The Money Mustache Community
Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: resy on May 03, 2015, 02:16:51 AM
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... the funny thing is she thinks she's being smart with her choices! Smarter than average, sure yet not really smart.
"The rest of the cash would be chucked in a savings account until we needed it. I would use this account to ensure that we maxed out our annual Roth IRA contribution each year."
Her ideas can be improved on but this one specifically horrified me a little, to let hundreds of thousands of dollars (after all her other allocations) sit in a useless savings account only to contribute to yearly ROTH IRA accounts but no other investing other than that! The horror! ;)
http://rvanews.com/features/family-finances-the-millionaire-game/123487
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At least she wouldn't blow it all on designer clothes, vehicles, a bigger house, vacations, etc.
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Don't pay off the mortgage, but put the amount needed to pay off the mortgage in a 0.00001% savings account, because of a mortgage interest deduction?
What is it about the mortgage interest deduction that causes people's brains to shut down?
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I think she might be using the term "account" or "savings account" to include a brokerage account containing equities. Earlier in the article, when listing possibilities of what she could do with the money, she says that one option is to "[p]ut all the money in an account and live off just the interest and dividends". This clearly contemplates that the money would be invested in equities rather than just a 0% savings account. Later on in the article, she does use the term "savings account", but reading the article charitably, I think she just doesn't make rigorous use of banking terminology, and to her, the term "savings account" can include a brokerage account holding equities.
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She's right that it's a fun game to play. I wouldn't put that much in my kid's 529. The tax penalty for non educational disbursements kinda sucks. With 15 years to grow I'd put in $75k and maybe a side investment account that I might tap to help my kid if he wanted to go to grad school.
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She could easily put it in Vanguard or another company and then set it to automatically withdraw 5500 each year on January 2nd to her IRA. That way she gets it there right away and can invest the remainder in tax-able accounts.
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I think she might be using the term "account" or "savings account" to include a brokerage account containing equities. Earlier in the article, when listing possibilities of what she could do with the money, she says that one option is to "[p]ut all the money in an account and live off just the interest and dividends". This clearly contemplates that the money would be invested in equities rather than just a 0% savings account. Later on in the article, she does use the term "savings account", but reading the article charitably, I think she just doesn't make rigorous use of banking terminology, and to her, the term "savings account" can include a brokerage account holding equities.
I know too many people who use the term "interest" and quite seriously mean a money market or vanilla savings account because they have no idea anything else exists to put your money. Strictly speaking a savings account issues a "dividend."
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If I had another million just given to me, I'd dollar cost average invest it (over time) in a low cost total stock market index fund.
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You guys suck at this game. I'd buy a billion penny candies and live out the rest of my days in self induced diabetic coma.
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You guys suck at this game. I'd buy a billion penny candies and live out the rest of my days in self induced diabetic coma.
Where are you getting penny candies at 10/penny? I need the number for your wholesaler, because I keep popping out of my coma!
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I'll tell you what I'd do, man: two chicks at the same time, man.
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You guys suck at this game. I'd buy a billion penny candies and live out the rest of my days in self induced diabetic coma.
Where are you getting penny candies at 10/penny? I need the number for your wholesaler, because I keep popping out of my coma!
http://www.thepennycandystore.com/shopdisplayproducts.asp?search=yes&bc=no&catalogid=208 (http://www.thepennycandystore.com/shopdisplayproducts.asp?search=yes&bc=no&catalogid=208)
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I'll tell you what I'd do, man: two chicks at the same time, man.
Really disappointed it took so many posts to get here.
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You guys suck at this game. I'd buy a billion penny candies and live out the rest of my days in self induced diabetic coma.
Where are you getting penny candies at 10/penny? I need the number for your wholesaler, because I keep popping out of my coma!
http://www.thepennycandystore.com/shopdisplayproducts.asp?search=yes&bc=no&catalogid=208 (http://www.thepennycandystore.com/shopdisplayproducts.asp?search=yes&bc=no&catalogid=208)
Though I don't wholesale candy, I can make a few calls and possibly get them to you for less.
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I'll tell you what I'd do, man: two chicks at the same time, man.
Really disappointed it took so many posts to get here.
Yeah, that was the first thing that I thought of when I read the title of this thread. Anyhow, carry on...
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I'll tell you what I'd do, man: two chicks at the same time, man.
Really disappointed it took so many posts to get here.
Yeah, that was the first thing that I thought of when I read the title of this thread. Anyhow, carry on...
What's funny is that my first thought was that it would be nice to do "nothing."
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My answer is the YouTube video below...
Sent from my iPhone using Tapatalk
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I'll tell you what I'd do, man: two chicks at the same time, man.
Peter Gibbons: That's it? If you had a million dollars, you'd do two chicks at the same time?
Lawrence: Damn straight. I always wanted to do that, man. And I think if I were a millionaire I could hook that up, too; 'cause chicks dig dudes with money.
Peter Gibbons: Well, not all chicks.
Lawrence: Well, the type of chicks that'd double up on a dude like me do.
Peter Gibbons: Good point.
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She seems pretty level headed from a consumer point of view. Us MMMs look at it differently. I would:
1) Refi duplex ($12k)
2) Fund down payments for 4 more at $25k down per.
3) Invest in dividend paying and wealth building Vanguard funds
4) Sell my commuting car(+$10k) for winter / construction beater ($2k) and an "economical" sportscar ($7k) for fun.
5) Replace 10 year old laptop with "new" refurb unit ($400)
6) Quit job.
I'd be looking at spending less than $120k of the $1MM, would replace my 9-5 job with managing the properties. The property profit exceeds my current spending level. If those went well, maybe I would add a few more. The 850k invested would likely grow to provide $50k in passive income within a few years, and that $50k could be used for down payments on new rentals until I can no longer self manage. Then I would farm out the management and declare myself fully retired.
I just want to make my own hours and be secure.
