Liquidation events

Link to YouTube – https://youtu.be/XqiM7kl-Ujo
Link to BuzzSprout – https://www.buzzsprout.com/2136084/episodes/17711150

Summary:

Sudden wealth? Whether it’s from selling a business, receiving an inheritance, hitting it big with a stock, or another unexpected event—don’t let it overwhelm you or disappear too fast.

In this episode of The Money Pig Podcast, Tim Goodwin and Joe Beckford share how to navigate a windfall with clarity and confidence. They discuss the emotional highs and lows that come with instant wealth, plus the most common mistakes people make—like overspending too quickly, “going public” before you’re ready, and making big moves without a plan.

You’ll also learn:

• Smart tax strategies to help you keep more of what you’ve earned
• Privacy & estate planning tips to safeguard your wealth and relationships
• Why building the right team (advisor, CPA, estate attorney) is essential
• How to turn a one-time financial event into a lifetime of peace, independence, and generosity

Whether your sudden wealth is a happy surprise or comes from a challenging life change, this conversation will help you steward it wisely and align it with your values.

Tune in and discover how to make your money work for you—without letting it run away from you.

Read the blog that inspired this episode and download the guide:

Blog Link: https://www.goodwininvestment.com/navigating-a-sudden-wealth-event/

Like, subscribe, and leave us a review if this resonated with you!

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For personalized financial guidance, schedule an intro call with our team at Goodwin Investment Advisory in Woodstock, Georgia. Our CFP® professionals can provide advice and help you navigate how to invest your wealth and plan for your retirement. We’d love to help you live out your legacy! To learn more about the benefits and services we offer click here.

Goodwin Investment Advisory is a Registered Investment Advisory firm regulated by the securities and Exchange Commission in accordance and compliance with securities laws and regulations. Goodwin Investment Advisory does not render or offer to render personalized investment or tax advice through the Money PIG podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Transcript:

And welcome back to the Money Pig podcast. We are super excited to have.

Joe Beckforth here in the studio today and and don’t forget notorious notorious PIG. We’re going to have you back Joe. Thank you. We’ve got a new little format here. I it. Not quite like touching these side to side. I love what you’re doing. Really spurs it up here. So excited to have you here today. We’re going to be talking about navigating a sudden wealth event. How good an investment advisory can help you plan wisely. But Joe before we do.

Yes. no. Listen, I, you know, we’re both cat lovers, but I also have dogs. And I’ve been thinking about changing my dog’s name to Six Miles, because that way I can tell people I walked six miles today. But I don’t think… All right, moving on from the dad joke. Tell the audience something they may not know about you.

Tim Goodwin (02:11.886)
first cruise ever. know you were thinking at your tender age. Sure you haven’t. Yeah, it was awesome. Yeah. Royal Caribbean. Yeah. Not a plug for Royal Caribbean. you recommend. like you’re not getting a kickback from Royal Caribbean. unfortunately. No, they did a great job. And they all did a Caribbean. It was like Mexico. Okay.

Western Gulf had two stops. Family and friends, Not just family. Oh, just family. Yeah, my wife’s family, brother and sister and their families together and the cousins got together and yeah, we had a really good time. You said they had a good ice show or something? Yeah, a really good ice show, yeah. Like an ice skates kind of show. I mean, top notch. Very swirly around on that little blade on the touch of their feet. There was this poor young

woman that was being spun in the air on the oligarh she does not get paid enough. It comes way too close to the iceberg or whatever she’s getting paid for. But yeah, it was cool. I highly recommend it. Awesome. Well, I’m sure just as exciting as watching the Ask a Page show on the cruise is going to be this topic. But I think it’s a super, super important topic because often people are coming in to almost feel like a liquidation event. Something happens. Maybe there is a liquidation event like selling a business or maybe it’s around sad things.

like a divorce or losing a loved one.

Or maybe it’s just like, well, gosh, I got these stock units from work or I made this investment in the stock. It’s really, really taken off. So it kind of feels kind of feels sudden. So we thought we would kind of break down a little bit of how we help our clients that are coming to us or potential clients that are dealing with this kind of sudden increase in wealth. So I think initially it feels like really excited, right? Because you’re like, maybe you weren’t expecting this money in some of those situations.

