Business sold, €4m to invest?

LS400

Frequent Poster
Messages
537
I have gifted (legally and tax paid)
I don’t plan on moving
I don’t plan on massively increasing
I consider myself lucky
I am starting the process
I also want to “enjoy”
I value staying grounded
Look, I accept I know diddly squat about... all that stuff, but couldn't help notice there was no "We" here, So while everyone here is congratulating you, helping you as to how you can seek enjoyment from your wealth, it was for that reason I found it quite sad to be honest. I admire those who has made a success of themselves as much as the next person, and really like to see people enjoying the fruit of their labour.

But, I just didn't get the, we would love to do this and do that etc. Maybe its my read on it, and that its not the case at all. I say that because your road trip adventure sounds brilliant, but only if these moments are shared with a loved one, Pal etc or just co-pilot.. and, I am available and can read maps!!

Your in a fantastic situation financially, and I can confidently assume that your in as good a position yourself to be giving advice about success with wealth and managing it as much as seeking it.

Best of luck.
 

gnf_ireland

Frequent Poster
Messages
1,412
The moral being the OP has achieved wealth, he has more money than his lifestyle needs and has no appetite to massively change. There is zero need to take on the risk of the stock market. Yes, it may rise 20% generating an additional 1million but to what ends?
I would second this statement. The OP has worked hard to get to the position he is in. Why not enjoy the fruits of his labour after the the transition period is up.

OP ask yourself who do you want the extra money for? Its unlikely to be for you or your wife (although I do share the sentiment above re too much use of I and not enough of we). You don't appear to have any children. Its likely you have more money now than you need for the rest of your life - why do you want to acquire more and who is it for (other than the taxman?)

Go enjoy yourself and forget about making more money. You have 100k ever year for the next 50 plus years... forget about being the richest man in the graveyard - be the happiest !
 

mtk

Frequent Poster
Messages
528
I would add to Brendan's excellent list of things to avoid....

divorce could wipe off 50%.

legal changes e.g. death duties hit the british aristocracy..... a wealth tax is not unthinkable.

vanity project of some sort e.g. seeking to get yourself cloned in 20 years time
 

hubble

Registered User
Messages
32
My guess it that this person is not going to rest on their laurels or go into retirement. I would say that the person is likely to go for it again and maybe a few times more before retirement. The windfall from the sale are somewhat of a distraction would be my guess.

I would say interview three to five fee paying advisors and see what their offering is. You could then act upon one or more of their advice. Let the advisor(s) take over the advising. How the mechanic of the investments would work I do not know. Does the advisor do this or do you do it yourself? The point is that managing the money is only a time distraction for this individual.
 

rcnt_acqtion

New Member
Messages
5
Thats a great list Brendan - and a good way of thinking about it. Why make the same mistakes as others, when you could be making a whole set of new ones, eh?

1) People get carried away by their own brilliance. So they invest a good part of their money in a new business to give them something to do. The business fails and they lose all their money.
I've seen this happen with a friend! Thankfully it didn't wipe them out but it caused unnecessary hardship. Every business success requires a healthy dose of luck and luck can't be planned for! The fact that my day-to-day isn't changing much (as I'm continuing to do the same job) is actually a great comfort for me. I liked my job because I created the role for myself by starting the company – the goal was never to try and retire early or stop doing what I do in my profession at a practitioner level.

1 B) The new business idea is so good that they borrow lots of money to invest in it and lose all their money and end up with a huge debt which they can't pay.
I've seen quite a few people do well in Silicon Valley with exits. I think its interesting (and wise) that they never fund their next idea themselves – they still reach out to private equity, venture capital and increasingly (and quietly) family offices.

1C) They buy a big property which costs more than €4m so they borrow the balance. It all goes horribly wrong.
Happened to the same friend mentioned in #1 – they are still under water although with a lovely property. I am happy in my high-density apartment in a great area of North Dublin. All my neighbours are hard working and grounded, where as my friend lives in a "ladies who lunch" area of Dublin!

2) They take a huge punt on oil or gold or a particular share because someone charismatic recommended it strongly.
I think thats just gambling, to be honest. I like Investment Trusts which long term (> 50 year histories) track records instead! I think I'd be a terrible individual stock picker myself. Too much bias – especially to tech stocks, the only thing I know anything about.

3) They fall victim to scammers who get them to invest in some great scheme and they lose a big chunk of their money.
I've read the more university educated you are, the more susceptible you are to getting scammed. i.e., its people who think they are smart enough to spot a scam are the very ones that don't. I think this is a worry for anyone. My way of trying to avoid it right now is to:

a] not be greedy and look for unrealistic returns, and

b] be conservative and invest in long established funds or trusts via long established brokers or platforms (such as Davy's in Ireland, for example). Even if that means slightly diminished returns or higher than average costs. Hunting for cheapest possible fees, in my opinion, opens you up to risk.

4) They gamble it away. I suspect that you are not the gambling type, but worth noting it here for completeness.
Sure all investing is gambling :) But you're right, I'm not the type. The stories I've heard from friends working for bookies and software gambling companies around Dublin would make you very wary of them. The house (almost) always wins!

