Second Careers: 5 Meaningful Financial Facts To Consider When Making A Career Move Over 40

SECOND CAREERS- 5 MEANINGFUL FINANCIAL FACTS TO CONSIDER WHEN MAKING A CAREER MOVE OVER 40 - Ajay NagpalDown-sizing is an unfortunate reality in the modern business world, even when you are over 40 years old. How can you regain traction in your financial life?

Here are five significant financial facts to consider when starting a second career after 40 years old.

Starting Second Career

You are no longer a “spring chicken” and starting over can be a challenge. If you adhere to these career tips, you can optimize your chances for success. You need to be realistic, but also energetic. Follow these five significant facts to get your second career, off the ground.

1. Accrued Benefits

While you work, you accrue benefits that could include stock options, a 401(k) plan or pension. You have many options for your 401(k) plan, including cashing it out or rolling it over. Remember, that these include both yours and your employer’s contributions.

If you cash out, you must pay 20% federal withholding taxes plus a 10% early withdrawal fee. The 401(k) rollover allows you to re-balance the investments in the portfolio. This makes sense because your life has changed – you want your assets to reflect your new life.

2. Rethink Mortgage

You set up your housing finance based on your employment expectations. When you are let go, you might want to change your housing loans, consider refinancing or even getting a HELOC.

3. Keeping Skills Relevant

You might have started your job, a decade ago. It pays to update your skills. Use downtime efficiently.

4. Prime Working Years

After graduating from college, you might only qualify for certain entry-level positions. If you figure that your prime working years are from 22 to 65, you are in your mid-life when fired at 40. But, you do have valuable experience that allows you to qualify for certain higher level positions.

5. Experience Pays

Do you know how many college graduates would love to have your experience? Now you can be eligible for a couple of these high-paying jobs: Financial Analyst, Fundraiser or Social Media Manager. You have paid your dues, now cash in with a higher paycheck.

Losing your job over 40 can be a shock, but take advantage of the situation to find a better job. You are mature and experienced. Find a second career that pays you top dollar for your valuable, accumulated experience.

Millennials vs. Baby Boomers: Financial Advice Across Generations

Millennials vs. Baby Boomers Header

Millennials are impulsive and want instant gratification instead of long-term financial gains.

Baby Boomers are behind the times and don’t realize how the financial landscape has changed.

Sometimes it seems like the generational conflict over finances never ends; lectures start with Grandpa at the family dinner table and end with his twenty-something grandson’s angry rebuttals over dessert. Neither party is flexible in their assertion that their financial philosophy is the correct one, and someone else inevitably has to change the subject when a heated intergenerational conversation turns to awkward silence.

The main issue with these conversations is that both parties are advancing incomplete positions. In all likelihood, the grandson’s approach to finances works – for his situation. The same is likely true for the grandfather. The intergenerational argument is an unwinnable one because financial strategies are dependent on a person’s stage of life and their individual financial situation.

Moreover, the current economic landscape must be taken into account when devising tactics for all generations, as strategies that may have served even twenty years prior might now fall flat. The buying power of the dollar has tanked in the last few decades; Business Insider reports that inflation has boosted prices by 784% over the past sixty years. Understandably, this makes it more difficult for younger consumers to buy homes, cars, or even get married.

Financial priorities change according to the economic landscape – and usually, that means shifts occur on a generational basis.

The following outlines a few financial approaches for each generational category.

 

Generations Y & Z (Millennials)

Teens to late twenties:

Millennials are only just beginning to learn how to manage their finances; they may be working their first jobs or finishing school. More often than not, they have a significant number of loans; in fact, the average debt burden for students graduating in 2016 was $37,172!  As such, Millennials may need to put more of the money they do earn towards paying off debt and day-to-day expenses.

However, members of this generational bracket should also focus on making and sticking to a reasonable budget. They would benefit from setting up a savings account and depositing a set amount of money into it each month. Building credit history is vital during the teens and twenties, so Millennials would further benefit from making monthly payments and establishing a good credit score.

 

Generation X

Thirties to forties

Members of Generation X typically have jobs, and often young families as well. Their priorities differ from Millennials because, as a contributor to TheWealthAdvisor notes: “Boomers and Gen X are further advanced in their careers and lives, they tend to have fewer concerns about day-to-day living.”

However, these individuals typically have greater investment obligations such as mortgages, college funds for their children, and their own retirement funds. As such, they should allocate their funds reasonably. Saving for a child’s college is wonderful – but not if it leaves the parent without a means to support themselves in retirement! Members of Generation X should be careful to observe their own financial needs by putting money away for retirement and medical and personal emergencies.

