if u had 2 million dollars what would u do with it?

[Houston Don]

@Big Daddy Don the 69th

There are options for living cheaply within $2mil for the rest of your life. Just very limited options

There’s a big difference between living based on your means and living based on a lifestyle you want to keep

If you can’t afford the area you’re in then guess what? You have $2m, go find somewhere cheaper. Sell everything you have aside from bare minimum so you're not lugging it around if it's cheaper to re-purchase then moving it

I agree with Stephs statement that you could live on $2mil for the rest of your life. I also think it doesn’t have to be used in that way. You could use it to set yourself up to generate more money.

The area I live in you can expect rent for $300-600 a week. Groceries a family might spend between $100-300 per week. Yet I know a couple that lives on only $30 per week total by camping. I know another couple that don’t have to fork out for rent or very little because they do housesitting. The rent fee is them looking after the property on behalf of the owners so it’s not burgled while on holiday.

If you can adapt you can live off of $2mil without supplement. If you can’t you need to use the $2mil to set up a passive income or better income

Most people never have so much as $50k in the bank. So if you have a lump sum $2mil and you can’t do either then you have a serious money management problem that can’t be fixed by throwing money at it.

"Just very limited options" -> I agree, which is why I stated it depends on what quality of life you desire.
"go find somewhere cheaper" -> Again, that factors into your quality of life, many just do not want to move away from family and friends, etc.
"You could use it to set yourself up to generate more money." -> As long as you already have the basics covered and are willing to work, this is also true but every investment netting you more than inflation carries risks that most of you casually ignore.

If your rent is $600/week and groceries are $300/week, you are already spending at a rate that would exhaust your jackpot in Stephen's 50 years, no money for taxes, medical coverage, transportation, and everything else people routinely embrace as part of living a decent life. Granted, I know people that would love to camp part of the year and could pick up odd jobs but that goes back to the necessity of working to sustain a certain quality of life most are accustomed to having, no government programs are going to supplement your lifestyle nor would any of those odd jobs like house sitting provide the kind of benefits most care for as a safety net. So it goes back to specific assumptions such as are you single, will you be working, do you already have a home, a car, and many others. Sure, given $2 million and starting with nothing else, a single person can do great, it's just that the reality is that most people will spend it within a few years because most people have "serious money management issues".

If you're around Stephen's age (as implied by his previous comment how he's paid taxes for some 50 years), it's a lot easier than someone in their 20's but I fully agree with your premise that if you are willing to work for a living or camp as a lifestyle, you will manage to survive. As a point of reference however, a single medical incident can wipe that slate clean if you aren't covered by insurance, and comprehensive, un-subsidized health insurance can dip into those savings quickly if you aren't employed.

 

[Emberguard]

You don’t get taxed on money you already have. Only on receiving and spending. So the whole 50 years no money for taxes is a moot point unless you’re telling me you get taxed on the $2mil before you’ve spent anything.

My assumption on this hypothetical is either it’s after-tax you have $2mil or it’s tax-free due to being won in a lottery or gameshow

 

[DeletedUser]

$40,000 a year won't cover your basic needs in many communities

It surely would once you don't have house or car payments. Even if you had a house or car payment, $40,000 a year is enough to live decently on in most of the country. Apparently you live in a high cost of living area and are somewhat snobbish about it. I can't see any logical reason for your statement otherwise. The choices in lifestyle do not solely consist of Hollywood and rural Mississippi, as you seem to imply. No, $40,000 a year will not allow you to live in an exclusive California community, but it would allow you to live very comfortably in most of the country. And my standard of living/quality of life would not be lowered with that amount to live on. I have a stepson for whom it would not be enough, but that because of his wants, not his needs.