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She seems pretty level headed from a consumer point of view. Us MMMs look at it differently. I would:
1) Refi duplex ($12k)
2) Fund down payments for 4 more at $25k down per.
3) Invest in dividend paying and wealth building Vanguard funds
4) Sell my commuting car(+$10k) for winter / construction beater ($2k) and an "economical" sportscar ($7k) for fun.
5) Replace 10 year old laptop with "new" refurb unit ($400)
6) Quit job.
My response wouldn't be much different, but because this would put me beyond my FIRE threshold, it wouldn't all go toward max ROI. I'd upgrade my house to net-zero energy, and keep a slightly more expensive car - I'm never going back from electric. (My Volt will be technically Mustachian in price after it depreciates just a little more... aaahahaha... but hey, $.02/mile)
I really like scenarios like this because they help us realize how many of our indulgences and conveniences are just responses to feeling stressed out and overcommitted. Realizing that if we all woke up tomorrow with enough money to do whatever we want, we'd do things much differently, is a thought exercise much like MMM's suggestion of acting like everything is free. The next step is to decouple the present pre-FIRE, more stressful, less abundant environment from our ingrained responses (clutching at dumb shit to ease the pain).
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If I had $1MM today I'd just stick it in my Vanguard portfolio and let it ride for a few more years. In theory I could FIRE today by adding $1MM to my portfolio. If I kept it invested until I actually retire from the Army (8 more years), that would be enough to pay cash for my retirement home and still FIRE with what was leftover even without my pension. I'd definitely splurge on energy starring everything in the house I could (solar panels, tankless water heater, xeriscape or artificial turf most of the lawn) and do some traveling in Europe. I don't think I'd buy a brand new car, but I'd certainly buy a much newer used hybrid or electric.
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... the funny thing is she thinks she's being smart with her choices! Smarter than average, sure yet not really smart.
"The rest of the cash would be chucked in a savings account until we needed it. I would use this account to ensure that we maxed out our annual Roth IRA contribution each year."
Her ideas can be improved on but this one specifically horrified me a little, to let hundreds of thousands of dollars (after all her other allocations) sit in a useless savings account only to contribute to yearly ROTH IRA accounts but no other investing other than that! The horror! ;)
http://rvanews.com/features/family-finances-the-millionaire-game/123487
No one? Really?
https://www.youtube.com/watch?v=06OowJl1J_k
I'd buy you smart car - a nice reliable automobile...
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If I got one million dollars now, I would:
1) Invest it all.
2) Continue working.
3) Retire at 30. Or not. Start living off 3% of my wealth. Considering everything I put in there and returns in excess of 3% to be pay raises to be used for good ol' lifestyle inflation.
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No one? Really?
https://www.youtube.com/watch?v=06OowJl1J_k (https://www.youtube.com/watch?v=06OowJl1J_k)
I'd buy you smart car - a nice reliable automobile...
Nice shoutout to the barenaked ladies. brings back memories of the late 90's.
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I would buy more VTSAX, and perhaps some lower risk/return items as well. It'd be nice to own an airplane, but it's safer to rent. I'd hate to have an issue where I lose my medical certificate and then be saddled with a difficult to sell airplane. Really, that's the only physical "thing" I'm interested in and I still wouldn't buy it with a million dollars.
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I'd buy a $1M car.
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I would buy more VTSAX, and perhaps some lower risk/return items as well. It'd be nice to own an airplane, but it's safer to rent. I'd hate to have an issue where I lose my medical certificate and then be saddled with a difficult to sell airplane. Really, that's the only physical "thing" I'm interested in and I still wouldn't buy it with a million dollars.
Well there are airplanes and there are airplanes.. High performance, aerobatic instruments capable (like the one in my Avatar) are very different to say a C152.
I sold that airplane last year, I built it back in 2006 and to be honest.. I was sick of it owning me as much as I owned it. Its now making an A&P very happy and I got the $100k growing nicely in my Vanguard accounts..:)
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I'll tell you what I'd do, man: two chicks at the same time, man.
Really disappointed it took so many posts to get here.
Yeah, that was the first thing that I thought of when I read the title of this thread. Anyhow, carry on...
Seriously. That's the only reason I even clicked on this thread.
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I think she might be using the term "account" or "savings account" to include a brokerage account containing equities. Earlier in the article, when listing possibilities of what she could do with the money, she says that one option is to "[p]ut all the money in an account and live off just the interest and dividends". This clearly contemplates that the money would be invested in equities rather than just a 0% savings account. Later on in the article, she does use the term "savings account", but reading the article charitably, I think she just doesn't make rigorous use of banking terminology, and to her, the term "savings account" can include a brokerage account holding equities.
I know too many people who use the term "interest" and quite seriously mean a money market or vanilla savings account because they have no idea anything else exists to put your money. Strictly speaking a savings account issues a "dividend."
Huh? Based on what definition? The IRS sure considers it interest.
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I think she might be using the term "account" or "savings account" to include a brokerage account containing equities. Earlier in the article, when listing possibilities of what she could do with the money, she says that one option is to "[p]ut all the money in an account and live off just the interest and dividends". This clearly contemplates that the money would be invested in equities rather than just a 0% savings account. Later on in the article, she does use the term "savings account", but reading the article charitably, I think she just doesn't make rigorous use of banking terminology, and to her, the term "savings account" can include a brokerage account holding equities.
I know too many people who use the term "interest" and quite seriously mean a money market or vanilla savings account because they have no idea anything else exists to put your money. Strictly speaking a savings account issues a "dividend."
Huh? Based on what definition? The IRS sure considers it interest.
That's what my credit union calls the interest on my savings and money market accounts. I should have clarified that the "dividend" term may confuse someone into thinking they're getting some kind of actual return on a simple savings account.
