A single, lump-sum payment after the sale of your business is something you’ve no doubt been anticipating for a long time. Despite having spent decades dealing with its value in terms of net worth and profit and loss, you’ve not had the money available to you in physical cash before. Now that you do, how should you use it?
Selling a business is very stressful and equally time-consuming. After the event, you’re likely to find yourself in a state of uncertainty – feeling as though you must act without knowing how. As long as your money’s held in a safe account, allow yourself some time to pause, take stock, and adjust to your new life.
When you’re ready, establish how your money needs to perform in order to maintain your desired lifestyle throughout retirement, whilst ensuring that enough is set aside for inheritance. It’s likely your will was written when your assets were in solid form and your financial situation was very different. Now is the time to revise and draw up a fresh plan to reflect your present circumstances.
Once you’ve done this, you may consider paying off your mortgage or any other accumulated debt. This is sensible for high-interest accounts, but there are better ways to put your money to work. Investing can offer higher returns than you might accrue in interest, after all, the aim of investing is to look after and increase your wealth. Most retired business owners use their capital to invest in a way that secures a future income, for example through the development of a diversified portfolio. They then wait until their investments mature before clearing outstanding debt.
A large, lump-sum payment from the sale of your business is a celebratory time. However, it can be difficult to know how to manage your new wealth. Getting in-depth advice from an experienced and professional wealth management company such as Wells Gibson can be invaluable in securing your and your family’s financial future.
Have you received a lump-sum payment from the sale of your business? Contact Wells Gibson and discover what your financial future could look like.