Im considering my fourth buy out in 7 years. This particular buyer will legitimately be a competitor should I not sell, and for that they are offering close to double what the others have at a multiple of 6-7 earnings. For my small size and industry that is a very, very fair offer, assuming no major clawbacks during diligence. The offer should come as early as next week to a month. We are 6 months in.

If I take it I may be obligated to work for them for a year or two though I'm going to try and get out of that and do contract work for living experience expenses until my wife's business(practice) is big enough for me to join and support perhaps 2/3 the standard of living we have enjoyed. At my income level I haven't had diddly in terms of available tax qualified investments for about 9-10 years save the simple IRA we do for our employees. Much of my earnings were reinvested into the business. So I am heavy in RE, including SFH and CRE, have some whole life products(save the criticism) that I plan to fund with cash from leasebacks from the buildings we operate out of until age 62-63. I'll be 48 by the time this deals close, if it ever makes(giving it a 50/50 chance)

I'm nervous as hell as what to do with a lump sum of money. Put it inside a trust and passively sit in in the market? With all gains taxed. I hope not to need it for 15-20 years and have hopes to leave behind a large amount for kids and GK while enjoying a comfortable part time working retirement. Over 15-20 years how much should I expect that money to grow, net of inflation? Let's pretend it's 1 million.

While premature to congratulate you on an exit, they are in order for the successful position you put yourself in.

In all likelihood, the risk associated with investing in the market is much less than the risk associated with your business. That is often hard for business owners to see because of their direct involvement in the business.

If you carve out enough liquidity for taxes from the transaction, and spending shortfall while your wife's practice ramps up (+ a cushion), you should be able to commit to long term investing without much concern over near term value fluctuations.

As far as growth expectations, most forward looking research I read suggests outpacing inflation by 2-3% over the next decade or so to be reaonable.

That is depressing. 24 years to double at 3% net of inflation is that right? Makes me want to hang on despite risk and PITA it is.

Pelayo, A few years ago I had an offer to sell out. It wasn't retirement type of money, but it would've given me the most money I had ever had.

I asked a friend who had sold his business to lunch and told him what I was thinking.

He asked me what I would do the next day to generate the kind of income I was currently making. I realized I couldn't come up with anything based on the amount I would receive after I paid taxes and debt.

I really enjoy what I do, so i decided to keep going despite the risk. My company is now worth 3 times what it was that day.

It sounds like you are maybe tired of your business. If that's the case, then what I said above might not apply.

I truly feel that though there are risks with a business, it's the best way to generate income.

Thank you

I do love what I do and won't be replacing the income

If I hold. I'll need to expand which in this location I have no worries about failure

If I did that I'd be at my professional ceiling without help having three shops. Changes in regulatory laws and far abs away my biggest risk if I stay.

Thanks for everyone's input

No guarantees in fact unlikely I do better in a sale unless I grow to 5-7 and for that I'd need logistical and operational help, other people's money and loss of some or all control. But multiple might be retirement type money if such a scheme worked

Neither option is perfect

Sell business near end of cycles. Buy/start new business in early cycle. Odd you would be offered a reasonable multiple without a full year's financials minimum, but sounds like it could a good time to be selling to me. Not sure why you would need to fund a Trust. There is no income tax benefit, and doubtful an estate tax issue (first $15M@ is exempt for married couple currently) yet.

If you're healthy consider index UL or annuity regardless of health. Much lower expenses. At a minimum, go talk to a CFP in your area who doesn't work for an insurance company. And if you want to consider active portfolio management, find a professional with real accreditation(s) in investment management as well. Most of them out there are proprietary garbage or something you can pass in a weekend.

Once you're an accredited investor ($1M+,) many more options available to you to better manage portfolio risk, including access to professional advice. At $5M+ qualified purchaser, you can incorporate even more powerful solutions to maximize risk/return metrics just like an institutional investor, and you'll have your choice of advisors. Most DIY don't have enough money yet to experience quality advice, and they're opinions can be jaded. As you get older and more successful, most people realize the value proposition of paying for advice is very real.

Good luck making your deal!