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I think she might be using the term "account" or "savings account" to include a brokerage account containing equities. Earlier in the article, when listing possibilities of what she could do with the money, she says that one option is to "[p]ut all the money in an account and live off just the interest and dividends". This clearly contemplates that the money would be invested in equities rather than just a 0% savings account. Later on in the article, she does use the term "savings account", but reading the article charitably, I think she just doesn't make rigorous use of banking terminology, and to her, the term "savings account" can include a brokerage account holding equities.
I know too many people who use the term "interest" and quite seriously mean a money market or vanilla savings account because they have no idea anything else exists to put your money. Strictly speaking a savings account issues a "dividend."
Huh? Based on what definition? The IRS sure considers it interest.
That's what my credit union calls the interest on my savings and money market accounts. I should have clarified that the "dividend" term may confuse someone into thinking they're getting some kind of actual return on a simple savings account.
Money market I can see. But savings? I've never heard of that - and again, it's not a dividend in any financial or tax sense.
Also, in some time periods you can actually get savings accounts, money markets, and CDs to have "real" returns - that is, returns noticeably better than inflation. Most of the 80s and 90s, for example: http://www.freeby50.com/2011/08/historical-cd-savings-rates-vs.html
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Why would someone invest $200,000 into two kids' college education? Assuming they are young kids and the money has time to grow, those 529s are going to be worth more than one M.D. and/or J.D. and/or Ph.D.
This game is easy for me. Just did a quick tabulation if Hubby and I suddenly had $1MM net:
Pay off the Student Loans ($115k)
Pay off the House ($165k)
Hubby and I quit our jobs
Sell one car
Live on 4% withdrawals (~$28.8k/year) or less
A quick calculation, this is more than enough for food, utilities, real estate taxes, home owners' insurance... and even those at high estimates it leaves several hundred extra dollars a month. And we have high RE Tax.
If I really really really miss my mortgage deduction, I'll just donate some money to charity because it's the same damned thing. And anyways, I probably won't need to itemize deductions anymore... We'd just be a broke family living on "only" $30,000/year.
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Why would someone invest $200,000 into two kids' college education? Assuming they are young kids and the money has time to grow, those 529s are going to be worth more than one M.D. and/or J.D. and/or Ph.D.
This game is easy for me. Just did a quick tabulation if Hubby and I suddenly had $1MM net:
Pay off the Student Loans ($115k)
Pay off the House ($165k)
Hubby and I quit our jobs
Sell one car
Live on 4% withdrawals (~$28.8k/year) or less
A quick calculation, this is more than enough for food, utilities, real estate taxes, home owners' insurance... and even those at high estimates it leaves several hundred extra dollars a month. And we have high RE Tax.
If I really really really miss my mortgage deduction, I'll just donate some money to charity because it's the same damned thing. And anyways, I probably won't need to itemize deductions anymore... We'd just be a broke family living on "only" $30,000/year.
Didn't see this the first time i read it. You're right; 200k into a 529/edu account is a waste. 20k each over 15 years should be 80k each. If you can't get your degree for 80k, you should take some loans. I did my BS in 4 yrs for about 20k. Paid out of pocket by working.
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I always play this game when I get bored enough to enter the PCH sweeps.
1) Pay off student loans. (Although that's now down to $3400 and won't last more than another few months.)
2) Remodel the house. (My current estimate is $5000 to do my currently god-awful kitchen, ALL the floors, and a deck. Although I'm sure costs will climb a bit while it happens.)
3) Build a garage with a livable loft over it. (I want a place to wrench on my cars/bikes/small engines! And will probably need a place to stick at least one hopeless relation in the future.)
4) Pay off the house? (I keep going back and forth between investing and paying it off.)
5) Give myself 1% to do what I want. (I'm sure I could eventually figure out how to spend $10,000. Like picking up an old teardrop trailer and restoring it. And getting a rabbit/chicken setup. And building a root cellar. And... And... And... so many fun things that I've wanted to do for a while but have a problem justifying the money.)
6) 'Stache everything that's left.
7) Retire/Only take FUN gigs. (Without debt, my living expenses are under $12,000/year. Even with the mortgage, I'm under $20,000. Which means I could easily be living off a 4% SWR even after bulletpoints 1-5.)
This is all, of course, assuming that I ended up with a mil after taxes. :)
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I had $1M:
1) Taxes: $333k (1/3 seems like enough, but will pay someone to double check this).
2) Student Loans: $200k (wife has medical degree, just graduated)
3) Max Retirements this year: ~56k [(17.5+5.5)x2]
4) Buy/fix up 2 investments houses, 2/1s, about 5miles in each direction of my house - rent them out - $75k each
5) No questions spending - $10k (5k per person, because, hey when will I have $1M given to me)
6) Investments: the rest (speeds up FIRE date).
Goal here is to reduce bills (student loans are $2500/month and a huge anchor on us) to free up income/cash to help increase the investment accounts over the years.
The rental houses are 'planning for the future' since both my parents and my in-laws won't last through retirement (mine will run out of money in 2-3 years, her will last 10). This would allow us to help, without being a financial burden on our family. We both know this is going to happen, so we're actually looking into starting getting a rental house in the next 3-5 years to get it set up and ready once my parents fail at retirement (probably 8 years away).
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Cripzy, the 401k limit is up to $18k this year. Don't miss out :)
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Slap that into the investment account and drop down to working four days a week, immediately.
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Oh, fun! If I had 1 million dollars:
Pay off the student loans (close to 200k)
Fix the furnace, yard, and anything else on the house that needs to be fixed, and buy ourselves some new clothes, boots, and stuff like that (10-20k)
Cargo bike (4k)
Stash the rest for the time being. Seed college funds for the kids (amount tbd)
Cut back to 4 days a week at work and take as many VTO days as were offered. Save as much as possible. Ride for a while like this.
Once we hit my FIRE number plus 200k:
Pay off the house and retire
At least the author of that article is saving most of it, though clearly she doesn't know much about investing. I'm no genius on investing but I know that a savings account is not the place for large hunks of money.
