Travis Kalanick, the founder of Uber who resigned as CEO last summer, is reportedly planning to sell 29 percent of his stake in the company, which will make him about $1.4 billion.
What does it mean to come into that kind of wealth? What is the smartest thing to do with the money, and what choices should a person avoid?
Rebecca Walser, a wealth management advisor who specializes in financial planning for high net worth individuals, tells CNBC Make It that the return on the sale will go into a brokerage account, where these kinds of stock equity transactions take place, and that it will immediately be taxed as a long term capital gain at the top rate of 20 percent.
So, once Kalanick sells his stock in Uber and deals with the IRS, he'll end up with about $1.1 billion. That is essentially cash that he can transfer into a personal bank account.
From there, Walser suspects he will keep a significant portion invested in the market. "Everyone is really bullish right now," she says, citing the fact that all three indexes — the DOW, NASDAQ and S&P 500 — are all hitting unprecedented highs. "This is actually a phenomenon ... Psychologically, [people] think they're missing out, and they buy in when the market is hitting these top rates."