Life changing money - how much would it take?

[jo-jo]

Interesting question. At first I was going to say five million. Would mean dh could retire, we’d have enough for the rest of our lives. But then I got thinking that even with five million, dh would probably keep working and we wouldn’t spend more. Life would stay the same. It’s just who we are. I often say that even if we had inexhaustible funds, I wouldn’t live in a bigger house, wouldn’t get my hair or nails done, wouldn’t eat out any more often, wouldn’t have a cleaning lady, etc. Life is exactly as we want it now. So the five million would be invested and life would continue on as normal.

The only thing that may change would be we would travel a bit more—but not much more. And again, the style wouldn’t change. I’m basically at the peak of any want for luxury now.

Not sure of the amount, but I feel like you, we wouldn't move , etc. I don't even know about traveling more, but take a longer trip to disney. Maybe do some of the extra tours. And not feel like I have to carry bottles of soda into the parks to save 10 bucks.

But I'd probably do a two week, bring the kids and grand kids and my siblings trip. Stay one week at two different resorts in 2 bedroom villas..guess we'd need three. Do a VIP tour every few days and with that number, we need two guilds. Let's see that should take about a million right there.

 

[Colleen27]

It does depend - as noted, I was only 20. Had no debt, but obviously hadn't build up a lot of money of my own. Plus, that would have been really early retirement (I was still doing my undergrad!).

In terms of leaving it to the next generation, I understand your thoughts. I don't have kids but have nieces/nephews (I include my cousins' kids in this). None of them *need* a seven figure inheritance (but, then, neither did I) and their parents are more then set to take care of them (and would never expect that I consider their children in my financial planning). However, I kind of feel that I did nothing to get it (other than having dead parents) and I know that my grandparents worked hard to have money to leave (they lost everything when they had to escape Europe during WWII), so spending it all in one generation (i.e. on me) just doesn't feel right (though, of course, I would if circumstances change and having "screw you" money is definitely a major positive in my life). And, honestly, I do save less than I would otherwise, and don't really feel that I deprive myself of anything.

Yeah, the timing is another big factor. Unless you have entrepreneurial ambitions or a consuming passion for a particular cause, I think it would be hard to "retire" that young and not find yourself at a loss for how to fill your days. Some career paths might lend themselves to it - for me, quitting my job would just be a shift in my career, not an ending - but most don't, and 60+ years is a long time to fill without a guiding purpose of some sort. Heck, I went back to school and then to work in my mid-30s, after many years as a stay-at-home mother, because I realized I needed something more to fill my time.

Under those circumstances, I think I'd probably feel as you do about leaving a legacy to future generations. Our legacy to our kids will be the same that our parents tried to give us, and our grandparents tried to give them - a debt-free degree or trade, help with the milestone expenses of early adulthood. We haven't inherited anything (well, my first car - a 1979 Dodge - was left to me by my grandfather when I was a teenager ) and likely wont for quite some time; my mom expects to leave a low six figure inheritance behind, but she's in relatively good health and God willing will be with us for many, many more years. Anything we do inherit from our parents will roll into our retirement planning to help provide a cushion against needing to rely on our children in our old age, and I hope that if our money outlives us, our children will do the same with whatever they inherit.

 

[Kathryn Merteuil]

I think 1 million is a nice round number. If somebody was willing to give me half of that, I would appreciate it.

I guess there is a big difference between being set for life and being life changing. The interest you would earn off of 1 million, would be a nice supplement to income, but probably not enough to quit working entirely (depending on your age I suppose).

 

[Chocolate Cake]

What is left will go to the nieces/nephews, but we not need to leave them anywhere near 7 figures. In full disclosure, we have helped pay for some schooling and some other family issues over the years, so it is not like we are selfish.

Even if you never gave your niece and nephew a dime, I would not consider you selfish. It's your money. Enjoy it how you see fit!

 

[morgan98]

Even if you never gave your niece and nephew a dime, I would not consider you selfish. It's your money. Enjoy it how you see fit!