5) Drink and drugs.
I think this is a point not to be overlooked. Drugs are a no for me, but I could reign in some pints a bit. So much of business ended up being "networking", which really is a code-word for sharing a business card and then boozing. One to keep an eye on, it being New Years resolution time and all :)
 

rcnt_acqtion

New Member
Messages
5
all that stuff, but couldn't help notice there was no "We" here,
I'm new to this forum and I guess found myself "filling out the form" in the first person. Don't read too much into it – there is lots of "we" in my life!

I am available and can read maps!!
That new car better damn well be able to read its own maps for the cost of it :) I"m already impatient for it to arrive and its going to be a long wait until its manufactured and delivered. Still its give us plenty of fun poring over maps planning various adventures.
 

noproblem

Frequent Poster
Messages
2,141
Regardless of what all of you are saying. It's all based on supposition. Pick 10 top stocks right now and no one can tell me they won't go belly up over the next few years, it's happened in the recent past. However, like you good people have said that over a longer period one is better to place their cash in some form of stock rather than just hold it on low deposits, the trouble is and for me it's a gamble, picking the stocks is the stickler, as it is with most ordinary people. One can go to the so called experts but trust isn't too high in that quarter and for good reason. There's an awful lot of plain Jane's and Joe's out there today who didn't do too much spending with their good amounts of lolly during the Celtic Tiger, they let the knowledgeable boys and girls do that and we all know how the story went.
I understand what Brendan and others are advocating but surely for this year and going forward we might be better off to talk to one another in clearer and simpler terms about investments. If a Doctors kept telling their patients what's wrong with them in Latin terms and explanations it might soon lower the no of people visiting their surgeries, but it wouldn't solve the problems. Not giving out to anyone or any profession. The general public understand savings and investments a bit, but not the high falutin terms sometimes used by those who sell and advise on products to invest in. A small bit of understanding and simplicity would help many, and some of those "many" can be quite wealthy in both assets and cash terms but not trusting of people they really need to have a chat with. Then again, maybe it's just poor old me. Happy New Year to everyone.
 

KOW

Frequent Poster
Messages
365
Age: 41
Spouse’s/Partner's age: 43

Annual gross income from employment or profession: 225,000 (+ 50% guaranteed yearly bonus for next 3 years)
Annual gross income of spouse: 65,000

Monthly take-home pay: €13,000 combined (excluding bonuses). Mortgage payments of €2,065/month lions share of monthly spend.
Type of employment: e.g. Civil Servant, self-employed: Both company employees

Savings: Currently saving approximately €8k-8.5k/month into demand savings a/c (7 days notice).

Rough estimate of value of home: €450,000 (down significantly from original purchase price in 2007)
Amount outstanding on your mortgage: €363,000
What interest rate are you paying? 0.5% tracker

Other borrowings – car loans/personal loans etc: No loans or borrowings.

Do you pay off your full credit card balance each month?
If not, what is the balance on your credit card?


No credit card(s).

Savings and investments:

From company sale: €4,200,000 currently in low interest demand deposit a/c. Amount reflects after CGT paid on Dec 15 recently.
Further lump sums are due in 12 and 18 months of a little over €1,000,000 in total (before CGT) as part of phased acquisition payments.

Do you have a pension scheme?
Yes, contribute €1,000/month + spouse contributes €500/month (after tax relief)

Do you own any investment or other property? No. And not a fan of owning more property directly; although okay via a wider investment plan.

Ages of children: No children.

Life insurance: Only what mortgage requires + death in service plans from employers


What specific question do you have or what issues are of concern to you?

Had recent (last 6 months) change in circumstances (sold company, staying on with new combined entity with much increased pay) and want to start putting lump sum to work + setup some sensible use of available cash from monthly income.

I have gifted (legally and tax paid) some lump sum payments to family to help them out and the lump sum amount above reflects this.

Job is demanding and I also don’t want to be a martyr to the cause in the sense of locking every penny up for decades in the future.

Over the hard years of growing the company, I promised myself an expensive sports car on company sale and have now ordered that. This was not an impulse purchase. Lump sum above reflects post purchase of car and my current spreadsheet estimates of monthly running costs (tax, fuel, specialised insurance, extended warranty cover (eventually) and servicing) will consume €900/month when annualised over the year.

I don’t plan on moving/selling home (I like where I live) and have been comfortable with repayments over the last 15 years – not really looking to pay it off early.

I don’t plan on massively increasing my monthly minimum commitments from a lifestyle perspective – no fancy watches or bags for us – I value staying grounded – but also when going on trips (plan on taking new car on long road trips), I also want to “enjoy” nice hotels and the like along the way.

I consider myself lucky to be in this position – I spent the last decade while building up the business – in near poverty after bills were paid – but would like to be able to generate extra income (before retirement) from the lump sum and cash that current job is throwing off.

I am starting the process of seeking independent financial advice and am interested in what this communities thought process would be w.r.t. what I should be looking out for when I receive said advice.
The only comment I can make is to realize and give yourselves a pat on the back now you have completed the hard part.
When you started out on your journey you both most probably only wished to be where your at now.
Dont stress because I dont think you can really go wrong unless you did something crazy and that is not going to happen.
Take your time. Pay for good advise if you need to.
Good luck with all.
 

Brendan Burgess

Founder
Messages
40,583
Andrew advised to put the balance of the money in a bank deposit.

I have moved all the posts on the topic to a separate thread:

 
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