Rief's Post-Exit Boring Money Allocation
Take half the chips off the table, put roughly ninety percent of the proceeds in deliberately boring assets, and spend only on what you genuinely care about.
- Difficulty
- Easy
- Time to result
- ~months to results
- Steps
- 6
- Confidence
- 85%
Rief sold a majority stake in Morning Brew at roughly a $70 million valuation at 25, receiving the wire while sitting in his childhood bedroom next to his parents during covid, which he calls unbelievably anticlimactic. His stated structure has four parts. First, the deal itself was designed so that he took life-changing money off the table while keeping enough upside to stay excited, explicitly not the tiny ten percent earnout many founders sign, and he expects the remaining business to sell for hundreds of millions. Second, the allocation: roughly 85 to 90 percent went into very boring assets, S&P 500, Vanguard target date funds, real estate and bonds, with about 5 percent in crypto and another 5 percent in venture investing. Third, he hired a team to manage it rather than doing it himself, and says it is a good thing he did because otherwise he would have gone off the rails. Fourth, the spending rule, borrowed from Ramit Sethi's rich life idea: he spends heavily on the things he actually cares about, travel, nice hotels, business class, a good apartment where he increased his rent four to five times, and refuses to spend on things he does not, buying a new Acura rather than a Mercedes because a car sits in a New York parking lot 361 days a year. He anchors this on a Will Smith quote about fame that Morgan Housel also tweeted: becoming famous is awesome, being famous is cool, and losing fame is horrible, and says money feels exactly the same, which is why he protects it.
Origin
Rief structured and received his Morning Brew exit at 25 during covid, and says he sleeps very well at night knowing he has his nest egg, having watched what happened to founders who kept all their chips on the table.
Core principles
- 01Take half the chips off the table if you have the option
- 02Keep enough upside that you are still genuinely motivated
- 03The overwhelming majority of the proceeds should be boring
- 04Hire someone to manage it so you do not go off the rails
- 05Spend lavishly on what you care about and nothing on what you do not
How to run it
- 1
Structure the deal to take half off the table
Rief's stated view is that if anyone has the option, it is good to take half your chips off the table. He sold a majority of Morning Brew at roughly a $70 million valuation while retaining a stake he expects to be worth many multiples of the first half.
Pro tip He acknowledges he may be biased because it worked for him, but the specific benefit he names is being able to sleep at night through covid.
- 2
Keep upside large enough to still motivate you
The retained stake has to be more than the tiny earnout, around ten percent of the deal, that Rief says many founders sign. His retained upside is meaningful enough that it drives him, keeps him excited and keeps him on the hunt.
Watch out A token earnout gives you the downside of staying without the upside that makes staying worth it.
- 3
Put roughly ninety percent into deliberately boring assets
Rief put about 85 to 90 percent into very boring things: S&P 500, Vanguard target date funds such as a 2065 fund, real estate and bonds. The boring bucket is the nest egg, and its job is to never need attention.
Pro tip He describes the whole point as making sure he maintains his wealth rather than growing it faster.
- 4
Cap the speculative buckets at single digits
About 5 percent went into crypto and another 5 percent into venture investing. These are sized so that a total loss changes nothing structural about his position.
Watch out Rief is separately sceptical of much of what he sees in venture, describing AI wrapper companies raising five on twenty-five with only a deck, which is precisely why this bucket stays small.
- 5
Hire a team to hold the line
Rief did not manage it himself. He hired a team, and says it is a good thing he did because if not he would have gone off the rails. The external manager is a constraint on his own impulses, not just a service.
Pro tip The value here is behavioural rather than analytical, since the allocation itself is simple enough to state in one sentence.
- 6
Apply the rich life spending rule
Following Ramit Sethi's rich life idea, Rief spends heavily on what he actually cares about, travel, nice hotels, business class flights and a much better apartment at four to five times his previous rent, and refuses spending he does not value, buying a new Acura rather than dropping another 50k on a Mercedes that would sit in a New York parking lot 361 days a year.
Watch out Rief names lifestyle creep explicitly as real, and frames the rule as the defence against it.
In the wild
Rief received the proceeds from the Morning Brew sale at 25, during covid, while living in his childhood bedroom sitting next to his parents with his mother cooking meatloaf. Everyone asked what he was going to do now and he had no answer.
→ He describes it as unbelievably anticlimactic, and says the durable value was the confidence, swagger and brand that let him get into any room and reach anyone, rather than the purchase it enabled.
Pressed on his splurge purchase, Rief says there was nothing out there he was excited enough about to buy, so he bought a brand new 2022 Acura sports edition rather than a Mercedes, while separately increasing his rent four to five times and spending heavily on travel, hotels and business class flights.
→ Sam Parr teases him for having too much immigrant energy, and Rief frames the choice as spending only on things he actually cares about so he can make sure he maintains his wealth.
Common mistakes
Signing a token earnout and calling it upside
Rief specifically contrasts his structure with the tiny earnout, around ten percent of the deal, that many founders accept. That version leaves you committed to the company without the stake that makes the commitment rational.
Self-managing a large windfall
Rief says plainly that if he had not hired a team he would have gone off the rails. A windfall arriving at 25 is a behavioural problem before it is an allocation problem.
Letting lifestyle creep define the spending
Rief names lifestyle creep as real and answers it with the Will Smith framing that losing money feels as bad as losing fame. Spending to signal, such as upgrading the badge on a car, spends the nest egg on something he does not actually value.
Is it for you?
Best for
Founders selling part or all of a company who want life-changing security while keeping meaningful upside
Not ideal for
Anyone looking for a general investment strategy rather than one founder's account of how he handled a single exit
From the transcript
“the ability to have life-changing money if anyone has the option like I always think it's good to take half your chips off the table”
“I probably took like 85 90% of it and put it into very very boring stuff right S&P 500 or Vanguard like target date funds”
“I spend money on things I actually care about so I can make sure I maintain my wealth”
From the episode
Austin Rief: Building Morning Brew, The Ultimate Guide to Building Newsletter Businesses, Side Hustle Ideas, & More
Austin Rief