After selling his company, Matt feels like he has a lot of cash but is still hesitant to raise his standard of living. He knows he shouldn’t hold cash and should invest it, but isn’t sure where to start.
Matt is married and has two children. He wants to buy a vacation home and is interested in venture investing as well as becoming an advisor to startups. In addition, Matt wants to start saving for his children’s education, and his friends have told him it’s important to have insurance for his family. These tasks have been sitting on his plate for years, but he feels overwhelmed and never finds the time to do them.
How We Helped
A friend of Matt’s suggested he speak with Keystone. Based on the information he provided, we conducted a goals and needs analysis that helped shed some light on Matt’s unique opportunities.
|Goals and Needs Analysis||Opportunities|
|Company Acquisition||Stock qualified for QSBS making the first $10mn of his stock sold exempt from Federal taxation saving Matt a material amount on taxes|
|What to do with Stock once Lockup Expires||Education on his options and tax implications, established trading plan created to reduce single stock concentration risk while abiding by the lockups and blackout periods, with the ultimate goal to reduce concentration risk|
|Family Protection||Selected guardians for his children, set up trusts to provide for children, and updated core estate documents including a will, trust, power of attorney, health care directive since his circumstances have changed since he first established them|
|Hesitant to Spend More Money or Raise Living Standard||Created a personal balance sheet and forecasted cash flows to show Matt what would be sustainable and still conservative to give him comfortability in raising his lifestyle and living standards|
|Future Plans||Helped Matt realize that work was optional in the near future, that he could start another business, never work again, or anything in between|
|Startup Investing||Established an asset allocation based on Matt’s risk tolerance and return objectives, added a separate carve-out bucket specifically for venturing investing, and established a program to make venture investments|
|Feeling Overwhelmed||Delegated several personal financial tasks to a financial advisor to guide and complete items for him|
|Wealth Transfer||Incorporated tax-efficient gifting techniques to minimize taxes and maximize the amount of assets his heirs will receive|
|Interest in Philanthropy||Education on philanthropic strategies which maximize donation power and considerations on using philanthropy in the future to educate his children to be familiar with investing and care about the community|
|Education Savings for Children||Set up 529 accounts and front-loaded 5 years of contributions|
DISCLAIMER: THIS CONTENT IS PORTRAYING A HYPOTHETICAL CASE STUDY AND NOT BASED ON ACTUAL INDIVIDUAL CLIENT RESULTS.