Boomer Think Tank: Investments & Retirement

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On our inaugural Boomer Think Tank, we focused on retirement, and specifically on how Boomers invested for their own retirement.

To frame the discussion we outlined these facts:

  • 2 in 5 Boomers have retirement-specific savings accounts.
  • Boomers are 35% more likely to have portfolios worth between $250-$500 000.
  • On top of this, 14.7 million Boomers have shopped for stocks in the last 6 months, and 6.8 million Boomers have bought/sold them.

However: the share of workers whose employer sponsors a retirement plan declined from 61.4 percent in 2000 to 53.2 percent in 2008, according to a Congressional Research Service (CRS) analysis of U.S. Census Bureau data. The share of workers participating in a plan also declined over this period from 50.3 percent to 43.6 percent. Declines were more pronounced among workers under 55 than among older workers. Clearly the recession has had an effect on Boomers and their investing strategies since the recession.

This week our panel included:

  • Bob Jones – an entrepreneur and start up investor, a partner of ArCompany
  • Jewel Fryer – business owner and property investor
  • Bev Lesnick – coffee house owner, investee, and secondary entrepreneur

You can listen or view the hangout in its entirety here, or read on for a recap:

As our Think Tank began, it became very clear that the 35% with portfolios between $250-500,000.00 were not members this panel. Bev left a corporate job to start her dream job: her coffee house. Bob, a serial entrepreneur (ArCompany is his tenth start-up that he has partnered with), used to be in a corporate job, and has a solid investment portfolio. Jewel, who didn’t want to work in the corporate world, has her own business and calls her property her biggest investment.

“My investments have been in my farm, my business, my land, and how I built my house, and that was the only ways to give me the freedom to do what I wanted to do because I didn’t really have all of this stuff in corporate savings…my savings are in another way.”

What does an investment mean to you?

It became clear that the concept of investments were much different than just the types toted by banks and Wall Street. Bev, a small business owner, includes herself as an investment, “I’ve invested in my business, in my condo in Tampa, and in myself. I was in the corporate world and I knew that I could do what I’ve done for other people for years, and I had someone who wanted to invest in me, and I invested in myself too.”

Jewel and her husband invested by purchasing property and building their house by themselves. By building and upgrading their house gradually, they do not have a mortgage and pay only for their utilities. And as Jewel and her husband save more, they add on to their house, continually “investing” in their property.

Bob has a more traditional portfolio that he and his wife divide into five areas: real estate (has traded up from a town house and does not have a mortgage), stable investments (mutual funds that they generally pick out), single stocks (low risk), higher risk stocks (lower value stocks), and entrepreneurial start-ups. For Bob, investing in start-ups is a two step process: monetary and sweat equity. For Bob, the fun comes from actually being a part of the process and putting his talents into the start-up. It also gives him a chance to share the skills that he has with up and comers.

Bev, who has a business partner-investor (her former mother in law invested $100k), still has reign to run her business as she thinks best. She used her 401k to help start up. She agrees with Bob that the rate of return for the investment is slow but it’s starting to turn around three years after the initial investments.

Post 2008 recession

Jewel got hit hard in the recession as her husband is a builder, and she was starting her business. Now that the recession has started to turn around, Jewel is in a place to start thinking about investments in the traditional sense.

“We all regrouped at that time because everything we thought we knew or everything we thought we could count on changed, and if anything, it inspired me to be riskier and take a chance as all these things that were considered safer were no longer there so we might as well go for it.”

Bob, who had invested in stocks and watched the market closely, found that the recession changed the entire investing game; the question no longer centered around if you should invest, but where you should invest as the unpredictable market took down even the most secure of investments.

Each of our panellists agreed that there is isn’t enough emphasis on the silent generation and how being raised by them instilled the concept of getting a job and retiring by 60.

We all came in a time where our parents grew up where they could have a job and a savings plan, and when we started working that all change and got yanked out from under us.

Late Entrepreneurship – The new retirement?

Bev started her own business when she was 53, and most of her friends could not believe that she was making such a risky move. Jewel has seen a lot of her friends start their own businesses in their 50’s. Bob (in reply to being called a late entrepreneurial bloomers) “Hey, that’s what my life is right now. My personal view of retirement is that it ain’t ever gonna happen but that’s because I don’t want it to happen!”

The biggest take away from this is that investing is not an aged demographic, and investments for Boomers go outside of the traditional idea of investment. All of our panellists do not see themselves retiring in the traditional sense. Each of them is doing something that they love. How can you call it work when you are doing something that genuinely makes you happy?

I cannot think of when I will actually stop working. I don’t see any reason why I shouldn’t. I enjoy what I do. I’ll live longer that way. It’s a lot of fun.

Join us on February 11, 2015 for Boomer Think Tank: Late Entrepreneurship when we continue this conversation on traditionally retirement and starting a new career later in life.

Photo credit: insider_monkey via photopin cc.

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