The Psychology of Sudden Wealth

Let's start with what nobody talks about: selling a business is disorienting. Your identity was wrapped up in being a founder, an operator, a builder. Now you're... what? An investor? A retiree? Someone with a lot of money and no clear purpose?

This psychological shift matters because it affects decision-making. Some sellers become overly conservative—so afraid of losing what they've gained that they stuff everything into bonds and watch inflation eat their purchasing power. Others swing the opposite direction—taking on reckless risks because they miss the adrenaline of building something.

Neither extreme serves you well. The goal is to find a sustainable middle ground—one where your money works for you without requiring the same intensity that building the business demanded.

First: Don't Do Anything Dramatic

The biggest mistakes happen in the first 90 days. There's pressure—from yourself, from family, from "advisors" who suddenly appear—to make decisions quickly. Resist it.

Park the money somewhere safe and boring. A Treasury money market fund. Short-term Treasury bills. Something that won't lose value while you take time to think. You're not missing out on anything by waiting three to six months before making major investment decisions.

Use that time to answer the real questions: What do you actually want your life to look like? How much do you need to spend? What matters to you now that the business doesn't define your days?

Define What "Lasting" Actually Means

"Making the money last" sounds simple, but it requires specifics:

How long is "the rest of your life"? If you're 50, you might need this money to last 40+ years. If you're 65, maybe 25-30. The difference in planning is significant.

What does your lifestyle cost? Not what you think it should cost—what it actually costs. Include the things you've been putting off. The house you want to buy. The trips you want to take. The help you want to hire. Be honest, not aspirational.

What about inflation? Something that costs $200,000 today will cost $330,000 in 20 years at 3% inflation. Your income needs to grow, not just hold steady.

What are your obligations? Children's education. Aging parents. Charitable commitments. A spouse who's younger than you. These aren't optional expenses—they're part of the plan.

What about healthcare? If you're not yet 65, you need to bridge to Medicare. Even after Medicare, supplemental insurance, long-term care, and out-of-pocket costs add up. Healthcare can easily be a six-figure annual expense in later years.

The Math of Sustainable Spending

You've probably heard of the "4% rule"—the idea that you can withdraw 4% of your portfolio annually and have a high probability of not running out of money over 30 years. It's a useful starting point, but it's not gospel.

The 4% rule was based on historical returns and a 30-year retirement. If your time horizon is longer, if future returns are lower than history, or if you want more certainty than "high probability," you may need to be more conservative.

A more personalized approach considers:

Your specific time horizon and age.

Other income sources (Social Security, rental income, consulting, board seats).

Your willingness to adjust spending if markets decline.

Tax efficiency—where you draw from matters as much as how much you draw.

Legacy goals—do you want to leave money, or is spending it all acceptable?

We run detailed projections that stress-test your plan against different scenarios: what if the market drops 40% in year one? What if inflation spikes? What if you live to 100? The goal isn't to predict the future—it's to build a plan that survives many possible futures.

Building a Portfolio for Income and Growth

After a liquidity event, your investment approach needs to shift. When you were building the business, you could take concentrated risk because you had human capital—your ability to earn and build. Now, your financial capital has to do more of the work.

That doesn't mean avoiding risk entirely. It means taking the right kinds of risk:

Diversification across asset classes. Stocks, bonds, real estate, alternatives—each plays a different role in generating returns and managing volatility.

Global diversification. Your business was probably concentrated in one country, maybe one industry. Your portfolio shouldn't be.

Liquidity tiers. Some money needs to be accessible immediately. Some can be locked up for years in exchange for higher returns. Matching your liquidity needs to your investments prevents forced selling at bad times.

Tax-efficient placement. Which investments go in which accounts matters enormously for after-tax returns.

The Tax Bill Isn't Over

You paid taxes on the sale—probably a lot of taxes. But the tax planning doesn't end there.

Every investment decision, every withdrawal, every charitable gift has tax implications. The difference between a tax-aware strategy and an oblivious one can be hundreds of thousands of dollars over a lifetime.

Specifically, you need to think about:

Asset location: Holding tax-inefficient investments in tax-advantaged accounts.

Withdrawal sequencing: Which accounts to draw from first to minimize lifetime taxes.

Roth conversions: Converting traditional IRA money to Roth in lower-income years.

Charitable strategies: Donor-advised funds, qualified charitable distributions, and appreciated stock donations.

State tax planning: If you're considering relocating, timing matters.

Estate Planning Becomes Urgent

Before the sale, your estate was mostly a business interest—complicated to transfer, but at least you had time to figure it out. Now you have liquid assets, and the estate planning that was "good enough" may no longer be appropriate.

Questions to address:

Are your beneficiary designations correct? IRAs, insurance policies, and retirement accounts pass by beneficiary designation, not by your will.

Does your trust reflect your current wishes? A trust drafted when your net worth was $2 million may not work at $20 million.

Are you exposed to estate taxes? The federal exemption is currently high, but it's scheduled to drop significantly in 2026. State estate taxes kick in at much lower thresholds.

Have you considered generation-skipping strategies? If you want to benefit grandchildren, there are specific planning opportunities (and pitfalls).

What We Do for Post-Exit Clients

We work with business owners before, during, and after liquidity events. For clients who come to us post-sale, our process looks like this:

First, we listen. We want to understand what you want your life to look like—not just financially, but in terms of time, purpose, and family. The financial plan serves the life plan, not the other way around.

Then we model. We build a detailed projection of your income needs, tax situation, and portfolio requirements. We stress-test it against bad scenarios. We identify the risks that matter and the ones that don't.

Then we implement—carefully. We invest the proceeds in a diversified portfolio, often over time rather than all at once. We coordinate with your CPA and estate attorney to ensure the tax and estate strategies are aligned.

And we stay engaged. Life changes. Tax laws change. Markets change. We review and adjust the plan annually—or more often when circumstances require it.

If you've recently sold your business and you're wondering what comes next, let's talk. This is exactly what we do.