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I recently went through a major liquidity event myself a few months ago (Wombat Security Technologies). Here are some things my wife and I have done: - Get a f

I recently went through a major liquidity event myself a few months ago (Wombat Security Technologies). Here are some things my wife and I have done: - Get a financial advisor. Make sure that they have fiduciary responsibility, that their job is to help you, rather than just fees. Talk to several different ones and find one that you're comfortable with. Note that you will eventually have to spend a fair amount of time learning about all the different kinds of investments that are out there. One surprise for me: I already knew about diversifying your portfolio, but had previously only heard about doing that based on assets. It's also useful to diversify over time too, that is slowly add more investments over time, rather than doing it all at once (since that's timing the market, and you might get lucky, and you might not). - Get an accountant. You will absolutely need one to handle the taxes. - Read up on Qualified Small Business Stock. If your company and length of your stock ownership qualify, it could be a quite large benefit for you regarding taxes. - Set up a Donor Advised Fund. Ok, it's probably too late if you already got the money in the bank, but this would let you donate the stock in a way that would save you a lot on taxes, and allow you to direct money to charities you and your family care about. - Get this book: Silver Spoon Kids. Our financial advisor got this for us, and I found it incredibly helpful as to how to talk to kids about money, especially to make sure that they don't end messed up. This can be quite common among financially well-off folks. - Set up a last will and testament. This should be done after you have kids. It's no longer just about you, you have your kids to think about, and what happens if both parents meet an untimely end. You will want a probate lawyer to go through this process. - Max out your insurance, ie auto, home, etc. People with money can sometimes be targets for lawsuits, for a variety of reasons. Maxing out insurance will help with a lot of things. - Also echoing a lot of the previous advice, take things slow. Don't make any rush judgements or investments. Time is on your side, and besides taxes, there's no rush here. The interest you would get from just a money market fund will be ridiculous. Also, the big surprise for me? Well, as you can see above, managing a windfall is actually a lot of work. But think of it as an upfront investment, to make sure that things go more smoothly later on. Good luck!

jasonhong 8y ago
Following up on my own comment, a lot of folks are saying, don't get a financial advisor. My wife and I discussed this quite a bit, and I was also lucky to be able to ask a lot of questions to my brother, who previously did a lot of work in hedge funds and has managed his own portfolio for decades. It's a perfectly fine strategy to manage things yourself, as long as you diversify. Be sure to get things that are non-correlated with the market, and diversify over time. The thing that a lot of people are missing in their "don't get a financial advisor" advice is access. Access to hedge funds, access to some investment vehicles designed to hedge your bets, access to early stage funding of companies. These are things that you would not get easy access to without a good financial advisor. Again, you can do perfectly fine managing things yourself, so it's basically a judgement call here.

jasonhong 8y ago

Following up on my own comment, a lot of folks are saying, don't get a financial advisor. My wife and I discussed this quite a bit, and I was also lucky to be able to ask a lot of questions to my brother, who previously did a lot of work in hedge funds and has managed his own portfolio for decades. It's a perfectly fine strategy to manage things yourself, as long as you diversify. Be sure to get things that are non-correlated with the market, and diversify over time. The thing that a lot of people are missing in their "don't get a financial advisor" advice is access. Access to hedge funds, access to some investment vehicles designed to hedge your bets, access to early stage funding of companies. These are things that you would not get easy access to without a good financial advisor. Again, you can do perfectly fine managing things yourself, so it's basically a judgement call here.