‘How entrepreneurs really succeed’

by Rocky Mountain Stepmom

The Sure Thing
How entrepreneurs really succeed.

It’s from a few years ago, and it’s by Malcolm Gladwell, so presumably
Milo will hate it. But it’s an interesting article about how
entrepreneurs succeed. Are there lessons for our kids? For us?

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98 thoughts on “‘How entrepreneurs really succeed’

  1. I don’t really like the way he uses the term “predator”. Running a business is risky enough, of course entrepreneurs try to minimize any risk they can. DH and I are in no way even close to the same league as Paulson or Ted Turner, however, we did manage a deal like the ones profiled, albeit on a much smaller scale.

  2. “Are there lessons for our kids? For us?”

    Yeah — do the cost-benefit analysis! Limited downside is more valuable than maximum upside.

    I really love the point that the really successful business guys are basically the opposite of the stereotype of the “entrepreneur.” I can’t tell you the number of businesses I have seen appear and disappear within something like 3-6 months, and all I can think is “did you not even pull together a business plan, or have even 3 months cash?” https://www.youtube.com/watch?v=D58LpHBnvsI

  3. I think this is pretty similar to “The Millionaire Mind” book. People finding specific niches in business that others don’t see and doing extraordinarily well, only buying and selling real estate at opportune times and learning from past mistakes and experiences to do even better. Or how in that book “The Big Short” Michael Lewis profiles some of the people that had the prescience to bet against the housing market and most had that ability to not think like the crowd (I think many of them had Aspergers if I remember correctly). I don’t think I have that ability so we just try to save a decent amount every year while working our boring jobs.:)

  4. “it’s by Malcolm Gladwell, so presumably Milo will hate it”

    Sarcasm, right? Because I love Gladwell.

    Good article. I wish I could find opportunities like that.

  5. We have a friend (lawyer) who tried to go out on his own after a not very amicable parting from his former small law firm. He had left the firm and steady paycheck the day before and was launching his website and telling us he had about one month’s expenses saved so he was just going to see how it went. We were dumbfounded (and he has a stay at home wife and three kids). Unsurprisingly, he packed it up a month later to move back near his parents and is now back in law firm employ. Brilliant lawyer but not an entrepreneur.

  6. Lessons for us? Not really. We’ve always been good at limiting financial risk. We have more money that our financial advisor would like in bonds. We have a portfolio of a couple who is 20 years older than we are. We also paid off our house (by liquidating some investments), which is very conservative.

    What I teach my kids is to recognize an opportunity and take it when it comes along. It’s not always easy to see, so say “yes” more than “no” to new opportunities. I have to force myself to take this advice every now and then–I risk getting comfortable as I age.

  7. We had a bakery open in our old neighborhood that lasted about a 2-3 weeks (maybe less). We were so excited to get something within walking distance. No signage, so it wasn’t entirely clear when it was open. On an corner that sees probably 50k cars a day. In the local post-mortem, I heard they were kosher and were disappointed that their target market hadn’t shown up in full force yet. Boggled the mind – how you could go through the necessary work to sell the first loaf of bread, but not keep at it for at least a few months.

  8. On a more meta level, I suppose we all have stories of terrifically naive failures of small business. What is maybe more interesting are tales of people who are successful without access to large rivers of capital or esoteric information.

    I have often thought I should have enough expertise in my field to find a way to profitably exploit some niche – but I have never seen the opportunity (I did imagine running a hotel visit hangover cure service before the bus started in Vegas, but I always thought the market sizing was off). I think a lot of doctors feel that way – many believe there is going to be a get-rich scheme that they will be a part of and they will be able to stop practicing medicine. I have yet to see it happen, however.

  9. “In the predator model, the entrepreneur’s advantage is analytical—he’s better at figuring out a sure thing than the rest of us. ”
    This is so, so, so true. Another person who comes to mind right away who really knew what he was Jeff Bezos. From WIkipedia
    “He had left his “well-paying job” at a New York City hedge fund after learning “about the rapid growth in Internet use”, which coincided with a then-new U.S. Supreme Court ruling holding that mail order catalogs were not required to collect sales taxes in states where they lack a physical presence.”
    He was smart enough to realize he could get in on this when no one else was thinking of it. And to hold his ground through years of losing money. The article notes that he pays a lot of attention to business details.

