Managing a Financial Windfall With Your Partner: IPOs

by | Feb 24, 2022 | IPO

Managing a Financial Windfall With Your Partner: IPOs

by | Feb 24, 2022 | IPO

financial windfall with partner ipo

We all know the cliche: most lottery winners end up broke.

And we also all know why:

When people who aren’t used to big financial windfalls receive them, they don’t know how to manage them properly.

Even if they’re given a “golden ticket” amount—where technically, on paper, they’d never have to work again—many still end up in a non-ideal financial situation, having blown their cash without making any stable, long-term financial moves.

So, when you or your partner are expecting a big financial windfall from an IPO, it’s completely understandable that there might be some anxiety around the situation.


How to Plan for Your Partner’s IPO Windfall

The good thing about an IPO, is that you usually know they’re coming. This gives you time to plan for them, with an approximate idea of what the amount of the financial windfall will be based on your partner’s current stock option package. Unlike winning the lottery or receiving a large inheritance from a long-lost uncle, you’ll have the chance to properly talk about and discuss what you’ll do with the money before it lands in your bank account.

But, because money is such a sensitive topic (and because a lot of divorces happen as a result of financial disagreements), it’s important to take care about how the two of you approach this topic, and understanding when and how the other person would like to make decisions.


Look at Your Pre-IPO Financial Plan

Hopefully, you and your partner have a basic understanding of what your common goals are, regardless of a financial windfall. Ideally, you’ll have decided on a general means of living, as well as longer-term, bigger financial goals you’re saving towards.

Are there ways this IPO windfall could help you accelerate some of those longer-term financial goals? (So you don’t get tempted to “waste it” on shorter-term satisfactions like material things and luxury trips?)

Is there one that you could knock out entirely, and advance yourselves (and your financial plan) by five years by getting that one financial goal under your belt and moving onto the next one?

These are all things to think about.


Don’t make any rash decisions: make financial moves slowly

It can be tempting to want to “treat yourselves” for years of hard work, but going on too lavish of a spending spree as a reward for the IPO can actually put a dent in its ability to have a positive, long-term effect on your financial goals.

A great approach is to put dates in the calendar, both before and after the IPO, when you and your partner agree that no final decisions will be made or actions will be taken. You’ll agree to explore your opportunities, talk to a financial advisor (or two), and make a plan you both feel good about… so no rash decisions are made and feelings aren’t hurt in the process.


Keep the IPO discreet from friends and family

As much as possible, try not to let other people in your life know about the IPO and the financial windfall you two will receive as a result of it. As exciting as it is, you’d be surprised how many people without financial training become self-appointed CFPs with boatloads of questionable advice to give you.

Not only that, but when large amounts of money are discussed, peoples’ needy, greedy natures like to show themselves, and you might be faced with more borrowing requests than you can handle… or that you feel comfortable saying no to.

Agree with your partner beforehand who you will and won’t tell this news to, and you’ll be able to protect your relationship from creeping, greedy hands or nosy know-it-alls who want to give you advice.


Congratulations on Your Financial Windfall!

Even though you and your partner (and your financial advisor) will have a lot to discuss soon, let me be the first to tell you:


It’s not everyday people experience the wonderful financial windfall an IPO can provide, and I’m sure you two are thrilled after all the hard work that’s gone into earning it.

If you’d like an impartial third party to talk through your options with, and who’s helped clients plan for more IPO windfalls than they can count, book a discovery call here to see if working with one of our top-notch planners is right for you.