If I had a million dollars

[kate_nepveu]

I wouldn't be rich.

Chad pointed out a Cognitive Daily survey on what it means to be rich, which had questions about both income and net worth. It's interesting reading, and I recommend all of it, but one thing in particular caught my eye.

The survey creators asked how much people would give away if they won a tax-free million dollars. The answer was roughly $200K, which prompted at least one person to express digust at the lack of generosity.

If someone wanted to give away most or all of a tax-free million, I would applaud them. But it's not what I'd do, and I think that "digust" is a bit of a strong reaction.

Here's what I'd do, at least my immediate reaction:

First, I'd figure out how to get full health coverage for our parents for the rest of their lives, everything from annual checkups to the less happy possibilities like nursing homes or hospice care. This would probably be very expensive, since I'd want to set things up to cover every possibility (buy an annuity to pay the insurance premiums, maybe? Something like that.).

Then I'd set up a college trust fund for our child(ren) and the child(ren) of our siblings, which would itself be a substantial chunk of change.

Whatever is left, either we'd renovate the kitchen or just sock it away as a vacation-and-treats fund.

And with the money freed up by not having to save for FutureBaby's college, I could increase my monthly charity budget. That's the thing with a million bucks, it's not enough to retire on, but it would give me the opportunity to provide for later contingencies and incrementally increase my standard of living and peace of mind today.

Anyway. What would you do with a tax-free million dollars?

Oh, and yes, some of you live in places where you wouldn't have to fund these contingencies personally, congratulations, I'm very happy for you, you don't have to comment just to say that. If I didn't have those things . . . probably new house, dream vacation, and yeah, an up-front chunk to charity.

(On the other hand, I definitely don't understand the people who answered the survey who said that they couldn't have enough annual income, that no amount would maximize their personal satisfaction and happiness. Seriously? The best spin I can put on that is that they have much better imaginations than I do.)

Comments

[pnkrokhockeymom.livejournal.com]

Well, I would get rid of the $140K in student loans I have. And I would pay off the house and get some serious repairs done that I'm actually, right now "saving up" for. And I'd get rid of the rest of the debt. And put away for Puppy's college education, and start a college fund for each of my 2 best friends who have just had or are getting ready to have babies. And take care of my parents' health care and their mortgage. And I would have a slush-fund for emergencies that Financially Smrt People always say you should have--what is that, 3 mos? 6 mos?

I would pay the balance of my alimony off lump sum, too.

Which might just break it, I think. And that probably looks TERRIBLE; if I got any more I would give it to charity, but I would want to help my parents and my friends with their kid's educations first, because I'm not sure they'll be able to save much for that.

[kate_nepveu]

Yeah. I wonder if the commenter objecting to people not giving most of it away didn't have a lot in the way of debt or personal contingencies?

Or, maybe they live their lives this way regardless. Some people do--Chad knew people once who literally tithed to their church, and also applied for food stamps, missing the eligibility cutoff by *that* much.

[raincitygirl.livejournal.com]

I think a lot depends not only on a person's net worth, but also on their socio-economic background. If you have wealthy relatives who'll help you out if you need it and who'll leave you money when they die, you'll have more financial security even if on paper you look to have the exact same economic situation as the next person. For example, you'll be a lot less worried about funding your children's education if you know your parents have been putting money into a college fund since their grandchild was born.

[avram]

Hm. I think I'd research what kinds of places I'd be able to buy a house with that kind of money. I'm thinking buy a multi-unit house, live in one unit, rent out the others, live off the rent. I'm not sure how the numbers work on that, though.

My parents already have great health insurance, and I'm not planning on having kids.

[pnkrokhockeymom.livejournal.com]

Um, yeah. That's very true. I think I am the wealthy relation in my family, and there's never been any extra anything for folks to be putting away for us. Hence the $140K in SLs.

[mswyrr]

First, I'd pay off the debt on my parents' home; it's one of those adjustable things that just keeps growing bigger and bigger even has the falling housing market makes the home's actual value drop, damn its eyes. We all live together anyway, and I think they'd be cool with putting me on the house w/ them so I'd be able to stay here even if something happened to them, instead of having to go through the court's inheritance rulings.

Then I'd talk to somebody about the safest ways to invest it and set it up so my mom and I get interest payments off of it. It would make it easier to survive when jobs are lost, etc. If I could, I'd give regular money to charity off of the interest I got, but I wouldn't touch the main money after paying off the house, though.

[veejane.livejournal.com]

I know that, in the real world, I would do things with that million dollars -- like pay off my mother's mortgage and take care of my niecephews' schooling -- but off the cuff I was sitting here thinking that, all other things considered and me being a frugal person, I could probably live off a million dollars for 20+ years.

