You Became A Millionaire Overnight. Now What?
Maybe you’ve hit the lotto jackpot, or you’ve sold your startup to a major corporation. Either way, you’ve become a millionaire overnight. Now what?
That’s what 33-year-old entrepreneur Peter Rahal thought when he sold the company he started in his mother’s kitchen, RxBar, to Kellogg for $600 million.
He now lives in a Miami Beach mansion he purchased fully furnished for about $19 million. He also treated himself to a Ferrari 488 and a cream Vespa.
“He and a buddy from elementary school started RxBar in 2012 after seeing an improbable opportunity in a very crowded energy bar market. They concocted their original recipe of dates, nuts, and egg whites in the suburban kitchen of Rahal’s mom; ginned up the brand’s package design on a PowerPoint slide; and sold the bars to CrossFit gyms in Chicago, then Indiana, then across the Midwest. By the time RxBar became a business with revenues north of $100 million (with virtually no outside investment), Rahal was grinding at it daily from 7 a.m. to 10 p.m.,” Marker reported.
When the deal with Kellogg was finalized, Rahal, who is single, had a ton of questions, including would be able to find someone who’s going “to love me without money?”
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“I didn’t celebrate — the job wasn’t done,” Rahal says. “I got my lunch bag and went to work the next day.”
Rahal and his partner each received a single, one-time payout. Rahal stayed onto help run RxBar.
Because of his new wealthy, status Rahal found himself became a “Celebrity” with employees.
Eventually, Rahal was no longer motivated. “I wasn’t as good of a CEO, because Sunday night, I wasn’t working,” he said. Working and making RxBar work was no longer challenging. “It was such an easy job. I got paid well. If something happened, it’s like, okay, we’re safe at Kellogg.”
Rahal stopped his day-to-day work at Kellogg but stayed on as RxBar’s founder.
He has battled with the idea of starting another company. Meanwhile, He and his former partner launched a venture fund and have invested money ranging from $10,000 to $1.5 million in about 15 early-stage companies. Among the companies are Olipop, a high-fiber soda for digestive health, and Huron, a men’s skincare line.
Still, for Rahal, it’s odd and unnerving being so rich, so fast.
“Rahal’s now socializing with a group of youngish guys — and it is mostly guys, in his new Miami circle, at least — who have inherited or made a ton of money. He’s invited out to steakhouses with movie producers and music producers. He’s throwing an Art Basel party. He and his new friends talk about the relative tax rates of Florida versus Puerto Rico. He lives on an island with a guardhouse. If he wants to date someone, or if he meets a new potential friend, they tend to do a standard Google check of his name, and the top search results are about how much money he has,” Marker reported.
Becoming wealthy overnight does intrinsically mean an easier life, as Rahal has found. It can be a confusing time. But there are some steps to take.
First, find a great tax lawyer and a financial advisor. “After you find out what your rights to the money are from your new lawyers, and after you find out what your tax burden is on your new fortune, lining up a reputable financial advisor is paramount. This is where you need to avoid penny-stock brokers or people who try to sell you complex financial products that are hard to understand with high commissions,” 247 Wall Street reported.
Also it will be necessary to design the life you want to live and realize that your old life is part of the past. “Consider what lifestyle you grew up with or are used to, and be realistic about what sort of lifestyle you would really like to have after becoming wealthy. Do you want to keep working, or do you want to phase that down or quit work entirely? Think about what you want to buy, and be sensible,” 247 Wall Street reported.
While you may have become rich, you will probably want to ensure you will stay rich. Do so by making your money work for you. “Some people who quickly become super-rich change very little about their lives. Some even keep working every day. But for those who will quit work entirely, or for the most part, it’s important to consider the phrase ‘It takes money to make money.’ Individuals can only earn so much per hour from work, and there are only so many hours one can work each day. With a budget, knowing what you can reasonably buy, and dealing with advisors, letting your newfound capital earn money is crucial. Otherwise, you could foolishly spend it all rather quickly, even if by accident. The rule of thumb in the past was that investors could expect as much as 8 percent returns from stocks, but it may be much less now,” 247 Wall Street reported.