Update the Game Plan
The money plan you made before the money arrived may not survive it.
"When your life changes, update the game plan for your money."
Meet Frank. He sold his first company in 2000 for $893,000 and hired a financial firm to manage the money with one instruction: zero risk. When he sold his next company in 2021, he wired eight figures to the same firm without updating the game plan, which cost him millions.
I sold my first company in 2000 and walked away with $893,000. I engaged a financial firm to manage the money, and my instructions matched what the money was: my safety net if everything else went wrong. Zero risk, I told them.
The next company I sold was in 2021. This time I was wiring eight figures of cash to my longstanding financial firm. Unlike back in 2000, when I needed a safety net, by now I personally was good. This money was to be inherited by my children and grandchildren, twenty or thirty years down the road.
A horizon that long can absorb some risk and ride out the ups and downs along the way. Back in 2021, for the first time in my life, I could afford risk, and the game plan still said zero: low-risk bonds, built for a safety net I no longer needed.
I only realized this recently, when my financial advisors walked me through my returns since the 2021 exit. The S&P 500 had just about doubled. My account had barely kept up with inflation. With a different game plan, my kids and grandkids would be inheriting twice as much.
The mistake was leaving the game plan I'd written for an $893,000 safety net in charge of a fortune my grandchildren will inherit. The day I stopped needing that safety net was the day to update the plan, and I let it run for years instead.
I'm rewriting the game plan now, but the compounding I missed is gone for good. Don't let a game plan you wrote years ago keep running unexamined. When your life changes, update the game plan for your money, or the old one will quietly cost your family a fortune.
Up next · Lesson 05 It Was Never Ours The bill that arrives before you have spent a dollar. Read next →