It may mean living in a rural community or making other changes but unless you are starting with a house, car, and everything else as well as no debt,

As I said, high cost of living California and some backwoods community are not the only choices available. And the fact that you keep repeating that thought indicates that you don't know about much outside your little circle of life. Personally, my wife and I have a mortgage free home and two paid off cars. We have less than $5000 in credit card debt that will be paid off very shortly. In fact, other than house/car loans I have never been in debt more than $20,000 in my entire life. (And that was only after my first wife left me holding the bag when she left.) It seems to me that the only people that would have trouble living off $2 million are those that are already in the habit of living above their means. And that's fine for them, if you need more, figure out how to finance it. But you'll always be chasing contentment, which is a sad way to live.

statistics bear out that people suddenly handed a large amount of money almost inevitably use it up, but there are always exceptions.

Well, that hardly seems relevant to me. In fact, it is just the kind of "money fixes everything" attitude that you have been exhibiting that leads people down that path. It is proof that it isn't the amount of money that is really relevant, it is the life attitude of the person. You seem clearly to be the type who will never have enough to meet your "needs". I am most definitely the type that can be content with the hand I am dealt.

 

[Houston Don]

You don’t get taxed on money you already have. Only on receiving and spending. So the whole 50 years no money for taxes is a moot point unless you’re telling me you get taxed on the $2mil before you’ve spent anything.

My assumption on this hypothetical is either it’s after-tax you have $2mil or it’s tax-free due to being won in a lottery or gameshow

I was using that assumption as well, that the amount was post taxes. The thing is, almost anything you buy will then be subject to various taxes, from the home you might purchase to the car to the various necessities. Almost any investment you make to generate future income will also be subject to various taxes and fees, most states tax such income on top of the feds. Mentioning some of the costs doesn't negate the argument, merely sheds light on the likely longevity of the original amount.

 

[Emberguard]

Not really. Prices where I live include taxes. And no biggy if generated income is taxed. That’s the difference between gross and net. Anything gained is still something gained

 

[Houston Don]

It surely would once you don't have house or car payments. Even if you had a house or car payment, $40,000 a year is enough to live decently on in most of the country. Apparently you live in a high cost of living area and are somewhat snobbish about it. I can't see any logical reason for your statement otherwise. The choices in lifestyle do not solely consist of Hollywood and rural Mississippi, as you seem to imply. No, $40,000 a year will not allow you to live in an exclusive California community, but it would allow you to live very comfortably in most of the country. And my standard of living/quality of life would not be lowered with that amount to live on. I have a stepson for whom it would not be enough, but that because of his wants, not his needs.

As I said, high cost of living California and some backwoods community are not the only choices available. And the fact that you keep repeating that thought indicates that you don't know about much outside your little circle of life. Personally, my wife and I have a mortgage free home and two paid off cars. We have less than $5000 in credit card debt that will be paid off very shortly. In fact, other than house/car loans I have never been in debt more than $20,000 in my entire life. (And that was only after my first wife left me holding the bag when she left.) It seems to me that the only people that would have trouble living off $2 million are those that are already in the habit of living above their means. And that's fine for them, if you need more, figure out how to finance it. But you'll always be chasing contentment, which is a sad way to live.

Well, that hardly seems relevant to me. In fact, it is just the kind of "money fixes everything" attitude that you have been exhibiting that leads people down that path. It is proof that it isn't the amount of money that is really relevant, it is the life attitude of the person. You seem clearly to be the type who will never have enough to meet your "needs". I am most definitely the type that can be content with the hand I am dealt.

This is exactly what I was talking about, "once you don't have house or car payments" is a huge assumption that I specifically addressed. If you are going in with a clean slate, ie: no car or house, you are already looking at a significant chunk of the original amount being used either in rent, a mortgage, or buying outright. I use two extremes (though not "Hollywood" as you have) for price comparisons but running with your narrative, the average price for a home in Hollywood, California right now is over a million dollars while one in MI is closer to $125k, the average nationwide is over $300k (per Dave Ramsey) so starting with nothing versus starting with an existing home/car all paid off is a huge assumption to the original premise.