 

Baby Boomers

Fifties to sixties

Baby Boomers tend to save a little more than millennials, but often have more significant financial obligations, such as providing for elderly relatives or helping grown children. Additionally, this group needs to start planning for retirement in earnest by saving and settling on the kind of lifestyle they intend to pursue in their later years. Baby Boomers should also consider enlisting a financial advisor to help balance conflicting financial needs and plans. This strategic work shouldn’t be put off!

There’s no doubt that the generations have varying priorities and require different strategies as a result – so the next time that awkward generation argument picks up, put a stop to it!


Ajay Nagpal, the Chief Operating Officer at investment management firm Millennium. Ajay Nagpal supports social entrepreneurship through his work as a Board member of Echoing Green. Please visit his social entrepreneurship blog to learn more about that! Also, find him on Behance!

16 Budget Tips For New Entrepreneurs

16 Budget Tips For New Entrepreneurs - Ajay NagpalBudgeting skills are essential knowledge for anyone managing a business, and this is especially true for new entrepreneurs who are looking to enter the business world on a sturdy leg. Small businesses are no joke, and piloting one means keeping one’s eyes ahead, while always knowing how to gauge your peripherals and keep it from crashing.

While some things go without saying for business leaders, finance and budget tips bear repeating. Look the 16 tips below, which offer some insight on budgeting for your business.

  1. Keep your personal life separated from business finances, which will ultimately help you with your budget. The commingling of personal and business can distort accuracy. You won’t have an accurate estimation of how much money your business grossed or how much it might need to succeed. Payroll is one of the biggest costs that a business has, so you must identify how much it will cost to pay your salary. The use of appropriate budgeting techniques and credit cards will starve off future obstacles.
  2. Don’t forget about your taxes, which is a recurring expense that’s sometimes left out of financial calculations. It’s recommended that you open a separate bank account and deposit 20 percent of gross revenue or up to 35 percent of your monthly net income. Failing to plan ahead for taxes can lead to a late fee or an audit.
  3. It’s important that first-time entrepreneurs, hold on to all of your receipts, and kept them organized. While many first-entrepreneurs take their largest expenses into account, they sometimes fail to account for overtime and smaller costs. Keeping those receipts on hand offers a clear understanding of your budgets and your finances, providing a glimpse into growth-related expenditures.
  4. Lean on your supplier if you feel like prices are a little too steep for you. As long as you’re polite, it doesn’t hurt to try to cut costs. Inquire if you can get a discount if you purchase in bulk or if you can get a discount by paying for supplies upfront.
  5. Always search for the best deal. By investigating your options, you’re more likely to save your business money in the long run.
  6. Understand that loss is on the table, and a good way to make sure that you hold to what you have is to shed some non-essential expenses.
  7. Overestimate your expenses when you’re planning for the future. If you do this, you won’t be devastated if a surprise cost takes you by surprise.
  8. Rather than hiring costly full-time employees, hire freelance writers, designers, and delivery people. Do so means that you’ll save money on training, hiring, and sourcing. Additionally, you’ll save money when it comes taxes, fees, and payroll.
  9. However, when you choose to hire your employees and budget for salary, consider the cost of training materials, insurance, taxes, payroll fees, and additional equipment.
  10. Shop smart and try to buy used furniture, equipment, and electronics, which will cut down on costs. However, don’t skimp on things you need.
  11. Brick-and-mortar locations are attractive, but when you’re starting out as an entrepreneur, it’s important that you notice that rent, furniture, and transportation can cost you thousands. If you sincerely require a physical location, then try working out of your home. You can even receive tax deductions if you opt to operate out of your home-based office.
  12. Use Mint and similar budgeting software to help you analyze, track, and monitor your spending. There are some intuitive and free programs you can use that will aid with online management of cash and spending analysis.
  13. When you’re looking to create a small business, you’ll have to bear your credit in mind, which is important if you’re interested in taking out a loan. Also, if you happen to take out a loan and you’re late with repayments, it could hurt your credit score and your business. Plan loan repayments within the monthly and yearly budget.
  14. Partner with other business professionals and save money on promotion, flyering, and overall advertising. If you split costs, you’re saving money.
  15. Seek out free advertising by reaching out to news publications to cover your events, pumping up your social media presence, and by volunteering at local events where you can advertise your business and connect with potential customers. Joining an industry association can offer you a network, which is great for word-of-mouth, discounts, and finding new ideas.
  16. Insurance is an important expense that’s not worth skipping. Budgeting for insurance before an incident can ultimately save your business.

Ajay Nagpal, the Chief Operating Officer at investment management firm Millennium. Ajay Nagpal supports social entrepreneurship through his work as a Board member of Echoing Green. Please visit his social entrepreneurship blog to learn more about that! Also, find him on Behance!