million bucks
#1
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million bucks
topic started in s2k talk.
if you won 1 million bucks, could you live off of it without working additionally?
the answer varies from location, personal situations, if you already own a home, etc.
just have some fun with the topic and if you can think of any tricks/methods to get the most out of the million, post it.
if you won 1 million bucks, could you live off of it without working additionally?
the answer varies from location, personal situations, if you already own a home, etc.
just have some fun with the topic and if you can think of any tricks/methods to get the most out of the million, post it.
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Originally Posted by dyhppy,Dec 19 2006, 11:11 PM
. . . if you can think of any tricks/methods to get the most out of the million, post it.
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Originally Posted by Currahee474,Dec 19 2006, 11:22 PM
put it in the bank for the first few years and let the interest grow.
then after that just live off the interest.
then after that just live off the interest.
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#8
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Heck, yea, you could live off it. Granted, you'd have to invest it somewhat aggressively.
Say you earn 8% per year, which isn't unrealistic with the long-term return being about 11%, including the Depression.
That would give you $80,000 per year. That's just the earnings; you'd still have $1M at the end of each year.
Problem is, $80K next year is worth less than $80K now due to inflation. You could take out $50K and put the other 3%, or $30K back into the "pot" to offset inflation. That way, you would be able to maintain your purchasing power from year to year. Even when you die, you'd still have the money left over to leave to your heirs, and they could live off the interest, as well as their heirs and so on. Of course, if you don't care about leaving money to your kids, you could withdraw a little more each year.
It should be noted that the return will not always be 8%; some years it could be negative. But, over the long term, living off of $1M comfortably is definitely doable. If you want guaranteed income, though, you should invest in bonds or mortgage securities...the return will be generally lower, but more consistent.
$50K doesn't sound like much, especially if you're in CA or NYC, but in most of the country that is a high income. Even if you don't think it is "enough" to live off of, you could work part time at a job you love instead of one that pays a lot.
Say you earn 8% per year, which isn't unrealistic with the long-term return being about 11%, including the Depression.
That would give you $80,000 per year. That's just the earnings; you'd still have $1M at the end of each year.
Problem is, $80K next year is worth less than $80K now due to inflation. You could take out $50K and put the other 3%, or $30K back into the "pot" to offset inflation. That way, you would be able to maintain your purchasing power from year to year. Even when you die, you'd still have the money left over to leave to your heirs, and they could live off the interest, as well as their heirs and so on. Of course, if you don't care about leaving money to your kids, you could withdraw a little more each year.
It should be noted that the return will not always be 8%; some years it could be negative. But, over the long term, living off of $1M comfortably is definitely doable. If you want guaranteed income, though, you should invest in bonds or mortgage securities...the return will be generally lower, but more consistent.
$50K doesn't sound like much, especially if you're in CA or NYC, but in most of the country that is a high income. Even if you don't think it is "enough" to live off of, you could work part time at a job you love instead of one that pays a lot.
#9
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Heh, I just posted this in the original thread:
Assuming 8% investment return, 30% IRS income tax on that, and 2.8% inflation: I could withdraw $43k the first year, increasing by 2.8% each year to offset inflation, and not run out of money until I'm 40 years from now (when I'm about 70.)
$43k isn't enough to live off for me, so I'd just use the money to supplement my current income and help do things I enjoy away from work.
Assuming 8% investment return, 30% IRS income tax on that, and 2.8% inflation: I could withdraw $43k the first year, increasing by 2.8% each year to offset inflation, and not run out of money until I'm 40 years from now (when I'm about 70.)
$43k isn't enough to live off for me, so I'd just use the money to supplement my current income and help do things I enjoy away from work.
#10
Would be kinda hard here with the cost of living being so high...
I'd have to drastically pull back on spending, drive a low end car, get a small appartment, etc... etc... Maybe then I could live with that money for a period of 15-20 years.
But what's the point of living work free for all that time if you have to be careful whenever you go spend cash.
I'd have to drastically pull back on spending, drive a low end car, get a small appartment, etc... etc... Maybe then I could live with that money for a period of 15-20 years.
But what's the point of living work free for all that time if you have to be careful whenever you go spend cash.