We live in an age where fortunes can be made seemingly overnight. Look no further than the tech titans or IPO unicorns to appreciate the fact that relatively young people can enjoy the economic fruits that take most of us a lifetime to build.
People of more modest means believe that more money will solve most of their problems. Those who have money, understand that it can present a whole new set of, shall we say, challenges. Setting aside the challenges of managing money, keeping taxes at bay, and not disincentivizing our children, I think the greatest challenge money presents is how best to spend our time.
Most of us build our net worth by working at a job that requires fairly regular hours. The “cost” then of building our net worth, is the lack of choice that we have in how we spend our time. Most of our waking hours, five days a week, are spent at our jobs.
Suddenly cashing in, typically through the sale of a business or perhaps through an inheritance can raise the question: What do I do now? Some fall for the leisure lie, that a lifetime of self-indulgence is what we should all aspire to – at least that is what the leisure industry is selling us. How about spending your time managing your fortune? I can tell you it is not as stress-less as the trading platform TV commercials would have you believe.
So can you cash in too early? If you don’t have a purpose, then the answer is yes. Most of our clients have found purpose in their work. They are purpose-driven. Just because they have experienced a “liquidity event” doesn’t change the fact that in order for their life to remain meaningful, they will have a continuing need for purpose in their lives.
So if you have been fortunate enough to cash in early, congratulations! Just remember that there is a world of difference between “having made it” and having it made.