  10. Bezos worked at a former firm working on a pre internet system that allowed institutional clients to download their portfolio holdings and performance returns. He left to start Amazon before I started there but recall seeing emails with his name on it. A number of people at this firm were given the opportunity to invest in Amazon for like $10-50k but didn’t. I’m sure they are kicking themselves now.

  11. As one of the sharks on Shark Tank said recently, you have to be “all in” – time, money, focus – to make a venture work; plus – you have to have a good handle on what you are selling, your target market, and how it is made/provided (product/service) and the associated costs and profits. I think some people get this intuitively, some can learn to do it, and some will never see it. Many are not ready to commit to the long term effort needed for the business to be successful.

    The family of my best friend growing up owned a grocery store. At first it was what we now think of as a convenience store (without gas pumps), but then grew to a full size store. It wasn’t until the last few years they owned it that their life was not dominated by the business, as it finally grew enough for them to hire managers to start taking over some of the things they did. It was profitable, but not to the point that they could step away from hands on management.

    A ethnic bakery/restaurant opened in our area. The food is good, the prices at first look high, but aren’t for the freshness and quantity you get. The problems are (1) the menu is difficult to figure out and you don’t actually use it when you order as you go through Chipolte type ordering line, (2) the layout is difficult to figure out – read menu, skip about 15 feet, place order, pay for order, then return to the 15 feet you skipped for bread, drinks, silverware, and (3)there has been no local advertising. It is fairly busy, but no where near as busy as the Asian (mainly Pho) place next door. I am afraid they are going to go under because they have neglected important non-food elements of their business.

  12. I think this is why the stock advice to go be an entrepreneur, given to any young person who is too ADHD to make it through college, is so misguided. Being a successful entrepreneur requires that very attention to detail and focus that these kids lack.

  13. Ninety per cent of the fastest-growing companies in the country sell to other businesses

    Interesting.

  14. I have a small hijack, though perhaps no one is reading today in any case. I have always had trouble when I drive with pain in my right leg, in the back of the thigh into my knee – intense cramping pain. When I get out of the car and walk for a few minutes it goes away. It gets worse in stop and go traffic, I think from working the brake. This summer, I am doing a lot of driving shuttling the kids to camps, and the paiin has gotten a lot worse. It is affecting my ability to run because my right leg feels so stiff and crampy. First question: any clue what this is? A lot of people have suggested sciatica, but I have no back or rear pain, and it is only in my right leg. Second question: for those of you here in Westchester, any advice on sports medicine doctors? I want to see someone who will be focused on keeping me running and biking.

  15. The fastest growing businesses tend to be in pharmaceuticals or technology, areas with a high initial investment that are easily scalable, so that statistic doesn’t surprise me a bit. Especially in pharmaceuticals, every large company needs to minimize its liability. This article should have looked at the effect of bankruptcy law on risk taking.

    The concept of making decisions on your own analysis applies to most of us. The people in this article made a particular bet that made them wealthy, but my entrepreneurial relatives are aware of opportunities in their areas of investment, and that these opportunities change over time. Slumlord uncle’s family had early involvement in quarter arcades back in the ’80’s, for example, and did well, but quarter arcades are no longer a great business.

  16. It’s the commitment and planning that would really deter me. My daughter and I were talking about this a week or so ago — we’d been doing school shopping and got some Mr. Sketch scented markers and we came up with the idea of doing a vegetable-scented line of markers in probably a hemp carrier or something, charging several times as much, and selling to the people who buy the organic junk food on the one hand and the people who will buy it as a gag gift on the other hand. But she wanted to really do it, so then we started talking about how one actually would do this — main initial problem would be developing the scents, because I’m sure some place in China can set you up with a specially packaged set of regular markers, but coming up with an beet scent (that’s for the pink marker) and making your special line of scented markers would take a lot more up front investment of $$ and time.

