Four tips for managing an unexpected increase in money

When Kristen Heaton launched her own business in 2013, she never dreamed she’d sell it for seven figures. So, when she sold it to Amazon aggregator Perch in July 2021, she hired a financial advisor to make sure her family could get the most out of the new wealth.

“They sat us down, and they just really wanted to know where we were interested in putting the money,” Heaton said. “It was really important for us to make sure that we took our kids into consideration and set things up for them years down the road in a trust.”

Crave Naturals has sold more than a million of its signature product, a detangling hairbrush, with a total revenue of nearly $15 million. The brush has nearly 60,000 reviews on Amazon.com.

But it was a new experience — even an overwhelming one — to sell the business, as was walking into wealth that she had never had before.

The first thing I would do if you ever do come into money that you’re not accustomed to is talk to people that come from money, talk to people that have had new wealth in their life, different entrepreneurs. See where they focus their time and efforts growing their money and keeping it safe,” Heaton said.

Based on what she learned from others, Heaton decided a professional financial advisor was a safer bet than just going it alone.

“I tend to be a risk taker, and it wouldn’t be unheard of for me to invest in some risky stocks. So working with a financial advisor, he will work with me to buy those risky stocks, but then also offset it with safe stocks and stocks that provide dividends over time and whatnot, so that we can aim to grow the portfolio in a more moderate-risk approach,” he said.

Then, Heaton recommends that you take some of the money to reinvest in areas you’re passionate about.

“My husband and I have always had an interest in real estate investing. And right now, the market where we live, it’s just continuing to go up. So it just made sense to us to purchase properties that we can give down to our kids one day,” Heaton said.

“One of my biggest concerns right now is that the next generation, they’re probably not going to be able to afford a lot of housing. So it was just really important that we bought some properties that we knew we could pass on to them later on in life so that they were going to be OK.”

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When Heaton sold her brand, she knew she wasn’t ready to stop being an entrepreneur. That also helped to inform her next decision about what to do with some of the new wealth.

“It spurred a creative side of me that I didn’t really know existed, so when we sold the brand, I knew for sure I just wanted to start up another one immediately. So we had the money at this point to be able to hire like a branding agency brand voice and just have a cohesive brand to launch. Whereas with Crave Naturals, it took us years to be able to afford that sort of thing.

“So in the summer, after we sold, we started working night and day trying to build this new brand. And now we have the new brand that we’re launching, it’s called Bare August; it’s a foot-care line, and it’s available on Amazon. And for me, I think that I’m just going to continue to do what I love as long as I can,” Heaton said.

The entrepreneur says it’s important to remember that success doesn’t happen without help from others, and it’s important to use some money to pay that forward.

“When I started Crave Naturals, I was super in debt. I had a lot of student loans. I was living paycheck to paycheck. And one of my good friends, her husband that was helping me with this program to sell products online, he actually paid for our first round of inventory,” Heaton said. 

“I think it’s important that as I continue to do what I love, I help others do the same. So if there’s an entrepreneur that needs help along the way, or they need somebody to invest in them financially or through mentorship, that’s something that I have an interest in doing along the way. I feel like it could pay off for both myself and the entrepreneur.”

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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.