by Will Schroter
bizjournals.com

Any entrepreneur or stockholder who has had a chance to cash out their stock has had to ask themselves one question: Is it enough? We wonder if we held out longer for a bigger offer whether that larger sum would make a much more significant impact on our lives.

The truth is, it's not the multimillions that will change your life forever - it's the first million (or less) that really makes the difference.

You see, most of our lives are spent trying to get ahead in this world financially. We all seem to make just a bit more than we spend, and we save those extra pennies to buy the things that we want. So in the event that we can get a big check in our hands that can finally get us ahead of the game, it's a very big deal, even if it's not a very big check.

IT'S NOT ABOUT RETIREMENT

Don't think about cashing out in terms of having enough money to retire on. Heck, don't even think about retirement. Retirement used to mean more when the average person had to toil in the fields or work in a mine shaft. These days the biggest physical hazard of your job is that you'll get carpal tunnel syndrome.

Cashing out isn't about never having to earn money ever again, it's about earning enough money that you're not worried about money ever again. There's a very significant difference.

It's nearly impossible to survive without some form of active income in your life, so it's safe to assume that no matter how much money you save, you'll always have to deal with earning more money to stay afloat. Cashing out rarely fixes that problem eternally.

Not worrying about money simply means that you have enough in reserves to address a financial crisis should it arrive. Knowing that you can survive a downturn is really what financial security is all about.

A MILLION BUYS A LOT

Think about what $1 million buys you. It's quite a bit. We spend the first couple of decades of our working life struggling to pay for the basics - a house, car, education and some furniture. At some point, usually when we're closer to retirement, we get ahead of the curve and pay for all that stuff. Only then can we start saving some serious money or start giving it away.

Yet if you could be so fortunate to pay for all of that stuff at once, without having to spend the next 20 years saving for it, you'd be way ahead of the game. You could spend your discretionary income on things like taking long vacations and giving to charity, which are luxuries most young people never truly enjoy.

If a lump sum of cash can do one thing that will truly change your life, it's reducing your debt. The average American lives in a constant cycle of earning his or her way through each month to pay off bills. The most responsible of us may even save enough money to pay down debt. The rest of us will be servicing mortgages and car payments for a really long time.

Would you really be doing this job if you didn't have certain bills to pay? What would you do if your expenses were next to nothing? What chances could you afford to take?

Reducing debt gives you an amazing amount of leverage. For the first time, you can actually afford to say "no" to the things you don't want to do. Very few people ever have that luxury because in the end, we've all got bills to pay.

TAKE THE CASH

Every person in a company struggles with the right amount to cash out with. The founders, the employee stock holders and the investors. But thinking about the deal in terms of the maximum amount of cash you can pull out isn't necessarily the best approach.

Instead, think about it in terms of whether or not it may disappear. There is a long line of forgotten entrepreneurs who wish they would have taken the money when they had the chance. There's a very short line of entrepreneurs who actually pulled the trigger, cashed out and never thought about it again.

That's because once you've cashed out, no matter how incredible the sum, you've created the opportunity to significantly improve your financial means in this life. If that opportunity comes your way, no matter what the price, take it.