What would you do differently if you were a millionaire??

[jedi]

I'll travel the world! I'll invest the remaining money...I mean why stop at a million?

[Ima saver]

I would help a friend who needs a vehicle. I wish I had my bronco that I gave away a few years ago.

[pennrj430]

If I won a million $$ after taxes, I would probably buy a normal size home for cash, where ever I wanted to move to. That would leave me with about 650,000. I then would invest 200,000 very very Conservitively because I would then take 400,000, leave my employer, and start my own business. I would probably blow 25,000 on vacations and stuff just to get it out of my system, and I would give away the remaining 25,000 to charities. That would leave my compleatly debt free, 200,000 richer in liquid assets, and my own business paid for, with very little overhead.

[JBinKC]

A million -not enough to really change a lifestyle.

[DebbieL]

It's enough to totally change mine. It's all a matter of how you look at it, and who you are. I would have a COMPLETELY different life with a boost of $1 million.

[disneysteve]

A million -not enough to really change a lifestyle.

Not for me and maybe not for you, but certainly for lots of people. The median income is somewhere around 45K, so a million dollars would be over 22 years worth of income, even more if you earn less than the median. That sure sounds like enough to be life-altering to me.

[LivingAlmostLarge]

Nothing, it would barely alter our lifestyle. Although I might splurge $50k and buy two newer cars. But that's a maybe and if DH agrees.

[Aleta]

I once read an article in my hometown newspaper by a writer writing about a person complaining to him about the measley 2 million that he inherited from his family and how it would just be a drop in the bucket. He thought about how 1 million would be alot to him. This article was written about the same time as The Millionaire Next Door was out. Anyway, he calculated that if he invested the 1 million at even 5%, that he could live on $50,000. a year. Mind you, you'll only pay tax on the interest made, which would be $50,000. and not taxed by social security. Even if you paid 15%, you'd still have $42,500. a year to live on and still have your principal of $1,000,000.
So, if all depends on what you would do with your 1 million. Some would blow it, give it away and still be where they were before they earned it which is exactly what happens to the vast majority of lottery winners. I think it's quite alot of money if you use it wisely.

[disneysteve]

he calculated that if he invested the 1 million at even 5%, that he could live on $50,000. a year.

There is a flaw in this plan: INFLATION. If you earn a 5% return, you can't actually spend that 5% each year. If you do, you will steadily lose buying power each year as inflation erodes the value of the $1 million principal.

That's why you often read that in retirement, you can withdraw 4% of your portfolio each year. That assumes a 7 or 8% return. That way, your portfolio continues to grow each year to hopefully keep up with inflation.

[Aleta]

Steve: You are quite right about the inflation edge. I think the point that this man was making was that he would continue working or could quit his job and still have money coming in. I agree with you about the 4% withdrawal. That is extremely important but I don't think most people will adopt that practice.

The idea was that after conservatively investing your money that you could have that amount every year while retaining having your principal. I guess that eventually that if you adopted that plan, that you would have to dip into your principal for sure.

[disneysteve]

I think the point that this man was making was that he would continue working....

This is true. If I suddenly had an extra million in the bank, we could loosen our spending belt a bit as there'd be an extra 50K or more of income being generated by the investments. Even if we spent an extra 5K or 10K/year and let the rest continue to grow, that would change our lifestyle, so maybe my earlier answer that it wouldn't change things isn't quite right.

[LivingAlmostLarge]

It depends really on your age. If you are younger it may buy a slightly earlier retirement. If you are older it may buy a more comfortable retirement.

But in general, will it change a life a lot? Probably not. If you make $40k/year and inherit a million then you can live on 2x your salary. But if you are a poor money manager you'll just blow through it anyway.

People who are money conscious will not change their habits because of an inheritance.

[disneysteve]

People who are money conscious will not change their habits because of an inheritance.

This is a great point. Us frugal folks won't become spendthrifts just because we come into some money. Honestly, we'd probably do some little splurge, like a nice vacation, and invest the rest of it, not changing our day to day lifestyle one bit. Being only 42, though, that extra million would be enough to advance my retirement date a few years.

[Denvergirlie]

I would travel more domestically to see family.

I would plan and save for overseas trips and then the rest would be to maintain my future homestead property. A million isn't all that much these days and we are in our 30's so that amount would make me feel secure for all time future.

Has anyone read "The Millionarie Mind"? If not, I recommend it

[dreamweaver]

Goodby dayjob. No more nightshifts. I would hire a caretaker and pay them well. And I would travel .