For the record, I am pretty well versed in finance and money issues as I learned from the mistakes of others, having seen multi-millionaires lose it all just as I've seen others arise from the ashes of poverty. Note that the US Census claims the average household income is over $60k a year and the average debt owed by people is far greater than the amount you and your current wife have (which is commendable on your part by the way) but having any income or debt is a separate assumption to the premise (my take is that the money is part of a blank slate, not in addition to existing assets or an income). If you are calculating based on being 60 years of age, having low debt, owing your own house and cars, and so forth, of course $2 million will last you in most parts of the country. But if you are calculating based on a 20 or 30 something year old head of household, it is not "snobbish" to think using the sum as the sole source of sustenance is going to result in some very hard choices far apart from living in some wealthy enclave. But I also agree with you that more money is not the answer, more education on how to manage money is far more important but few care to pursue such education.

 

[Houston Don]

Not really. Prices where I live include taxes. And no biggy if generated income is taxed. That’s the difference between gross and net. Anything gained is still something gained

I'll admit that I've never lived in a place where taxes were included in all purchases, car dealerships are notorious for under estimating taxes to make their sales and house sales in my experience lead to yearly taxes (some states like Texas do not have income taxes but use property taxes to finance things, I am not familiar with any states that do not have some form of property taxes). I'm just waiting to hear from one of you about these great investments that would generate so much money with little or no risk to the principle because I get those fliers in the mail all the time but the fine print makes it clear the real risk is open ended. lol

 

[Emberguard]

Oh you wouldn’t do a single investment, you’d do multiple investments so if one fails you’ve got more

 

[Houston Don]

Oh you wouldn’t do a single investment, you’d do multiple investments so if one fails you’ve got more

I agree but given the way the markets have bounced around, if I had a lot to invest, I would not invest in any of the traditional financial markets right now. Bonds are in the tank, treasury bills are not keeping up with inflation, and even the biggest investors like Buffet believe the stock market to be very over priced. This is part of the reason so many pension systems are in trouble, most expect them to make 7% or more in an environment where that isn't safe like it used to be. I get invited to all sorts of investment seminars where they feed you prime rib or other fancy dinners, some even give you mini-vacations to hear their sales pitch, but in the end, their experts can't promise even 5% with a diversified portfolio unless they use cherry picked data. So as a supplement to existing assets and a job, the stated amount can do wonders but as a singular amount, any projections are going to be sketchy at best.

 

[DeletedUser]

I'll admit that I've never lived in a place where taxes were included in all purchases,

Neither have I, but sales taxes are pretty much irrelevant in the grand scheme of things.

car dealerships are notorious for under estimating taxes to make their sales

In Missouri you can go to the state website and figure your vehicle sales tax beforehand. I've never even discussed sales tax when buying a vehicle because I knew beforehand how much it would be.

house sales in my experience lead to yearly taxes (some states like Texas do not have income taxes but use property taxes to finance things, I am not familiar with any states that do not have some form of property taxes)

I'm not sure about real estate property taxes, but I know there are several states that do not have property taxes on vehicles and such. I just looked up Texas info on this and they have one of the highest home taxes in the nation. They do have on there that the national average real estate property tax on a $250,000 home would be around $3000. My home was just reassessed at a market value of $78,000 and my estimated tax on that this year will be a little less than $1200. Not insignificant, but not a deal breaker, either.

I'm just waiting to hear from one of you about these great investments that would generate so much money with little or no risk to the principle because I get those fliers in the mail all the time but the fine print makes it clear the real risk is open ended. lol

So let's say you spend $200,000 on a house, $80,000 on two cars, $100,000 to get all furniture, furnishings and home maintenance items, $10,000 on clothing. That's $390,000 out of the $2 million, leaving you with $1,610,000. If you invested that at 2.5% interest it would give you $40, 250/year to live on. With no house or car payments. Even taking out property taxes and home/auto insurance, that would probably leave you over $30,000/year, or $2500 month. And for every .5% in additional interest you would get another $8,050/year. And that's figuring strictly on interest rate, not on annual percentage yield, which is slightly higher for most investments. Personally, I could replace everything I have for way less than that $390,000. So to have a comfortable lifestyle right where I am I would not even need that 2.5% rate.