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I would leave 50k or so for "playing" and invest the rest. I already have all the physical objects in my life I want…
Actually even spending those 50k in a meaningful way wouldn't be easy. Perhaps I'd buy a fancy bicycle or help parents remodel their house. Probably would splurge on first class tickets for my next long range vacation.
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Put a down payment on a home in HB, move my elderly and poor parents in and invest the difference in a 3 fund portfolio. Keep my job for another 10 years or so
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Buy a duplex or more, do property management and stick the rest in vtsax
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My students asked me what I would do if I had millions of dollars like boxer Floyd Mayweather. I told them that I would add more solar panels to my house or expand my garden. When they replied with incredulity, I relented and said I'd buy a fifteen speed bicycle.
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I just noticed that if I had 1 million dollars today, I can retire today if I wanted to. I spend 15K$ a year approx., so that would take me 66 years before spending it all (if inflation stayed the same), but with inflation, i guess it may last me 50+ years which is still good considering I am 33 years old...and if I invest that money while gradually withdrawing, it is still enough for me to survive in my lifetime.
Back to answering the question "what would you do with a million dollars", I would buy a condo for myself(I can live with a small place) and a small house for my parents, pay off their debts and the rest would go in my current investments.
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I honestly don't think my life would change very much at all if I had a million dollars... I'd probably just put half or more of it straight into an 80-20 Betterment account, and use the rest to fund real estate forays. I might take more vacations, but that's really about it.
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Give my two weeks notice, plan a massive landscaping/garden installation for the fall (I've been doing small pieces in favor of more savings), pay off the house, replace 70+ year old drafty windows, and still have more than enough than we need for an indefinite casual lifestyle.
**assuming 1 million after taxes
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... the funny thing is she thinks she's being smart with her choices! Smarter than average, sure yet not really smart.
"The rest of the cash would be chucked in a savings account until we needed it. I would use this account to ensure that we maxed out our annual Roth IRA contribution each year."
Her ideas can be improved on but this one specifically horrified me a little, to let hundreds of thousands of dollars (after all her other allocations) sit in a useless savings account only to contribute to yearly ROTH IRA accounts but no other investing other than that! The horror! ;)
http://rvanews.com/features/family-finances-the-millionaire-game/123487
No one? Really?
https://www.youtube.com/watch?v=06OowJl1J_k
I'd buy you smart car - a nice reliable automobile...
I'd buy and wear a real green dress.
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For me debt freedom = FIRE..so
- Pay off debt ($178,000)
- Max this year's TSP and Roth
- Open a Vanguard or Betterment account (the mysteries of loss farming still escape me)
- Give notice
- Pack up house
- Head to PNW (Mom lives outside Portland)
Might splurge a bit on money for family, both my mom and sister have terrible spending habits and lots of debt. Gifts, not loans.
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As a college student....
Place it all in total us market/total international market index funds.
Work in my chosen field until I get bored or pursue a phd right away.
Retire and travel most of the year.
:) The dream.
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1. Put the money in a Vanguard index fund.
2. Write up my thirty day notice.
3. Smile widely while I contemplate submitting the notice immediately or wait until some optimal moment.
We are saving right now so we can buy a nice farm closer to family in the Midwest that would generate adequate rental cash to live off of without having to tap retirement investments. A million would put is way over the top on that goal.
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I wouldn't risk anything buying a farm. Seems that every year I hear from friends that own land or work in ag and they are struggling.
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Might splurge a bit on money for family, both my mom and sister have terrible spending habits and lots of debt. Gifts, not loans.
Do you picture them changing their ways as a result of such a temporary reprieve?
I know it's family and sometimes compassion just wins out, but this board is full of stories of people diving right back into even worse debt as a result of unexpected windfalls that could have permanently solved their debt problems. It's like "oh look, we can finally have all the other stuff we always wanted!"
In my case, there are three of us (siblings) who care deeply about our mom but have collectively realized she doesn't apply much logic or discipline to her finances and will probably end up insolvent someday (she at least has SS now, just started, but doesn't get enough to even have her own place). The idea of eventually supporting her was one of my motivators in getting my own shit together and setting a course for FI, but the irony is that everything I've learned along the way made it painfully obvious to me that she totally did this to herself and could even derail our plans if we make an open-ended commitment.
It really is a hard call to make. I love the shit out of her, but I don't know where to draw the line.
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Might splurge a bit on money for family, both my mom and sister have terrible spending habits and lots of debt. Gifts, not loans.
Do you picture them changing their ways as a result of such a temporary reprieve
Nope. No such illusions. However, both of them have sacrificed for me in the past, and if the difference for me is between living a simple life or spendypants travel, I'll give them that reprieve.
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Nope. No such illusions. However, both of them have sacrificed for me in the past, and if the difference for me is between living a simple life or spendypants travel, I'll give them that reprieve.
Well, with a little luck, someday we'll both have our cake and eat it too.
I just hope I can build my stash up into an exploding volcano of cash in time to bury mom's next crisis, while still punching out of this fascist popsicle stand around 40 and living an altruistic life of goodness toward others.
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Don't pay off the mortgage, but put the amount needed to pay off the mortgage in a 0.00001% savings account, because of a mortgage interest deduction?
What is it about the mortgage interest deduction that causes people's brains to shut down?
The worst part is that for so many middle-class families, they're hardly getting any value out of it in the first place. For a married couple with a $200,000 outstanding balance on their mortgage at 4%, that's only $8000 in mortgage interest per year. The standard deduction alone for a married couple is $12,600 so unless you have a ton of other itemized deductions, the median family making $53,000/year simply isn't getting much and possibly zero value out of their mortgage interest at tax time.
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As I roll my eyes at an impending meeting where I have to play politics (while keeping my middle finger raised under the conference room table), my choices would be:
Pay off the three smaller investment property loans with higher interest rates (approx $160K).
