Early Buyout / Early Retirement

ABOUT THIS EPISODE

How should you respond if your employer is acquired and you are offered an early buy out or some other option? Listen to financial expert John Browning discusss differeing liquidity events throughout your life. Learn more from John when you reach out to John at GuardianRockWealth.com.  

Welcome to the build your life podcastwith John Brown, build your life as a relaxed and unedited conversation withfinancial expert in number. One Amazon, best selling author John Browning Jones,the founder of Guardian Rock well, and serves clients across the United States.Johns the author of the book, build a life, not a portfolio, a guide to yourfinancial future, based on your personal values, which you can purchaseon Amazon or stay round to the end of to day, show and I'll. Tell you how toget a free copy, milled right to your door. I migeon your house for the nextfew minutes as we chat with financial expert and business owner John Brownie Ay John Brownie is a great week where Iam. How is it where you are? It is very nice. It's it's warm! It's sunny. Theywere saying we would get some some rain this afternoon, but I haven't seen ityet so I'll take a little rain once in a while. You don't get the help I grow.It does help the Bran Cla, yes, and it gives me an opportunity to go moe theart again, Hey I've got a question and thisdoesn't affect well. Maybe it does more people than I really know, but you've heard of people who have workedfor a company for ten fifteen twenty thirty years. Let's say they're,usually middle aged people and the company gets bought or something andthe company comes in and offers them an early buy out package or an earlyretirement package unpacked that for us I've heard about that happening. I'venever had it happen to me. But do you know anybody t a that's happened with aand does it turn out? Okay or what yeah I mean a Mi, the one that I know the best isis my dad. He he had an early retirement s by out and I don't know alot about it, but that was back in his. You know: Midhat S, I don't rememberthe exact year and he is now eighty...

...three years old just turned eightythree okay, so he had a pension on top of the buyout, so I mean he's doing.Okay, he's, you know he doesn't live a lavish. Lifestyle doesn't want toeither. So that's fine with him and he's getting a pension because they hada penshin back then and that's still paying him and he also gets socialsecurity, but he also has savings as well. So we're got just fine, so he so he heretired, mid late s and he's eighty three. Now so could you say that he's been retiredas long as he worked? Maybe yeah it's it's real close! If not, if not over,that Huh, that's amazing and as e as amazing, as that sounds you know, withthe length of life that we have now it's. It would not be unusual forsomebody to work thirty years and be retired, thirty or forty years, becausewe're leaning longer and as I'm glad you had had a pension. We talked aboutthat two or three episodes ago. We talked about how to create your ownpersonal pinsion. If you don't have a pension he's working or living offsocial securities, a portion of it. We talked about that a couple times ago.You said he's got some investments or four o one K we're going to talk aboutthat in depth and the in the coming week. So it's he's layering differentincome streams on top of each other to make up the whole river of income right.Yes- and that's that's really important, but help us understand this. This bio,early retirement think and I'm sure there are again a thousanddifferent ways that happens, but is there a way to kind of ball park?Here's typically when this is going to happen, is it a corporate by out or Imean when the something like this should should I expect something likethis in our lifetime? If I'm working for a company- or I mean what are theodds or what does it matter,...

I well it matters, but I think we can expect. I mean, eveneven as old as I am right. We no longer tend to work for the same company forthirty forty years. That's true when I tell people that I worked for one ofthe Big Wall Street companies for eighteen years. They kind of look at melike wowly, know somebody younger, because most of the time you don't workfor a single company that long anymore, for whatever the case may be either youdecided you could do better somewhere else or they could decide that youshould somewhere else, but with whenever you hear that therethat your company is being acquired or frankly, your company is acquiringsomeone else, you should be prepared to potentially be S, shall we we call itdown size reduction in force. Just plain Al laid off, there's a lot ofpolitically correct ways to to say it, but at the end of the day you no longerare getting that paycheck you're not going to that cubicle anymore right andyou know it's okay, people think like when I got when I was laid off aftereighteen years of the same company I mean I felt like, and they tell youthat that this is what happens. You felt feel like somebody died yep. Imean that because that at some point that had become my identity and I'mwilling to admit that, and I I'm happy to chat with somebody who'sgoing through it now, because it's tough, you think Konto just ended, butit didn't. I assure you it's a not just in, and the key thing is: What do youdo with? Typically, you get in chunk of money and plus you've got this for one K thatyou've been investing in. You probably...