The only really valid point you've brought up is health care costs. That could certainly be a deal breaker. I'll admit that I don't have to worry about that. However, a younger person who had $2 million in tax free cash could certainly find something to keep them employed that was not overly tedious or stressful that gave them benefits, since they would not have to consider salary. Alternately, they could find something that would pay enough to finance a personal health care policy. Again, without regard to paying for anything else, because the $2 million would take care of that.

 

[RazorbackPirate]

I would merely accelerate the plan I am currently on. 2 million would simply shorten my timeline.

 

[DeletedUser13838]

I have a dream, a dream for a cerain amount of money that would enable me to travel and live where I want and as I want. That number (at least for me) is around $20 million. You can safely invest at a 4% rate long term which would produce $800,000 annually and if you play your cards right would be taxed at a 15% rate. Staying at nice hotels and eating in nice restaurants costs ~$250k per year ignoring rewards from the hotel programs (exploiting the programs can generate at least a 10% discount if not more). Fly to a new city in first class 20 times a year costs $100k (see above for airline programs). That's around half your after tax income. No need to pay for a home, furniture, utilities, internet and most other bills. You can save some money by spending a month on a long cruise (internet not cheap though). Most other expenses become rounding error and you should be able to increase your principal to offset inflation.

I think I can make do with $10 million, 4* hotels instead of 5*, business class instead of first and of course balcony instead of a suite on a cruise ship.

But at $2 million it looks like Motel 6, Ryan air and a canoe.

 

[DeletedUser41358]

I would sell the very small home I live in and rent twice the space and extra bathrooms. I would setup a trust fund for my children with most of it, establishing a portfolio for automatic re-balancing weighted at 10% bonds of various terms, 30% in index funds, 5% in select stocks, 10% in gold, 10% in silver, 5% in crypto coins, 10% in real estate, 20% cash). The same portfolio but much smaller part of the $2mm for myself for life expenses, game playing etc. I would reduce my work hours to 1/2 time an volunteer a regular day a week instead of the on-again off-again volunteerism and spend extra time studying. I would create a volunteer organization to support community food programs nationwide and prepare for the coming financial apocalypse, requiring all volunteers to have a good understanding of math. I would start several youtube video channels, at least one for fun and one for education, though this might involve someone else in the starring role. I would arrange a trip to Inno to discuss customer support suggestions. I would bring a gift of polyhedron dice.

 

[Lannister the Rich]

In this day and age, $2m is honestly not that much money for the average American. The average household income as of January 2019 was ~$63k, which rounds out to roughly 32 years of income at once: hardly a lifetime's worth. Sure, there are things that can be done to extend that money, but I would dissuade anyone from quitting their job or changing their lifestyle over $2m.

Me, I would pay off the rest of my student loans and get a Tesla, do something really nice for my parents and fiancee, then put the rest in a CD and keep doing what I'm doing.

 

[Houston Don]

Neither have I, but sales taxes are pretty much irrelevant in the grand scheme of things.

In Missouri you can go to the state website and figure your vehicle sales tax beforehand. I've never even discussed sales tax when buying a vehicle because I knew beforehand how much it would be.

I'm not sure about real estate property taxes, but I know there are several states that do not have property taxes on vehicles and such. I just looked up Texas info on this and they have one of the highest home taxes in the nation. They do have on there that the national average real estate property tax on a $250,000 home would be around $3000. My home was just reassessed at a market value of $78,000 and my estimated tax on that this year will be a little less than $1200. Not insignificant, but not a deal breaker, either.

So let's say you spend $200,000 on a house, $80,000 on two cars, $100,000 to get all furniture, furnishings and home maintenance items, $10,000 on clothing. That's $390,000 out of the $2 million, leaving you with $1,610,000. If you invested that at 2.5% interest it would give you $40, 250/year to live on. With no house or car payments. Even taking out property taxes and home/auto insurance, that would probably leave you over $30,000/year, or $2500 month. And for every .5% in additional interest you would get another $8,050/year. And that's figuring strictly on interest rate, not on annual percentage yield, which is slightly higher for most investments. Personally, I could replace everything I have for way less than that $390,000. So to have a comfortable lifestyle right where I am I would not even need that 2.5% rate.

