Two weeks ago we examined the perils and pitfalls of life after employment and many readers got thinking about their own experiences. Perhaps the responses that got me ticked the most were about not having given the discussion a balanced view in terms of how to prepare for retirement and the joys of self-employment. Indeed, some commentators were of the view that I had ended the discussion rather abruptly. So let me try and close the loop.
First to preparing for post-employment life. Since retirement is inevitable, preparing for it should not be an abrupt process. It needs to be well planned and gradual so that there is no shock treatment to the system. As you plan to go into retirement, make sure that the three most basic things in this season of your life are taken care of and are unencumbered. That is a roof over your head, food and health.
When it comes to accommodation, you don’t want your house to have a charge on it. Ensure that it is mortgage-free as you ease out of employment. Since you will most probably remain in an urban setting, feeding and health require that you have created some kind of passive annuity (constant cash flow come your way whether you are active or not).
A smarter thing to do in terms of health would be to have health insurance for you and your spouse. This comes with the caveat that your ‘gun’ is safely deposited with the county (gombolola) chief! However, if you are still in the baby manufacturing business at retirement time, I have no answer for you on this one! You got a whole load of trouble on your hands mate!
Again as you ease out of employment it is important that you are doing a number of things. These include learning a new skill or craft, a hobby and cultivating a network of people in similar circumstances to yours. Leaving employment means you have to commit some kind of social suicide.
As your income reduces, your new social circles should not exert undue expenditure requirements on you. That is a tough choice but if you maintain the same lifestyle as in employment, your golden egg will be done before you are even settled into retirement.
A new skill or craft enables you to set up in business or create a new income source. Think about it, you could learn to make wine, do carpentry or such other craft as would keep you busy. Most of the craftsmen who are doing these jobs are poorly skilled, uneducated and unreliable. As a former executive (if you are the practical type) this is money waiting for you to harvest! A hobby (like sports or reading and writing) helps you stay socialised and keeps you healthy. Whatever you do, you must avoid a sedentary life, or the evening of your life will be shorter than you can imagine!
Having gotten into retirement and started a business, ensure that the business is in an area you have some mastery of. Remember you are now a risk taker and risk management is crucial for success. If it sounds too profitable, it is probably a scheme to relieve you of your money. Making money is a slow ponderous process and in order to succeed, you have to keep on doing what you know best – slowly and consistently. There is nothing romantic about business.
It is hard work and your presence is a must, given that trust is a rare commodity. Keep on doing research about your new business. Focus on improving the quality and efficiency of your business. If you can’t keep your promises, you won’t last in this game. Be reliable and dependable.
With time you will adjust to your new groove. There is nothing as rewarding as creating value and being paid for it. With money in your pocket, your self-esteem will rocket and you will certainly discover a new sense of purpose.
Prof Sejjaaka is country team leader at Abacus Business School.