So, your company just went through an amazing IPO.
What will you do with your equity gain? Do you have a plan?
I recently talked to a friend who’s company IPO’d at a share price much higher than expected. They originally targeted the price around $24/share but ended the day at $90/share.
My friend was beside himself with excitement, of course, and I understand why. That’s a HUGE gain.
But then, I asked him: “What are you going to do?”
He responded, “I’m going to let it ride. I think this company is going to be BIG. It’s my gut feeling.”
We need talk about gut feelings when it comes to your investments.
If you have a tremendous equity gain from an IPO event, but you don’t really have a thesis of why you’re going to let your investment ride, that’s pure speculation. Your gut feeling is NOT an investment strategy.
Instead of going with your gut, you need to make educated investing decisions on what to do with your tech equity by thinking through the following issues:
What To Do With Your Tech Equity Gain: Convert to Cash Plan
Do you have a convert to cash plan? In other words, how much do you want to take off the table in cash?
Having a large portion of your personal wealth tied up in a single stock can feel like Monopoly money. It’s surreal. That’s why you need to have a divest to cash plan. I talk about two GREAT ways to develop a cash plan in the video this week.
What To Do With Your Tech Equity Gain: Diversify
Take that cash and diversify across the market! Spread out your risk so that you’re not dependent on one company’s performance.
What To Do With Your Tech Equity Gain: Invest in Income-Producing Assets
Learn about and invest in assets that aren’t correlated to the stock market. Investing in real estate, for example, is a perfect way to get income producing assets in your portfolio, which is critical to long term success.
Companies are going through IPOs right now and creating great gain, so investing your time and talent in a technology company is a great way to build wealth even in an economic downturn. I call this concept your career capital, and if you’d like to learn more about trading your time and talent for equity, go here:
- How To Trade Your Talent For Tech Equity Shares
- What You Need To Know About ManagingYour Tech Equity
If you’re ready to understand how to move an IPO to cashflow, and make wise investment decisions with your equity gain, today’s video is for you!