How Do I Not Blow My Money?

Smart wealth management after exit

How Do I Not Blow My Money?

Set aside money for taxes immediately, avoid lifestyle inflation, invest conservatively at first, set boundaries with money requests, and plan for the long term. Money amplifies who you are—if you're disciplined, it will serve you well.

Immediate Financial Priorities

Handle Your Tax Bill First

The reality: A significant portion of your exit proceeds will go to taxes

Action items:

  • Work with a good accountant immediately after closing
  • Estimate federal, state, and local tax liability
  • Set aside tax money in a separate account
  • Don't touch tax money for anything else
  • Consider quarterly estimated payments to avoid penalties

Tax rates: Expect 20-37% federal plus state taxes on capital gains

Create a Financial Plan

This money needs to last the rest of your life—plan accordingly:

  • Define your long-term goals (retirement, kids' education, philanthropy)
  • Calculate how much you need for basic living expenses
  • Determine how much you can afford for lifestyle upgrades
  • Set aside money for future investments/ventures

Avoiding Common Mistakes

Resist Lifestyle Inflation

The temptation: Upgrade everything—house, car, vacations, restaurants

The problem: Every upgrade comes with ongoing costs that compound

Smart approach:

  • Make a list of what would actually improve your life vs what feels impressive
  • Upgrade gradually, not all at once
  • Consider the total cost of ownership, not just purchase price
  • Ask: "Will this matter to me in 5 years?"

Invest Conservatively Initially

Goal: Preservation and steady growth, not beating the market

Strategy:

  • Diversify across asset classes (stocks, bonds, real estate)
  • Don't put everything into startups, crypto, or single investments
  • Consider index funds for broad market exposure
  • Work with fee-only financial advisors (not commission-based)

Rule of thumb: Don't risk more than 10-20% on high-risk investments

Managing Relationships and Money

Set Boundaries with Requests

Expect requests for: Loans, investments, donations, business opportunities

Create policies upfront:

  • Decide your approach to family/friend requests before they come
  • Set aside a specific amount for helping others (if desired)
  • It's okay to say no—mixing money with relationships rarely ends well
  • Consider making gifts instead of loans to avoid ongoing complications

Handle Investment Opportunities

You'll get pitched constantly on "can't miss" opportunities:

  • Set strict criteria for investments before evaluating deals
  • Don't invest in anything you don't understand
  • Limit angel/startup investments to money you can afford to lose
  • Beware of "friends and family" deals that aren't real opportunities

Long-Term Wealth Management

Professional Help

Consider hiring:

  • Fee-only financial planner: For overall strategy and planning
  • Tax accountant: For ongoing tax optimization
  • Estate planning attorney: For wills, trusts, and legacy planning
  • Family office services: For very large exits ($10M+)

Think Generationally

Consider the impact beyond your lifetime:

  • Estate planning and inheritance strategies
  • Teaching financial literacy to your children
  • Charitable giving and tax benefits
  • Creating family investment policies
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