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When the SpaceX initial public offering launched, it came fully loaded with a $1.75 trillion valuation and a $135-per-share opening price.
In its wake stands about 4,400 current and former SpaceX staffers who’ll become newly minted millionaires as the stock gathers steam (1).
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One of them is former SpaceX welder Juan Hernandez, who holds 6,500 shares of SPCX, which should net over $1 million if he decides to sell.
Hernandez was offered $10,000 worth of stock when he started working for SpaceX in 2015, he told CBS News (2).
“I didn’t know anything about it then,” he told CBS News. “I didn’t know it was gonna be this big, at this point.”
But Hernandez is just one of many who have a newfound financial responsibility. And of the others, several have their eyes on luxury homes in California (3).
Dealing with immediate wealth
Hernandez and the thousands of SpaceX millionaires joining him, now face a welcome but unfamiliar question: How is the cash best maximized? And how can they resist an “instant millionaire” luxury home splurge that may prove reckless?
“Often when someone experiences a sudden liquidity event, they act quickly on making dramatic purchases,” Senada Adzem, a real estate agent at Douglas Elliman who’s generated $4.5 billion in total career sales, told Moneywise. “Instead, they need to plan carefully.”
Real estate and financial experts advise that SpaceX employees take time to let the initial adrenaline rush fade to prevent emotionally driven, impulsive financial mistakes — especially if they’re looking for a pricey home upgrade.
Here are a few things worth considering.
Consider hiring a pro
After a sudden windfall, it can help to consult financial advisors and hire a trustworthy real estate agent so you can understand exactly what you can afford, what ongoing expenses would actually cost and any tax implications.
“Also, don’t concentrate too much of your new net worth in a single property instead of considering possible investment opportunities and diversifying your portfolio,” Adzem told Moneywise. “The first year following such an event should be focused on building a long-term strategy and not making impulsive decisions.”
For those with portfolios of $250,000 or more, platforms like WiserAdvisor can connect you with vetted professionals who specialize in this kind of planning.
Simply answer a few questions about your savings, retirement timeline and overall investment portfolio. From there, WiserAdvisor reviews its network to match you — for free — with up to three vetted, reputable advisors aligned with your specific needs.
You can then schedule no-obligation consultations with your matches to determine who is the best fit for your long-term goals.
WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties and specific financial results are not guaranteed.
Watch out for a big overpay
A common mistake instant millionaires make when they receive a lump-sum payout is immediately overpaying for a house without considering holding costs.
“You receive a $1 million paycheck and think you can afford a $5 million mansion,” Mike Roberts, co-founder and president of City Creek Mortgage, told Moneywise. “The fact is that when purchasing a mansion, there are still large property tax bills, high homeowner insurance costs and hefty maintenance expenses to keep it looking like a mansion.”
If you receive millions from a stock sale, Roberts advises not spending more than 30% of it on a house.
“If you’re interested in a home, buy it all in cash to save on the interest costs and invest the rest [into diversified investment vehicles] to supplement your day-to-day expenses,” Roberts noted.
Make insurance a big priority
High-end home buyers in high-cost insurance states like California and Florida, among others, need to manage their home insurance needs thoughtfully and carefully.
“One of the largest errors new liquid buyers make is not paying too much for the home; it’s underinsuring,” Michael Benoit, founder of ContractorBond.org and San Diego-based President of Pacific United Insurance Services, told Moneywise. “Most people superimpose the same insurance assumptions they had when they lived in their former home and in a place like Malibu, where the property is worth $4 million, that won’t work at all.”
The coverage issue in California doesn’t stop there, Benoit noted.
“Seven of the top 10 admitted carriers in Los Angeles and Ventura counties have ceased new business since 2022, forcing buyers into surplus lines coverage, which can be three to five times the admitted rates,” he said. “I’ve had clients who closed on a home between $3 million and $5 million in value, where they had not yet received a viable insurance quote until two weeks after closing.”
With luxury home insurance, there may be a one-time price, but there may also be ongoing carrying costs.
“Owners of a $10 million home in California can face property taxes and surplus lines insurance and home maintenance for $200,000 or more per year,” Benoit added. “Don’t wait until you make an offer to get an insurance underwriting review. Once you close, they may not be available.”
Answer three key questions
Cynthia Mattiza, a Global Luxury Advisor agent with Sotheby’s in Austin, Texas, advises new millionaires looking for their dream home to emphasize practicality.
“I recently represented a buyer who cashed out a significant stock position and purchased an $8 million home in West Austin,” she told Moneywise. “The buyers who struggle are the ones who let the excitement of the purchase lead the process. The ones who thrive are the ones who treat it like the wealth decision it actually is, not just a lifestyle upgrade.”
To make the best choice with that wealth decision, Mattiza advises being honest and answering three valuable queries with full transparency:
- Does this purchase leave me financially flexible?
