Monday, June 7, 2010

What would you do if you got $1,000,000

So, what would you do? I know it’s not likely and people think it’s silly to waste your time thinking about it, BUT if it did happen, what would you do?

I hear a lot how $1,000,000 isn’t enough, wouldn’t really make a difference etc... But seriously, if you got $1,000,000 it wouldn’t make a difference? You really think it’s not enough to live off? Sure, it won’t give you a million dollar lifestyle, but if used wisely it sure can help. In fact, I know if I ever got $1,000,000 I could live off it and never need work again. (I know I don’t work right now, but I am trying to make a point here! Lol)

If I got it, I would pay tithing to my church first then buy a few homes to use as investment properties. I would live off the rent from them and they would be a long term investment. I would also purchase some shares. And before you jump the gun saying you couldn’t buy a few homes, or if you could the rent wouldn’t be that high/they’d need a lot of work etc... If you look around in areas other than where you currently live or the centre of capital cities, yes there are properties you could buy and rent out for a reasonable amount.

On my current budget, if I received a payment like that, I could easily live off the rent of some properties and still save money. Not everyone is happy with what they have though and would want more. I could save a few hundred in fact. Yes, I do think about “If I had $1,000,000”, probably too much!

What would you do?

Statistically most people who get a windfall like this blow it. They buy flashy cars or houses they can’t really afford (ok, $1,000,000 won’t get you a really flashy house anymore, least not where I live). They end up worse off than they were before they got the money, which is sad, as it could really enhance your life.

I think one important thing many people forget to do is to sit on it. You just received A LOT of money. Before doing anything, put it away and have a good think about it. Don’t rush out and buy everything you have wanted or pick the first house that you see. If you want this money to make a difference to you, just hold onto it for a bit. Put it in a savings account and earn interest on it whilst you think about it.

The interest alone on $1,000,000 a year would itself be enough to live off (if you are relatively budget conscious already.) That said, not everyone is that way inclined.
I know I would be sorely tempted to buy new clothes, a new car, new furniture etc... but when it comes to the choice of having new things or setting myself up for life, I know I would prefer to set myself up for life.

So, tell me, what would you do?

4 comments :

  1. I would pretty much do the same as you. Buy property and rent it out while living on the profits and/or reinvesting any profits that I don't actually need to use to live.

    I would rather set my family up to live comfotably than to race out and buy a flashy car, lots of clothes and toys for the kids.

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  2. Of course $1,ooo,ooo makes a lot of money for me and my family. Buying a property is the most common investment one would do with that much amount of money and I belong to the same category. I am also a part time musician so I would set up a home based recording studio.
    Personal finance

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  3. Great minds hey? lol. I think we think similar in a lot of ways Alicia. :)

    Parag, a home recording studio would be awesome. I wonder how many other people would do something different like that?

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  4. Very true!! $1m would definitely set us up for life. I would probably pay off our house, would give some to family and then invest the rest to live off.

    And as a family we would continue to work, but probably doing something we LOVE as opposed to LIKE.

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