Thank you for these words of encouragement, but sometimes it does feel a bit selfish when you hear about others trying to leave a legacy or give large amounts to a cause. Don't get me wrong, we will do that with whatever is left, but there is just a place where I do not need to continue to work to fund an inheritance.

The poster I quoted did come back and explain that because he inherited some money, he felt the need to use it wisely (my words, not his). My husband and I have not inherited a dime yet (and that is fine as our parents are alive - well 3 of 4 are), so I guess it is truly our money and should plan with it accordingly.

 

[china mom]

I have always said that in my perfect world, my mother would spend her last penny on her last day - die neither leaving nor owing nothing. When I was managing her money, I was stretching it so that it would last through her end of life and her medical issues. No one is owed an inheritance.

Of course, I estimated too conservatively and she did leave money but that was not my goal.

I feel the same way about my money. I am not saving so that my kids can inherit. I am saving so that i am not a burden in my last years. If a million dollars fell into my lap, I would use it to change my life, not anyone else's (well, mine and DH's).

 

[tex1989]

As many have pointed out the amount it would take is a function of where you are in life and what your goals/ dreams are. Realistically I am 60 years old as is my wife, and it would not take a lot of money to change things considerably for us. I plan to retire in three years as it is and $500k could allow me to go now as opposed to waiting. A couple of million would allow us to retire now and help our kids and their significant others. More than that would let me do those things and also expand my farm holdings. Any amount I got would most definitely mean another trip to WDW, and a deluxe resort.

 

[RamblingMad]

$4 million and I wouldn’t have to work again.

 

[Snowflakey]

Oh I think of this very question often ha ha

$500K would take care of bills, my girls college debt and get DH and I a new car as we have very old ones.

$1 million would give me extra to do some much needed things - new septic, etc.

$5 million would make DH, myself and our girls millionaires with a little left to plan a few vacations

Feels so good to just dream/wish/pray

 

[Colleen27]

I guess there is a big difference between being set for life and being life changing. The interest you would earn off of 1 million, would be a nice supplement to income, but probably not enough to quit working entirely (depending on your age I suppose).

Your age and your starting point. At a 6% rate of return, the interest on a million bucks would be just about equal to the U.S. median household income. So for a lot of people, it would be enough to quit working entirely (assuming they're okay with their standard of living and don't have excessive debt).

 

[FlightlessDuck]

I'm shocked by how many people would stop working if they came into 2-4 million.

Yeah, I don't think I'd quit at 2-4 million. I'd be more likely to take a risk by switching jobs to a startup or something. I'd pay off student loans and mortgage, remodel the house (or move), get new cars, then throw a chunk in a savings account and the rest in an IRA.

I'd rather work now and then know I have $9 million sitting at the bank when I'm 65 than retire early and be spending that money that could be in an IRA earning interest.


10 million? Then I'd probably quit.

 

[ReneeA]

$500,000

This would pay off the mortgage and DH's truck. We're debt free other than that. It would be enough to stick money away for kid's college and give them a small trust fund for when they're adults (nothing crazy, just $25,000 to put towards a down payment on a house or a bit of cushion).

I like to work, and as long as I stay in good health, plan to work until I'm 70. I have a job in a very sought after field with lots of different avenues for when I get older. DH will need to retire at 62, as he works in tile and has a bad back, bad knees, and bad hips - hazard of the job! That much money would give us enough cushion to guarantee his retirement at that age.

 

[mummabear]

$500,000 would be life changing in that we could pay off the mortgage and that would give you spare cash monthly for savings etc, make life a lot easier..
But as far as lotto winnings go, it would take several million, if you think about it, pay off the house, big trip for me, fancy car for DH, some money for the kids etc...

 

[Kathryn Merteuil]

Your age and your starting point. At a 6% rate of return, the interest on a million bucks would be just about equal to the U.S. median household income. So for a lot of people, it would be enough to quit working entirely (assuming they're okay with their standard of living and don't have excessive debt).

I am not good at math, but the best I could estimate it that would be $60k per year? I think I might be willing to quit working to see if we could survive.

