Boom or Bust?

Fred Petrillo worked hard at his business, an enterprise he and his brother inherited from their father, an Italian immigrant who came to the United States in 1910. They built their company from an obscure venture operating with horses and wagons to a $15 million trash collection business.

Like many entrepreneurs, they poured all their money back into the business, never saving for retirement or future financial needs. The sale of the business would take care of that . . . or so they thought. No one could have foreseen changes in rules and regulations that would drive them, after 40 years of building their business, into bankruptcy and ruin.

This story isn't fiction. Though the names have been changed, the point is very real. Many old-time entrepreneurs didn't have business degrees or corporate backgrounds, and they didn't realize that to be truly successful, it's necessary to diversify your assets.

Today, the baby boomer children of those earlier-generation business owners are well into adulthood, and corporate downsizing, combined with a desire for individuality, has driven many of them to become their own bosses. With their better education and increased access to information, surely today's entrepreneurs won't make the same mistakes as their fathers . . . or will they?

If you were born between 1946 and 1964, demographics place you in the baby boom generation. The boomers, who number 77 million, are now moving through their peak earning years. In general, the baby boomers had the benefit of more education than preceding generations. Growing up, they enjoyed a sense of entitlement and material abundance that, for many, has become part of their psychological makeup. But cash may not flow so smoothly for the boomers as the years go on.

The first wave of boomers is 15 years from retirement, and their needs are vastly different from those with 35 years to go. We'll divide the group in two-those born from 1946 to 1955 (41- to 50-year-olds) and those born between 1956 and 1964, aged 32 to 40. Whether you're part of the Woodstock generation or you were "born to run," the time to assess your financial situation is now.

This article was originally published in the February 1996 print edition of Entrepreneur with the headline: Boom or Bust?.