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Old 06-14-2021, 02:49 AM   #1 (permalink)
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What would you do with a million dollars?

I tend to think about stuff like this during idle moments. That would let me charter private planes for a while.

I hate airports!

I have also long wanted a personal assistant, someone to help me remember stuff, help out around the house.

Is that spelled "wife" or "husband?"

Except this would enable me to pursue opportunities elsewhere.

Maid?

Brothersitter?

Emperor Leo Atreides had a batman, so I would go with that.

How much would I need to pay someone to put up with my brother's eccentricities and my mother's lunacies?

The U.S. government determined this is worth $12.15--the going rate for various providers that would work with Mom and my brother, but my brother's provider doesn't do much besides talk crazy and watch television.

(The Arizona government actually pays $18.48 and agencies keep $6.33 for whatever they do)

I need to pay above the minimum wage to find good help nowadays?

Sure, I could probably find someone for $30,000 a year, but undoubtedly I would have an easier time finding--and keeping--a quality employee for $40,000--and an even easier time for $50,000.

Forbes says that benefits cost 47% on top of the salary. A $50,000 employee would actually cost $73,529.41.

If I account for a 3% annual cost-of-living allowance a million would run out in under 12 years--and this $50,000 employee would cost $100,000 in the end.

Which reminds me, are we considering before or after taxes?

I am sure there is some kind of deduction here, but probably not much.

At least I wouldn't need to worry about Mom and my brother as much for at least a decade.

The other thing that I want is to buy a nice 1,600-square-foot house, load my stuff into a 26-foot U-Haul, and tell Mom "You two can come and live with me as long as all of your stuff fits in the truck without making a second trip."

Maybe that would work.

Maybe.

With less stuff and a bigger house we would finally have a reasonable amount of clutter. Then I could fix all of the cracks in Mom's house, repaint the inside, replace the flooring, and repair anything else that is awry.

When I tried to find a house like that in Show Low I found this 3-bedroom, 2-bedroom, 1,473-square-foot house with a 2-car garage for $455,000.

That was more expensive than I was thinking, but the point is that here are 3 different good things that I want and I don't think that I could afford 2.

Again, is this a million before or after taxes?

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Old 06-14-2021, 02:56 AM   #2 (permalink)
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Same as I'd do with a hundred bucks; double the money and make it work for me, to improve the things I desire to improve.
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Old 06-14-2021, 04:02 AM   #3 (permalink)
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Some guy's plan from a blog called Fire-Year Fire Escape


How many people thought about this as a kid? How many people still do? Whoever Lief Welcome is, he or she points out that a million doesn't go nearly as far as it did when we were kids, especially real estate.

Lief shared a small home needing a great deal of work that was posted for sale in 2018 for $750,000.

It might have cost a million by the time it was livable.

My sister just bought a 2-bedroom townhouse near San Francisco for $1.1 million and she will probably pay $100,000 remodeling a house that we thought was amazing--and paying more in HOA fees than Mom pays in rent.

In other words, the best time to buy real estate was years ago.

Lief wrote "In 2020 savings accounts have an interest rate of around 0.6%."

Is that the mean, median, or mode?

Oh the glory days of a $6,000 annual return on $1,000,000 in savings!

"The national average interest rate for savings accounts is 0.06 percent, according to Bankrate’s June 2, 2021 weekly survey of institutions."

Bank of America pays me 0.01% and Navy Federal yields 0.25%. I have always found higher rates, but if I had enough money to buy more than one cherry limeade a month I would have enough to actually use.

Comenity Direct offers .55% and Ally and Marcus by Goldman Sachs offer .50%, but don't require an opening balance.

Hopefully I get back up to $9,000 in savings soon, so I am giving up on $27 annually.

Think what I could do with all of that!
Quote:
Even if you gave up on living off the interest and lived off the money itself you’d only be able to spend $36,000/yr and still run out of money in 30 years.
Inflation!

The best account right now pays .55%, while inflation will be around 3%, so on top of pulling out $36,000 annually you would lose 2.45% a year to inflation.

$1,000,000 / 1.0245 - $36,000 = $940,085.90.

The first year you lose $24,500 in interest!

In this scenario $36,000 a year would last 22 years, but you would be able to buy barely half as much in the end.

Accounting for inflation, $36,000 (today and $57,769.43 in 2039) will last 18 years.

