The historically "prime" years for entrepreneurship are in one's late 30's to early 50's, years when one typically has a family in need of healthcare, college tuition, and hopefully retirement at some point down the line. In the 70's and 80's someone could leave the security of their big company, get relatively affordable private insurance for them and their family, and sleep moderately well knowing that even if their new venture fails their children will at least be able make it through a state school working part time. Now, they'll have to pay through the nose for healthcare and we all know how much schools cost these days.
Given the increased failure rates of new ventures these days it's not so hard to see why more mid-career individuals are remaining in corporate jobs instead of venturing out on their own: it's getting too expensive to roll those dice.
2. You can hire an "nanny tax" accountant for ~$500 a year (maybe was more expensive a few years ago)
2) Yes, but it's the principle. I have to hire an accountant (zero added value for me) just to hire someone who actually does provide value to me. It shouldn't be this complicated. It was easier setting up an LLC, and if we could do that, we should not need an accountant for a nanny; guess not.
I'm not going to criticize Obamacare, but there are a bunch of things they could've done that would've been easier to implement and easier to understand that would've fixed the system! For example, get rid of the PPOs and give the "discount" they provide to everyone. PPOs provide no real value and have basically stuck themselves in the middle of the transaction and inflated costs, which inflates insurance premiums. Getting rid of them would immediately reduce costs quite a bit and make healthcare (and, indirectly, health insurance) much more affordable.
I guess the politicians wouldn't outright get rid of a whole sector of an industry, though, which makes it harder...
When I sold health insurance, one of the things we would often suggest is, if possible, to get a cheap policy with a high deductible and simply put the difference into an emergency fund until you can cover the deductible. This gives you access to the PPO, so you can pay the reduced rates (which are actually quite affordable if you make a decent income!) if something happens, while making the whole thing much more affordable.
The PPOs have very large revenues and therefore wield great power in determining the outcome of any move to reduce their influence.
This is regulatory capture by economic interests that don't provide value in the health care service chain. It's making health care more expensive for everyone.
disclosure: I'm for a single payer system that allows everyone to choose their preferred provider.
Once you're beyond your post-college years and have a wife, and possibly children, the risk of a startup suddenly includes the cost of healthcare and risk of not having any. All of us can make comfortable salaries and have money to take risks on our dreams and be protected from failure by incorporation. But that does not translate to the potential medical issues of yourself or your family which would lead to personal bankruptcy and future employment issues.
And health care, while expensive, isn't as big of a deal as most people make it out to be. Get a high deductible plan and a family of 4 can be insured for <$700/month. If you are starting a business in your late 30s you should have a lot of savings already. While annoying, this shouldn't stop you.
It takes 10 months to save $40,000 if you're putting away $4,000 a month (which is half of take-home pay at $150k). If you are someone smart enough to be an entrepreneur in your late 30s with a corporate job paying 150k+, your children are probably smart enough to want to go to an expensive college.
Looks like it can be done for quite a bit less than that, when ACA subsidies are taken into account (or when expanded Medicaid is taken into account if the other adult family member also has no income...I think all the states where tech startups are common went along with expanded Medicaid).
To get through college for $10k/year in many places, you'd need to go to one of the state's lower-tier schools in a small town and live at home. Not many state flagships are in the business of charging less than $20k.
Unfortunately, without working more than 20 hours/ week, a college student isn't going to be able to come up with that $18k per year on their own, but they could get more than half way there, which doesn't leave a ton of support the parents would actually have to provide.
She does live at home. If she lived at school it would be about $17k
I have a variety of company ideas, but I have several key issues:
- College loans. I pay close to my apartment costs in these.
- Health care for myself and family. Expensive!
- Living costs - moving to someplace really cheap to bootstrap would likely be horribly for my career and would drag hiring down significantly.
So I incur a fair amount of immediate costs, as well as future risk by quitting and starting my own company. I could probably handle the risk, but the immediate costs are.... high.
(If I thought I could have done something involving early loan repayment that I could have performed, I would have! But I didn't see any when I last checked).