    I know someone whose family money is sufficient to start up whatever kind of venture he dreams up, but who is not what you’d call fully sane. In his younger days he had a venture as an itinerant piano tuner, and then when that wasn’t going so well (or possibly he just got bored) he decided instead to open a magic muffin shop. He had the facility, he hired his staff, and then he realized that he didn’t know how to make magic muffins.

  17. DH is self-employed. He saw a need that wasn’t being met and he took advantage of it. Not many people are qualified to do what he does in our area, so competition is low. He works out of the house and except for a few special tools does not have much in the way of overhead costs. He wrote a business plan before he started, and has stuck to it. He could expand his business if he hired others, but he has no desire to do that. He then would spend too much time managing employees and not doing the job that he enjoys. The key to a successful business is finding something that people need (or think they need) and working hard to meet that need.

  18. In tech & biotech startups, investors seem to be all about the exit strategy. They want to buy low & sell high, of course. Unfortunately, that strategy is directly at odds with state/regional/local economic development goals, which want companies to grow in place and expand. My university has a big emphasis on entrepreneurship these days, and we certainly have undergrad students and faculty/grad students with the right ideas and skills. However, they often don’t have the money or motivation to move past the idea & research stage. We have had a few successful companies started here that got bought buy a bigger one who then kept this location for various reasons, including the proximity to recruit talent from the university. We’ve also had companies get bought out just to acquire their technology, as well as some who have had to move because they couldn’t attract the talent they need as they scale up. The common thread between any of the success stories is always a driven entrepreneur who works day and night but also knows how to hire the right people to fill the gaps – someone who recognizes what he/she doesn’t know and can’t do him/herself.

  19. I have an idea for a cannabis edible that I think would sell well, but I can’t bring myself to get into that industry.

    About 10 years ago all libraries everywhere were fed up to the teeth with their Integrated Library Systems (the complicated system that maintains the catalog, the circulation system, and several other things.) Two open-source products came out and everyone was making a mad dash for them. I saw very clearly the business opportunity. Everyone was gushing about how if you want your system to do something, you can “just write a module”, but libraries have no idea what’s involved with that and no idea what’s involved with maintaining their own open-source installation and just generally no idea what would be involved with doing any of it. The obvious thing to do was form a consulting firm that specialized in writing custom modules and installing them and providing ongoing tech support. Another possibility might have been providing co-location services for the libraries who were clearly going to collapse within six months of trying to implement their own open-source stuff. I had three people who would have been excellent employees with the right technical skills. I had the years of experience in IT and in schmoozing librarians, and I besides, I was one of them. I had street cred because of the non-profit I was working with. I even had a lot of the capital. I totally could have done it, but I sagged at the knees at how much work it was going to be.

    Naturally, a 27-year-old boy came along and did exactly what I should have done. I hope he’s doing well. It was a great idea.

  20. Mooshi, could it be the seat position as per Rhett’s post, or even the car?

    I could recommend two sport medicine doctors and they’re close to your home, but they generally jump into surgery.

    I would start with the car because my husband had a lot of knee pain when he used to drive my old car. The Acura and our new car allow him to adjust so many parts of the seat, seat height, back, neck etc. It seems crazy that there could be so many adjustments, but I wonder if you could start with the seat and see if that helps.

    Also, I can’t remember if you have 1 or 2 cars, but I would trade cars with your DH for a few days if you have two cars to see if the pain is the same when you drive another car.

  21. Rocky’s story reminded me of our closest flirtation with entrepreneurship. At his CO company, DH and a buddy wrote a shop-floor management system — the company couldn’t afford a system from the big boys like SAP, so he and his buddy basically wrote the code at nights and on weekends. And then that company announced a shutdown. DH thought there was a market out there — basically, companies like his, which were big enough to need some controls but small enough to find SAP unaffordable. Just through word-of-mouth, he even had one company contact him and fly him to Germany to check out the system. But I had just had our first kid and was telecommuting on a very part-time basis, so it was a really crappy, financially insecure time — and he was smart enough to know that he didn’t have much of a clue about running the business side of things. So when he got a quick offer for a new job with a promotion, it was sort of a no-brainer.

