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I did it!!
Old 01-08-2011, 04:58 AM   #1
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I did it!!

Well it's hard for me to believe, but it's finally happened... last month I sold a majority stake of my business to a Private Equity firm. This has been months and months in the making, and anyone who has gone through this can probably relate to the sky high anxiety levels towards the end of the process.

I am so fortunate, it's hard for me to get my arms around it at this point. When I look back at my first post here, it's taken a little longer than I originally planned, but the delay resulted in a more lucrative liquidity event, so it's all good. I'm not a religious man, but the word "blessed" comes to mind. I will still be participating in the company on a limited basis (board level, and 4-6 days/mo), and I still own a significant minority stake, but for the most part the end game is finally here.

It's mind numbing to think about all of the things that are now available to me, and how I will construct the next phase of my life. I have good advisors, and money will not be an issue. Over the years, while I have not posted much, but I have consistently checked back with this forum for advice and inspiration. I hope this does not come across as bragging... these are all topics that are difficult to discuss with existing friends and co-workers- the people who I have been surrounded with for the last several years. I am hoping to learn from this group and others about how to adjust to the next phase of your life, how to manage sudden wealth and a change in lifestyle, and how to find your path after the big event.

Thanks all!
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Old 01-08-2011, 05:16 AM   #2
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Congratulations v5200 !
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Old 01-08-2011, 08:02 AM   #3
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Sounds like winning the lottery but with a lot of front end work Now you can start learning how to handle that small fortune on your own. You may discover that those "good advisors" were useful getting you were you are but are sucking wealth now that you have sold the business.
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Old 01-08-2011, 08:21 AM   #4
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Sounds great - congratulations! Be careful how you invest that fortune, so you can live long and prosper... (I just couldn't resist)...

Time to do the happy dance:
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Old 01-08-2011, 08:35 AM   #5
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v52, congratulations and welcome to your new life.

Donheff mentioned you might find that your good advisors become a drain on your hard-won wealth. That may or may not be the case, but it might be worthwhile to post how your advisor wants you to invest and manage your funds. You might get some interesting feedback and suggestions from this group.

I say this because my ex boss pulled the ripcord on his golden parachute a few years back and his brother, a broker, manages his portfolio for him. I had lunch with him last month and was very interested to hear some of the investments his brother had chosen for him - some made sense to me, others I wouldn't dream of putting any money into.
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Old 01-08-2011, 08:48 AM   #6
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Congrats & welcome.

If I may misquote Robert Browning, you are about to enter
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enjoy it
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Old 01-08-2011, 09:05 AM   #7
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Quote:
Originally Posted by v5200 View Post
...I have consistently checked back with this forum for advice and inspiration. ... these are all topics that are difficult to discuss with existing friends and co-workers - the people who I have been surrounded with for the last several years. I am hoping to learn from this group and others about how to adjust to the next phase of your life...and how to find your path after the big event.
First off, sincere congrats.

The above part of your post struck a chord with me too. Even though planning for FIRE has been a significant part of my life over the past several years, I have never been able to discuss retirement or the plans leading up to it with anyone at work at all ever. Nor with friends or even family except for DW of course. But DW has no interest in anything financial, nor does she have any post career plans, so this place has been an incredible resource for me too. Thanks everyone...
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Old 01-08-2011, 10:14 AM   #8
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Congratulations. I'd second the advice about cross checking the investments your advisers recommend. My next door neighbor runs an investment firm for high value clients and I'm amazed at his spend rate. Dunno, maybe he delivers.....but, wow.
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Old 01-09-2011, 09:58 AM   #9
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Congrats V5200. Please post what you experience as I hope to live thru your experiences.... at least until I can join the group in 8 - 10 years.
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Old 01-09-2011, 01:26 PM   #10
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Congratulations! I too hope you'll post more often now that you have the time.

This is one helluva supportive community. Its support definitely made ER an easier decision.
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Old 01-09-2011, 01:40 PM   #11
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Thanks so much for updating us on the sale of your business. Congratulations!!!!!
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Old 01-09-2011, 02:04 PM   #12
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Hi V5200, welcome to ER. As a few others posted, hopefully you will or have already done your due diligence on the advisors. Don't want any Bernie Madoff repeats.
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Old 01-09-2011, 03:56 PM   #13
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Wow, thanks everyone! Midpack- it sounds like you've felt the same way... even though it's all good news, money and finances are just something that are difficult to discuss with even close friends- and there is no DW, so I can see the value in this forum already!

