I had $758 in my pocket when I landed in New York City in 2012.
And what started as a Kickstarter project, my company BestSelf was acquired in late 2022.
The journey between 2012 and today has been out of a movie. And I’ve learned so much.
But over the last few months, I’ve learned something entirely new:
What to do with a boat load of cash.
You read books and watch movies about the journey up the mountain. But what then?
Apart from maxing out HSA and retirement accounts, here are 2 more things I did with the money:
1. Bought a new house (but not for the reason you’d think)
If Austin, Texas, were a stock, I would buy it. I believe in it as a city – as the next epicenter of entrepreneurship in the United States. So I thought the equivalent of buying stock in a city is buying real estate.
So I bought a new home.
Not only because I sold my business but mainly because we need extra space with a growing fam. Welcome Quinn!
Plus, I found a great deal on an Austin place. (Reminder that I was originally an architect, so I’m pretty picky about my home designs.)
We’ve decided to keep our current house and Airbnb it. Since we are short term renting (STR) and converting it from a primary residence to STR, we can also do a bonus depreciation which will save me a lot in taxes.
So no, I didn’t buy a house and upgrade because I got this infusion of cash. This is an investment in our family and our future.
2. DCA index funds
My friend Mike Brown is an ex-fighter pilot and investor who sold his own startup a few years ago and now helps other people figure out how to handle their wealth. Just as thrilling as the cockpit, I’m sure.
He taught me how entrepreneurs generally take risks – in both our lifestyles and finances. But smarter, savvier entrepreneurs find which areas they’re most skilled in, centralize risk to that sector and use everything else as a safety net.
In other words, risk-on with my business and entrepreneurship (crypto 🤮) doesn’t mean I need to be risk-on in all areas of my finances and life.
So Mike made me realize – I’m okay with a reduction in risk if it means I can sleep better at night knowing our finances are safe and sound.
80% of the money I made will be DCA-ed into index funds. Set it and forget it. I use Wealthfront for this (their cash account is also paying out 4.3% savings rate too).
Until I was approached about selling BestSelf, I hadn’t thought of the post-exit financial implications. Of course, I’d imagined what everyone imagines:
- More free time
- More fancy vacations
- Gifts for my friends and family
But my friends who had navigated similar challenges when they sold their businesses really helped me through this chapter of my life.
If you’ve sold your business, I’m curious how you invested or used the money. Any quirky rules, loopholes or fun ideas you have?