There are many compelling reasons to operate a small business in retirement. It’s a great use of your time, a productive application of your mind, and a gateway to financial opportunity. For today, let’s talk about three top reasons to consider starting a business in retirement.
Going from working every day to doing nothing would be a shock for most people. So is it any wonder that early retirement feels, for many, like having all the time in the world? For someone who has worked their entire life, such an adjustment is often too harsh. Many of our clients solve the “time” problem with a small business, as it also has the benefit of added income.
Having a small business is also a great thing to occupy your mind with. Some individuals are tempted to spend indulgently in early retirement. Often, this is a byproduct of simple boredom, a boredom that can be eradicated entirely by operating a small business premised on a hobby or talent. Focusing the mind on a healthy and positive routine can prevent it from wandering towards more destructive patterns.
With your basic needs covered, retirement is an ideal time to experiment with how you invest and generate long-term income. Operating a small business is one great way to engage in both activities at once.
One common question investors have is how to get started. It’s simple: locate an idea, service, or product (whether your own or someone else’s) that resonates with you. Some investors who want to start small will capitalize on a hobby, like the investor we know who creates fishing lures and sells them to his fellow fishermen.
Understand that there are ways to determine how much risk you will tolerate, and operate within those margins. It’s okay, and even recommended, to know going into any kind of investment how much you’re willing to risk and under what circumstances.
The extra money is the obvious reason to keep a business going in retirement. But it is true that small expenses can contribute substantially to your quality of life. What that looks like will be a little bit different for everyone, but for most of us it’s some variation of freedom.
Starting a new business is a great example of a change to your retirement plan that your professionals can assist you with making in the best way for you. It is never a bad idea to run such changes by your legal and tax professionals. We advise our own clients on these matters often.
If you are considering establishing a retirement plan or making major changes to your own retirement plan, such as adding a new type of self-directed account or starting a new business, we are happy to offer our guidance. Feel free to contact the professionals Royal Legal Solutions today. We can answer your questions or set up your personalized retirement planning consultation.
Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.
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