Lief's plan:
  1. Pay off bad debt ($25,000)
  2. Put $975,000 in a 6-month CD and plan. He claims this wouldn't cost anything, but remember? He ignores inflation! It would cost $10,985.20.
  3. Invest your 401k for this and next year: $39,000
  4. Spend $10,000 on courses through something like Udemy to learn useful skills.
  5. Get better credit cards and refinance that bad debt you already paid $0.
  6. Put $25,000 in savings, bonds, or something safe and easily-accessed for an emergency.
  7. Put $500,000 into index funds.
  8. Instead of paying off your mortgage, get into real estate! Instead of saving 3% a year on a mortgage, near the inflation rate (which, of course Lief doesn't mention), he averages an 8% cash flow from his rentals. Lief says you should get $32,000 annually from real estate and $20,000 from index funds.
"[O]nce you have one million dollars you have more money than 92% of adults in the USA."

It sounds boring, but I believe it is sound.

What do you think?
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Old 06-14-2021, 05:04 AM   #4 (permalink)
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Retire.
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Old 06-14-2021, 07:49 AM   #5 (permalink)
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The question should be

What are you going to do the the Million plus dollars you will earn in your life time?
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Old 06-14-2021, 09:28 AM   #6 (permalink)
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Quote:
Originally Posted by nemo View Post
The question should be

What are you going to do the the Million plus dollars you will earn in your life time?
Spend it.

If I had any sustancial amount of money if buy a house and stop renting.
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Old 06-14-2021, 01:13 PM   #7 (permalink)
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Your probably right, a million dollars wouldn't change you life by much.

Were I to be gifted one meellion dollars (after taxes, thankyouverymuch), I'd try to disrupt the housing industry and then live in the failed prototype. Realistically, I have a better shot at grant money. I know where it is, I just have to convince them.
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Old 06-14-2021, 04:27 PM   #8 (permalink)
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Theoretically if a person were to invest all that money they could possibly retire and live the rest of their life off of their interest.

Half of US households make less than $70,000 a year. As long as you can make 7% yearly off of your investments you'd be set.
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Old 06-14-2021, 05:10 PM   #9 (permalink)
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Quote:
Originally Posted by Isaac Zachary View Post
Theoretically if a person were to invest all that money they could possibly retire and live the rest of their life off of their interest.

Half of US households make less than $70,000 a year. As long as you can make 7% yearly off of your investments you'd be set.
I once determined that I could retire in Nicaragua for $200k, and that was when I was in my 20s. Back then I figured I'd need 2.2M to retire in the US at my youthful age.

A million bucks isn't anything anymore. Depending on how much longer one expects to live, the interest on a million probably isn't going to get them to the end of their years. 3% inflation will end up making the interest income insufficient to live on.

My retirement strategy will likely involve renting out property since the income adjusts up with inflation.
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Old 06-14-2021, 06:14 PM   #10 (permalink)
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Quote:
Originally Posted by redpoint5 View Post
I once determined that I could retire in Nicaragua for $200k, and that was when I was in my 20s. Back then I figured I'd need 2.2M to retire in the US at my youthful age.

A million bucks isn't anything anymore. Depending on how much longer one expects to live, the interest on a million probably isn't going to get them to the end of their years. 3% inflation will end up making the interest income insufficient to live on.

My retirement strategy will likely involve renting out property since the income adjusts up with inflation.
Whether a million is enough or not depends on your circumstances and expectations when it comes to your standard of living. Half of American households make less than $70,000. Than means some live off of $60k, others $50 and even others $40 and so on.

If you can earn 7% off your million dollar assets then keep 3% for inflation and take out 4% (currently $40,000) you could live indefinitely ($413,000 per year in 80 years) and your million dollar assets would also increase by 3% every year (over $10 million in 80 years).

Just a bit more (current equivalent of $42,000) and you could live off of it for 80 years ($433,000 per year by that time) but would run out of money by then.

If you take out $50,000 today's equivalent you could live off of that money for some 43 years ($173,000 by then) and then run out of money.

If you use $60,000 you'd run out of money in about 30 years ($141,000 per year by then).

Or just invest it and wait 14 years and then start taking out what would likely be the median wage by then ($103,000 and 3% more every year). Then you could live off that money for the following 66 years or more.

Whether real estate or stocks are better depends. The point is it's an investment that continues to increase along with inflation.

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