Q: Why did you leave your last job?
A: Got a million dollars... I would think a potential future employer would understand, as long as you were not in the news for using part of your winnings to dump manure on your boss' lawn (I looked on Snopes and they said that did not actually happen, that kind of makes me sad now).

Seriously though, if I were to come into a "set for life" amount of money I might substitute teach or volunteer at a school. I would just like to stay in touch.

 

[bobbiwoz]

We are retired and are doing OK. We do buy lottery tickets and hope to win big, but the single life changing request I have would be to buy a house where I can see the ocean.

 

[FlightlessDuck]

Yeah, I don't think I'd quit at 2-4 million.

That's not to say 2 - 4 million dollars isn't life changing, though. Pay off my mortgage and my children's student loans? A total home remodel (or possibly a new home)? Put enough away after charitable donations that retirement will be a cakewalk? That's certainly life changing.

 

[tex1989]

As I look at peoples responses I am thinking about a show or documentary I have seen many years ago about where lottery winners are today. Sadly many are poor without any money at all. As we say what amount of money would it take I guess you have to be specific. The resason I say that is what does winning a million dollars really mean? Right of the top there are federal taxes. I think the highest rate right now is 37% but could be off a point or two. This would mean that considering your other income your overall tax liability is going to probably take $300,000 right off the top. So now you have $700K, be careful about buying that new house, because with it comes property taxes, higher insurance, and higher maintenence costs. New cars, sure but they cost more to insure too. Quit your job, okay but now maybe you don't have company supported health care and you pay a lot more for that.

I guess the bottom line is sure I will take any amount of free money I can get from a lottery or anywhere else but I understand that free money is not always free!

 

[Searc]

As I look at peoples responses I am thinking about a show or documentary I have seen many years ago about where lottery winners are today. Sadly many are poor without any money at all. As we say what amount of money would it take I guess you have to be specific. The resason I say that is what does winning a million dollars really mean? Right of the top there are federal taxes. I think the highest rate right now is 37% but could be off a point or two. This would mean that considering your other income your overall tax liability is going to probably take $300,000 right off the top. So now you have $700K, be careful about buying that new house, because with it comes property taxes, higher insurance, and higher maintenence costs. New cars, sure but they cost more to insure too. Quit your job, okay but now maybe you don't have company supported health care and you pay a lot more for that.

I guess the bottom line is sure I will take any amount of free money I can get from a lottery or anywhere else but I understand that free money is not always free!

DH has a colleague who won $750,000 after taxes in the lottery about 11 years ago. Today, she has nothing to show for it. No paid off house, no paid off cars, no college funds for her three kids, etc. In fact, she is going through a separation/divorce with her husband, but she doesn't even have the money to file divorce papers.

 

[china mom]

As I look at peoples responses I am thinking about a show or documentary I have seen many years ago about where lottery winners are today. Sadly many are poor without any money at all.

The question is, how many of those lottery winners had any previous experience managing money before winning? I think your average Diser tends to be more economically savvy than the general lottery playing population. I have not seen a lot of posters on here who would buy houses and cars without considering the ancillary expenses. Many of us who have said that they would quit working with a million dollar windfall are at a place financially where they could do that.

But you are right, many lottery winners end up broke i the end and it is sad.

 

[tex1989]

The other documentary that is heartbreaking is the 30 by 30 ESPN episode that talks about ex major leaguer's and the fact that they have no money left. china mom makes a good point about those with financial experience and that is what you see with Pro Atheletes and Lottery winners. Statistics show that more people with less means and in bad socio economic situations play the lotteries more than financially secure folks do. Also many Pro sports players come from lower income homes. As a result they do not understand the things that will impact you financially. Like signing bonuses, they are great but receiving all that money up front means huge tax burdens. Million dollar homes come with never ending tax bills, maintenece costs, and high insurance. On top of that there are all sorts of people out there willing to take that money from you in any way they can. Don't want to wait 25 years for all those lottery winnings? Okay I will pay you a lump sum today. Need some one to manage your money, no problem for 10% I will take care of everything.....

It is definitely not as easy as just coming into a lot of money and thinking everything gets easier all of a sudden.