  22. Rhett, I’m still not going to pursue the marker idea, but now I want to put banana cream pie or rose du bois scent in everything. It’s like when you go to the hardware store and get distracted by the possibilities . . . “Oooh, I wonder what I could do with that stuff? Oooh, we don’t have that tool!” I want a crazy inventor’s shop with all the tools and random building materials, interesting chemicals, springs, duct tape and wire, and of course odd scents and weird paint colors on shelves everywhere.

  23. Mooshi, do you keep anything in your back pockets? I stopped carrying my wallet in my back pocket because it caused hip discomfort, and apparently that is not uncommon with guys.

    Can you move your seat back and still comfortably reach the pedals? If you’re too far in front, having to repeatedly pull your foot back to get it onto the brake pedal may be causing your hamstring to cramp. Try to observe what triggers the pain– is it pressing the brake pedal, or is it moving your foot onto the brake pedal before pressing it? Pressing the pedal is uses your quad more than hamstring, so I’d be surprised if that’s the trigger.

    I also suggest that you do regular stretching of your hamstrings (both sides) as well as strengthening exercises (e.g., leg curls). Sprinting will also strengthen your hamstrings.

  24. Mooshi – I would try the seat position first. Maybe moving it back would help.

    DH’s current company is entirely self-funded; he is currently angling for an acquisition. I think this would be the best thing – if they don’t get acquired they will need investors so that they can hire salespeople (which DH decidedly is not).

  25. I’ve been working with the seat position for the last few weeks. I also started using a special cushion which raises your butt up, which all the websites recommend. It helps but not totally. The pain while driving has gone on for many years, across many cars. I think it first appeared when I was about 30, in fact. It is just that it is suddenly worse, and affecting my ability to run (as well as making me very cranky when I am shuttling the kids)

  26. @Mooshi: suggest trying seat tilt as we as back/forward. I have periodically had that sort of feeling, like in the back-of-the-knee-but-not-quite-hamstring area, when my thigh is not fully supported by the seat. Tilting the seat so the front part is a little higher has helped.

    @Finn: Don’t think so. He was the junior guy. I think DH set him loose with permission to go make whatever he could out of it, but the buddy had even less business experience than DH. And, on a pure geek level, DH was pretty embarrassed about the roughness of the code — he was going for “get the job done quickly,” not “elegant,” because, hello, he was running a fab at the time. So he knew it would take a lot of time to pretty it up as a real product for sale, and I don’t think his friend really had the skill set to do that.

  27. Actually, most of the sites say to keep your knees lower than your hips, to decrease pressure on your rear. The special pillow I bought has quite a slant to it.

  28. Mooshi – you need a professional consultation, probably from a doc or other provider who specializes in the workplace, not sports medicine. I would actually ask a Teamster for a reference, given the makeup of your town, because it sounds like you are having a professional driver’s issues. I used to have a hamstring and lower back issue that went away partially when I got my workstation adjusted and fully when I changed to an automatic from a standard (I live in a very hilly town).

  29. Meme +1 — Occupational Medicine is probably the answer, and they can likely refer you to OT or PT to actually fit you in the car.

  30. Also, I recommend seeing a doctor that can’t take you to surgery – most board certified in sports med are not orthopods and are less likely to recommend cutting (many sports med docs started as family practice, ER, internal medicine). A physiatrist is also a good choice.

  31. Mooshi, any thought to two-footed driving? I’m assuming you’re driving an automatic.

  32. I kind of want to avoid occupational medicine people because I feel like they are so geared towards putting people on disability. I want just the opposite – someone who will work with me to keep me running and exercising. I have seen the difference – when my DH had knee problems he had problems with doctors who just kept telling him to quit running. Finally he went to a sports medicine person who said that if he worked at it and did all the PT, he could get back running in time for his next marathon. And that is exactly what happened.

    I also saw similar problems when my father had back problems. So many doctors just told him to avoid exercising, or didn’t push him hard enough. So then he gained weight, and his heart problems were exacerbated, and finally he was in a place that he couldn’t really recover from.

    Most of the Googling I did indicates to me that this is piriformis syndrome, which is a nerve compression thing similar to sciatica, but not caused by disk problems. The sites all mention pain while driving as being typical. They also say it is frequently confused with disk problems by doctors leading to unnecessary treatment and surgery. I want someone who can distinguish between all these things, and who doesn’t rush to one stock diagnosis (which is something I see all the time).