Or a lot fewer years, and put myself through the artsy-fartsy impractical graduate program of my choice with no financial aid.

[dsgood.livejournal.com]

Give money to some people I know who could use it.

Spend a lot of time traveling to various places around the world.

Donate a bunch to food shelves.

[janni.livejournal.com]

I'd get together with a trustworthy investment counselor, and work out ways to invest it so that some portion could serve as part of a yearly income and some could go toward part of something resembling retirement. And then I'd give to charity and do other worthwhile things out of the yearly income part.

Probably, unless the investment counselor convinced me it was a really bad idea, I'd pay off our house before doing all the rest.

[raincitygirl.livejournal.com]

Many people's lives would be much easier (and there'd be much less student debt in the world) if society were more plentifully supplied with wealthy relatives. I mean, there they are, mostly concentrated in among people who are doing just fine financially anyway, and not equitably distributed among the general population. Why can't life be more like Agatha Christie novels? Wealthy relatives are a dime a dozen there. Of course, they also usually end up filled with arsenic or shot to death in a locked room, so that may not be particularly desirable. Bringing them over from fiction would just increase the crime rate.

[pnkrokhockeymom.livejournal.com]

See, that's why I make sure all of my DISTANT relatives know about the SL debt and Puppy's forthcoming college adventures in the Ivy League. So they won't poison me.

[kgbooklog.livejournal.com]

Or, maybe they live their lives this way regardless.

Lawrence Watt-Evans has been talking about class in America over on one of his blogs, and had this to say about attitudes towards money (http://www.watt-evans.com/blog/?p=70).

[montoya.livejournal.com]

I'm one of the "no limits" sort of people.

How much would it cost to run a space program? What kind of supercolliders did you physicists need? Mr. Whedon, would you like a big budget TV show that's guaranteed to lose piles of money (oh, I'll buy NBC to air it without commercials)? What sort of incredibly awesome underground lair can really be built within the limits of modern construction technology, and what's it take to advance the state of the art? Oh, and how about something like Orb only with a broader catalog (at a start, every book I own, because I want matching copies), selling absolute top-quality (hand-sewn, leather-bound, etc.) editions for like $5?

None of this stuff is necessary in any way, of course, but wouldn't it all be COOL?

[cofax7]

Make donations to various siblings' kidlings' college funds. Set aside an amount for my folks' retirement/medical. Set aside an amount for my own retirement. Sell my house and move half a mile east. Put $20,000 or so aside for fun, make some long-term commitments to charity.

[montoya.livejournal.com]

A million dollars is really not enough to retire on, unless you want to live rather austerely. If you're not retirement age, so need it to last indefinitely, you can get a withdrawal rate of 2-3%, which amounts to something like $25K a year. Which you have to pay taxes on (though if that was your only income, I think just 5%).

But it's a heck of a nest egg...

[lbmango.livejournal.com]

Interestingly, $1mill is enough to endow a chair at a college. so, one answer that I've had is "endow a chair, with the stipulation that I be the first person to take it.

In other words, create a job for myself, and then do it.

That would have unfortunate political ramifications, I'm sure.

Alternatively, by really nice condo, and stick the rest somewhere intelligent...

For the most part, Investing a million dollars, and then paying for health care out of pocket will be more efficient than paying health insurance for all parents.

I agree with you, that the effect it would have on my charity giving would be indirect. I'd buy a house (condo) again, and have more financial flexibility, so my yearly charity giving would go up, but I probably wouldn't give any of the original million directly to charity.

[calimac.livejournal.com]

$1M would be barely enough to buy a house around here. It's not worth it, anyway, so I wouldn't do it.

SAVE IT!

[spiderweb888.livejournal.com]

I don't have any debt so I'd save it. All of it.

There will be very little social security or Medicare soon because of the baby boom. More people are getting Alzheimers (witness pTerry!). That money would sure come in handy for long-term care for me or someone in my family should that happen.

[coraa.livejournal.com]

Pay off my debt and then save the remainder Just In Case (of medical emergency, lost job, etc.). Though I'd probably blow a relatively small chunk of it on something moderately frivolous, like travel, beforehand, but I am a fairly anxious person, and having a significant emergency fund would make me measurably happier.

Most likely, when I have children, some of it will go to their college fund.

[kiya]

This question comes up often enough that I'm tempted to crunch the numbers on it for real sometime.