- Does this home serve my life ten years from now, not just today?
- Am I buying in a market with long-term appreciation opportunities?
If you can answer “yes” to each of these questions, it may be a sign your purchase is financially sound.
Consider a hands-off approach
A sudden financial windfall can make it tempting to upgrade your lifestyle — and for many people, a dream home is the first thing on the list.
But if your current home already meets your needs, moving into a mansion may not be the best use of your newfound wealth. A larger home often means higher property taxes, maintenance costs and more money locked into an asset that doesn’t generate income.
Instead of tying up more money in a bigger primary residence, you may want to consider putting that capital toward an investment property. A rental home can offer the potential for long-term appreciation while also creating a steady stream of rental income along the way.
Of course, owning a rental property comes with its own set of challenges.
Being a landlord can involve far more than collecting a monthly check. You may need to handle mortgage payments, insurance, maintenance costs, repairs and tenant issues — responsibilities that can quickly turn your “passive income” idea into another full-time commitment.
The good news? There are ways to invest in real estate without becoming a hands-on landlord.
You can invest in shares of vacation and rental properties across the country with Arrived.
Backed by world-class investors like Jeff Bezos, Arrived’s team handles all the necessary work — from securing properties to finding and managing tenants — so you can sit back and become a landlord without having to do any legwork.
Even better, Arrived distributes any rental income generated by properties to investors monthly, allowing you to potentially set up a passive income stream.
To get started, simply browse through their selection of vetted properties, each picked for their potential appreciation and income generation.
The best part? For a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match.
For those with more capital on hand, there are other options too.
Accredited investors can now tap into this opportunity through platforms such as Lightstone DIRECT, which gives accredited investors access to single-asset multifamily and industrial deals.
Lightstone DIRECT’s direct-to-investor model ensures a high degree of alignment between individual investors and a vertically-integrated, institutional owner-operator — a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate.
With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets Lightstone pursues with its own capital, with minimum investments starting at $100,000.
Take your time and learn how big money moves
Having a pile of cash can be fleeting if it’s not handled with care.
“History tells us sudden wealth, whether it’s inheritance or winning the lottery, can go out and disappear as quickly as it appeared,” Ari Rastegar, an Austin, Texas-based real estate developer and investor, told Moneywise. “That’s because of financial literacy and understanding the mechanics of money.”
Managing money is a trade, not unlike plumbing, being an electrician, being a doctor or being a lawyer and new IPO millionaires should know that.
“Just because you made a lot of money does not mean you know how to manage money,” Rastegar noted. “It’s a fascinating concept, how predictable it is when people start to lose it as quickly as they made it. It’s just about money management. Making money is not the same as managing money and that’s a very important distinction.”
Don’t put all your eggs in one basket
One of the biggest lessons wealthy investors often follow is simple — avoid putting too much of your money into a single asset.
Even if an investment has performed well in the past, markets can change quickly. That’s why most wealthy investors don’t rely on a single strategy to grow their money. Instead, they spread their assets across different investments so their financial future doesn’t depend on one market, asset, company, or economic trend.
Diversify with a safe-haven asset
For those who suddenly came into more wealth, diversification often means looking beyond the usual asset classes.
While stocks and real estate can play a major role in building wealth, many high-net-worth investors also include assets that may help protect their portfolios during periods of uncertainty.
Gold, for instance, has long been viewed as a safe-haven asset that can hedge your portfolio against market uncertainty and inflation.
One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Priority Gold.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainty.
To learn more, you can get a free information guide that includes details on how to get up to $10,000 in free silver on qualifying purchases.
A finer asset billionaires love
While billionaires such as Jeff Bezos and Bill Gates have built much of their fortunes through businesses and stock investments, they also tend to allocate money toward assets that don’t always follow the same ups and downs as the broader market.
Ultra-wealthy investors typically build portfolios that include a mix of traditional and alternative assets — from real estate and private companies to collectibles and other investments that may move differently when stocks are under pressure.
One standout example: post-war and contemporary art. This kind of finer alternative has outpaced the S&P 500 by 15% from 1995 to 2025 while showing near-zero correlation to traditional equities.
Until recently, this world was off-limits to most everyday investors. Now, with Masterworks, you can buy fractional shares in multimillion-dollar works by icons like Banksy, Picasso and Basquiat. While art can be illiquid and typically requires a long-term hold, it offers unique portfolio diversification.
Masterworks has sold 27 artworks so far, yielding net annualized returns like 14.6%, 17.6% and 17.8%.
Moneywise readers can get priority access to diversify with art: Skip the waitlist here.
Note that past performance is not indicative of future returns. Investing involves risk. See important Regulation A disclosures at Masterworks.com/cd.
- With files from Brian O’Connell.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
The New York Times (1); CBS News (2); CNBC (3)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
