Using Your Nest Egg
Renee Colwell’s retirement plan depends on the computer problems of small businesses in Manhattan. In January 2006, Ms. Colwell, 48 years old, invested her entire $150,000 nest egg, plus $50,000 from other savings, into starting a CMIT Computer Solutions franchise.
The Austin, Texas-based franchise system provides information-technology services to small and mid-sized businesses that can’t afford their own on-staff computer gurus.
‘I’m a computer geek and I always wanted to do something on my own. I’m fairly bad at saving, but I had a good 401(k) from my corporate jobs,’ says Ms. Colwell, who spent 10 years working in the computer-programming departments of large corporations. ‘When our accountant told me I could use it without tax penalties to finance a business, my husband and I had a lot of discussions. He’s a free-lance photographer with no retirement plan, and we have 2 children, ages 5 and 7. We finally saw this as an investment rather than a gamble, and decided to take the chance.’
Ms. Colwell says she spent $40,000 on the franchise fee, plus $10,000 to $12,000 to set up her business. She opened in January and is using the remainder of her funds to pay employees, finance advertising and cover other expenses until her franchise breaks even, which she expects to be sometime later this year.
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