Tim Goodwin (04:10.736)
but any way that you’re getting this kind of increase in wealth certainly feels overwhelming. So from your experience, what are these first emotions and challenges people face when they’re kind of getting this instant influx of money? I think you’re right because you hit the nail on the head when you said overwhelming, right? Because you’re going along with your normal life, which you expected, and then all of a sudden your financial life is significantly upended. And we are…

We know that money is tied to the heart. so when things with your money change, your demeanor and whole outlook on life tend to change and things like that. see that every day with people, right? So when all of a sudden you have this blessing, how do you make this blessing not become a curse? And I feel like what I see a lot of times for people who where it was really out of the blue and that’s usually like a sudden inheritance or something, maybe from a distant relative you didn’t even know.

We’ve had that happen here a couple of times, right? Selling a business, you kind of know that’s coming. It’s like already on your net worth if you’re selling a business. just became like, you’re already doing that. Right, if it’s sudden. But if it’s sudden like that, it’s like, wow, this is awesome. And what an awesome responsibility.

I was not prepared to do with this and what the heck am I gonna do? So there’s these this euphoria good and then there’s this dread and it’s all happening at once and Sometimes you just need somebody to help you kind of unpack it and Separate it out. Yeah, absolutely All right. So so let’s say somebody that’s great that makes a lot of sense to me So let’s say they come to you at this big wealth event that’s happened for them. It’s really changed things You know, we’re talking about kind of the overwhelming emotional side

when it really comes down to advice, know, two part question here, what advice do you give them typically? And what’s a common mistake you see when people suddenly have more money than they used to imagine? The biggest mistake that I see is all of a sudden, sometimes people go buck wild and spend a lot of money.

Tim Goodwin (06:18.862)
Like what are some really fun examples? How are they spending this money? Like I’ve always wanted a Porsche, so I stopped at a Porsche dealer on the way here and I put in the order for the 911 and it’ll be here next week. Oh, they didn’t drive it here. I would have been like, well, let’s go for a Well, have a custom-ized, it’s not ready. Oh my God, exactly. So I think that’s the thing that I see a lot. And then also I’ve seen people go public early.

Which I typically don’t recommend. public with their friends. I’m not going public like having an IPO or something. No, mean going public without like, oh yeah, I just had this huge thing and then that is going to be all kinds of other non-necessarily financial consequences. We can get into what are the pitfalls you need to worry about and stuff like that.

I think going public early with other people, three things I think, spending money really quickly. Right. Without having a plan. Right. Going public with people not having a plan. And three, just not taking a peek and not have a plan. think those were the big. Yeah, I think there’s attention to the news there where like you take a breath, like slow down, you know.

Don’t make a sudden decision that you might regret, but also we need a plan. You need to be a good steward to figure out how to manage this money. But coming back to the mistake you said about going public, you know, I won’t share their name, but you and I remember.

old lady and she did she had sold especially it was a mobile park that her husband owned and they sold it and it made her a liquid millionaire but she shared that with the family and it created all kinds of animosity and jealousy came out and greed came out and really negatively impacted a lot of relationships she had with her family I remember her telling me that she was she had never told her family

Tim Goodwin (08:23.522)
how much she made from the sale of that property. Now that was a long time ago, know, a dollars isn’t quite what it was, but I think that’s a great example. Let’s just kind of keep it private. Let’s take a breath, you know? We love encouraging folks to enjoy it, right? How do you want to be generous and how do you want to make like a memory-diving or experience out of this? But let’s also do that within reason with your plan. Maybe you really need this to keep it going.

to retire sooner, which is about fortunate on the way here. now you don’t have that option. Right. Right. Yeah. Okay. So other things that come into play, well, is there other advice or is that kind of the advice too? Is there other advice that you My first thing is just take a beat. Just take a beat. Okay. Very first thing. Yeah. Second thing behind that.

is get your team together. Okay, and who’s the team? To me, the team is twofold at first and then maybe a third, right? So I think your financial advisor and your CPA. And if you’re the four, maybe your life hasn’t been complicated enough to have a CPA. Right. It all of a sudden it’s- Now it is. So you need one. So that’s great, because that leads me right into the next question, which is really around taxes, right? Because taxes can take huge bites out of potential windfalls.