Invest the remainder in VTI/VTSAX.
Work until March, 2016, when my 401K is fully vested, then give notice.
Discuss w/DH what FIRE date he's contemplating, whether it be immediate, or a few months down the line.
Do a Happy Dance!! :)
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I wouldn't risk anything buying a farm. Seems that every year I hear from friends that own land or work in ag and they are struggling.
Agreed, but the passive rent I get currently on my 160 acres is pretty consistent. We are almost set for a traditional "early" retirement so a windfall being used to get a bigger place wouldn't really be a risk.
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I really like scenarios like this because they help us realize how many of our indulgences and conveniences are just responses to feeling stressed out and overcommitted. Realizing that if we all woke up tomorrow with enough money to do whatever we want, we'd do things much differently...The next step is to decouple the present pre-FIRE, more stressful, less abundant environment from our ingrained responses (clutching at dumb shit to ease the pain).
+1
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If I won a Million Dallars
1) Pay the 20% pre payment on my mortgage that is penalty free. This year, and 20% next year
2) Use the $$ to pay my monthly mortgage for the next 4 years until it comes due for renewal.
3) Invest rest in MM fund, .... then a small business
While I take 2 years figuring out what "lifestyle" business I want to create for myself as my money making "hobby" in retirement.!! Work until I figure out what that will be, exactly.... then, after that is figured out, if $$ remain...
4) take a Europe vacation (1-2 months) with my family -- using home stay or other low cost / real life experience accomodations.
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Pay Taxes: $330k
Pay Student loan: $50k
Move to Oregon (Eugene?): $30k (one year's living plus moving expenses)
Buy 3 rental houses at approximately $100k each: $300k
Buy a townhouse for myself to live in with excellent school district $200k? maybe less
Keep remaining $90K as a cushion and live off of proceeds from rental houses while I return to school for an engineering degree paid with cash.
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1. Pay off debt
2. Buy a house
3. Go back to school (for RN)
4. Buy lots of index funds
5. Live happily ever after
This is pretty much what I'm doing right now anyway; the million would just let me do it a lot faster. I'm paying off debt right now, going to start taking nursing school pre-reqs this fall, and hopefully buying a house next year.
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Invest it all, ER, and travel around the US until we decide which city we want to live in.
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After tax, R8mil.....
I'd buy 4 ~R1m homes, 1 to live and 3 to earn R6k income each so R18k passive income, not enough to ER but it's a good start.
Then I'd use R400k to do a 1-year MA at the University of Cape Town that would increase my salary.
The rest I'd invest in the JSE and give myself 10 years to FIRE.
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$1,000,000 free and clear today?
I'd retire tomorrow.
I'd put the entire $1M into VTSAX or VDADX, then live off my current nest egg (harvesting long term capital gains) and dividends which is more than enough to pay the bills.
'Meh...maybe I'd work one more year...
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If I suddenly had a million dollars I would stay in my current underpaid job for years, instead of using it as a stepping stone to better paid but potentially less amazing work.
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$1,000,000 free and clear today?
I'd retire tomorrow.
Same here.:)
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Here's the value of MMM, ERE, et al: I was never a high wage earner, but I always knew I wanted to retire early and that I wanted to own property despite living in high COLAs my entire working life. I'm 57 now, FIREd, surfing here because I want to, and not clicking on the OP's link because I have $1M. And you know what? There's not much of anything I want to spend it on...
So freaking wierd to think that I would end up in this position. Moral of the story: Keep earning, keep saving, keep living smart and it will most likely happen to you too, even of you don't earn a ton of money. Oh yeah, that figure does not include the value of my real estate. How did this happen?? Can't hardly believe it, but sure do like it.
Edit: I apologize if this post sounds braggy, but no one is more surprised at my state of financial affairs than I am. This MMM shit really works! I'm gobsmacked.
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buy eight cords of firewood and pay to have it stacked…the remainder I would place in bank accounts waiting for underpriced foreclosures to snatch up, rehab and flip.
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Say: "I have one million dollars!" <evil laugh>
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If I had one million bucks given to me tax free (on top of what I have now), I'd invest it and continue with my current plans for the next year and see what happens. I'm planning on changing jobs anyway, so I'd see if it was something I wanted and liked to do. If not, I could just quit.
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I'd pay off my house (and rent it out), invest most of the remainder, and live off some of the income. I'd travel the world, then buy land somewhere and go off grid. Put that way, it sounds a bit bland and boring, but inside my head, the dreams are very alive and colorful.
I was also glad to see the Office Space references, as the first thing I thought when I read the title was Peter saying, "I would do nothing."
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$1,000,000 free and clear today?
I'd retire tomorrow today.
Same here.:)
FTFYB
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$1,000,000 free and clear today?
I'd retire tomorrow.
Same here.:)
Actually yeah...this. What am I thinking wanting to continue working am I insane?
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I'd pay off my house (and rent it out), invest most of the remainder, and live off some of the income. I'd travel the world, then buy land somewhere and go off grid. Put that way, it sounds a bit bland and boring, but inside my head, the dreams are very alive and colorful.
It's as colorful as you make it. Those who look down on such dreams are projecting their own lack of creativity onto your future blank slate.
We do need people like that to keep our investment returns up... but you don't have to be one of them :D
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If I had 1 million dollars after tax, I would invest it all and travel across the country until I found which state I want to live in. Then I would built an awesome off the grid house that sits on a couple acres in the forest. Then retire and do whatever I want.
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$7,000 / mo gross income is where I quit working. It's enough to live like a king and still have some left to fix up the house.
I would use the $1MM to generate $7k/month [mostly] passive income. Rentals. Dividend funds. Maybe a business.
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Add it to my other million dollars and FIRE.
