Can you get rich after 50? Do you think variable interest rates are still good?

by Tim Broadway

How to make a fortune after 50

Reuters Dec 23, 2011 – 9:30 AM ET | Last Updated: Dec 23, 2011 10:46 AM ET

John Pratt/Keystone Features/Getty Images
By Lou Carlozo

At an age when others might ready for pre-retirement, some folks pass age 50 determined to start a new life in the business world — and succeed beyond their rosiest business plan projections.

In a sequel to our October piece that looked at wealthy whiz kids, Reuters spoke with four entrepreneurs who have created successful businesses after 50. And take note: Three of the four leaders featured here are women, having shattered the twin glass ceilings of gender and age. Though some of these folks did well in their former lives, others had to think creatively start their businesses. (Jill Boehler, for example, used seed money from her son’s college fund, while Carol Gardner offered pieces of her business in exchange for essential start-up services.)
Carol Gardner, 66

HER STORY: While nursing a broken femur and a broken heart (she’d just divorced her husband of 27 years), Gardner got an English Bulldog named Zelda, who became the mascot of a humorous greeting card land gift line, Zelda Wisdom. A former advertising creative director, Gardner started the business at age 52 around 1997, and almost by accident: Cash-strapped, she entered a Christmas card contest held by a pet store to win free dog food for a year, and won.

TODAY: Gardner started her company with 24 greeting cards in the middle of her living room. Within six months, she sold more than one million cards. Today she produces more than 200 licensed Zelda products, from calendars to children’s books. Sales are conservatively estimated at $50 million annually.

TOP TIPS: Listen to your customers. “The young ones said, ’Why can’t we buy greeting cards online?’” Gardner recalls. That led to a lucrative deal with, which was bought out by card giant American Greetings AM.N.

Gardner also advises building a close-knit circle of trust. She’s worked with publicist Sandi Serling and photographer Shane Young since the start. “I couldn’t offer them money, so I gave them a part of the company. We’re the best of friends and we take care of each other.”

PRICELESS: The original Zelda died two years ago, but not before saving Garner’s life. Gardner fell out of bed and broke her neck roughly four years ago. When she came to, “Zelda was butting me in the head. For the next two hours she stayed with me until I clawed my way to the phone and called 911.”

Franny Martin, 65

HER STORY: A former marketing professional who worked with Domino’s Pizza DPZ.N, Martin left the corporate world just shy of turning 56 to pursue her passion – baking cookies.

TODAY: Martin’s Cookies on Call, based in Douglas, Michigan, ships 40 cookie varieties all over the world and should surpass $700,000 in sales for 2011. She provides work for more than a dozen part-time and full-time employees. She started the company in 2002.

TOP TIPS: Get a great business team and ask for sage advice. “Make sure that you have the best accountant, the best lawyer and the best web designer,” Martin says. She also enlisted held from Michigan’s Department of Agriculture. Inspector Larry Goldin suggested Martin rent an elementary school kitchen, which saved her “hundreds of thousands of dollars. It was already licensed and all I had to do was come in, bake my cookies and clean up afterward.”

ROLLING IN DOUGH: Martin’s recipes can’t be copied because they go back two generations to her maternal Italian grandmother, Maria Ginotti, who wrote everything by hand. But you can fool your guests by buying her newest product in development, “scoop and bake” – it’s raw dough in ready-to-cook form.

Jill Boehler, 59

HER STORY: A self-described “do gooder,” Boehler spent her career as a speech pathologist until she got the inspiration to make “portable shawls” (wrinkle-free wraps that come with a tiny carrying bag) after she shivered through a meal at a restaurant because the air conditioning was too high. Soon she was making cold calls at fashion stores; she was 54 when she started in 2006.

TODAY: The founder of Chilly Jilly sold more than $500,000 in products in 2010 and is constantly unrolling new products, from gloves to the Duelette bracelet and hair tie. Boehler works with 20 private contractors across the country.

TOP TIPS: Toughen up. “You will have people who will come up to you and say mean things – all the reasons you should not do something – and I’ve had friends tell me, ’Why not go back to speech? You were really good at it.’”

STARTING AFTER AGE 50: “It’s the perfect time to do it. My kids were gone and I could start working at 3 o’clock and work until 1 in the morning. My husband was into it, and I don’t have to wait for kids at the bus stop, change diapers, or take them to activities.”

FROM PATHOLOGIST TO TASK-OLOGIST: The day of her interview, Boehler was dashing around her warehouse to check inventory, and prepping for an all-nighter so she could appear on QVC at 4:30 a.m. “Sometimes my computer screen looks like ’The Brady Bunch’ credits, because I Skype with so many people at the same time.”

