Your Money's MissionSubmitted by The Entrepreneur's Advisor - Derek Notman on September 26th, 2018
How to use the wealth created from selling your business to live a life of meaningful experiences.
Your business is sold. Now what?
You’ve worked hard, crazy hours ensuring your business is a success. You’ve held onto this vision and goal for as long as you care to remember. This is not just a project or hobby turned into a business. No! It is your passion, this is who you are and what defines you. The countless hours and years of hard work, taking risks and meeting obligations such as an ever-competing environment, payroll and cash flow challenges, finally pay off. As an entrepreneur, you have just sold your business and the bank balance is a cosy reminder of these achievements.
The business is sold. Now what? The day-to-day challenges and hands on building of assets and wealth are likely over, and the prospect of golf does not enthuse everyone. Surfing on a private island, perhaps, but not a daily round of golf. Most entrepreneurs who sell their business seek new opportunities to invest the proceeds. Very often this quest becomes an adventure that consumes the very time entrepreneurs wished they had for family, hobbies and the next stage of their lives.
Life carries on
What are you meant to do now? The process of selling a company becomes all-consuming. As the owner, your time will be spent on due diligence and negotiations, not to mention the endless review of legal documents needed for the sale. To negotiate the best terms, you need to distance yourself emotionally in order not to obscure your judgement and objectivity. This is a big deal and acting hastily will see you giving away more than you intended to.
Your financial advisor is an integral person in this process and subsequent negotiations. Your financial advisor will help you define your hopes dreams, and goals for the future as well as your personal financial needs now that you are no longer running a company. Knowing what to do with your windfall before it happens is crucial to making sound and appropriate decisions for the wealth you are unlocking from your business.
Time to let go and move on
What does selling a company feel like? Is there a sense of excitement and accomplishment for achieving your ultimate goal as an entrepreneur? Surely there will be, but at the same time a sense of sadness and loss is endured. This is akin to your child graduating from high school and moving away to pursue studies at university. An empty nest sort of feeling. As an entrepreneur, you just hope that you have done enough to prepare your employees to be okay at the helm. Sure, this transition will see a few bumpy rides and glitches, but you must trust that you have done everything diligently to ensure your positive legacy prevails.
Should you head for retirement?
As an entrepreneur, the odds of retiring are not in your vocabulary, nor your portfolio. Entrepreneurship is part of your DNA, it’s in your blood! Why stop working now? There’s still far too much to do and achieve. The adage that 60 is the new 40 has never rung truer than now. Technology has shaped our lives and given us access to reach goals way beyond that which our forefathers would contemplate dreaming of.
Working with your financial advisor to make sure your personal financial needs ad wants are taken care of will allow you to focus on taking some time off and maybe even launching your next venture. What might you occupy your time with though? How will your wealth attribute to you living a life of meaningful experiences?
Living a life of meaningful experiences
Based on a survey conducted in 2014 with affluent individuals being financially comfortable through years of hard work, these entrepreneurs are at a stage in their lives where they can afford to reassess their values, objectives, and outlook in life. Beyond simply deriving satisfaction from purchasing and owning luxury goods, the affluent view wealth as the catalyst to experience the world.
In a nutshell, it is about spending your money on experiences, not things! Let me delve a little deeper.
We like buying things, at least we think we do. Life in this millennium is a fast paced, consumer-oriented experience where media bombards us at all times enforcing the idea that happiness is a matter of buying the biggest mansion, driving the top of the range luxury car, wearing the latest designer clothes and posting status updates on the latest high-tech devices. Everywhere we look we are inundated with the same message: "BUY, BUY, BUY your way to happiness!"
While buying a new gadget or the first drive in a new car may be exhilarating, even for a short while, the thrill inevitably doesn’t last long, and we find ourselves back in the starting blocks seeking the next purchase to keep the feeling going. People become too addicted to this cycle of perpetual buying. But, there is a better way to spend your money and keep that feeling alive: Stop buying stuff you really don’t need and start buying experiences!
The next time you're feeling a bit blue, or before you go out and buy things remember the following tips for evaluating your spending and decide to have experiences instead of just accumulating stuff. Besides, where are you going to store all these possessions anyway?
1. It's The Little Things In Life
When it comes to happiness, size shouldn't matter. Really. Most people associate purchasing large assets with even larger amounts of happiness. Sure, buying a Lamborghini will give you more of a thrill than dining out with your friends and family, but the thrill of a fancy car soon fades. With the money you spent on the Lambo, you could dine out a couple times a week for years in the company of loved ones. Life is about create lasting memories. Little bits of happiness add up and when spread out and last a lot longer!
2. Giving Is Better Than Receiving
Few things provide a lasting sense of happiness and fulfillment like giving to others. There is very little you can do for yourself which will have the same effect as doing well by someone else. Keep this in mind the next time you're window shopping or strolling through the mall. Instead of purchasing things for yourself, take some time and find the perfect gift to surprise your best friend or significant other.
3. Feeling Good Is Better Than Looking Good
Are those $800 shoes going to make you happy tomorrow, or next week? What about a $100 pair of shoes and a $100 massage every Friday for the next month? Trying to look like a movie star or a fashion model is a pricey endeavor and the only one who comes out ahead is your credit card company. Instead of spending your hard-earned cash on clothes, jewellery and other trivialities, spend your money on activities that will make you feel better. How’s about contributing to a charity of your choice? A reputable organization who ensures the funds are accounted for and enriches the lives of the people or animals in their care.
4. Learning Lasts A Lifetime
One of the very best things you can do with money is investing in learning a new skill or hobby. Take a class in woodworking, skydiving or surfing. Buy private dance or tennis lessons. Not only is the act of learning a new skill fun and rewarding, but you will broaden your horizons as a person, giving yourself fun new activities that you can participate in for a lifetime of fulfillment while expanding your social circle at the same time. This is an investment in yourself and money well spent!
Remember, financial advice should always be personalized. In the 13 years I have been a financial advisor I have never come across two clients that had the exact same needs. Solid financial advice should be administered through a qualified financial advisor (Certified Financial Planner®) that can have an open dialog with you.
Entrepreneurs don’t think small and there is life after selling your business. For an entrepreneur it is a life filled with even larger and more meaningful goals yet to be accomplished.
“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” ~ Nelson Mandela
If you require further information on your exit strategy, read my blog Exit Strategy – How to Make Money Selling Your Business here.
Thank you for reading this post, If you have any questions about what it is like to work with a financial advisor please feel free to contact me here.
Thank you for reading!