"1 Milllllllllllllion Dollars....."
While I was having lunch with a friend, he asked me, “What would you do if someone gave you 1 million dollars?” Jokingly, I said “spend it.” Of course he knew I was kidding…for the most part. Since it is VERY unlikely for someone to just hand over a million in cold, hard, United States cash, I still wanted to give him a truthful answer to his question. Here is what I came up with…
- I would first pay off ALL of my outstanding debt – Bookies (Sallie Mae), loan sharks (credit cards) and the KGB (IRS)
Everything paid! Debt free…YAY! - Give! - I will give away $100,000 to good causes. I won’t give it away all at once or to one person/organization. I will probably open up a charitable foundation and give money as I see fit. I might create a college scholarship program or start a non-profit organization that would educate people financially and help them get out of debt.
- Spend! – I will purchase, in cash, a modest home here in Texas. (approximately $200k) – I will buy a newer, low mileage, used car to replace my 1998 Honda Civic that has almost 200K miles. I will then take a global vacation, visiting many countries. Remember that you have to enjoy your wealth. If you don’t enjoy your money, then why have it?
- Save! – After my global vacation I would take the remaining cash and talk to a financial planner such as Rick Kahler, http://www.kahlerfinancial.com and come up with a plan to grow the remaining money for retirement. Rick is a fee-only Certified Financial Planner, CFP(R) out of Rapid City, SD that has a heart of a teacher and not a salesman.
- Continue to work! – Since I will have a little financial breathing room I would probably look into building a business. There is nothing more rewarding than working for yourself as long as you are making good profits!
Obviously, this is the Reader’s Digest version of my plan. My friend seemed impressed with my answer so he then asked, “Well what if it was 10 million dollars?” I said “simple…same answer.” I told him to keep in mind that when you come into contact with a large amount of money, you do not need to rush to spend it. It should be your goal to keep as much of it as you can and still enjoy it. There are many stories on the Internet about people who win millions in the lottery and they end up broke shortly afterwards. Many lottery winners have called winning mass amounts of money a “curse.” It is my opinion that it is not a curse, but a blessing. It is only a curse when you do not know how to management money.
So the burning question I have for you is… what would you do with 1 million dollars? Let me know…
To your financial health – Martilyo!
Great post! Really got me thinking, and this is what I would do:
1) Pay off all debt
2) Buy some property – house to live in, rental property to generate some income
3) Pay off my parents’ mortgage
4) Donate 10% like you
5) Invest the rest
$1 million surprisingly doesn’t go THAT far anymore…But I wouldn’t refuse it if someone offered!
Kamara
http://www.themodernfinancial.com
Your right, 10 million is the new 1 million. However, I would like to have both…LOL
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I like your answer and the plan you have in place if you ever were in possession of a large sum of money. My answer is basically the same.
1. I would give/donate some of it, to churches and organizations.
2. Pay off my debts and then gift (under the gift amount before it’s taxable) some money to my family.
3. Upgrade to a nice apartment – yes I would probably still rent.
4. Go on a nice vacation to see Italy, Paris and South Africa. Also pay for my family to go on a nice cruise.
5. Invest and save lots for retirement.
6. And the last one is basically keep doing what I’m doing. Like you, I would keep working at my job, keep blogging and counseling people about personal finances. I just might have a nice laptop to do it all with.
Great post, thanks for getting me thinking!
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Thanks for the comment! I had forgotten about giving to family but that is important gift. However, I believe everyone that is given money should be financially responsible with it. I think I would require anyone I gave money to, to take a financial education class. Many times I find that people lass the financial education to make responsible decisions with their money. Thanks again!
Martilyo recently posted..What would YOU do with 1 million dollars?
Travel. Do good. Invest. Write a LOT. Oh, and probably find a pair of jeans that fit, since I can’t seem to find the perfect pair as is!
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Travel for sure! I want to visit all of those places I have not had a chance to see…Ireland, Scotland, England, France and Australia…just to name a few. I am sure you will be able to afford custom made jeans
Martilyo recently posted..What would YOU do with 1 million dollars?
I would do much the same as you. Donate 10%, pay off my debts, including my current mortgage. Purchase a rental property near by, travel and invest the rest. I would also give a little to family members.
