NFRs2000NYC

[QUOTE=steven975,Dec 21 2006, 01:39 AM] That's a pretty bad assumption.

cthree

51%?? Where did you come up with that? If you bought a dividend paying blue chip and got paid a 4-5% dividend you would pay 15% (thanks GWB). Nobody said you could be stoopid and live on it but if you were very careful about how you managed and spent it you could. No you couldn't live in a penthouse in Central Park West but that wasn't the question. If you moved to a reasonable location (not NYC since you aren't working and have no need of being there) and lived an average lifestyle, stayed out of debt and invested it in good solid reliable dividend paying blue chip stocks you could do fine.

If I had $1m in after tax money in cash and nothing else (no other assets) and I couldn't work (disabled say) I would do this (hypothetically):

1. Open a cash account with e*trade and deposit $800K
2. Take $200K and buy a house/condo worth $200K in a moderate cost of living area.
3. Invest the $800K in a diversified array of dividend paying stocks, say PG, XOM, BOA for example, something returning a combined 5.5%. After tax that works out to $37K/year or $719/week inclusive of income tax and accommodation.

It's more than enough to live a very modest fixed income lifestyle. It's not what I would choose to do but if it was forced on me I could get by.

dyhppy

the interesting thing here is how many people say they wouldn't want to live on it. what exactly do u need the "extra" money for? you would have to go to work to get that extra money. what do you get that is worth u going back to a 9 to 5? a faster car, a bigger house with a more prestigious address, newest cell phone? why? because it's there?

some may say travel. i look at what people pay for rent and car payments these days and travelling startsto look extremely cheap. imagine how many places you could go and do instead of buying a m3.

in any case, good discussion.

cthree

I wouldn't want to live on it because I'd want to work. Not to say I wouldn't take the cash but not at the price of not earning any other sort of living beyond what the $1mil would earn me. I'm not configured to do nothing forever. Maybe that's why so many lottery winners have such a hard time after winning. It takes a special chemistry to sit around doing nothing and still maintain your self respect.

Elistan

There's still plenty of markets where home prices are going up:
http://money.cnn.com/2006/11/20/real_estat..._cool/index.htm
http://money.cnn.com/2006/12/20/magazines/...sion=2006122106
http://money.cnn.com/popups/2006/fortune/i...tate/index.html

Plenty of places with declining prices, as well. That last link projects NYC values going down by 2% to 3.5%, FWIW.

Elistan

I'd need the extra money for all the little things that I can buy now, but wouldn't be able to with the smaller income that trying to live off $1mil would bring. And what if my S2000 is totaled - should I replace it with a used Civic? I don't think so.

cthree

I've had my home on the market in San Diego since before Thanksgiving and not only can't get any offers I can't get anyone to even come look at it. Two people have viewed it in the last 30 days and none of them even left a card.

I listed it for $525K and it was appraised last year for $580K so go figure.

NFRs2000NYC

Erik, the thread is about "WINNING" a million. In the US, if you win 1 million, you actually go home with 364,000, give or take a few bucks....

Money won is heavily taxed here.

Amit

probably due to the time of the year. Even when the market was strong, homes don't sell much in winter. I hope you're able to wait till spring comes around. that seems like a very reasonable price for San Diego in general.

cmflex84

is that a realistic number? Seems pretty high but I live in FL so i dont know anything about NY