Life after selling a practice can become even more complex than you anticipated. You may have been looking forward to days of relaxing in the sun, but instead you are thrust into a multilayered web of money decisions that will add unexpected stress to your life post-sale. The key to surviving the first year after you sell your practice is to develop a hearty financial plan. Here are the five steps you need to take to stay in control:
Enlist a money manager. Hiring the right money manager should be your number one priority. They will be able to guide you through the early days of your post-sale life, and present you with plenty of products and services that will ease your transition. They will also work to protect your interests along the way.
Create a new budget and balance sheet. Your balance sheet will help you see the big picture when it comes to your funds. This includes all of the money that is squirreled away in trusts and other accounts and how accessible the money is. Your new budget will take into account changes in your spending now that you're not spending 50+ hours a week at the office. Make sure that your family is aware of the change and are prepared to make changes to their spending habits accordingly.
Double check your insurance and will. Your financial professional can help you reassess your needs when it comes to health and life insurance. Your attorney can help you rewrite your will to account for changes in your financial situation. These are items that should be checked off your list within the first one to three months after selling a practice.
Sort out your taxes. Taxes are inevitable and you need to start preparing for them now. Your money manager should be able to offer you strategies for deferring some or all of your tax liability, and can point you in the direction of any deductions that you should be taking.
Expect the unexpected. Throughout the first year after selling your practice your life will take on many new characteristics. Whether you decide to spend more on travel, or you find a new business venture to engage in, you need to leave yourself enough room to work through these changes. Having an extra cushion in your financial plan will ensure that your money goes the distance and you have plenty to live on in the future.
By hiring a money manager you can complete the first four steps of your new financial plan immediately after selling a practice. Then it's up to you to see where life takes you and adjust your financial plan year after year as your spending changes and you take on new challenges.