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Exactly 2 years ago, I sold my main business to Qualcomm.
Throughout my career, I witnessed many cases where successful founders with successful exits wasted their money within a few years, buying items like yachts, causing them to lose their wealth and start from scratch.
So right after the exit, I decided to follow these rules:
- Don’t touch money for at least 1 year: After the exit, forget about the money in your bank account and don’t touch it for at least 6 months. In my case, if I had invested my money in public stock right after the exit (March 2022), I would have lost 50% of my wealth. So, no rush.
- Don’t change your lifestyle: Try to maintain the same lifestyle you had before the acquisition. Through this practice, you will understand that most of what is called “luxury” is just nonsense for people without goals and purpose in their lives.
- No rush with investments: Do not invest in anything for the next 1 year (except maybe public stocks, but wait for 6 months after the exit). 99% of the offers you receive will be worthless. No rush. Do not invest in anything outside your expertise; you will lose in 99% of cases. It’s hard to earn money through an exit, and it’s very easy to lose money through wrong investments.
- No dumb purchases: Don’t buy things like yachts, airplanes, expensive cars, etc. In a year, you will realize it’s better to rent and not waste your money. No rush when it comes to buying a house, etc.
- Avoid new “friends”: Many people will try to be your new best friends just to offer you to “invest” in something or sell nonsense. Don’t waste your time and money on this. Spend time with your old friends.
- No loans: Don’t give significant loans to anyone; refer them to banks.
- Invest in your education. Spend a year doing nothing to understand what you want to do next, where your “next passion” lies, etc.
- Invest in your and your relatives’ health. Improve your lifestyle. Exclude toxic people from your circles, those who waste your time. Now, you can afford to communicate with people you like.
- Load your brain and your life with a “new luxury”: access to more advanced intellectual products, more interesting people with unique experiences, better education, and a healthy lifestyle.
- Charity: It is important, but in this field, too many people just use it to earn money, there are too many fake organizations, and very low efficiency. So, don’t throw money into charity. Try rather to find how you can help this world with your knowledge and skills first. And only then put some money to help.
- Bargain: Once people become aware that you are rich, they will start to think you do not calculate your money, so they will start to offer you everything for a higher price. So don’t be stupid — bargain for each dollar. You will save 30–40% of your spendings. 🙂
- Relatives: definitely, it makes sense to improve the lives of your closest relatives, but for the rest, the maximum you can do is help with healthcare and/or education. Otherwise, you will spoil them and feel guilty for not supporting their “new lifestyle” for their entire lives, which makes no sense.
- New business: after M&A, you might think that you’re a guru of business, and people who follow their passion and immediately start new businesses usually fail. Remember — business is not just about your passion. Business is about a good business model first and second about passion. Don’t jump into a new business immediately. Spend some time, speak with investors, advisors, verify your ideas.
- People from your past: after M&A, a lot of people from your past will try to resume relations with you. Just remember — usually, it’s not because of you; it’s about your new status. Better to leave people from the past in the past.
Hopefully, these pieces of advice could be useful to you soon. 🙂
Best regards,
Vitaliy Goncharuk
Serial Entrepreneur(1 exit) and Systems Architect.
Linkedin:http://www.linkedin.com/in/vactivity