Wally Blume, 73

HIS STORY: The one-time dairy marketer struck out on his own in 1996 to form Denali Flavors, a company that specializes in making ice cream ingredients and flavors for independent dairies. He was 57.

TODAY: With Denali sales at between $80 and $100 million, Blume credits much of his success to Moose Tracks – the flavor he helped develop and popularize as his company took root. “You have a flavor that is almost as strong as vanilla, and the national brands will never be able to get it. As soon as we developed it, it just took off.”

TOP TIPS: Know your industry. “You have to figure out if there’s a niche you can take advantage of,” Blume says. “All our partners knew the industry and had been in it all our working lives.”

He also stresses training and hiring people you can trust to mind the store. “I have such good people working for me that I’m hardly involved with ice cream. They just run it and they do a better job than I can.”

ANOTHER FLAVOR?: Eight years past retirement age, Blume is an avid philanthropist, giving to various organizations around the world, from orphanages in Latvia to helping homeless kids in Moscow. He has also started a brand new company, Brandi Renee Designs: “I’m jumping into women’s fashions on the Internet. How’s that for diversity?”




Variable rate mortgage discounts disappearing

Garry Marr Dec 17, 2011 – 8:45 AM ET | Last Updated: Dec 19, 2011 10:47 AM ET

Norm Betts/Bloomberg
The days of getting any sort of discount on a variable rate mortgage are over — again.

Those mortgages, tied to prime, have become a mainstay of the housing market. And, why not? While prime has stood at 3% at most major financial institutions, the discount has meant a rate as low as 2.1% at times this year.

However, in the last 10 days what was left of that discount — it had already been shrinking for weeks — has disappeared at all of the major banks.
You have to head back to the credit crisis of 2008 to find a similar period where the discount disappeared. At the time, consumers were paying a 100 basis point premium above prime for the privilege of a floating rate.

The new reality is expected to reshape the mortgage market in the coming months, reversing a strong trend that had seen consumers roll the dice on interest rates, confident in the belief they were not going up.

How confident were they? Well the Canadian Association of Accredited Mortgage Professionals says 37% of consumers opted for variable rate mortgages over the last year, bringing the total percentage of those with a floating rate to 31%.

To be clear, anybody with an existing mortgage is unaffected until they renew. Why would you want to renew early or lock in if your present rate is 2.1%?

“If you have three and half years left on that term you are not going to give it up,” said Vince Gaetano, of Monster Mortgage, adding you can borrow at 3.29% if you lock in for five years or 3.09% for four years. “The last decade I’ve been telling people to go variable but I’m saying go fixed [for new clients].”

The other key advantage for a term five years or longer is you get to use the rate on your contract to qualify for a mortgage as opposed to the current five-year posted rate of 5.39%. The difference means you’ll qualify for a larger loan by locking in.

“People are being heavily compelled to lock in,” says Doug Porter, deputy chief economist with the Bank of Montreal, in talking about the negligible spread between short and long-term money.

Will Dunning, an economist CAAMP, said his group was not surveying consumers the last time short-term rates climbed like this so he can’t be sure what the reaction will be this time around.

Meanwhile Farhaneh Haque, director of mortgage advice and real estate secured lending with TD Canada, says she’s already seeing the effects as people shy away from variable. Her financial institution is not offering any discount at all on prime these days, a move necessitated by rising borrowing costs for the bank.

“I think there is a whole different conversation that we are having now than we were a few years ago,” says Ms. Haque, adding at today’s rates fixed products have their own attraction. “The stability it offers with a low rate makes it more affordable.”

While Benjamin Tal, deputy chief economist with CIBC World Markets, doesn’t think variable rates premiums will rise above prime, the drop in the discount we’ve seen in the last few months could impact on the housing market.

In particular, the condominium market seems the most vulnerable as investors trying to stay cash flow positive — virtually impossible in Toronto’s current condo market based on rental rates and the costs of carrying a mortgage with a 25% down payment. Investors have opted for the cheaper variable rate products in an attempt to keep costs down as they waited for a payday based on capital appreciation.

“You know 80 basis points below didn’t make much sense either. I think variable at prime is the new normal. They won’t go higher unless we get a new crisis,” says Mr. Tal, adding banks were not making much money on variable with the steep discounts so they backed away from them.

Mr. Tal’s information points to the record high for variable rate products being driven by investors and he thinks the new rates will hit that segment of the market

“I think you will see an impact on the investor market in the next six months. The shift hasn’t happened yet,” says Mr. Tal.

Clearly there is no discounting how dependent the housing sector has become on cheap money.