 15,298,270 times
Reputation: 3661
Quote:
Originally Posted by user_id View Post
The failure rates of business are way overblown and is in some sense an unfortunate urban myth.
These statistics are directly from the us labor bureau.

Are they an urban myth? Not from the stats posted. If you have some updated figures to back up your claim, please post them. I always have heard opposite to what your claiming so I'm curious to see some figures....


http://www.bls.gov/opub/mlr/2005/05/ressum.pdf



Quote:
Originally Posted by user_id View Post
You are in control? How so? You don't control a single market, at best you can try to diversify. Will that in the end work out for you? Perhaps, its up to the markets. .
You are partially correct. Yes, it is up to the "markets" however if you have a diversified portfolio, history has shown that you can build wealth.

No one has a crystal ball, but I seriously like my chances (which are on track). The key is diversification and adhering to a portfolio built to your risk tolerance. Look at 2008. If you weren't diversified, you probably lost a good percentage, however many people didn't lose as much as was reported (if they had a healthy percentage in bonds or fixed investments...)

Again, many roads to Dublin.

UserID, Im not saying your way is right or wrong. I give tons of credit for people who try to do it. If you achieve success, you "cannot get fired" . However, its a big risk......
Reply With Quote Quick reply to this message
 
Old 06-02-2009, 03:46 PM
 
Location: Conejo Valley, CA
12,476 posts, read 16,969,159 times
Reputation: 4304
Quote:
Originally Posted by CouponJack View Post
Are they an urban myth? Not from the stats posted. If you have some updated figures to back up your claim, please post them. I always have heard opposite to what your claiming so I'm curious to see some figures....
Did you actually read what you posted? Its not about business failure per se, but business survival rates. This is a rather important distinction, business close shop for many reasons not just out right failures. Is closing up shop after 3 years and breaking even a failure? Not really. Is selling your business after a few years a failure? Is closing it because you want to do something else a failure? No.

The posted article does not even define "business failure" which would involve looking at the businesses books. All they are doing is measuring how many new business exit. There is really not a good study that I know of on actual business failure rates because doing so would involve hours of looking over each businesses books. Something that most businesses won't be open to in the first place. The rate of bankruptcy is far lower than the often cited "business failure rates" though. So are the failure rates on SBA loans (around 12%). Given the bankruptcy and loan data, it would seem that around 80% of business that "fail" don't file for bankruptcy and pay off their loans?!

USATODAY.com - Focus on success, not failure
What's Behind High Small-Biz Failure Rates?

Quote:
Originally Posted by CouponJack View Post
You are partially correct. Yes, it is up to the "markets" however if you have a diversified portfolio, history has shown that you can build wealth.
The dynamics of the markets and economy obvious change over time, hence the history is only interesting if you have a time machine. Furthermore, when you talk about history you're really talking about the last 2-3 decades. The current investments were built around those market conditions, in a more historic sense they are not necessarily successful.


Regardless, I'm not suggesting that everyone stop working and start a business. Just that one has more control over their business than they do on the markets. I've known far too many people that would like to start a business and just put it off and save for "retirement". Waiting to do the things you really wait to do until you retire is silly, you have no idea if you'll even reach retirement. Yet, this is how the majority live.

Also the uncertainty in when you die also makes the way people back load their retirement a bit odd. Why not work 6~7 out of every 10 instead?

The idea of retirement is just odd on so many levels.
Reply With Quote Quick reply to this message
 
Old 06-02-2009, 05:22 PM
 
Location: Wouldn't you like to know?
9,113 posts, read 15,298,270 times
Reputation: 3661
Quote:
Originally Posted by user_id View Post
Did you actually read what you posted? Its not about business failure per se, but business survival rates. This is a rather important distinction, business close shop for many reasons not just out right failures. Is closing up shop after 3 years and breaking even a failure? Not really. Is selling your business after a few years a failure? Is closing it because you want to do something else a failure? No.

The posted article does not even define "business failure" which would involve looking at the businesses books. All they are doing is measuring how many new business exit. There is really not a good study that I know of on actual business failure rates because doing so would involve hours of looking over each businesses books. Something that most businesses won't be open to in the first place. The rate of bankruptcy is far lower than the often cited "business failure rates" though. So are the failure rates on SBA loans (around 12%). Given the bankruptcy and loan data, it would seem that around 80% of business that "fail" don't file for bankruptcy and pay off their loans?!

USATODAY.com - Focus on success, not failure
What's Behind High Small-Biz Failure Rates?


The dynamics of the markets and economy obvious change over time, hence the history is only interesting if you have a time machine. Furthermore, when you talk about history you're really talking about the last 2-3 decades. The current investments were built around those market conditions, in a more historic sense they are not necessarily successful.


Regardless, I'm not suggesting that everyone stop working and start a business. Just that one has more control over their business than they do on the markets. I've known far too many people that would like to start a business and just put it off and save for "retirement". Waiting to do the things you really wait to do until you retire is silly, you have no idea if you'll even reach retirement. Yet, this is how the majority live.

Also the uncertainty in when you die also makes the way people back load their retirement a bit odd. Why not work 6~7 out of every 10 instead?

The idea of retirement is just odd on so many levels.
I'm not waiting to do anything. I take vacations and do alot of things that if i had a business I might not have the time to do.

I live the way I do to give my kids a better life and provide them w/good values. I refuse to be a burden on them later in life. Sure, I can take a trip around the world right now if I wanted, but to me that is selfish. Sorry we see things a little different.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top