The advisors I'm using have come highly recommended from trusted associates, and I called several other references just to get some further perspective before we started working together. I know there are fees associated with using advisors that could be avoided if you truly manage all of your own investments, but I just don't think I have the expertise currently, and I'm not sure that's the best bet for me... what I like about these guys are they deal with people in my situation (a lot of entrepreneurs who have sold companies, or executives in public companies with stock options, etc), AND they don't at all recommend swinging for the fences- their approach seems balanced and sensible. That being said, I know you need to watch everything carefully!

The portfolio that they are recommending consists of roughly the following:

30% index and mutual funds
25% Munis
5% MLPs
20% Alternative (PE funds/Hedge)
20% Cash/Fixed "alternative"

The last bucket is a work in progress... they normally would have recommended a larger bond piece, but the current market conditions seem a little tenuous, so that will morph over time. I'll be looking on the board to try and figure out other relatively safe investments for that cash/foundation part of the portfolio...

In addition, I'm continuing to manage any existing investments that I held prior to this event, as a benchmark and to keep my mind active in this arena!

Any comments and thoughts are appreciated, and thanks again for the warm re-welcome!

(actually, I just realized this is probably the completely wrong place to post this portfolio info!!)
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Old 01-09-2011, 06:57 PM   #14
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20% Alternative (PE funds/Hedge)
In addition, I'm continuing to manage any existing investments that I held prior to this event, as a benchmark and to keep my mind active in this arena!
If you're in the realm of "accredited investor", then you can save yourself at least 2% in fees and 20% of your unrealized cap gains per year in this part of your portfolio by joining an angel investor's club. But the real reason you'd be interested in joining the club would be to (1) be a better investor, (2) be a business mentor to other entrepreneurs, and (3) apply what you've already learned from the private equity guys... but this time for your benefit.

Oh, and it's hugely intellectually stimulating.
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Old 01-09-2011, 07:14 PM   #15
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Nords, yes, I'm very interested in learning more about angel investing... it actually is on the top of my list!
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Old 01-10-2011, 06:24 AM   #16
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Congratulations, V5200! Can anyone tell me if a fixed index annuity is a good thing? I want it for hopefully 10 to 12 or more years from now, when I figure I will take out some $ every month to help with whatever I need some extra $ for.

The one my financial guy recommends is a guaranteed 8%, with a 10% bonus for getting into it. The amount in this cannot go down no matter what the market does, only up....but it may not go up as quickly or as much as the stock market. But, that is fine with me....as long as I don't lose any $. Actually, he said, if the market was to drop, there is no downside for me....my account would only go up, when the market rises, without having to make up for the money I lost, because I would not have lost any money.

I did do a little reading on these fixed index annuities, and the only people that did not like them seem to be people that cannot sell them to you.
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Old 01-10-2011, 07:11 AM   #17
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I did do a little reading on these fixed index annuities, and the only people that did not like them seem to be people that cannot sell them to you.
Which is exactly the same as saying,
Quote:
"The only people who like them are people that can sell them to you."
And congrats to v5200. I'm sure you won't be buying an indexed annuity.

Hedge funds did extremely poorly recently and caused their investors lots of taxes even with poor returns. Your list of other investments looks like a great way to lose money. I wonder if you have just thought about used tried and true methods? You have the ability to take on risk, but you have no need to take on any risk, so what's the point of going outside the normal stocks:bonds index fund route? Think about it.
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Old 01-10-2011, 08:10 AM   #18
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LOL,.....That is true,....but the people that can sell them, can also sell many other products, and they say, a FIA is what to get when you don't want much risk, and are willing to keep this money in it for a while.
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Old 01-10-2011, 08:30 AM   #19
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Thanks LOL... you bring up an interesting point. I felt the balance was fairly diversified, but as instruments such as MLPs and Hedge/PE funds are concerned, as it was explained to me they do offer a level of diversification, and the opportunity for higher returns. MLPs in particular have a low correlation to other parts of the portfolio (which seemed to make sense to me at the time). You bring up an interesting point though, which is how much risk should I take, given that I could probably do OK with modest gains. Food for thought...!
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Old 01-10-2011, 09:03 AM   #20
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Congratulations, v5200. Enjoy this next phase of your life. I am looking forward to joining you and many others in 2014!
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