One of the first things we did after “winning the stock option lottery” was to exercise some of those options, sell some of the resulting stock, and then invest some of the proceeds and spend the rest.
I think we invested more than we spent. (I know we lost more than we spent, since this was also just before the stock market crash of 1987, but that’s a story for another day.)
One of the things we spent money on was a new car for my wife. It was sorely needed, her previous car having been nearly totaled the year before.
Naturally we were in a position to get a “nice” car, and we did. This was 1987, and the car, a new Pontiac Bonneville, cost something like $20,000. To the car’s credit, and to my wife’s, it lasted nearly 10 years, so we feel like we truly got our moneys worth out of it.
Or did we?
Consider: $20,000 of company stock, adjusted for all the growth in the company’s stock price since then would today be worth over $2,000,000.
Two. Million. Dollars.
Sometimes hindsight sucks.
And that’s really part of the point of this essay.
Hindsight is great, when you can learn from it. But if you use it to fill your life with “oh, we should have done X”, when there was no way to know at the time that X was the thing to do, you’ll just drive yourself nuts.
Perhaps $2,000,000 worth of nuts.
In reality, there was no way we could have predicted what was going to happen to our company’s stock over the next 20 years. In fact it could just as easily have gone the other way. So, we hedged our bets. But we did it what we hoped would be a sensible fashion.
We spent some. We saved some.
We grew wealthy anyway.
Perhaps not as wealthy as we could have been, had we been able to predict the future, but wealthy enough.
And in the mean time, my wife had a very good car that lasted her for a long time. And loans got paid off. Yes, perhaps a few toys were purchased. And some philanthropy was enabled.
So what are you doing?
Are you avoiding your wealth for fear of purchasing what’ll turn out to be a two million dollar car?
Are you spending right and left because you don’t think it’ll last?
Or are you somewhere in-between?
Think about it.
I believe strongly that there is value in the here-and-now, just as there is value in preparing for the future. The trick, of course, is balance.
In hindsight, I don’t regret our decisions. Even after having done the math.