When people think about building wealth, they usually consider the obvious tools: brokerage accounts, 401(k)s, maybe a rental property. But many forget the single biggest financial factor for wealth-building — income.
For someone in their 30s or 40s, the lifetime value of future earnings can dwarf everything else on the balance sheet. Yet the decisions that influence your earning power often get made separately from the financial plan they’re funding.
In all my years in this business, I’m not sure if I’ve ever been asked by a client about an upcoming initial public offering. Well, that has certainly changed in the last couple of weeks.
Conversations are heating up about the IPOs of some of the most talked-about tech companies in America. I’ve spoken to tons of clients about SpaceX, Anthropic, and OpenAI. And while I can’t give my full opinion in this forum due to compliance rules, feel free to give me a call if you want to hear Dave Unfiltered.
Here’s what I can say: We’re potentially talking about three of the biggest IPOs of our generation. And, as such, they’re coming out with new ways every day for you to get a “great deal” by getting in early on the opportunity. So, should you take it?
A lot of my clients, as they near retirement, start considering either relocating or buying a second home in warmer weather, often in Florida. When they do the research, they often find builders with websites offering great deals on houses; maybe they’re knocking tens of thousands of dollars off the asking price, issuing credit toward closing costs, or even buying down points.
When they tell me about those “special, one-time offers” that seemingly are available to anybody year-round, I usually ask them: Don’t these builders seem a little eager to give you this great deal? Have you actually looked into the comps, the insurance costs, the builders’ reputations?
Do you have a thorough understanding of what exactly you’re buying, and is it worth it?
If the answer is yes, then by all means, make your purchase. But if the answer is no, I encourage them to do a lot more research to make sure that they’re not being sold a bill of goods.
Now what does that have to do with IPOs? In both of these situations, as a buyer, you’re trying to figure out if what you want is a reasonable deal, can fit in your budget, and can get you closer to your preferred retirement lifestyle. And that takes work.
Have you read the prospectus? Or the amended prospectus? Have you looked at the history of IPOs and how many of them are winners? How much of your portfolio are you willing to risk without derailing your retirement plans?
I can’t give you any specific advice on this here. But I will tell you that, if billionaires are willing to sell up to 30% of the initial slice of their companies to the general public, I don’t think that it’s any different than a builder saying they’re willing to knock 30% off the price of their house. Buyer beware.
Our team’s experience has been that the clients who are steadily working a plan toward a preferred future tend to experience a higher degree of success over time than the clients who dabble in get‑rich‑quick schemes. And I’ve seen it all — from Beanie Babies to sports memorabilia to cryptocurrency to day trading. They’re usually the ones who aren’t interested in slowly saving money over time.
Whether you want to go to Florida or go to the moon, the question that you should ask yourself before making either of those transactions is the same: Am I getting a good deal? We welcome those conversations with you, so that we can help you figure out what fits in your budget and how you can make those purchases work best for your family.
Reach out today, and let’s talk. Dave Unfiltered can be a lot of fun.
This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. Past performance is no guarantee of future results.
Article by David Smyth, Senior Partner and Wealth Advisor at Family Financial Partners — a financial services firm in Lexington, Kentucky.
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As the holiday season approaches, generosity often tends to take center stage, and for good reasons. Giving back not only supports the causes you care about, but it can also provide potential tax advantages before the year wraps up. Whether you give regularly or are considering a larger year-end contribution, here are a few strategies that can help make your charitable dollars go further.
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