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Basically the risk that you can't work or need care taking. It happens to millions all the time.More often a failed business actually bankrupts the person that owned it after leaving them in deep debt.Most business fail because they are poorly financed;porrly run and the person fails to relise just how mnay hours and years it takes to build a secure business.That is why 90% fail the first year.You basically need to have the finances to take the risk like anyhting else.
Yes, countless, as in you've yet to say this in this thread. Anyhow, what you're saying is empty, mitigating which risks?
Here:
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Originally Posted by cyclone8570
Or one could take that cash for retirement and use it to buy a cupcake stand that will make 1 million dollars a year. I knew a guy who did that-- he made tons of money!
The point is that there is a huge amount of risk involved in renting out "units" to "tenants." Sure, there is a lot of risk in a retirement plan-- but if you diversify your portfolio towards safer investments as you get older, you can significantly mitigate that risk. There is more risk in being a landlord than saving for retirement through the traditional methods.
In fact, if you start saving when you are young (and invest in the right funds that adjust to safer investments as you age)-- you are almost guaranteed to have a safe and financially secure retirement. Tax free growth helps a lot!
Getting money from the government isn't a guarantee in the future (see the growing trend of libertarianism). Neither is affordable health insurance (look at how they have shot up over the years). People love to save in the traditional method (401K/ROTH IRA/TRADITIONAL IRA) because it is a safe (and proven) way to secure your future (if done properly-- i.e. no 90% stocks when you are 50).
You got it all backwards, its less risky to start a business early in your live than later in your life. The opportunity costs are much lower when you are just out of college, etc than they are after you've been working in your industry for 10~20 years. Additionally, in the case you don't succeed you have plenty of time to recover, retrain, etc.
Is it less risky to start a business on debt or on capital?
Is it less risky to buy a house with a mortgage, or outright without a mortgage?
The point being, often you need lots of capital to start a business-- often times the only way to get that when you are young is to take out debt-- while when you are older you will have enough to finance said business through your savings. No bankruptcy will be required if you fail when you are older and financing it without debt.
I revised (in bold) your statement to be more accurate. People "just know" that 9/10 businesses fail and all sorts of nonsense, yet in reality business isn't any more risky than getting a job. In both cases it really depends on the details.
I find it a bit amusing how people think about jobs, they seem to forget when they get a job they are working for a business. If business is risky, then in what sense aren't the jobs similarly risky? If anything, the business owners are better off, when a business fails or closes they often walk away with something where as the employees get nothing.
So you believe working at wal-mart is more risky than trying to start a retail chain of your own?
To a slight degree, higher wage earners are subsidizing lower wage earners in Social Security because the formulas which determine the retirement benefits allot a larger percentage of average adjusted life-time monthly income to the latter as opposed to the former. I'm not arguing this is wrong, just laying out this fact.
Only the bold statement is a fact, the rest you are trying to push under the table with it. If the two groups had the same life-expectancy then in a sense the higher earners would be subsiding the lower, but that is not the case. Lower income individuals have a lower life-expectancy than higher income individuals.
Social security is not a welfare system, its rather a government managed retirement system. Its no different then a pensions system, one's benefits are based largely on one's contribution to the system.
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Originally Posted by Escort Rider
I am not arguing either for or against all these subsidies, just pointing out that they exist.
Why? I never claimed that heath-care subsidies don't exist, or that welfare does not exist. No, instead I claimed that social security and disability are not welfare systems, the former is a government run pension system and the latter is a government run insurance system.
Now some old people may get welfare, but they are largely getting it due to their low income rather than being old. A poor young mother of 3 will also get welfare. But in terms of "bail out", you can't look at the costs without also looking at how the programs benefit higher tax payers. In terms of the middle-class, they delude themselves into believing they are the primary tax contributors and speak out against anything that can be seen as "welfare" (they are usually painfully ignorant of actual welfare systems though), yet ironically they the biggest drain on tax dollars. Just look at today, who exactly is being bailed out by all the housing, etc schemes? The middle class who purchased a bunch of overpriced stucco boxes so they can pretend as if they have money.
The middle-class are pathetic in this way, they deride programs that help mothers feed their kids, help elderly with health care, yet will line their pockets with government bail-outs at every opportunity.
The point being, often you need lots of capital to start a business-- often times the only way to get that when you are young is to take out debt--
Some business require low amounts of capital, some business require little capital. But this is exactly why your comment is gibberish, how risky the business is depends entirely on the details. In business you can manage your risks, saying "business is risky" just exposes your prolishness.
Also, once again, what you are saying is rather inaccurate. Where are young entrepreneurs getting these magically loans? Which credit card company, bank, etc is loaning large amounts to kids just out of college with no income? None of course, hence why the primary source of start-up capital for this group is money from relatives and venture capital (VC for seed capital is actually not that common).
Those that are older often have significant opportunity costs, they are at the top of their pay scale and often have more secure jobs than they did when they were younger. The most common time for mid-aged individuals to start businesses is after they lose their job, obviously in this case the opportunity costs shift wildly in the other direction.
So you believe working at wal-mart is more risky than trying to start a retail chain of your own?
No and this is of course a rather ridiculous question. You have to compare apples-to-apples, in this case compare a wal-mart job to say starting a pool cleaning service.
People don't start retail chains out right, for example Wal-mart started as a small general store (some other name) in the South. It was funded with "parent capital". It took decades for it to reach what it is today. The vast majority of other large retailers had similar beginnings (i.e., small stores often started with little money).
Anybody else have no serious plans to save for retirement? I can't think of a reason why I'd actually want to retire and therefore don't save for it in any sort of serious way.
What makes you think any employer will want you when you're over 60? Or, if your profession will even be relevant?
What makes you think any employer will want you when you're over 60? Or, if your profession will even be relevant?
1.) One does not need to rely on employers, 2.) You can change professions.
The latter issue effects everyone, its not like professions magically start to become irrelevant after 30~40 years of working in them, they become irrelevant with new technologies/industries which can occur at any point during your career.
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