...don't have a pension or anything likethat, but you got a four one K that you've been putting money into you.Maybe you didn't know exactly what it was involved with, or anything else orjust then goes out and does something right so now? What do you do that forone kick and number one as we've talked about inprevious episodes? Don't leave it there right? But what do you do then, with thischunk of money? Well, most people will take it and put it all in the bankand they're scared to death, and this is a normal, customary response and,frankly might be the right one depending on your situation. But another way to do it is, you know,keep looking for that job keep looking for that next, whatever it is andinvest that money in a way, that's right for you and it can actually be avery good thing, because if you get that next job right, because whenyou're today's fifty is, you know what seventyused to be or whatever they say about that, and you know I know I I'm fiftyI'm getting ready to turn fifty two and I am not ready to retire. I I'm, I hope,to work another twenty, maybe longer years, and because I like what I doit's right like you do as well yeah, so it could be a great thing. All of asudden. I got this chunk of money and I get my next job. Well, whatever youdon't, please don't go by a boat because I slator holes in the waterinto what you port running right. That's just okay: You can buy a boat,but maybe not the bigger one that I smallyeah. That's right, yeah, don't yeah! That's that's not the first thing youshould do if that, if so a this happens to if you're down, sized or outsize orearly retirement, but the first thing you should do really is called John andexplain to him what's going on, so he can guide and direct you yeah, takingmoney into cash may not be a bad thing, although there are pro some textramifications to that, but I don't know because I don't give financial adviceon this podcast. Nor do you John, and...

...so these are conversations we have tohave because the other thing you know early retirement early by out, so we'relike yeah that happened and the old time like with your dad. But what aboutpeople who start companies, tech, related companies and they build themfor five or six years, then they get bought out by a bigger competitor right,it's going to happen. As a matter of fact, I work with a couple folks that are inthis in this are going to be in this situation and it's a it's a realconcern, because there, those things are are typically: Sometimes they getshares. Sometimes they get cash. Sometimes they get both. Sometimes theyagree to work for that company for a certain length of time, sometimesthey're out the next day, and and what do they do? They have spent their lives.Building this company and suddenly all they're left with, is a chunk of changeor restricted chairs that they can't really buy anything with, but maybethey can reduce their risk if they do things the correct way,there are ways to reduce the risk of something that has to must be held.Okay, there's ways: we can reduce that risk for them. So there's there's a lot of things thatgo into it if you are just having what we call a liquidity event and that'salso by the way where we really get into building your life. Here we go not just your portfolio yeah, becauseyou have. Generally speaking, you have really put your life in thiscompany. If you've been that successful- and you have built something thatsomebody else was going to pay a lot of money for it, that's going to make lifechange money, you may not have built your life. Theway that you really want your life to be yep and you can chat with eonsor anyof those folks that have billions and...

...they have more than they can spend, andthey will tell you that money really doesn't buy happiness, but it can makethe life that you choose to build much easier yeah. If you treat it kindly yeah money money that somebody told methe other day done. Money is an amplifier. If you, if you're a wickedperson, is going to amplify that, if you're a good person, it's just goingto amplify that it's just going to amplify it's just a tool right, itdoesn't bring. I was watching a movie the other day and the guys said.Whoever said that money can't buy happiness, never bought a dog. I chuckle I Chaka, I'm like I, okay,there, you go other than buying a dog. Yeah money can't buy the happinessbecause we just see it in recent months. With you know, billion billionaires,getting divorced, money's, not buying them happiness, right right, and- andso you that's why you have to build a life, not a Po Prom, don't focus on theportfolio focus on building your life, use the port folly and let John Helpyou build the portfolio to sustain your life and give you the life style thatthat you want and when this opportunities, I love how you put thata liquidity event when you might a when you're sitting in a position where youmay have a chunk of change, as I say, come in your way, you need somebody like John Browningthat you can reach out to and say, okay help, and then you can have someconversations around it right, because that I mean some people just get a fewthousand dollars or tens of thousands others get a few tens of millions,because they've been part of a of a building of a com or whatever a TEcompany. They gets acquired by somebody else and you just may be a third or fourthor fifth person down the line, but you're going to get a chunk of changethat you never really expected. It's like wow. What a? What? What do we do right becauseyou're too young to retire at twenty five or thirty five right, but you canuse it to build that life right and...

