Build a Holistic Financial Plan and Detailed Personal Balance Sheet
A critical step involves forecasting a personal balance sheet with the same meticulous attention once devoted to business finances. This includes a comprehensive analysis of assets, liabilities, and long-term financial goals. By taking a holistic view, a business owner gains a clear understanding of their new financial landscape, allowing for more informed decisions and sustained wealth management.
Understand Lifetime Consumption
For owners targeting or navigating a transaction, it’s important to determine how much liquidity and cash flow is needed to meet lifetime consumption or spending goals. From there, you can better understand how your balance sheet can support those goals over time.
Align on Estate and Philanthropic Legacy
A transaction will often create opportunities for estate planning and philanthropic or charitable giving, particularly if a deal is expected to net liquidity beyond what’s needed for lifetime consumption.
Recognizing that wealth management isn’t a solitary endeavor, the next pillar of the plan focuses on engaging family members in financial literacy.
This includes imparting a nuanced understanding of the family’s financial legacy and how to navigate the responsibilities that come with it. Educational initiatives, family discussions, and collaboration with advisors form the bedrock of this engagement.
By fostering financial literacy, family members are empowered to continue the legacy purposefully, instilling values that transcend the mere accumulation of wealth. The emotional process of involving the family builds trust and excitement, creating a shared commitment to the sustainable stewardship of financial heritage.
Set Wealth Allocation Targets and Execute on Investment Strategy
This meticulous process, akin to the nuanced art of business forecasting, becomes the guiding compass for navigating the complexities of post-sale wealth management.
It outlines an intricate roadmap for resource allocation to help determine the appropriate risk profile and investment strategy for each of the following buckets:
- Personal consumption
- Aspirational
- Philanthropic or charitable
- Gifting to heirs or multigenerational family members
Each of these buckets will have different goals and objectives that drive the underlying strategy, which could be a different mix of investments—bonds, stocks, real estate, or alternatives, for example. This provides a delicate balance between meeting immediate lifestyle needs and fostering sustained long-term financial growth.
Similar to how a seasoned entrepreneur strategically allocates resources within a business to optimize performance, this approach considers the allocation of financial assets as a pivotal strategy for personal wealth optimization.
By seamlessly integrating lifestyle aspirations with long-term financial objectives, this roadmap transforms the post-sale narrative into a journey of purposeful wealth creation, where every financial decision contributes to a fulfilling and sustainable future.
Create Purpose and Intentions for Wealth
The holistic plan extends beyond traditional wealth management to emphasize intentionality and purpose in future financial decisions.
This involves expanding wealth for a greater purpose, whether through philanthropic contributions, strategic investments, or supporting causes aligned with one’s values. By creating a platform for wealth that transcends mere accumulation, it establishes a legacy grounded in purpose and impact.
This intentional approach not only provides fulfillment for a business owner, but also becomes a guiding principle for future generations, setting a course to serve a greater societal and familial purpose with the wealth amassed.
The Business Sale as a Starting Point, Not the End Game
A strong integrated approach reframes the business sale as a starting point rather than an end game.
The emotional process of letting go is transformed into a catalyst for new beginnings. This perspective encourages a business owner to explore their passions, whether it involves starting a new venture or dedicating time to personal pursuits.
Embracing the post-sale journey as a canvas for reinvention and growth cultivates a sense of excitement and purpose for the future. This transformative mindset not only solidifies a financial foundation, but also sets the stage for a fulfilling and dynamic post-business life.
We’re Here to Help
At Moss Adams, we specialize in guiding individuals through this transformative process, offering insights that extend beyond numbers to foster trust and excitement for what lies ahead.
Reach out with questions as you align your financial goals with your hearfelt aspirations.
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