  33. There are not suprisingly about a bazillion choices here in Westchester for sports medicine, physical medicine, orthopedics, etx, etc. That is why I am asking everyone for recommendations. Unfortunately I am not so plugged into the local running community, otherwise I would be asking them.

  34. Mooshi – Actually, if I google your symptoms it appears you have something called gas pedal knee. There is even an pdf article about it with respect to the fact that the pain shows up in active runners. The treatment involves learning to position your foot differently on the pedal, plus some sports massage, etc to get things back in line. The syndrome you cited above is one of those residual diagnoses that are leftover after all the usual tests are negative, so even if you got a doctor who agreed with your preliminary assessment, he would probably have to go through the process of elimination.

  35. Mooshi, the doctors that I would send you to see would rush you so I don’t want to make a recommendation. If I think about my husband, and a few of my neighbors – they all had surgery, but I am going to each out to my friends in the community that are doctors. A few are runners too.

  36. OK, I looked up gas pedal knee – looks like it is the same thing as IT band syndrome which some of my friends have suggested – but the key symptom is pain on the outside of the knee, which I do not have. My main symptom is cramping pain in the hamstring area, which occassionally extends into the back of my knee and even down into my foot. Everything I read says that is the sciatic nerve. The only thing that is weird is that I don’t have back pain.

    When I Google on “hamstring pain while driving”, the hits are mainly for this piriformis syndrome thing, or something even scarier sounding “high hamstring tendonitis”. Ick!

  37. Mooshi, I’ve dealt with sciatic issues. A few things that have helped:

    -Ab exercises; I suggest you extrapolate that to core exercises. Poor posture seems to exacerbate sciatic problems, and a strong core will help maintain good posture.

    -Stretching, especially of the hamstrings and hip joints. I also suggest stretching of the thighs (quads, adductors, abductors), glutes, and core.

    While these may not directly resolve your issue, they may help your overall heath, perhaps in part by keeping you running (cue Michael McDonald and the Doobie Bros.).

  38. Mooshi, I also used to crack my back, especially lower back, and hip joints, which seemed to help.

    Over time, the need to crack my back and hips (not to mention my neck, which I don’t think is connected to sciatic issues) has largely gone away, which I attribute in part to maintaining a regimen that includes ab exercises and some stretching (I’ve backed way down on the stretching compared to when I was having problems; I think I’m in maintenance mode now).

  39. Mooshi, I assume you’re already taking steps to prevent muscle cramping in general– stay hydrated, eat bananas, strengthen and stretch the involved muscle(s).

    I’m also wondering if it’s a manifestation of an injury that is aggravated by driving, and thus you may never have allowed the injury to fully heal.

  40. Mooshi – I had sciatica for a few weeks during my last pregnancy and I could barely sleep it was so painful. And it never went away. But the pain radiated down from my lower back and down my inner thigh if I remember correctly. Hot baths every night and stretching twice a day got rid of it while I was waiting for a PT appointment but I was religious about doing both.

  41. Mooshi-
    I have had two relatively severe bouts with sciatica, about 8 years apart. As my sister has as well, there seems to be something in the way we are built that makes us prone to it. If it’s that, or a similar nerve compression issue, I highly recommend finding a good physical therapist. Mine was in a practice that treated a lot of athletes and ballet dancers, and like someone else mentioned, a lot of their attention was on core strengthening. They are by nature anti-cutting, at least in my experience. And they were able to work miracles on me.

    Also, no one would mistake me for an athlete. I may not have tried this PT group but for a friend’s referral. However, a practice like this tends to have a goal of getting you back to being your active self, and that was perfect.

  42. Mooshi – I would try some different seating positions in the car to see if it makes any difference. It took me a while to get my seat to where my one leg did not just feel tired after a lot of driving. I have a lumbar pillow (one of those cylindar shaped ones) that I find more comfortable than the car’s lumbar support and I find it helps that leg a lot.