The only really valid point you've brought up is health care costs. That could certainly be a deal breaker. I'll admit that I don't have to worry about that. However, a younger person who had $2 million in tax free cash could certainly find something to keep them employed that was not overly tedious or stressful that gave them benefits, since they would not have to consider salary. Alternately, they could find something that would pay enough to finance a personal health care policy. Again, without regard to paying for anything else, because the $2 million would take care of that.

Texas uses property taxes to finance government much like other states use income taxes combined with property taxes, some states provide less to residents so there is less need for the money. Taxes in general would factor in though given the schemes posted by some in this thread, a few of you would want to move to a state that did not tax capital gains from investments (MO averages 28.6% the last time I looked-that's over a quarter of any income you'd get from investing). But the best I could get a home for in my area for $78k would be a trailer home and I don't think it's snobbish to say no thanks at that option. lol

Then, in a recent survey, it was pointed out that families average over $20k/year in medical costs, those working full time have a big part of that subsidized by their employer, possessing a large sum of money would almost certainly negate any government handout just as it would kill the chances for any children to get financial aid so hopefully the kids could get merit scholarships if college was to be a thing. So it goes back to my belief that for most people, the money would be spent within a handful of years and the bulk of the remainder would be able to live a modest lifestyle in a place like rural Missouri, Mississippi, Alabama, or adjacent state if they were starting with a clean slate. The best way to make the funds work would be to get a job that provided medical benefits and to use the money as a supplement because all it would take is a few years of 1970's style inflation or one large market adjustment to kill your plan. But yes, living where you do and in your specific situation where you currently have everything paid off and you are about to enjoy your golden years is a far cry from what most people would be happy with so enjoy!

 

[Houston Don]

I have a dream, a dream for a cerain amount of money that would enable me to travel and live where I want and as I want. That number (at least for me) is around $20 million. You can safely invest at a 4% rate long term which would produce $800,000 annually and if you play your cards right would be taxed at a 15% rate. Staying at nice hotels and eating in nice restaurants costs ~$250k per year ignoring rewards from the hotel programs (exploiting the programs can generate at least a 10% discount if not more). Fly to a new city in first class 20 times a year costs $100k (see above for airline programs). That's around half your after tax income. No need to pay for a home, furniture, utilities, internet and most other bills. You can save some money by spending a month on a long cruise (internet not cheap though). Most other expenses become rounding error and you should be able to increase your principal to offset inflation.

I think I can make do with $10 million, 4* hotels instead of 5*, business class instead of first and of course balcony instead of a suite on a cruise ship.

But at $2 million it looks like Motel 6, Ryan air and a canoe.

There's an old joke about an elderly person taking continual cruises because she'd eat better and be better taken care of on the ships than in her nursing home, the cost being less most of the year as well. That being said, you'd want to live in a state that had no capital gains tax as most states tax it as regular income (which would be more than 15%, much more if some of those wanting to take office get in) but as I tried to educate Stephen, a lot depends on an individual's specifics. For the record, I like your plan the best.

 

[DeletedUser41358]

I like the tone of your answer though a CD may not be a practical answer. Still, I love the simplicity.

 

[DeletedUser41358]

There's an old joke about an elderly person taking continual cruises because she'd eat better and be better taken care of on the ships than in her nursing home...

I had not ever heard that, but I am adding it to my options for the long term. Note however, elderly people eat little. Note also, they need the company and conversation.

 

[DeletedUser41358]

If only the "with a government controlled by you the American people" were real.

 

[Godly Luke]

2mil is a lot. I would
1) Buy a car -60k
2) Buy a house -200k (if not more)
3) Move to Hamburg
4) Go to college -100k+