How well are you doing in today's economy? Are you thriving? I hope so, and congratulations if you are! Obviously, many people are not. Unemployment is still high, and more people are staying unemployed for longer periods of time, especially the Boomer and near Boomer population. Underemployment, those working but at lower wage jobs, is a much discussed phenomenon and a seeming trend of the future for all age groups.
Older workers are especially hard hit as many of them have fewer working years to make up for the losses to their retirement and savings accounts, which have taken a beating from the poor economy of the past few years and the "tech burst" early this century. Many are changing their plans to work longer instead of retiring, as they had anticipated.
"Human capital", a term economists use to define a person's future earnings, takes on more importance as more Americans of all ages find their career choices impacted by fewer stable and long term opportunities in the corporate, governmental and non-profit fields. This affects our ability as wage earners to enjoy a long term, stable career with few disruptions. We must now plan for many changes along the way, and think more clearly about the impact this working environment has on our "financial capital", our savings and investments.
We must now be more creative in our career aspirations and look outside of the traditional choices as they have become more unstable. Viewing your working life in terms of "human capital" is a good place to start, and comparing this "human capital" concept with the same flexibility to change and make improvements as you might do with your savings and investment portfolios helps to put career changes and job market dynamics into a useful perspective.
The first question to ask yourself is, what effect will losing your job, or working at a lesser job have on your "human capital", your future earning capacity, your future financial well-being? Looking over a working life span of 30-40 years and multiplying that by your current earnings gives you an idea of your "human capital" worth in monetary terms. (NOTE: this may be starting to sound like a disguised pitch for life insurance but it's not!) Now, think about how volatile your career path is, are you a salaried worker in a large, stable company, a college professor or on a tenure track, or are you a stock broker, banker or sales person with the largest portion of your earning's in a commission or bonus, or a laborer with limited job market choices? Historically, the more stable the career track, the more accurately you can predict your "human capital" number. Surprisingly, a professor will earn somewhat more over a career life span than a stock broker or sales person due to the more predictable nature of their career.
With the recent job market volatility and continuing poor economy, how predictable is your career track? Are you a professor, a sales person, a civil servant, a laborer? Can the market and economic history of your profession still show you a reasonably stable and rewarding "human capital" calculation that still appeals to you?
With the high probability of a long economic recovery and low levels of hiring by employers of all sizes for the foreseeable future, making a leap to your own small business or home business permits you to get a head start on others who will wait for improving economic conditions before their career circumstances change. And, depending on your market and business model, there may be a rich field of prospects for your business.
As an example, the Baby Boomer generation will double in the next 30 years (a Boomer is turning 50 every seven seconds!) and is now 35% of the population, has 77% of the financial assets and 57% of the discretionary income in America. And, while the recent poor economy has not been kind to older workers, overall, they still have significant "financial capital" and believe that they can make vital contributions as workers and entrepreneurs in addition to their massive purchasing power.
So, in summary, looking at your career in terms of it's "human capital" potential and realizing that the job marketplace now and in the future will be more volatile as a result of recent fundamental economic changes, does starting your own business seem less risky and make more sense for you now? And, can you find or develop a business that takes advantage of the large and lucrative Baby Boomer marketplace either as prospective customers, workers or partners?
Boomers are there, unavoidable and waiting for you to bring them the products, services and income opportunities that they are now lacking! Do you have the desire and willingness to learn how to satisfy their needs?
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