Exit Strategy

[Mojo]

Most of you know that I utilize consultants when it comes to making major business decisions. I typically come up with a plan, strategy or idea and before putting it into place run it by my son and 2 others who are friends and extremely successful business owners. I always want to see all Pro's and Con's before taking a leap into the unknown.

During a meeting with one of our friends/consultants he brought something up that neither my wife or I even considered - an exit strategy. When he asked what ours was we looked at each other dumb founded and admitted we had never considered it.

Do we plan on retiring and selling the companies ? Do we plan on holding on to both companies and go into semi retirement and bring in someone to run them for us ? Or do we plan on closing them down, selling off the equipment and inventory and retiring ? We thought we were going to turn the companies over to my daughter but she has changed her mind and is pursuing a new career.

We still have not figured it out yet. I was just wondering do any of you have a planned exit strategy ?

Mojo

[kodydog]

I have a feeling you have put more thought into retirement than you give yourself credit for.

I read this artical last week and its kinda scary.

The vast majority of Americans have under $1,000 saved and half of all Americans have nothing at all put away for retirement.
https://www.cnbc.com/2017/06/13/heres-how-many-americans-have-nothing-at-all-saved-for-retirement.html

I have met a lot of people who retired early only to realize later they haden't saved enough money. I think retirement is over rated. My father went into a deep depression and started drinking heavily when he retired at 65.

Rose and I have been putting money away since we were in our 20's. Now that we are in our 60's retirement is even a bigger concern.

I cannot predict the day I will completely give up the trade but I can see a time, about 10 years, where I will slow down and do more things I enjoy. Gardening, fishing and traveling.

We are already turning away work that is not as profitable as others. We moved closer to our customers and spend less time making pick-ups and deliveries. And we now have more customers bringing their pieces to us.

Rose's dream is to retire in St Augustine. Last March we bought a single wide mobile home just outside the St Augustine city limits. It sits on 1/2 acre just one lot over from Moultrie Creak (a kayakable and fishable creak). And its only 15 mins to the beach. The mobile home, built in 1972, has little value but the lot is big enough to build a house someday.

Mojo, you say you need an exit strategy but you don't seem like the kind of guy that would be happy if you didn't have your hands into something. The fellow I worked for in Gainesville is almost 80 years old and still goes to work every day. He says he will never retire.

I have no planes to groom someone to take over the business. When we finally do retire that will be it for Ladd Upholstery.

[SteveA]

I'm thinking more about whether I'll be able to run my business with a profit until I'm 66-1/2.  3-4 years to go and it's getting physically more difficult every year.  No body told me when I was in my 20's that after 60 you might slow down.  But how do plan for that - what cloud is hanging over your head in any given year  ?
The wild card is health - wishing you all blessings to do what you want when you want to when retirement comes knocking !
SA

[byhammerandhand]

Interesting article here: https://www.marketwatch.com/story/millennials-havent-saved-two-years-salary-theyve-saved-one-weeks-worth-2018-05-17

[kodydog]

Interesting article Hammer.

He states the problem, "millennials aren't saving for retirement." Then he gives us the answer, "we could fix it by strengthening Social Security and the safety net." Yeah that will work.

Then he gets a little cheeky. "Or we could try to fix it by telling young people to just grow up and stop whining: You are on your own and you always will be."

The problem is its too late. We should have told them that years ago. Most millennials I've talked to think the government is somehow going to bail them out.

Then he gets sarcastic with his conclusion, "If you are poor, it's your fault. If you have to work until you drop dead, that's what you deserve. Life is supposed to be nasty, brutish and short."

I'm not sure if life is nasty, brutish and short. But their are times it can be a struggle. No millennial ever dropped dead from working too hard. There really are times when you have to try a little harder. Times when you might have to work 50 or 60 hours a week. Times when you might have to work a regular 40 hour week and then work a second job on the weekend.

If you're 30 years old and still living with mommy and daddy, yeah it is time to grow up. If you're 40 years old with a family to feed and still making minimum wage, yeah you dun f'ed up. Sorry y'all but you could tax the top 10% income earners 100% and it would not fix this problem.

Mr Nutting sounds like he has a big ole chip on his shoulder. Perhaps he has a few millennials living at home. Maybe.

[Mojo]

I was schooled once by an old supervisor when I was in my 20's to begin participating in a 357 plan ( similar to a 401 K ). I thought he was stupid since we had a great pension system. I am damn glad I took his advice as the dollars added up over the course of 20 years. It was like having a big savings account.

I think the young-uns simply live for the day and cannot even fathom retirement. I know I sure didn't when I was young. But old age and retirement creep up on you quickly. I could easily retire right now but I am a workaholic. I would have to have something to do as I could not sit around and wait for the grim reaper. That is what got me started in this business to begin with - too much idle time. But I really need to slow down and start taking more time for fun things in life.

We have seen a new trend in our industry over the last decade with couples who retire, sell their home ( an appreciating asset ) and then buy a big motorcoach and hit the road and travel and live the American retirement dream in style. The problem is that taking your money from an appreciating asset like your home and sinking it into a depreciating asset like a big RV is sometimes not a smart thing to do. Little do they realize that they are only one day away from a life changing event like a chronic illness that will require them to park that big RV and quit traveling. Many have to sell their RV and then repurchase a home.

Just to show you what a horrible investment an RV is I had the chance to buy an older luxury bus / Prevost that was in mint condition and had low miles. I could have wholesaled it from one of our dealers for $ 130 K. Here is the kicker. The sticker price on this bus when new was in excess of $ 1.5 million. Talking about taking a beating in 15 years time. Ouch. Friends of ours own a custom bus converting company that takes brand new Prevost's and convert them into luxury buses. Some of them carry price tags of $ 2.8 million.

Everything we do and the decisions the wife and I make are all geared towards staying debt free and being able to coast to the finish line in retirement without financial headaches.

Mojo