I was talking to a client recently who had a substantial liquidity event a few years ago. This event changed his life in more ways than he could have imagined. It produced what should be multi-generational wealth. But he said one thing that surprised me. His liquidity event did not produce peace of mind. He had worked hard with his family for many years and dreamed of one day reaping the harvest. But when it came, the experience was not what he thought it would be.

I hear this more times than you might imagine. Many people work hard and dream of a day when the windfall comes. But when it does come, they often find they’re really not prepared for the moment and all the changes that follow. If you or someone you care about is working hard for a future liquidity event or they’ve already had one, I’d like to offer some questions to think about. Beginning to think about these questions now could make a big difference down the road.

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"I enjoy serving multi-generational families because I value trust and discretion. They often have very complex financial lives and multi-generational stakeholders who see things in different ways. I find satisfaction in leading a team of advisors in a united effort to serve these families exceptionally well."


The Four Big Questions

I think there are four critical questions that people who are planning for a liquidity event should be asking themselves:

  • What will you do with your time?
  • Will you need to add or change counselors once you have your liquidity event?
  • How will you align your wealth with your life?
  • How will you protect and grow your wealth over time?

Let’s look at each of these questions in greater detail.


What will you do with your time?

Human beings are creatures of habit. Busy entrepreneurs become accustomed to an active lifestyle that often includes not only a rigorous work schedule, but also family activities, volunteer time and hobbies and activities they enjoy. A liquidity event can be very disruptive to a familiar schedule and this can leave people feeling a bit lost.

Most people can only vacation and travel for just so long before they feel the need to do some type of work again. This is particularly true for serial entrepreneurs. It is not uncommon, after a liquidity event, to find people who used to wish for just a few moments of peace and quiet to themselves now wishing for some of the chaos that used to pervade their lives.

You might say to yourself – I’ll cross that bridge when I come to it. That’s perfectly fine. But if you don’t have some ideas about how you’d like to preoccupy yourself after your liquidity event, you might find you have time on your hands and not enough to do. That might be just as frustrating as not having enough hours in the day.


Will you need to add counselors once you have your liquidity event?

Most entrepreneurs rely upon at least two counselors as they are building their business. I often find they consistently turn to a lawyer and an accountant. These two types of professionals add real value to the operational outcomes of any business. But will this team alone be enough to help you plan and manage the next stage of your life, after your liquidity event?

At Whitnell we’ve discovered that each type of professional brings a valuable skill-set to bear for clients. It is usually advisable to consider how a financial consultant, not just an investment advisor, can help you think through what you want wealth to do for you and your family.


How will you align your wealth with your life?

This is a critical question that most people who are building wealth don’t have time to consider. Aligning one’s wealth with one’s life-goals requires a formalized process and a trusted advisor who can help you think through a myriad of options and make the best choices for your family.

One of the biggest areas that people building wealth underestimate is the responsibility of managing wealth once it has been accumulated. For many people, this is where a lot of the discomfort is realized. They might be great at running their businesses, but managing wealth? That’s a whole other ball game.

Most business people know they need to show up at work every morning and manage their business affairs. Otherwise, the business may go downhill. But few people realize that managing wealth requires a similar level of discipline and attention. The money will not manage itself. This means you will be making all sorts of decisions, many of which you may not be prepared to make.

This gives rise to an overarching question. What do you want your wealth to accomplish? To answer this question, you’ll need to consider many different areas of your life, some of which I touch on below.


How will you protect and grow your wealth over time?

This is the one question that gnaws at most wealth creators. They know how to build wealth through managing a business. But growing and protecting wealth is often not their core expertise, nor is it often the core expertise of their existing trusted advisors. Here are several questions that can help you start to think through a strategy to achieve these goals.

How much capital should you preserve as securely as possible? Most people want their wealth, at a minimum, to sustain their desired lifestyle for the rest of their lives and even possibly their children and grandchildren’s lives. This is the proverbial nest-egg. How much do you need to sock away in a secure nest-egg for your loved ones?

How much wealth do you want to transfer to your heirs and loved ones? Those who realize multi-generational wealth will need a plan to transfer that wealth to loved ones through the most tax efficient means possible. There are many strategies available to you. Which are right for your unique situation?

How do you grow your wealth over time to increase purchasing power and support your long-term goals? Everyone knows that inflation devalues purchasing power over time. It can be tough to find the right balance between taking risk to grow wealth and being conservative to preserve wealth. Each family will have a different level of risk tolerance based on their goals and needs.

How much wealth should you put at risk to follow your passion for a new business? This could create tremendous upside or you could lose everything you venture. Many serial entrepreneurs are overly confident when it comes to a new business. But this could also be a great opportunity to learn and grow in a new way, keeping your mind vibrant and active. These decisions are best made only after a careful analysis of your need for a nest-egg.

How much do you want to give away to a charitable cause about which you are passionate? Many of my clients want to give back to charitable organizations and causes that inspire them. People who are busy growing wealth often think of charitable gifts as something they leave behind. In fact, it could produce better financial outcomes for you and for your desired charity to structure contributions well before then. Whether gifting directly to your charity of choice or establishing a family foundation, there are many ways for your family to experience the joy of giving.



As you can see, there is a lot to think about when it comes to life after a liquidity event. These are just some of the questions that I see people grappling with after they have realized a windfall.

To realize the peace of mind that a liquidity event should produce for you, it is probably best to start thinking about these questions now. If I can help you think through a plan that is right for your life and loved ones, I would welcome the opportunity to have a conversation.


The information contained in this article is provided for informational purposes only. No illustration or content in it should be construed as a substitute for informed professional tax, legal, and/or financial advice.