All the money in the world, part 1
I came across this article about taking a year off to travel without ruining your career and it got me thinking about money, especially when you have lots of it.
So now I’m going to do the thing where I imagine what I would do with a whole bunch of money. (Warning: this can be fun, instructive, but also depressing)
In my mind, there are two types of windfalls: the kind where you can pretty much buy anything you want, invest some, and have some left over (1–5 million dollars), and then there’s the kind of wealth that will last you and your children’s children their whole lives. I’m talking about $200 million dollars in the bank.
So these are two different scenarios: 1) What would I do if I won the lottery and ended up with $1 million dollars after taxes? 2) What would it be like to have so much money coming in that your children’s children’s grandchildren won’t ever worry about money? What would it be like to be one of those grandchildren?
Today I’ll tackle numero 1 and I’ll post number two another time.
1) Winning $1 million after taxes. Being a semi-personal finance blog, you know where some of this is going already. Right off the top, half that money would go straight into an investment vehicle. Something safe and conservative that will net me some money every year, almost like a paycheck to tack on to my annual salary.
Which means that, yes, of course, I’ll still work. It just won’t be where I’m working now.
The thing about this much money is it comes with stress—is it really that much? Is it enough for me to not worry about money ever again? Or should I be more worried about it? I don’t want to mess it up (like so many lottery winners do) but I also want to enjoy it.
All of the sudden a million dollars isn’t as much as it sounds.
Here is the breakdown:
- Invest $500,000 into a safe, interest-bearing account (let’s say 5%), netting me $20,000/year.
- Quit my job (like, right away) and go to portfolio school ($12,000, one year at Chicago Portfolio School)
- Down Payment on a house/apartment ($100,000-$200,000)
- Buy my parents an awesome trip to wherever they want ($30,000)
- Buy my fiancee whatever she wants (well, almost whatever she wants, $10,000)
- A splurge: pimped out computer, an iphone, and a wii, stuff I don’t need but really want ($6,000)
- Take a trip around the world, cruising the world, flying all over, going to exotic places ($30,000)
That leaves me with a little more than $200,000, which I would use to live off of until I got a job with my awesome-looking portfolio (let’s say $50,000 or so). Then maybe I’d put $100,000 into a down payment for a second home, either as a vacation home or as an investment.
Poof! Money is gone.
What do you think? Not responsible enough? Did I miss something?And, more importantly, what would YOU do with $1 mil after taxes?
Click here for part II.