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How to Encourage Youthful Entrepreneurship

How to Encourage Youthful Entrepreneurship

Way back when, setting up your own business generally meant going to a bank to arrange a loan, spending an inordinate amount of time networking in-person and figuring out how to find and manage a staff.

Today, however, with a wealth of online tools at the disposal of anyone with an internet connection, it’s easier than ever to start a business with very few costs. Twenty-somethings are especially poised to take advantage of this shift, given that they tend to understand these tools. What’s more, whether they ultimately wind up employed at a massive corporation or go the full way on their own, experimenting with entrepreneurialism teaches a host of skills that will be crucial in our globally competitive workspace, where just being “good enough” isn’t going to cut it.

What Entrepreneurialism Does for Youth

Entrepreneurs tend to be jacks of all trades. They must be willing to learn as they go, shift with the market and work until they drop. Encouraging twenty-something entrepreneurialism means:

1. Teaching employable skills.

Take a look at any given job description today, and you’ll see a single buzzword repeated throughout: innovation. Employers want motivated employees who are creative, willing to “disrupt paradigms” while working with little management. However, they still need those employees to possess a number of more traditional skills, like communication, organizational and time management skills. And, hey, if they also happen to be good at marketing and sales, all the better.

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Whether you like using and developing these skills or not, all entrepreneurs must master them if your business is going to get anywhere. If sales doesn’t come naturally, then the entrepreneur must either figure out a creative way to get around it (like designing an even better online sales system) or just dive in and get over that fear. Not only does doing so show potential employers that you have developed that specific skill, but it also shows a willingness to take risks in the name of personal growth. If that doesn’t make someone employable, I don’t what does.

2. Nurturing creativity and teaching youth how to fail.

There’s a reason why these two things are sandwiched together: creativity and failure go hand in hand. To be creative, you have to look beyond everyday constraints to those things no one has ever thought of before — or they have, and decided they weren’t worth the risk. Doing so will inevitably come with a lot of failure, from which the entrepreneur must pick him or herself up and move on, having evaluated the failure and gotten him or herself ready for more directed experimentation.

While schools do fail students, they’re not the best at teaching student how to fail. In fact, in the academic realm most students strive to avoid failure at all costs. That’s fine when it comes to memorizing and mastering known information, but it doesn’t promote the kind of thinking that’s going to rescue humanity from its deepest crises — or make anyone a profitable company.

Entrepreneurialism forces young adults away from their knee-jerk failure avoidance behaviors. This will have enormous benefits in the ability to think creatively and pursue new avenues, which extends beyond work and into personal lives. A true entrepreneur is someone who sees failure as an opportunity for reinvention.

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3. Teaching the young how not to settle.

Entrepreneurs don’t just settle for what they’re given. Being an entrepreneur is akin to being an artist — never fully happy with where you are. Combine dissatisfaction with curiosity and you get someone who is constantly on the hunt for new ideas — and who pursue those that are most worthy. Whether you stay in the entrepreneurial world or not, embracing a spirit of entrepreneurialism will prevent the young from simply accepting less than ideal employment situations just because “that’s the way it is.” That drive will inform a lifetime of good work.

4. Doing this all within a relatively safe framework.

The younger an entrepreneur is, the less he or she has to lose. There’s generally no house to pay for or family to support. Yes, there may be student loans, but if they get going while still in college, they may still be on the parental dole and benefiting from scholarships, or there is at least no pressing need to pay loans back instantly. Even better, more and more colleges are offering courses in entrepreneurship as well as startup funds, so there’s less to lose and more to gain than ever. Netflix CEO Reed Hastings just announced that he will be sending $14 million to a Seattle startup that encourages more entrepreneurial education.

So, How to Get Going?

All of that said, there’s no getting around one key fact about entrepreneurialism: it’s hard. Or tiring, at the very least — especially when balanced with school obligations. That budding young entrepreneur is definitely going to need as much support and advice as they can get. Here are a few tidbits to pass on.

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1. Find the Focus

One of the best things new young entrepreneurs can do is find their focus. Of course, finding that focus may very well mean experimenting first with this kind of product and then the next as they “beta test” and find the most viable audience. But that shouldn’t be taken as sanction to offer a million different things, just because the given entrepreneurs find them interesting. New entrepreneurs can start simply by writing down problems or annoyances they see as they process they world, as well as ideas for fixing them. Then they should take those ideas to family and friends to see if they seem viable, and do a little research into competitor offerings. Having narrowed down to a focus, new entrepreneurs will find it easier to test the market with various manifestations of their product and go from there.

2. Sort Out Pricing

Competitor and audience research is also key for determining the price of the product or service. Many budding young entrepreneurs are idealistic about how little they can charge, especially for a web-based product, but competitor prices often reflect real world realities, like just how much it costs to host a popular website each month. It’s also important to consider other factors, like building in room for growth and just how price-sensitive any given audience of consumers will be.

Again, this is a place where entrepreneurs should really be encouraged to experiment, not fear failure, and be ready to shift course.

3. Set Up an Online Store

Whether this specific new startup will operate solely in the online space or not, having an online store will be crucial for most businesses. Today’s consumers expect to be able to get whatever they want online, and they’ll simply go elsewhere if they can’t get it from that budding entrepreneur. However, consumers will also turn away if an ecommerce store doesn’t feel trustworthy or easy to use. As such, from both a design and a sales perspective, it’s usually easiest for a time-limited entrepreneur to build their shop on a third party platform Check out Amazon webstore’s small business spotlights for some great examples. Platforms like this will integrate easily with their site, and will also handle all of the tricky shopping cart and credit card processing for them. What’s more, with a service like Amazon, products will automatically become searchable on the Amazon site, gaining the product even more exposure.

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4. Market Via Email and Social Media

Even the best product or service won’t sell if no one knows about it. Thankfully for busy young entrepreneurs, marketing is easier than ever with tools they already use every single day: email and social media. Email marketing begins with a newsletter signup list on the company website. From there, entrepreneurs should put together an editorial calendar to help them regularly brainstorm ideas for content they can post on their blog and email out to their list, as well as any accompanying promotions. This should of course accompany regular activity on social media platforms, as well as attendance at any campus or local events to let target customers know all about the product.

5. Think Hard About Time Management

Being an entrepreneur requires juggling many different balls at once. That means time management is key, especially for enrolled students. Entrepreneurs should take time every week to plan out the week’s schedule, making sure to build in time just to relax and do something other than relentlessly pursue their business goals. In general, it’s best to focus on one thing at a time, rather than trying to multi-task. For some entrepreneurs, outsourcing basic labor like data entry or even higher level tasks like accounting will go a long way towards lightening that load.

The Takeaway

Whether that startup becomes a billion dollar behemoth or fails after just a few months, entrepreneurialism has a wealth of lessons to teach our nation’s youth, from financial literacy to creativity. Encouraging entrepreneurialism is good for the economy and even better for the young. So what will you do to encourage a young person into entrepreneurialism today?

Featured photo credit: Shutterstock via Shutterstock

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Published on May 7, 2019

How to Invest for Retirement (The Smart and Stress-Free Way)

How to Invest for Retirement (The Smart and Stress-Free Way)

When it comes to stocks, I bet you feel like you have no idea what you’re doing.

Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

Here’s how to invest for retirement the smart and stress-free way:

1. Know Clearly Why You Invest

Odds are you already know why should invest for retirement.

But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

  • Will you spend more time with your family?
  • What does retirement mean to you?
  • Are you looking to launch that business you’ve been holding off for years?

Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

2. Figure out When to Invest

“The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

Investing your money well depends on your emotions.

Why?

Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

4. Open a Reliable Retirement Account

Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

  1. Vanguard
  2. TD Ameritrade
  3. Charles Schwab

5. Challenge Yourself to Invest Consistently

Committing to invest for retirement is hard, but continuing to do so is harder.

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Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

6. Consider Where to Invest Your Money

The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

Robo Advisors

Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

Bonds

Think of bonds as “IOUs” to whomever you buy them from.

Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

Here are the different types of bond categories:[5]

  1. Treasury bonds
  2. Government bonds
  3. Corporate bonds
  4. Foreign bonds
  5. Mortgage-backed bonds
  6. Municipal bonds

Mutual Funds

Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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Real Estate

Yes, buying a home is an investment when done correctly.

Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

Savings Accounts

Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

7. Master Disincline to Dodge Short Success

Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

So how can you master delayed gratification?

By building your discipline.

Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

8. Aggressively Invest on This One Investment

I’ve mentioned several types of investments but haven’t covered the most important one.

It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

But, how can you invest yourself?

Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

Retire Happy with Excess Money

The key to a secure financial future doesn’t only belong to financial experts.

It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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Featured photo credit: Matthew Bennett via unsplash.com

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