Since I already have a million, I feel like I should be FIREd now. But I can't. And I don't know what goal I would set for myself if I did. There go the Barenaked Ladies in my head again... If I had a million dollars................
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I have a (slightly) negative net worth, live in a high cost-of-living country, don't own a house, and have a family of four to feed. Would $1,000,000 get me to FIRE? Fuck yeah.
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I know too many people who use the term "interest" and quite seriously mean a money market or vanilla savings account because they have no idea anything else exists to put your money. Strictly speaking a savings account issues a "dividend."
Huh? Based on what definition? The IRS sure considers it interest.
That's what my credit union calls the interest on my savings and money market accounts. I should have clarified that the "dividend" term may confuse someone into thinking they're getting some kind of actual return on a simple savings account.
Money market I can see. But savings? I've never heard of that - and again, it's not a dividend in any financial or tax sense.
Also, in some time periods you can actually get savings accounts, money markets, and CDs to have "real" returns - that is, returns noticeably better than inflation. Most of the 80s and 90s, for example: http://www.freeby50.com/2011/08/historical-cd-savings-rates-vs.html
Actually now that Travis mentions it, I remember my credit union calls it a dividend too. Maybe something about making people understand they're "investing" in the credit union because it's member-owned. But yeah, still treated like interest for tax purposes.
Edit: I apologize if this post sounds braggy, but no one is more surprised at my state of financial affairs than I am. This MMM shit really works! I'm gobsmacked.
Ha ha, awesome.
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0) Tell almost no one. (I'd probably tell my parents, just because I know nothing would change for them and it would make them happy for me.)
1) Quit school and write, which I'm given serious consideration to doing anyway.
2) Invest it in a few mutual funds.
3) Look for a rental or two to purchase, either purely as rentals or as a some-day home to rent out until that day comes.
4)DH might want a fancy-ish watch
5) Not much else changes, other than maybe our plans for what DH would do after he reaches 20 years in the military.
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Fix up and sell current home, probably about $25k in total costs (house would have little to no equity even after fixing up)
Move to better school district for DD, pay $125k for a 3/2 town home w/basement.
Leaves me with $850k. DH would quit, I'd keep my FT work from home job (5 weeks vacation, 12 sick days, 401k with match, awesome low cost medical). With no debt we could live off of just my income and not touch the $850k. I'd probably work until we had enough to pay for DD's college in full, help MIL in her old age if needed (she has no assets other than her home and is at high risk of future strokes, so we'd like to be in a position where we can help make sure she's in the "nice" nursing home if it comes to that) and have enough 'stache to live comfortably. At most I'd only work until 59.5 (DD would graduate college that same year) but ideally as early as 55 (I'm 39 now), maybe even earlier depending on market returns and other unforeseeable events.
Really, it's the same plan we have now, we just would be able to do it 7 years earlier than planned* with a much bigger 'stache and a better ability to help MIL if it's ever needed.
* Current plan is to fix up home/save up down payment over the next 2 years, move, pay off new home loan in ~4 years, DH works 1 additional year to beef up emergency savings, then he can tell his employer to go fuck themselves. With no debt, we can live off of my income/benefits and I can retire between age 55-59 depending on if we decide to help DD with college costs and to what extent.
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Surprised it took all the way to infogoon before we got an Office Space reference... I'm a little disappointed in you guys...
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Pre or post tax? $1M pretax would almost, maybe pay off the mortgages on both of my houses. I'd probably do that, even though it isn't that smart. Wouldn't care.
Post tax, I'd do the same thing, drop enough in my daughter's college fund to fully fund it, spend 2 weeks in Hawaii and invest the rest.
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I would throw it in the stache, so I would have to ask myself what I would do with the extra $40k/yr for the rest of my life.
Give a little more away to non-profits
Give a little to my 86 year old grandmother (no worries about her getting too accustomed to it!)
Take a few more/fancier vacations
Make a few modest improvements to the house out of cash flow
Sad to say, but I would probably eat out more and drink fancier beer, too.
It would be interesting to see if we completely adapted to the extra income over time, or if we would hit a "fully satisfied, everything we could possibly want" point before then, given our ER budget does still require a bit of restraint.
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Hmm. I'd have a professional landscaper add some shrubs to the backyard rather than doing it myself. I'd add a shallow little water feature to the pool so that the cats could splash in it and I wouldn't hear the neighbors. I'd give $10,000 each to my stepdaughters, niece and nephews and goddaughters. I'd put $10,000 each into 529s for the 5 grandchildren and the 3 great nieces and nephews. I'd fund a local spay and neuter program for 1 year. And the rest I would tuck away.
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I'd probably quit my job, buy a used car, and start travelling the country (USA) for a bit staying maybe 6 months in each place. That way I can scope out the surrounding areas and figure out the area I want to live in. Then I'd buy 1-5 acres and custom build a small, energy efficient house. Then anything in my investment accounts left over 700k would go to family and/or charity.
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I'd start some businesses. I've been wanting to bring some manufacturing back to my poor little town and I think I could manage it, employee a lot of local folks at a decent wage and grow the business. The employees would hopefully be large consumers of the goods and promote the brand.
I also need to get my kids a start up going. They will both be graduating soon and want to open a business.
I don't need the money for myself. I've really been thinking of how to improve my little piece of the world and not just focus on myself and my needs/wants.
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So basically you would all waste it ;-)
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I'd take a frivolously lavish vacation for a week or two to Hawaii including hiking, learning to surf, drinking various tropical fruity things, and whatever strikes my fancy while I'm there. When I get home, I'll laugh at my ridiculousness, sock everything in my portfolio, and go back to my regular life.
I'd do the same regardless of pre- or post-tax. It would be enough money for me to FIRE either way, but I generally enjoy my working life as-is, so I wouldn't change anything. Well...maybe buy fancier food more often, or get a more economical car.
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I'd quit my job, sell my houses, buy a camper van, go live near my family for a bit, travel more.
