What is Bootstrapping?
In my work life, I have bootstrapped two companies. Essentially that means bringing them to life and growing them from operating revenues with no outside investment. The biggest advantage of bootstrapping your own company is that you maintain control over decisions without the outside influence of venture capitalists or investors. The downside is the risk to the entrepreneur’s personal finances.
To minimize this risk, bootstrapped startups minimize overhead expenses so that revenues can be put to work efficiently. Overhead expenses for a service-based business could include expenses such as rent, utilities, and insurance. Even as the company grows, profits need to be reinvested and emergency funds need to be established for the inevitable lulls in business, shit storms and occasional outright chaos that comes with the territory.
Where am I going with this?
At some point we will all be working for ourselves. This could include an early retiree who decides to sell her artwork online or a 22 year old green thumb whose starts organic farming for both enjoyment and to eat! The fact is, the world of work has changed. Even if you manage to reach the finish line at age 65 after a 40 year career, or more likely get offered an early retirement package at 55, you should think now about how you will bootstrap your next life.
What if someone told you you’re going to live an extra 25 years?
I am an optimist. I truly believe that, with advances in medicine and science, people will be living to be 100 years old. So, you don’t want to wait until the day after you sign off on your early retirement package to start thinking about the next 50 years of life.
Bootstrapping your life
The best way to do this is to start bootstrapping your life now, so by the time this inevitable date rolls around you will be prepared. What is bootstrapping your life? It’s approaching your personal finances and lifelong learning like you’re the CEO of the startup called YOU. Just like a startup, you want to minimize expenses, avoid debt, and live lean so you can be ready to launch your second act.
If you start thinking of your finances like a small business now, you will have the resources and the freedom to do work you love. If at first no one wants to pay you for work you love, or you’d like to volunteer, that will be great because you’ll be ready.
From personal experience, I know this takes a lot of time, savings, and soul searching. I like to look at it this way — Now that I know I’m going to live in extra 25 years, 50 is the new 25. That’s great but it also means that most of the traditional retirement planning gets thrown out the window.
Not only that, do you really want to spend 30+ years in retirement without a very good reason to get up every morning? The really cool thing about 50 being the new 25 is you get a few more do overs. So, if you’ve been busy acquiring stuff all your life and have limited savings, it’s never too late to start fixing that. Ray Kroc was still selling milkshake machines at the age of 51 when he decided to buy a small restaurant called McDonald’s and franchise it.
If you want to start bootstrapping your life and making your plan for those extra 25 years, here are a few books I highly recommend to get you started: