Business owners are a special breed of worker, with more than half never planning to retire.
Nearly one in three (32%) said they want to remain actively involved in their current business as long as they can, and 19% said they do not plan to retire but plan to leave their current business and shift to working just as hard at something new, according to a study by Northern Trust.
“Many business owners have DNA that keeps them highly involved in the business – it’s their identity as a person. It’s hard to walk away,” said Eric Czepyha, director of business services at Northern Trust Wealth Management.
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Business owners have more options today than in the past, Czepyha said. People are living longer and healthier, there’s more opportunities for entrepreneurs and it’s easier now to work remotely.
They also have a personal drive to make an impact, he said.
“There’s more impetus to do that than sit around and play golf,” said Czepyha. “They’re more confident about acquiring new skills, being exposed to new industries. Many of them think ‘If I could get my business through COVID, I can do anything.’ They’re still looking for a challenge,” Czepyha said.
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Among those business owners who sold their businesses, most reported that life stayed the same or improved, with 15% saying life was about the same, 37% saying better and 47% saying much better.
But many are not putting their feet up after selling their companies.
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In terms of how they’re keeping busy post-sale, they’re spending less than 20% of their time on leisure activities, but spending nearly a third of their time on starting a new business — which suggests that continuing to work might be a key contributor to their increased happiness, Czepyha said.
The desire to remain engaged in later years, often long after achieving success, is frequently driven by an overall sense of purpose that extends beyond any one business or endeavor. When asked what drives business owners to create wealth, in addition to providing basic financial security for their family, many respondents viewed wealth as a means to help them make an impact on the world.
“Whether you’re 45 or 85 and you sell your business, theoretically you could check that box and retire. But many are staying active post-sale and want to do big thing in life. They want to keep the fight going,” Czepyha said.
A look at business owners’ balance sheets provides a window into how they are using their wealth to achieve their broader goals. While most respondents not surprisingly own passive investments such as liquid assets (80%), a large number of respondents also own assets that require more active engagement, including direct investments in private businesses (65%), commercial real estate (74%) and family foundations (35%).
“Business owners often enjoy investing in things they can touch and feel. There’s a desire and attractiveness to investing in things and digging in and doing big things in retirement,” Czepyha said.