Basically I'd continue doing all the things I'm doing, but I'd bump up the FIRE plan to start now, and I wouldn't wait for the houses to sell before I quit work.
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I'd ask for a raise.
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I just asked my son what he thought I'd do with a million dollars. He rolled his eyes and said "You'd put it in the bank." Eh, close enough, kid. Next week I'll explain Vanguard.
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Same thing I said when I was a little kid: save it. (I was a wild and crazy kid.)
Then? Quit. Immediately.
Throw a giant "I QUIT" party. You're all invited! We'll ceremoniously burn my one remaining interview outfit.
That's it. I figure the rest can sort itself out.
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Actually the real tragedy of this thread, Office Space wise, is nobody remembers what Samir said he would do with $1 million.
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Actually the real tragedy of this thread, Office Space wise, is nobody remembers what Samir said he would do with $1 million.
I do, and agree with him, though I wouldn't hire anyone to manage it, I would just toss it in Vanguard.
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I'd ask for a raise.
Best answer here. You are in a stronger position, you might as well use it
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I'd buy and wear a real green dress.
But not a real green dress, that's cruel.
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Pay Taxes: $330k
Pay Student loan: $50k
Move to Oregon (Eugene?): $30k (one year's living plus moving expenses)
Buy 3 rental houses at approximately $100k each: $300k
Buy a townhouse for myself to live in with excellent school district $200k? maybe less
Keep remaining $90K as a cushion and live off of proceeds from rental houses while I return to school for an engineering degree paid with cash.
$330k in TAXES???
How could you owe that much?
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Pay Taxes: $330k
Pay Student loan: $50k
Move to Oregon (Eugene?): $30k (one year's living plus moving expenses)
Buy 3 rental houses at approximately $100k each: $300k
Buy a townhouse for myself to live in with excellent school district $200k? maybe less
Keep remaining $90K as a cushion and live off of proceeds from rental houses while I return to school for an engineering degree paid with cash.
$330k in TAXES???
How could you owe that much?
Probably from being given a million dollars.
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Pay Taxes: $330k
Pay Student loan: $50k
Move to Oregon (Eugene?): $30k (one year's living plus moving expenses)
Buy 3 rental houses at approximately $100k each: $300k
Buy a townhouse for myself to live in with excellent school district $200k? maybe less
Keep remaining $90K as a cushion and live off of proceeds from rental houses while I return to school for an engineering degree paid with cash.
$330k in TAXES???
How could you owe that much?
Probably from being given a million dollars.
lmao. Yup.
I'd dump all of it in Vanguard and continue on with my life. No debts I have are worth paying off instead of investing, so it'd just jumpstart my FI. Actually, I'd technically be there..but I'd probably keep working for another year or two at least.
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I love playing this game. So... $1,000,000.
1. Pay off all debt ($9k)
2. Quit jobs.
3. Blow a small portion (buy electric bicycle, put a full tune-up on wife's car, take a small trip to my friend in Texas, total of about $5k)
4. Pull $30k out into a bank account to live on for the next year.
5. Invest the rest. With a 4% draw, and a 7% average rate of return, that's... $39,440 per year. Anything over that 4% goes back into investments.
6. With all this extra time, finish school.
7. Do a job I really like and don't worry about the money.
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Pay Taxes: $330k
Pay Student loan: $50k
Move to Oregon (Eugene?): $30k (one year's living plus moving expenses)
Buy 3 rental houses at approximately $100k each: $300k
Buy a townhouse for myself to live in with excellent school district $200k? maybe less
Keep remaining $90K as a cushion and live off of proceeds from rental houses while I return to school for an engineering degree paid with cash.
$330k in TAXES???
How could you owe that much?
Probably from being given a million dollars.
If it's a gift, then the donee is not subject to income or, usually, gift tax on the gift (although donee liability may apply if the donor does not pay any applicable gift taxes). If it's lottery winnings, however, then income tax would apply.
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I'm afraid our life wouldn't change terribly...
1) pay off mortgage
2) do some remodeling on the house (already daydreamed about, about 50k if we go crazy on it)
3) buy a rental property, a duplex or triplex in our neighbourhood
4) send (future) kids to Montessori schools
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I'd blow it on my car.
by getting a new side light unit. The one on my 15yo volvo has been held in with tape for the last 5 years...classy.
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I love this game. I would pay off all my debts (not my house), including our small business and quit my job that I don't like. I wouldn't pay off my house because I don't really love it and it's not a great rental so I'd want to sell that. My husband and I would go on a much needed vacation together. After that, I would spend $50,000 starting a small business I've dreamed of starting for the past year then we'd start making plans to move to Belize for a much slower (and cheaper) pace of life...
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Share it equally with my brother and sister since I think that what Mom and Dad would want. They, and their spouses, are reasonable but didn't start saving as early as I did, plus they chose lower paying careers for personal satisfaction (not that I had either a high paying or miserable career).
With my third, I'd give 10% to charities and invest the rest in Dogs of the Dow stocks. I don't have any pressing needs, other than my spare bicycle needs a new tire.
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$1M after tax? I would:
- tell no one but my spouse.
- build a slightly nicer house on a nicer piece of property I have my eye on
- invest the rest for now
- possibly cut our work hours back slightly to 2/3 time or 1/2 time
- get very serious about examining our budget.
- take vacations further from home. Rather than a beach trip or a 150 mile trip to the mtns, we might visit the PNW or NYC or New England on a still modest budget.
Extended family are spenders so any financial gifts we offered might evaporate during trips to the malls. Maybe give everyone something to pay off their mortgages. Maybe figure out who has the largest mortgage and give everyone that amount.
Would get very serious about examining our budget and educate myself more on the topic of FIRE'd. Create a daily routine where the kids leave for school and I sip coffee while studying the topic before going to work.