My immediate thoughts run something like:

- We have some irritating debts that would be useful to pay off.
- I don't honestly know if it would be more useful to pay off the mortgage or keep that liquid for the future (as we have hopes of moving in with our partners in a few years, and buying or building a house that suits us all and handles whatever size the family is at that point will not be insignificant)
- We have very little in savings; this needs corrected, but I don't know to what level.
- We need a second car, or, if the magic money appears after said car is acquired, will need to pay off second car.
- Education/care for the whole children thing needs considered.
- For that matter, one of these days I'd maybe like to get a bachelor's so I can pursue an M.Div.
- My other partner is in a going-back-to-school phase as well, and I'd like to be able to help him with that more than I can as a paid-in-royalties freelance editor for a teeny press.

If I presume that that takes half of it -- I got that number reasonably, but doing something like a full undergrad college investment fund for multiple offspring would eat much more, or putting more into savings, or -- I'd have to think about the remainer.

(I would note that I'm not doing any of this directly into 'personal indulgences'; my thought on that is, frankly, 'If we paid off the mortgage, that'd be n hundred dollars more a month we'd be able to spend on whatever we want', which means working out how much it would cost to accumulate everything on my to-acquire booklist (including the rare OOP only available for ~$3K and the like) doesn't go into windfall-magic-money calculations -- the freed-up money would come in faster than my reading speed anyway, even if I only got some fraction of it, especially given my backlog.)

So supposing I don't do as much long-term 'immediate family support and responsibility' stuff as I could in theory do, and am left with half of it:

I can think of two pipe-dream "If I had the money" projects that I would love to try to make work. I frankly have no idea how much it would take to float either, or for that matter if either is feasable, but that's enough money to think about starting.

Project One: park this notion somewhere near the intersection of 'grocery co-op', 'soup kitchen', 'community college home ec department'. Ideally in cooperation with local farmers (I know a community farm near here sends produce to charitable organisations in the inner city). Increase access to produce, bulk grains, etc., in an area where the nearest grocery store that has such things is an hour's bus ride away; produce healthy meals for people who don't have the time to do it due to things like 'holding down two and a half jobs'; offer instruction on basic cooking techniques, crockpot cooking, etc., for people who would do more if they only had the skills.

Project two: a goddamn religious foundation for my religion that's actually worth shit. The explanation of which is a whole other rant, but. If nothing else, at least that might be the resources to start to build something worth having as a semi-private location/foundation. (I know of a couple of groups doing this, one a working farm, one an intentional community/religious retreat space.)

Somewhere in there, that's what I'd do with a million dollars.

[firecat]

I'd invest the $1 million. I give away some money to charity, but mostly I just have plans to give it away when I die, assuming any is left.

I can kind of get the "not enough annual income." On the one hand, I'm quite happy with the income I have. But I have fantasies. One strictly selfish one: I would love to travel more, but I'm pretty mobility impaired. In my fantasy I would have unlimited use of comfortable air, water, and land vehicles and enough personal attendants to make traveling anywhere I want comfortable.

Then there would be the opportunity to fund of all sorts of cool stuff. I would love to set up an alternative MacArthur grant or something.

On the other hand, I don't really have the personality to deal with that kind of lifestyle, and I probably can't buy the personality.

[thette.livejournal.com]

I'd start by paying off the debts. Mortgage and student loans together would be about a million SEK, which right now is about 160 K USD. The rest? I'd give a lot of it away to my brother, because he's in a financial hard place, and has been for ten years now. Say another 160 K. 180 K to charity, invest the remaining half million, and then we could live comfortably on my salary alone and KJ could do whatever he wants.

[ninjoo.livejournal.com]

I would pay off the mortgage of my parents’ house, or buy them a house where they like. Whichever they prefer. I’d pay off my student loan, which luckily isn’t that much. I’d give a large portion to environmental charity.
And if I happen to have a house of my own already, I’d spend some to get a large, cozy kitchen, to make it the heart of the house.
And if I have some left after all this, I’d probably save it. I have no need for a cool car or designer clothes.

All this, if it would be a million euros. I cannot do a lot with dollars here in Europe, at least not the things I’d like to. :)

[dhole.livejournal.com]

In Orthodox Jewish law, there's actually a cap on how much charity you're supposed to give -- there's a minimum of ten percent, and a maximum of twenty percent. The logic is that you're not supposed to make yourself poor giving money to charity, because that doesn't help anyone, and that people have an obligation to financially support their families.

So, 200k to charity, and 800k invested, which would mean somewhere in the range of 40k a year, assuming relatively cautious investment. 40k a year actually is enough to retire on here. It would mean more trips back to the US for visits, and maybe we'd get a nicer apartment after a few years.

All in all, a cash free million would be rather nice indeed.

[itlandm.livejournal.com]

Well, my job will be supernumerous starting June next year, if all goes as planned. My 30 years of job experience is not transferable outside our organization. So I would probably not give away much, if anything. It is hard for people over 50 to get a job these days.