...you're. So, true, you don't have to bethe owner of the company to make quite a lot of money in the vented liquid again youthe event you think of the there was a story of face book. The janitor youknow had. I don't know if it was a million or several hundred thousandsevens. But what do we do with this right yeah and at exactly if you suspect, by the way that you arein a company like this, that's going to have a liquidity event and oftenthey'll talk about it. You know, and if you're in that situation, talk tosomebody talk to a financial advisor before it happens, a because I willtell you this as well- and this is a really well known statistic- is that avery large percentage of the lottery winners go bankrupt. They go Vero yeah and the lot of, as do a lot of sportsfigures, young sports figures. I don't have good, who don't? Who Don't haveJohn Browling's in their corner? They make millions, but they spend millionsright yeah. So absolutely don't have the no guy t e? That's right. Theydon't johns the no guy. That's an no telling all your friends and neighborsand relatives who want money say no. The other thought I had John was yeahthat I've got a friend who's going into e sports. Sports is huge money there if you're in,if you or your children, are in e sports. They need to be talking aboutJohn About these things, because it is it's just crazy how themoney can flow so quickly and you can either blow it or stole it or invest itand build a life. And that's where you come in is helping people just thinkthrough navigate and say: Well, here's a here's, a right thing to do that.Somebody told me the other day that...

I'll probably get A. I think it wasShikimi, big basketball, Guy Right, O he's a successful guy yeah an off thecourt well because of the investment strategies and decisions he made earlyon his his John Browning gave him greatadvice, I guess- and now I guess he lives every month on, like I think hegets a million dollars a month out of his investments every every month. Youcould almost live on that I'm sure he had social security. On top of that andall that, but I m sure I thought, Oh, my goodness, but he made decisionsearly on knowing that he was going to make lots of money, but he didn't wasteit. He planned. Well, I'm sure he invested consistently and he's doingreally well right now and you don't have to make the moneythat Chakili neal makes to plan well and do well during your life and yourretirement. If you've got somebody like John Browning help, you navigating youguiding, you ask when you write questions to help, you build the life oyou want, and if you want the boat John will helpyou figure out how to get the boat. I hope you're playing for it. That'sright! That's right as that's what it needs to be. So John Thanks for anothergreat episode about early by US. I really when I first thought about this.I thought they just got kind of a non sequiter. As my eldest son would say,it's just nobody's. That's a that's a thing of the past, but the more we gotinto it. I realize now it's the thing of the current and future because ofall these byous that are happening. All these tech companies and differentcount. Young people are going to experience this liquidity event intheir life, where they're going to get ten thousand twenty thousand twohundred thousand. What are they going to do with it? Oh, the other thoughtthat I wanted to throw on her is when you're working at a company- and theystart talking about the IPO- that our company is going to do to have an IPO.Okay, that's what you need to call John and say: Hey May or may not happen, butwhat do I do? Because if you get stock in a company, that's going public that might be a liquidity event for you...

...right. So anyway, that's fun. I lovetopics like that that that come out of the blue and really surprise me thatwas fun. So John, that's all I have for today. Let's surprise them with a greatepisode again next time, because I know it's going to be good, so I lookforward talking with you. Then all right, we'll see you. Then money really is a big part of our livesand John Browning can help you and your family learn how to keep money in theproper perspective, it's important, but it's only a tool that can help youbuild the life that you want. If you like, John and mill you free copy ofhis book, build a life, not a portfolio, go to John's website, Guardian RockWealth Com and click, the contact to US link and send your request. John WillMella copy his book right to your door. Absolutely free! Thanks for listeningto building your life, podcast with John Brownie be sure to subscribe tothis podcast. So each new episode will be sent to you auto magically when it'sreleased have a terrific day, a.

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