    I also second PT – though it can be painful, it can resolve things in ways that avoid surgery. My orthopedist recommended avoiding surgery if at all possible for my shoulder. He said fair haired/skined people often develop a lot of scar tissue and it can be more painful than the original problem

  43. Thanks everyone! Yes, I am a big believer in PT. Many years ago, I had knee issues and was able to resolve it over the course of a year with lots of PT

  44. I also had on/off problems with sciatica. What worked best was lying on the unaffected side with multiple pillows between my knees and thighs to take the pressure off my hip. The more I did it, the better I felt. I would sleep this way, of course, but even eat and hang out like this when the pain was really bad. It really helped. The sciatica hasn’t bothered me in for quite a few years, thankfully.

  45. I’ve been reviewing our budget so that I can get a handle on our likely retirement needs. We’re spending $7K a year on Long-Term Care insurance. I am a big believer in it, because my mom used it for 10 years. But I also realize that’s confirmation bias on my part. How many of y’all carry LTC insurance?

  46. On topic: I had to run into CVS and I noticed the Burt’s Bees section. As it turns out Burt was forced out by his (business) partner Roxanne Quimby. “In 1999, Quimby bought out (Burt) Shavitz’s 1/3 stake in the company in exchange for a house in Maine, worth approximately $130,000.” Five years later, in 2004, Roxanne sold 80% of Burt’s Bees to a private equity firm for $173 million and later she and the PE form sold their entire stake to Clorox for $975,000,000.

  47. Rocky – I advised my parents against it with the idea that they could self-insure, and my Dad agreed. I think he was just using me to confirm what he already suspected. It seems like whenever we talk about the high costs of decent nursing homes, we’re in the neighborhood of $100k per year per person.

  48. Milo,

    It seems like whenever we talk about the high costs of decent nursing homes, we’re in the neighborhood of $100k per year per person.

    the median length of stay in a nursing home before death was 5 months
    the average length of stay was longer at 14 months due to a small number of study participants who had very long lengths of stay
    65% died within 1 year of nursing home admission
    53% died within 6 months of nursing home admission

  49. Rhett – Agreed. The only caveat to

    the median length of stay in a nursing home before death was 5 months

    that might be more relevant is what is the median cumulative (if non-sequential) number of months spent in a nursing home.

    Still, I think for Totebaggers who are over-savers and have dual Social Security earnings histories, you can probably just pay for the nursing home yourself. And I don’t like buying unnecessary insurance, because, by nature, it’s a gamble stacked against you. No extended warranties for me, either.

  50. But Rhett, there’s nursing homes and then there’s assisted living. I agree that nursing home stays probably aren’t USUALLY that long. But for the entire 10 years my mom needed help, she only spent a few days in an actual skilled nursing facility. She didn’t need IV medication or parenteral nutrition, so the bathing/feeding/oxygen etc. was all done by CNAs. I should ask my in-laws how much their lovely continuing care facility costs, although it’s in Indiana and asking them might be a teensy bit awkward. It’s also one of those places where you pay a bunch upfront and then supposedly get some of it back at the end.

  51. that might be more relevant is what is the median cumulative (if non-sequential) number of months spent in a nursing home.

    My understanding is that almost never happens. If you go to a nursing home in almost all cases you’re leaving in a box.

  52. RMS,

    The average cost of Assisted Living in Indiana is $3,693. Assisted Living costs range from $1,600 to $7,860 depending on location and other factors.

  53. My mom’s assisted living was $70K per year. Which, yes, we could pay out of pocket. But…what if I want to leave something to the kids?

    Isn’t your anticipated retirement income well north of $70k?

  54. The $70k is from your Social Security, plus your dividends/earnings on your investments. They get the principal after you expire.

    ” although it’s in Indiana and asking them might be a teensy bit awkward.”

    Call the…what’s the term?…admissions staff?

  55. Sometimes it’s a transitional rehab from hospital back to assisted living.

    Which medicare pays for.

  56. Isn’t your anticipated retirement income well north of $70k?

    Yes, but there are two of us, so let’s call that $140K. Yeah, I know, there are probably cheaper ways to go. I guess I should resign myself to spending my late 80s and 90s in Indiana.