We like our jobs pretty well but it would be nice to have more hrs for us. A four hour work day or a three day work week. Go in, troubleshoot or delegate, attend some meetings and go home.
Would be nice to have a home without all the little 30 yr old house issues cropping up (needs a roof, some brick work, driveway needs rework).
If after more in-depth study we could FIRE we would. We are saving as much money as we can right now without counting nickel and dime expenditures. Our income finally rose this year significantly due to a career advancement for my wife (small career field).
We spent several months replacing worn out things, exploring our new budget, etc. Have been adjusting our debt for faster pay off as MMM and you (the readers) have educated me. Am interested in seeing what next year's tax return will look like.
Looks like we will be able to save $20K this year and $30K next year if we don't get spendy. Want to pay off our house and accelerator our retirement savings.
Alternatively I might buy a duplex eventually and build upon that. Have not run the numbers or read the MMM landlord threads. I managed an older apt building in a low income part of town years ago for my parents. Didn't mind the work but I want to deal with a better grade of resident. We were renting nice, clean but older apartments to folks who were not quite squared away. I'd build my duplex(s) in a nicer part of town.
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What a fun game. While at the gym this morning the stupid television played a Publisher's Clearinghouse (they still exist??) commercial talking about wining $7K/month for life and I did a bit of daydreaming about what I would do if I won that. Slightly different, but for $1M I think we would let the dust settle a bit, decide on how much $ to gift to my sister and MIL, and then put the rest into investments. That would put us over the top so then we would have to seriously think about when to quit/reduce hours/do something else. High up on our To Do list is move to the small beach town we have been eying. Fun times!
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Pay Taxes: $330k
Pay Student loan: $50k
Move to Oregon (Eugene?): $30k (one year's living plus moving expenses)
Buy 3 rental houses at approximately $100k each: $300k
Buy a townhouse for myself to live in with excellent school district $200k? maybe less
Keep remaining $90K as a cushion and live off of proceeds from rental houses while I return to school for an engineering degree paid with cash.
$330k in TAXES???
How could you owe that much?
Probably from being given a million dollars.
Duh. Silly me. :)
I thought they meant they already owed the tax money.
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What a fun game. While at the gym this morning the stupid television played a Publisher's Clearinghouse (they still exist??) commercial talking about wining $7K/month for life and I did a bit of daydreaming about what I would do if I won that. Slightly different, but for $1M I think we would let the dust settle a bit, decide on how much $ to gift to my sister and MIL, and then put the rest into investments. That would put us over the top so then we would have to seriously think about when to quit/reduce hours/do something else. High up on our To Do list is move to the small beach town we have been eying. Fun times!
I will admit to entering daily. Because there's always an infinitesimal chance.
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Is there anyone on this forum who wouldn't retire the next day? Ha!
Specifics:
-Pay off rentals ($275K) - net annual income with no debt service, $10-12K
-Pay off all other debt ($35K)
-Buy 4-plex in agreed-upon FIRE location near family; relocate ($300K); live for free and profit ~$10K
-Invest remaining $390K in ETFs and ignore (total ret. funds $600K)
-Hang out with family, nieces and nephews; do more biking, paddling, and surfing
-Master aquaponics
-Contribute to growth of renewable energy
-Keep working ANG for lulz and grins, and cheap healthcare, one weekend a month and 2-4 weeks a year; fully retire in another 7 years at age 44
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Put stuff in storage while waiting for passports. See if we could support ourselves importing music from the UK and Europe. Save $40K if it doesn't pan out to get back into working. Even if we can't make it work as a business, it was a tax deduction for trying.
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I live in Hungary, so $1M would be a HUGE amount of money.
I would:
- give 100k to my brother, 100k to my parents and 100k to my father/mother-in-law.
- invest 100k and give the yield (5k/year) to charity.
- build our dream house (140k).
- buy a house at a lake (60k).
- buy a great new car (15k).
- travel with my wife for a few months (15k).
- blow money on stupid things (10k), which I would immediately regret :D
- invest the rest (360k). With a ~3% draw, that's roughly $1k/month. Anything over the 3% would be re-invested.
Btw, our current target is around $280k (of which 80k is saved already), so 360k would be more than enough for us to retire.
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I live in Hungary, so $1M would be a HUGE amount of money.
I would:
- give 100k to my brother, 100k to my parents and 100k to my father/mother-in-law.
- invest 100k and give the yield (5k/year) to charity.
- build our dream house (140k).
- buy a house at a lake (60k).
- buy a great new car (15k).
- travel with my wife for a few months (15k).
- blow money on stupid things (10k), which I would immediately regret :D
- invest the rest (360k). With a ~3% draw, that's roughly $1k/month. Anything over the 3% would be re-invested.
Btw, our current target is around $280k (of which 80k is saved already), so 360k would be more than enough for us to retire.
I think that's my favorite answer.
Hungary is great, but I found your language very difficult!
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I live in Hungary, so $1M would be a HUGE amount of money.
I would:
- give 100k to my brother, 100k to my parents and 100k to my father/mother-in-law.
- invest 100k and give the yield (5k/year) to charity.
- build our dream house (140k).
- buy a house at a lake (60k).
- buy a great new car (15k).
- travel with my wife for a few months (15k).
- blow money on stupid things (10k), which I would immediately regret :D
- invest the rest (360k). With a ~3% draw, that's roughly $1k/month. Anything over the 3% would be re-invested.
Btw, our current target is around $280k (of which 80k is saved already), so 360k would be more than enough for us to retire.
I think that's my favorite answer.
Hungary is great, but I found your language very difficult!
Thank you! :)
I agree with you, I think the Hungarian language is terribly complex, irregular and unlearnable for foreigners (and for some of the Hungarian people too, LOL).
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I was going to say something about how $1k / mo may not be enough (even by MMM standards), but then I read that you live in Hungary.
Not that I'm considering moving there to stretch my dollars, but what is the cost of living like?