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.
November 15th, 2007 at 12:51 pm
[...] first post in this series had me pretending I won a million dollars and what I would do with the money if I [...]
November 16th, 2007 at 3:45 pm
[...] 16, 2007 by Nut The purpose of this post is to look at the two scenarios I laid out earlier (winning a million dollars and being filthy rich), and analyzing how my choices in those two scenarios differ and what I can [...]
January 2nd, 2008 at 6:12 pm
[...] first post in this series had me pretending I won a million dollars and what I would do with the money if I [...]
January 2nd, 2008 at 6:15 pm
[...] purpose of this post is to look at the two scenarios I laid out earlier (winning a million dollars and being filthy rich), and analyzing how my choices in those two scenarios differ and what I can [...]
February 6th, 2008 at 1:55 pm
Funnily enough I was thinking about this just the other day (except it was £1M).
Firstly, I’d give away £100K to charity, then I’d give £50K each to my immediate family members, then I’d pay off the mortgage and student loan, finish all the work that needs doing on the house and go on a holiday on the Trans-Siberian express.
I’d put about £25K in savings, and then invest the remaining £500K in a balanced boring portfolio, and carry on as normal, but rich.
February 6th, 2008 at 7:30 pm
i’d probably do nothing.
put the whole damn thing in muni bonds at 5.3% tax-free and not change anything. except throw a party and invite all my friends i haven’t seen in years.
April 24th, 2008 at 5:34 am
[...] done this, that, and why I don’t do it now, anyway. It’s the whole impetus behind my All the Money in the World [...]
May 26th, 2008 at 11:50 am
I did a similar exercise recently where I tried to figure out my retirement “number.” Based on an inflation rate of 4% and how much I feel I would need today to “retire,” and how long I think I’ll live (I do think I’ll live close to 100), I calculated that I’d need $26 million. And that’s just going by my student-standards of living!
One million dollars is definitely not a lot of money anymore.
May 6th, 2010 at 7:21 am
[...] having more money would certainly make all our lives easier and “better.” If you had all the money in the world, you’d probably quit your job and do what you really love to do. Maybe that’s working [...]
August 6th, 2011 at 4:22 am
what would you do with all of the money in the world?