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Money Management Lessons I Learned After Selling My Company

With that announcement came the realization I now had more money than I knew what to do with.

Minutes
Minutes
Oct 22, 2019 · 4 min read

By Michael de la Maza, Co-Founder of DemingWay.com

I’ll never forget the day I received a phone call that would set a new course in my life. It was July 2011 when the CEO of InQuira- a startup I’d helped launch-told me the company had been acquired by Oracle.

With that announcement came the realization I now had more money than I knew what to do with.

It had been over a decade since I co-founded the company and I’d been employed in a number of jobs since then. Most recently, I started consulting as an agile coach on the side, hustling to grow my career.

Now I could afford to not work at all. Following the news, I even began drafting a list of all the things I planned to buy with my newfound riches. I could finally purchase that Exclusive Resorts membership and get a Marquis jet card. I could drive around town in a new Fisker Karma and rock a Patek Philippe watch. Maybe I’d even buy a case of that pricey Araujo wine.

But as I contemplated every purchase, I couldn’t help but pull myself back to reality. Spending money without limitation would only push me further from living an authentic life. I would be operating in the world of Paris Hilton instead of the hardship experienced by a vast majority of humanity.

Aware of the potential to waste my payout, I made a choice to not spend any of the exit money for one year. What I learned from that decision changed my life.

Vowing to not overspend for one year helped me clear the belief that self-worth equals net worth.

Having newfound wealth opened my eyes to a lot of things. I realized I was spending at least 80 percent of my waking hours thinking about money, or trying to make more of it. No longer needing to make money, I felt even more shame and humiliation. If I wasn’t working, I didn’t know what to do with myself. And if there was no struggle to make money, I was nothing.

By sticking to a middle-class income for one year I would be living the lifestyle of a family of four. I would be able to stay in touch with reality-and preserve my money.

As a result, my day-to-day experience was no longer based on achieving success and dollar signs. Over the course of the year, I stopped worrying about money and learned to value my connection with others. Nothing could compare to the joy I felt in InQuira’s success-to see all the people who had jobs and were happy as a result of this start-up I’d helped to build. I went from working to make money, to working at being in a state of loving-kindness. And rather than be disconnected from the greater populace, I found myself connecting with people in a supportive, caring way.

I was no longer allowing my net-worth to define my self-worth.

Maintaining that financial discipline has been very valuable today.

I’ve always had a personal rule that my agile coaching income would be what determines my lifestyle-it’s not my agile coaching income, plus dipping into the exit money. Today, with the bulk of my wealth invested, I don’t use it to take lavish vacations or buy expensive cars and watches. That would be living outside my means as an agile coach.

But it wasn’t always that easy. When I started Heart Health Scrum, I quickly learned that I’d chosen a challenging career path.

In agile coaching, nothing is certain. Jobs can last a few months or weeks, making it hard to predict income. And layoffs can happen without any notice if a company decides to shut down an entire agile transformation effort.

Several years ago, a client waited over six months to pay me. The experience forced me to hustle, but I didn’t have to dip into my reserve funds to pay bills. I was already accustomed to living off my agile coaching salary and budgeting for my living expenses.

That experience taught me the importance of having a buffer-I never wanted to be in that position again. Maintaining that financial discipline of having my career actually pay for my lifestyle, and not relying on this one-time exit money, became very important.

As a result, I made a decision to increase the amount of money I had in my emergency fund. To be comfortable, I would set aside 11 months’ worth of living expenses as opposed to the typically recommended six. Recently, due to the volatility of the market, I increased that figure by 50 percent. Now, my goal is to have even more-about 16 months worth of reserve emergency funds.

This has been a useful policy to have in place. It’s kept me from going crazy and squandering money on things that wouldn’t provide long-term value.

Looking back, I’m satisfied with my decision to not spend my exit money for one year. The experience has given me a better perspective on wealth while teaching me a valuable lesson: that money isn’t everything, and it certainly doesn’t determine your self-worth.

If you would like to learn more you can connect with me on Linkedin to read the latest articles!

Here are a few other articles you might find helpful:

Impactful Change Requires A Deeper Mindset. Here’s Why

Fast-Growing Industries Are The Perfect Fit For People Looking To Change Careers. Here’s Why

Originally published at Minutes.

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