  57. RMS, my grandparents in Denver were bankrupted by my grandfather’s 8+ year stay in a nursing home as the first spouse. A great grandmother spent 10+ years needing assistance. Especially if your insurance covers other forms of help (assisted living, in-home care, etc.), one of the best predictors of your decline is the decline of your relatives. My MIL has long-term care insurance, purchased before I was in the picture.

    If the remaining spouse will be OK if years of nursing home care are required, then it’s fine to drop it. Policies are hard to get now and insurance companies have recognized the selection bias in the population that buys them, often people whose parents/grandparents had long periods of need.

    Would you remain in Denver for care? It’s less expensive than the coasts but more expensive than Pierre, SD. If my Dad needs care, he’ll probably get it at the nursing home where he grew up in rural Iowa… great place and all his friends will be there.

  58. Ha! I see you’ve never dealt with pricing out assisted living. They tell you nothing over the phone. You have to make an appointment and take a tour and listen to the huge sales pitch and then they give you the pricing in incomprehensible dribs and drabs.

  59. “Yes, but there are two of us, so let’s call that $140K.”

    If you wait until 70, your combined Social Security will probably be close to half of that.

  60. RMS, my grandparents in Denver were bankrupted by my grandfather’s 8+ year stay in a nursing home as the first spouse.

    I assume they didn’t enjoy a totebag median retirement income of $216k a year?

  61. “You have to make an appointment and take a tour”

    Have you seen “Still Alice”?

    I’m terrified of Alzheimer’s now. My Dad’s best friend from college developed it in his late-40s.

  62. Milo is correct, the CCRC should have a nice brochure where they disclose all their fees.

    For comparison, one of my clients is buying into a CCRC. The fees are $480K entrance fee and then a monthly charge. Level 1 of assisted living is like $630 a month, and that goes up to $2900 for “level 5” which is one level below skilled nursing.

    Pay close attention to the CCRC agreement and policies. The one my client is looking at has NO REFUNDS of the entrance fee if you die within 5 years. Most of the places in this area do offer some kind of pro-rated refund if you die shortly after moving there.

  63. “my grandparents in Denver were bankrupted by my grandfather’s 8+ year stay in a nursing home as the first spouse.”

    My grandparents somehow split all their assets, including the house, right down the middle when my grandfather had to enter a nursing home. Per Rhett’s statistics, he only lived about six months longer.

    What pi$$ed off some of the neighbors was that when my parents sold their house on my grandmother’s behalf, Zillow recorded the sale at only 50%.

  64. Also, my insurance friends inform me that there are new policies out now that combine LTC insurance and some life insurance/death benefit. They are probably cheaper and more widely available than the “regular” LTC insurance, which is getting way expensive and doesn’t necessarily cover everything.

  65. Milo,

    She becomes lost searching for the bathroom in her own home and wets herself, and does not recognize Lydia after seeing her perform in a play.

    Everything I’ve read or heard says I’m heading out to Oregon to be put down when the time comes.

  66. “Everything I’ve read or heard says I’m heading out to Oregon to be put down when the time comes.”

    Amen. I’ve seen too many lingering deaths in my family. It seems LTC insurance is mostly appropriate for those mid-upper income folks who 1) can actually afford the premiums, and 2) probably cannot self insure. I don’t feel the need for it.

    From the people I know, sciatica often seems to come and go somewhat mysteriously.

  67. Rhett –

    Spoiler alert!!!

    She set up a daily quiz on her iPhone. “What is your eldest daughter’s name? What street do you live on? In what month were you born?”

    Then she recorded video instructions for herself that appear when she no longer answers the questions correctly. “Go upstairs. There’s a dresser with a blue lamp. Back of the top drawer has a container of pills. It’s important that you take all of them, then lie down and go to sleep.”

  68. Rhett, by the time you’re ready to be put down, you won’t need to bother coming here.
    RMS, you can e-mail my local Mennonite graduated assisted living facility for rates if you want. It’s quite nice- I’ve taken meals to elderly people from church as they recover from their elder ailments.