I mean, it’s sad when you lose a loved one. The good news though about your inheritance is that’s typically coming to you tax free. It’s a step up in basis on your date of death or it’s life insurance that usually comes tax free. But if it’s realizing a business sale or a home or you want to reduce this concentrate position of the stock that’s really skyrocketed then.

and taxes are something that we need to be strategic about. So how do we help clients navigate those tax implications that could be in the hundreds of thousands of dollars? Well, you’re right. And we do figure out what kind of tax, all taxes are not created equal, right? So what kind of taxation are you looking at? Are we talking?

Tim Goodwin (10:20.162)
To your point, if you got a million dollar life insurance policy that’s gonna pay out, they’re going to pay you a million dollars in cash. And it is tax-free. Awesome. That’s not everybody’s situation though. Like you said, what if it’s an IRA that’s paying out or there’s a distribution? I know a lot of clients who have some deferred exact comp thing that is gonna trigger the second they retire.

and it’s going to be taxable income. And they know that the WOM is coming, but all of a sudden it’s, here’s all this money, what are we going to do? So to your point, how do you mitigate some taxes? So one, figure out, is it taxable? How am I going to be taxed? Is it going to be taxed at ordinary income or is it going to be cap gains?

Can I change that a little bit? Like, I drag it over two years? If I’m going to get this, can I take some of it in November and some of it in January or February and even break out the tax burden a little bit that way? Is it going to be cap gains? And if it is, is there anything I can be doing on my income side? Like, I don’t know. Maybe I’d…

Don’t work as much this year. If I’m a freelancer or something like that, maybe I just don’t make as much income this year because now I’m going to be getting into that investment tax because my cap gains are so big. there’s a lot of times there are ways we can counsel people to maybe you throw all your income a little bit to be able to add Yeah, of quick takeaway, that quick one, like the deferred comp.

example that you gave, if somebody would retire in December and then make all of that deferred income real, it also includes their whole, almost their whole year, is that income they made. If they just can work another few weeks and make it to January, then, you know, turn on the pink slip or throw in the towel, so to speak, and get all the deferred income then, and then not really worry about producing a lot more income that year than their effective rate on that. I imagine it could be substantially less. 100 % sure.

Tim Goodwin (12:21.762)
So you mentioned this earlier about the kind of the privacy of it, you know, maybe not going public with it. So when a client has, you know, this kind of sudden increase of wealth and risk, what steps do we help clients to ensure that they’ve got privacy to keep their families financially secure for the long term as well? Well, some of that stuff is around wealth preservation, right?

State planning, wealth preservation kind of thing. So if you’ve got a will and you were planning on having going through probate and all of that stuff, you might consider not doing that.

this might be a situation where you want to set up a trust instead. And how you keep your estate out of the probate courts. And trusts are settled in private matters and that’s one of the big ways. Right, then by putting some criteria in that trust, maybe it goes out to heirs over time or after certain criteria were met, is it just given to them all at once?

I think too the normal probate process involves kind of this like publishing and a legal newspaper, a legal organ, think is a legal order for it, In case like you have time for creditors like claim dearest state or something like that. So you don’t have to do that with trust. I think that’s a really, really great point. All right, so final question.

Ultimately, most people don’t just want money sitting in a bank. You even mentioned the life insurance, for example, a lot of times like boom, million bucks sitting in cash. Most of our clients, if they have a sudden influx of wealth of money, they really want to use it as we call it, live their version of rich. What does that look like? Whether it’s retiring early or getting generously to nonprofits or doing something like see their family.

Tim Goodwin (14:09.102)
Share with us how we help clients turn this one-time event into a lifetime of, well, we’ve got a Taurus PID here, but a lifetime of peace, independence, and generosity. That is a great question. You hit on, think, the three prongs that we try to focus on when we’re doing that. I’ve got a client who’s relatively recent who did go through this exact thing where a-

relatively distant relative past and left a pretty decent inheritance and this person felt like, you know, I was going to have maybe, I was maybe going to have a comfortable retirement, but maybe it was not going to be so comfortable. And now all of a sudden, I’m not only able to have a comfortable retirement, but I’m going to be able to pay for education for my kids. I probably got some bandwidth to leave some charitable legacy. So

So we’re going into all of those things. saying, do we, you know, and you know, I used to work for Delta, right? So I always use the airplane analogy. was like, well, put your mask on first before you put anybody else’s mask on. let’s get your financial plan to where your retirement works the way you want to work. And we had everybody go through, with zero. And we sent that to all of the client base, right? So we inherit people to, we encourage people to live their lives to the fullest, right? So do that.

