Post-retirement enterprise

The real value of your post-retirement enterprise

As a retired person, If you were to earn say R 7 000 per month from your business, this would roughly be equivalent to earning monthly interest on a bank deposit of circa R 1 000 000.

An added benefit of having a small business is that the capital which would have normally serviced your income needs can now be fully invested to protect your capital against the debilitating effects of inflation. Stripping out normal market fluctuations, you’ll enjoy the growth on that undisturbed capital.

The moral of the story? Here are a couple of thoughts:

  • Be determined – picture that R 1 000 000 that you’re “adding” to your investment portfolio and keep on going with your business.
  • Draw up a business plan based on what you need to do to reach that R 7 000 pm from your business. Now you’ve added context and meaning to your business.
  • In running your business, play the role of Investment Manager rather than just seeing yourself as a small business owner or house sitter.  Make investment decisions.
  • See your business, as small as it might be, as a valuable asset in your total investment portfolio. What you’re doing is taking charge, backing yourself and diversifying your risk.
  • There’s the chance of selling your business one day, thereby adding to your capital.

It is very important to note that we are not suggesting that you risk your retirement capital in your business. What we’re saying is that, although your business may be small or even a micro enterprise, take it very seriously and understand how it compliments your investment portfolio. It’s a smart way to supplement your retirement funding, both from an income and revenue perspective.

 

Gary Hendrickse,
Special adviser to YEI Digital.