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 podcast with John Browning. Build your life as a relaxed and unedited conversation with financial expert in number one Amazon bestselling author, John Browning Jones the founder of Guardian rock wealth and serves clients across the United States. John's the author of the book build a life, not a portfolio, a guide to your financial future based on your personal values, which you can purchase on Amazon, or stay around to the end of today's show and I'll tell you how to get a free copy mailed right to your door. I'm Michael The lawn, your host for the next few minutes as we chat with financial expert and business owner John Brownie. Hey, John Brownie, is a great week where I am. How is it where you are? It is very nice. It's it's warm, it's sunny. They were seeing we would get some some rain this afternoon, but haven't seen it yet, so I'll take a little rain once in a while. Yeah, it's girl. It does help to bring clarian yes, and it gives me an opportunity to go mow the art again. Hey, I've got a question and this doesn't affect well, maybe it does more people than I really know, but you've heard of people who have worked for a company for ten, Fif, twenty, thirty years, let's say. They're usually middle aged people, and the company gets bought or something and the company comes in and offers them an early buyout package or an early retirement package. unpacked. That for us. I've heard about that happening. I've never had it happened to me, but do you know any mighty has happened with and does it turn out okay or what? Yeah, I mean I am the one that I know the best is my dad. He he had an early retirement buy out and I don't know a lot about it, but that was back and his you know, Middle Late S. I don't remember the exact year, and he is now eighty...

...three years old. Just turned eighty three, okay, so he and he had a pension on top of the buy out. So I mean he's doing okay. He's you know, he doesn't live a lavish lifestyle. Doesn't want to either, so that's fine with him. And he's getting a pension because they had a pension back then and that's still paying him and he also gets social security, but he also has savings as well. So work out just fine. So he so, he's he retired mid late s and he's eighty three now. So could you say that he's been retired as long as he worked? Maybe? Yeah, it's it's real close. If not, if not, all over that. Huh. That's amazing. And as amazing is that sounds, you know, with the length of life that we have now, it's it would not be unusual for somebody to work thirty years and be retired thirty or forty years because we're living longer and, as I'm glad you dad had a pension. We talked about that two or three episodes ago. We talked about how to create your own personal pension if you don't have a pinsion. He's working or living off SOCI scurities. A portion of that. We talked about that a couple times ago. You said he's got some investments are for one Ky. We're going to talk about that in depth in the in the coming week. So it's he's layering different income streams on top of each other to make up the the whole river of income. Right. Yes, and that's that's really important. But help us understand this, this buy out early retirement. Think, and I'm sure there are again, a thousand different ways that happens. But is there a way to kind of ballpark here's typically when this is going to happen? Is it a corporate buy out or I mean, when does something like this should should I expect something like this in our lifetime if I'm working for a company or I mean, what are...

...the odds or what does it matter? Well, it matters, but I think we can expect, I mean even even as whole as I am right and we no longer tend to work for the Steam Company for thirty, forty years. True, when I tell people that I worked for one of the Big Wall Street companies for eighteen years, they kind of look at me like wow, you know somebody younger, because most of the time you don't work for a single company that long anymore. For whatever the case, maybe either you decide you could do better somewhere else or they decide that you should come around. But with whenever you hear that they're that your company is being acquired or, frankly, your company is acquiring someone else, you should be prepared to potentially be, shall we call it, downsized, reduction in force, just playing old, laid off. There's a lot of politically correct ways to say it, but in at the end of the day, you you no longer are getting that paycheck, you're not going to that capical anymore, right, and you know it's okay. People think like when I got well, when I was laid off after eighteen years at the same company. I mean I felt like, and they tell you that, that this is what happened. You feel like somebody died. Yep, I mean that because that at some point that had become my identity and I'm willing to admit that and I I'm happy to chat with somebody who's going through it now, because it's tough. You think kind of the world just ended, but it didn't. I assure you, it's not just in and the key thing is, what do you do with typically you get a chunk of money and plus you've got this for one K that you've been investing in. You probably don't have a pension...

...or anything like that, but you've got a one K that you've been putting money into. You maybe you didn't know exactly what it was involved with or anything else, or just think goes out and does something right. So now what do you do? That for one K number one, as we've talked about in previous episodes. Don't leave it there, right. But what do you do then with this chunk of money? While most people will take it and put it all in the bank and 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, and invest that money in a way that's right for you and you it can actually be a very good thing because if you get that next job right, because when you're today's fifty is, you know what seventy used to be, or whatever they say about that. And you know, I know at I'm fifty, I'm getting ready to turn fifty two, and I am not ready to retire. I'm and I'm I hope to work another twenty, maybe longer years and because I like what I do, it's right, like you do as well, and so it could be a great thing. Al Sudden I got this chunk of money and I get my next job. Well, whatever, you don't, please don't go buy a boat because, well, it's your holes in the water. Into which you pour money. Right, that's just okay. You can buy about, but maybe not the bigger one, maybe that small yeah, that's right, yeah, don't yeah, that's that's not the first thing you should do if that. If so, this happens if you're downsized or outsized or early retirement. But the first thing you should do relay is called John and explain to him what's going on so he can guide and direct you. You have taking money into cash may not be a bad thing, although there are probably some tax ramifications to that, but I don't know, because I don't give financial advice on this podcast, nor...