I have worked it all out before, as it is my goal to be a millionaire. I would not rush into anything, rather keep most of it and use it according to my plans in a timely manner and continue on with my life pretty much as is.
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Good luck on your goal! I truly hope you achieve it! I agree, I would invest quite a bit in rental property. Nothing better than growing your “financial garden.” Thanks for commenting!
Martilyo recently posted..What would YOU do with 1 million dollars?
Add it to retirement savings and retire that much sooner.
It’s strange to be at a point in my life when that much money wouldn’t prompt me to do anything different. No purchases, no trips, nothing but get that many years closer to retiring.
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I guess we all go through stages where material items become important to us. Then as we see the effects of debt and over paying for said items, they really are not as appealing as they used to be. I still have wants, but they are not as strong as they used to be. I guess going from a consumer mindset to a frugal one, one realizes what we want and what we need are definitely two different things. Thanks for commenting!
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A million isn’t a lot, so I’d have to be a bit more frugal with it than, say, if I won $10 million or $100 million.
- Pay off debt first.
- Finish all the projects in our fixit-upper house or *maybe* buy a new one.
- Purchase almost-new cars for wife and I.
- Take a sum ($10,000 or $15,000) and go traveling for a long time.
- Take the rest and put it in a high-interest money market fund or similar, to give me a monthly check off the interest to supplement income.
With $1 million I don’t think I could quit my job and get away with it, but with $10 million? I’d quit my job in a heartbeat and do what I *really* would rather be doing instead.
I agree with you fully that a million isn’t what it used to be. Don’t get me wrong, I would love to be in the “club” but it won’t make me quit my job. 10 mil? I’m right there with you! Thanks for the comment
Martilyo recently posted..What would YOU do with 1 million dollars?
I think my answer would be pretty similar:
1. pay the taxes on it
2. pay off all debts (CC, student loans, mortgage)
3. finish renovations on my house, including a HVAC system, finishing the kitchen, redo back end, and the yards
4. fully fund my emergency fund for 1 year,
5. fully fund my Roth IRA
6. 10% to other investments
7. buy a nice, affordable second house and move my mom here
8. replace my car with a hybrid that actually has working AC (no AC in Texas…might make you tough, but still sucks)
9. I usually do 10% of “found” money to fun, but I’d be hard-pressed to actually spend $100k frivolously. I would do a little shopping (more books, probably finally update my warddrobe some, PS3), and my sweetie and I would have to do a 2 week trip to Hawaii (long time dream).
The rest – probably savings account or CDs. With no more debts, enjoy my paycheck and life more freely
#1 made me laugh. No getting around on that one huh? I am sure I could frivolously spend 100k but that would really be irresponsible. One thing I would have added to the list is some land with a cabin and perhaps access to a lake. It would be nice to have a get away spot. Of course the cabin would be ran off of solar/wind and “off the grid.” Thanks for commenting!
Martilyo recently posted..What would YOU do with 1 million dollars?
My answer is exactly the same as Kamara’s! Unfortunately, the house prices here in Victoria (our neighbourhood) are in the $650k+ range so there wouldn’t be much left to invest.
(Yes, we could move to another neighbourhood or out of town which would decrease the house cost to about $550k or $400k but increase our commute times/gas cost and negatively affect our quality of living – leaving at 7am and not returning home until 10pm on days we have sports after work)
Oh, I like this game.
I would donate at least 10 percent to trustworthy charitable causes, preferably local. I would pay off mine and my husband’s outstanding debt. (It’s not much, but let’s get rid of it!) Plan on international trip for the two of us (probably Asia or Eastern Europe). Then, we’d buy a home in San Francisco (probably a condo, but something we can grow in). Finally, I’d invest in my husband’s and my side hustle projects (exciting!). Then, the rest of it would be split between accessible savings and investments.
Just like yours, this is the Reader’s Digest version. I could develop a much more stringent plan, for sure. First, I’ll wait for the $1M windfall.
Sound like a well thought out plan. I really wonder how many lottery winners actually stay millionaires and how many end up broke. Make you wonder! Thank you for commenting!
Good question! I’d pay off all debt, pay taxes, buy a house, help my extended family, put a lot of it towards retirement, save some for kids’ college, and travel. Travel a lot.
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Now that sounds like a plan to me!!!
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