  69. Update: DW’s uncle (my MIL’s younger brother) has swooped in and told DW’s grandmother that she is going to move from the old folks home that she made into a health and fire hazard to a condo right next to him and his wife. (A two-minute golf cart ride away.)

    This will be interesting. At least it will be in an area that’s closer to us, and that I’ve never before visited.

    She listens to her DS in a way that she would never listen to her DD (MIL).

  70. RMS – I don’t have it, and I don’t advocate it for UMC retirees. However, if you and Mr RMS have an older or group quality policy with a reputable firm, paying 7K per year for the both of you for peace of mind is not unreasonable, especially with your parent with severe dementia and your husband with a variant of type 1 diabetes. Read the fine print and see how much they can raise your premiums.

    The sort of policy that was sold to your Mom has not been available for years. Modern policies are capped, usually by total payout and by length of time (calcs can be complex) and I did the math for me buying a policy at 60 and collecting at 85 to 90 (DH wouldn’t qualify) on both inflation adjusted and non inflation adjusted – the maximum payout would be 3 times (fully loaded coast including cost of capital) the premiums. I don’t think 33% is a reasonable amount to pay as a premium. I think longevity insurance is a much better use of funds if one is worried about extra outflow needs at 85. However, the newest LTC products are a combo with cash value Life Insurance, and they have received some good reviews.

  71. Mémé, I actually have the kind of policy that Mom had. She had CalPERS, and I got mine several years ago through CalPERS (I was eligible because my sister was an active CalPERS participant) and it’s the same policy. It’s more expensive now, and I think they did quit issuing the open-ended ones a few years after I grabbed it.

  72. “Everything I’ve read or heard says I’m heading out to Oregon to be put down when the time comes.”

    We’re planning to go to Switzerland. Or pills at home.

  73. This was the movie. Why? Because at that stage, you may not be able to ascend the stairs?

  74. “I actually have the kind of policy that Mom had.”

    So if you have a policy that is such a good deal they don’t sell them any more, and it allows you to not fret about the future costs of assisted living, and you can afford the premiums, then stop worrying about it — hang onto the policy and call it good.

  75. Rocky — I was able to buy group LTC insurance through my former employer, and I’m keeping it. It has an unlimited-duration benefit for DH and me, and the benefit goes up by 5% each year. (The monthly benefit started at $6k per month, and now is close to 8k.) I’m keeping the insurance even though it has become expensive (about $5.5k per year — premiums shot up a couple of years ago). My husband’s mother has extreme longevity in her family, and his father died of ALS. ALS and extreme old age can both bring enormous costs. On my side of the family, my mom had a slowly progressing Alzheimers, which also required several years of care. A few years ago, I myself was having neurological issues, and there was a fear that I might have MS. The one thing that kept me going at that time was the knowledge that even if I did have MS, there would be money available to hire care for me, and my husband and kids could go on with their lives pretty normally. More than anything, the LTC insurance helps me sleep at night.

  76. I’m late, but Mooshi, I’ve rehabbed through PT several times in my life from various things, but when I had sciatic pain (or anything having to do with alignment, really) I found a chiropractor to be really helpful. I had one years ago in another city that was both a PT and a chiropractor. He did adjustments along with massage (the painful but useful kind) along with sending me home with exercises. My sciatica paind (during pregnancy) went away after 2-3 visits and stayed away once I had the baby and was no longer pregnant (I understand all those joint wonkiness during pregnancy made my situation worse.) Might be worth trying a chiropractor to get some relief — a good one will see you short term to help you & not try to sell you on being there forever– and then a good PT to build up strength and flexibility in the right areas to help keep it from recurring. If that doesn’t work you can always escalate, but I share the bias to avoid the people who leap to cutting.

  77. RMS, I have LTC insurance through my workplace. I chose a long time before it kicked in; I don’t remember the exact length, but it was the longest available, perhaps a year?. I figured I had enough to cover that time, and it brought the premiums down a lot.

    Rhett’s stats suggest I will never collect any benefits, but I’ve mentioned here before my family history, which includes many people being in nursing homes for well beyond the median; many in my family had bodies that outlived their brains by years.

    My cousin told me that her dad, who passed a way a few years ago, was in a nursing home that cost about $14k per month.

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