...do you, John, and so these are conversations we have to have. Because the other thing, you know, early retirement, early buyouts. We're like, yeah, that happened in the old time, like with your dad. But what about people who start companies, tech related companies, and they build them for 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 guess I work with a couple folks that are in this, in this are going to be in this situation, and it's a it's a real concern, because those things are typically sometimes they get shares, sometimes they get cash, sometimes they get both. Sometimes they agree to work for that company for a certain length of time, sometimes they'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 change or restricted chairs that they can't really buy anything with. But maybe they 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 that go into it. If you are just having what we call a liquidity event, and that's also, by the way, where we really get into building your life, here we go, not just your portfolio. Yeah, because you have, generally speaking, you have really put your life into this company. If you've been that successful and you have built something that somebody else is willing to pay a lot of money for, that's going to make life changing money, you may not have built your life the way that you really want your life to be. Yep, and you can chat with Elon Musk or any of those folks that...

...have billions and they have more than they can spend, and they will tell you that money really doesn't buy happiness, but it can make the life that you choose to build much easier. Yeah, if you treat it kindly. Yeah, money, money, is at somebody told me the other day, John, money isn't amplifier. If you're if you're a wicked person, is going to amplify that. If you're a good person, it's just going to amplify that. It's just going to amplify. It's just a tool, right, it doesn't bring out was watching a movie the other day and the guy said, whoever said that money can't buy happiness never bought a dog. I chuckle, I chalcol I'm like God, okay, there you go, other than buying a dog. Yeah, money can't buy the happiness, because we just see it in recent months with, you know, billion billionaires getting divorced. Money's not buying them happiness. Right, right, and and so that's why you have to build a life, not a perform don't focus on the portfolio, focus on building your life. Use The portfolio and let John Help you build a portfolio to sustain your life and give you the lifestyle that that you want and when this opportunities. I love how you put that. A liquidity event when, you might add, when you're sitting in a position where you may have a chunk of change, as I say, come in your way, you need somebody like John Browning that you can reach out to and say, okay, help and then you can have some conversations around it, right, because that I mean. Some people just get a few thousand dollars or tens of thousands. Others get a few tens of millions because they've been part of a building of Acom or whatever, a tech company that gets acquired by somebody else, and you just maybe a third or fourth or fifth person down the line, but you're going to get a chunk of change it you never really expected. Just like wow, what? What? What? What? What? What do I do? Right? Because you're too young to retire at twenty five or thirty five, right, but you can use it...

...to build that life, right, and you're so true. You don't have to be the owner of the company to make quite a lot of money in the event of the liquid again event. You think of the there was a story of facebook, of the the the janitor, you know, had I don't know if it was a million or several hundred thou. Suddenly, what do we do with this? Right? Yeah, and that's exactly if you suspect, by the way, that you are in a company like this that's going to have a liquidity event, and often they'll talk about it, you know, and if if you're in that situation, talk to somebody, talk to a financial advisor, before it happens. Yeah, because I will tell you this as well, and this is a really wellknown statistic, is that a very large percentage of lottery went here's go bankrupt, they go back. Yeah, and there's a lot of as do a lot of sports figures. Young sports figures don't have good who don't? Who Don't have John Browning's in their corner? They make millions, but they spend millions, right. Yeah, so absolutely don't have the no guy. They that's right, they don't. John's the no guy. That's anno, telling all your friends and neighbors and relatives who want money, saying nope. The other thought I had, John, was yeah, the I've got a friend who's going into esports. ESPORTS is huge money. They're right. If you're in if you are, your children are in esports. They need to be talking about John, about these things, because it is. It is just crazy how the money can flow so quickly and you can either blow it or stow it or invest it and build a life. And that's where you come in, is helping people just think through, 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.

I think it was Shaquille O'Neil, Big Basketball Guy, right. He's a successful guy. Yeah, and off the court well, because of the investment strategies and decisions he made early on his his his John Browning gave him great advice, I guess, and now I guess he lives every month on like I think he gets a million dollars a month out of his investments. Every every month. You could almost live on that. I'm sure he has social scurity on top of that and all that, but sure thought, oh my goodness, but he made decisions early on knowing that he was going to make lots of money, but he didn't waste it. He planned well. I'm sure he invested consistently and he's doing really well right now, and you don't have to make the money that Shaquille O'Neal makes, to plan well and do well during your life and your retirement. If you've got somebody like John Browning helping you, navigating you, guiding you ask me, you write questions to help you build the life you want and if you want the boat, John will help you figure out how to get the boat. I hope you playing for it. That's right, that's right, that's what it needs to be. So, John, thanks for another great episode about early by US. I really want to first thought about this. I thought they just got kind of a nonsecuitter, as my eldest son would say. It's just nobody's that's that's a thing of the past. But the more we got into it, I realized now it's the thing of the current and future because of all these buyouts that are happening all these tech companies in different kind of young people are going to experience this liquidity event in their life and they're going to get tenzero, Twentyzero, two hundredzero. What are they going to do with it? Oh the other thought that I wanted to show on here is when you're working at a company and they start talking about the IPO that our company is going to do. The have an IPO. Okay, that's what you need to call John and say, Hey, may or may not happen, but what do I do? Because if you've got stalk in a company of this going public, that might be a liquidity event for you. Right. So,...

...anyway, that's fun. I love topics like that that come out of the blue and really surprise me. That was fun. So, John, that's all I have for today. Let's surprise them with a great episode again next time, because I know it's going to be good. So I look forward to talking with you then. All right, we'll see you there. Money really is a big part of our lives, and John Browning can help you and your family learn how to keep money in the proper perspective. It's important, but it's only a tool that could help you build the life that you want. If you like, John Emilie a free copy of his book build a life, not a portfolio. Go to John's website, Guardian rockwealthcom, and click the contact US link and send your request. John Will Mell a copy of his book right to your door absolutely free. Thanks for listening to building your life podcast with John Browning. Be Sure to subscribe to this podcast so each new episode will be sent to you automatically when it's released. Have a terrific day.

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