Randomly opening the Magic Book to the page that says I write about...
Blowing my budget. (Page 33 of the magic book.) Apparently, I just came into ten million dollars. Assuming that the GET BENT TAX MAN will take 33%, as he is wont to do, I will be left with approximately $7 million.
Anyway, here's how I would spend what's left:
- First, I would allocate enough of it to ensure that my parents could fix up their house, sell it at a much higher price than they're estimating, move wherever they wanted and live happily without needing to worry about income for the rest of their lives.
- Next, I would pay off my brother's mortgage, my good friends' mortgages and any relatives' mortgages who I like and keep in contact with
- Then, I would pack up all my crap into storage, pay my health insurance for the next four to five years, find a permanent sitter for Her Majesty (or buy an RV so she could come along) and quit my job so that I could spend the years driving all over the place and traveling all over the world.
- Finally, assuming I didn't find any worthwhile places to live or worthwhile causes to devote the rest of my money to (both of which are very doubtful), I would invest whatever is left over into a killer retirement fund so that I could retire at 50 and live a wonderfully happy and fulfilling life.
I like your ideas. Paying off the mortgages is a very kind and generous move and I can't think of many activities more enjoyable than travelling this globe of ours. You've got a charitable spirit and a real sense of social justice. I think a good cause would find you pretty quick.
ReplyDeleteThat said, the tax man in me has to burst in on your fantasy and tell you that the tax on 10 million bucks is a lot closer to 50% than it is to 33% (Depending on how exactly the money was earned/reported).
And, unless you're anticipating a cost-of-living that I can't fathom you could retire immediately (rather than at 50) and you wouldn't need anymore killer of a retirement fund than simple FDIC insured bank CDs. 5 million collecting at least 6% interest a year is 300 thousand dollars of interest a year. I'm imagining you could live pretty good off of 300k a year. Or even 200k a year and let the compounding interest go crazy.
Hope you don't mind the interuption.
Mark
I like your style. Though I think I'd agree with Mark's comment on living off the interest. I think I'd want to give some of it away upfront (parents' mortgage, nieces' college funds) but after that I'd rather live slightly more modestly--though say $150K a year doesn't sound modest to me at all--and never have to work again.
ReplyDeleteAnd this is why I need more GET BENT TAX MAN friends. :) To never work again... [insert Homer Simpson drool]
ReplyDeleteI think I could live off $50,000 a year if I put my mind to it. My friends call me cheap, I prefer to think of myself as frugal. But yeah, in the end, I'm cheap.
Adding on Mark's point, I would also note that reserving 4 percent of the interest income to keep pace with inflation would be prudent if you planned to live a while, so that you don't have to worry about how little $300k is worth say 30 years from now!
ReplyDeleteI think this is where the phrase "Mo money, mo problems" comes from.
PS I should say '4 of the 6 percentage points of the interest income', leaving you with a mere $100k per year, pre tax...
ReplyDelete