Big Boy Expenses for Entrepreneurs

While the stereotypical tech startup entrepreneur is 23 years old, single and has no children, the reality is that many tech startup entrepreneurs are married and/or have children.

Don’t avoid “big boy” expenses just because you are bootstrapping. That is, make sure you have (or at least look into obtaining) insurance against life’s big risks — serious illness, permanent disability and early death.

Most tech entrepreneurs with young families are either not insured or grossly underinsured for these life-altering events. The good part is that if you are young (and healthy), a term life insurance policy isn’t that much. Even if you don’t have a wife or husband or partner or child, it can be a good idea to obtain a term life insurance policy since you can essentially “lock in” your good early health on term life insurance policies and later change the beneficiary of the policy.

Whatever your scenario, you owe it to yourself to at least investigate these things and determine what’s right for you. But cutting out these big boy expenses if you have a family isn’t “lean” or “bootstrapping” — it’s family malpractice.

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3 thoughts on “Big Boy Expenses for Entrepreneurs

  1. There’s lots to think about… I think when you’re young and adventurous, you still have that feeling of invulnerability. But that’s what ends up biting you in the ass. I know more and more recently I’ve become aware at how different I am (being 30) than I was at 23… this has definitely brought more stuff to light for me.

    And yeah, I used to be an avoider of these “big boy” expenses… mostly because they are scary and could be considered wasteful, and also they require time… time away from doing what you love. That’s why I took a route of using an advisor to take care of these things for me. It costs money up front, but they can find the best deals and the things that make the most sense. I got my advisor through a referral, but he definitely has similar interests to me and makes me feel comfortable.

    :: shrugs :: I guess it’s been on the top of my mind recently 🙂

  2. I can totally relate with this , even though i aint married. I have been working as a serial entrepreneur ever since 2007. I never took salary in my last startup ( it was fine because i was 23 ) , but then i moved on with huge losses to my next job ( a short 1 year stint ) and still i am paying back for the losses incurred in my first startup. I leveraged my self so much in my last startup because i was single and “apparently ” no liabilities, I totally ignored the requirements in the family over the next few years. Even now 27, i aint insured and only just about time that i have started to look into family requirements , beyond my own.

  3. I can’t echo your idea about “locking in” your good health enough. I married late (40), and didn’t think I needed life insurance until then. But, by that point, some apparently genetic health issues had shown up. As a result, it’s been impossible to find life insurance just because my health issues are not easily classified or reduced to statistics for the insurance underwriters. I wish I had bought a policy in my late 20’s and named my dog as the beneficiary.

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