But also how can we be generous and how can we make sure that you take care of the loved ones that you want to take care of while we’re here? And that could be paying for a wedding or camping on the house or education or something like that and get the funds all together. And so we just consider, you know, what is most important to you? And let’s proceed with that. And those are kind of the three that we recommend. Let’s go to explore these paths. Yeah. And that’s, you know, that’s part of our ethos here, too, is like to guide the client to be the hero with their money. We certainly have our own.

as in what you could do or should do. But I think we do a great job here of trying to get to know the client. What are your values? What are your hopes and dreams? We hope that your money outlives you and there’s this great plan and that you’re purposeful with it and it takes care of you. But in terms of the timing, what that looks like, we’re really trying to unpack that from the client. So anything else that you wanted to share around this that you maybe want the listeners to hear, to think about in the case of Sudden Wealth?

Tim Goodwin (16:27.528)
Well, couple things. You’re probably dealing with a level of complexity that you’ve never dealt with before. So like I said, first, take a B. Two, hire a team that you trust that you think is going to help take care of you. And I think step one is a good advisor. Step two is a good CPA. And sometimes you find a good advisor through…

CPA sometimes you find a good CPA through advisor either way course obviously we recommend people hire us as that trusted advisor You probably have an estate attorney right behind that as well to figure that stuff out And you probably want to be talking to insurance if you don’t have a life

All of a sudden your net worth is a lot more it was in the umbrella policy. You’re at risk potentially and that goes into the whole public too, right? Right. You weren’t a millionaire yesterday, now you’re definitely a today. You’re at much more liability.

for being sued and all kinds of things happening. So you want to make sure that you’re covered from liability. That’s good. And just as close as we can sell insurance, we’re generally recommending our clients when they start to some wealth outside of qualified accounts or primary real estate, when you start thinking about this liability and spread of policy. that’s great advice. That’s really great. Well, thank you, Joe, for coming today. Listeners, if you want to read more about this, we’ve got a blog on this very topic. So check out GoodwinInvestment.com.

and sign up for our blog and you can look for this in the Knowledge Center. Joe really loved as we sign off here sharing something we’re grateful for. So while you’re thinking about that, I will share. just, I got home yesterday and my younger daughters and my

Tim Goodwin (18:06.542)
spoke up and my oldest daughter, Kayna, was at home and it was still kind of nice outside. was like, hey Kayna, do you just want to go for a walk? I haven’t closed my rings yet. And so she was like, yeah, it was just cool. Just like, you know, go on a simple walk down the nice little country road with my 17 year old daughter and just talk to her about the first couple of days of school and what’s going on. was just really cool. So just those special little simple, simple moments because I couldn’t just went out there and have to puff to get my calories burned and my rings closed. But I kind of thought, hey, maybe Kayna wants to go.

I was like, pretty cool that she wanted to go on with my 17 year old daughter, I want to go on a walk with her dad. So she just talked to me the whole time. So it was great. Yeah. You know, I’ll say to those, I’m going to take a page from your book and say the same thing when we were just on this cruise, we got some time.

We had a little bit of a beach day and I found myself sitting on a chair next to my daughter Jade and we just had like this nice 20 minute conversation where we just got to connect and unpack and it was chill and it wasn’t like anything I was trying to get out of her or force her to actually talk the whole time and I just listened and I remember thinking at the time, know, this is what it’s about. This is an important step. So I’m just grateful for little moments like that. Yeah, absolutely. Absolutely. Well, that’s so great.

Thanks again Joe for coming and for talking about this and listeners we hope it helped and if we can help with any of that reach out to us until next time bye bye

The Money PIG podcast is hosted by Reid Trego. Goodwin Investment Advisory is a Registered Investment Advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with securities laws and regulations. Goodwin Investment Advisory does not render or offer to render personalized investment or tax advice through the Money PIG podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

For personalized financial guidance, schedule an schedule an intro call with our team at Goodwin Investment Advisory in Canton, GA . Our CFP® professionals can provide advice and help you navigate how to invest your wealth and plan for your retirement. We’d love to help you live out your legacy!

Goodwin Investment Advisory is a Registered Investment Advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with securities laws and regulations. Goodwin Investment Advisory does not render or offer to render personalized investment or tax advice through the Money PIG podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.