Awhile back, I asked you how much money you would spend if you won $1 million dollars instantly. Before I go into details, let’s see the results first.
As you can see, many people (exactly 50% in fact) say they will spend less than 5% ($50,000) if they instantly won this amount of money. Stephen suggested
…I would put it in a high yield savings account that earns at least 5%. In a year, I would earn 50k or more in interest without ever touching the principle. After taxes, you are looking at around 35k a year to spend.
Pretty smart I’d say if you have no debt to pay. Many people instantly spend their good fortune and fail to recognize that delaying their gratification for 1-2 years might mean forever prosperity.
44% of the people voted to spend 5% to 50% of the winnings to pay off debt with a significant portion of it being their mortgage. Can you imagine that somehow you don’t need to pay your monthly mortgages? Thinking about these types of questions are the reasons why we all buy lottery tickets. Personally, I buy lottery tickets only once in a blue moon because I buy it for the fun of checking the numbers against my ticket and not because I believe I will win. I feel that if I put too much emphasis on pure luck, it demotes the importance of hard work.
6% of the people plans to spend all of his winnings. Several people claimed that $1 million is not that much money nowadays. This is certainly true but every little bit of savings help! These people are probably the ones that also say their income is too small for them to be able to save money. To that statement, I honestly say “Shame on You!”. There are always ways to save more money, especially for people that live in a developed countries because of our relatively higher incomes. Be creative and you will find ways to save, guaranteed.
So which option did you vote? Did this article help change your mind?
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{ 8 comments… read them below or add one }
$1 million may not be a lot if you want to live like Britney Spears, but it’ll do just fine for me. Heck, if I had an extra $10,000 even, I’d be elated!
-Raymond
I voted for 30%. Since I figured I’d have to have some for taxes if I can’t get it deferred somehow. Also since I’m currently paying rent, I’d go and buy a condo to free up a huge chunk of the monthly income I get. Anything left over I’d start investing with, but having a place to live that’s paid for would be my first option.
Pay taxes, buy myself something nice around $20K, and then invest the rest. My girlfriend would laugh at that. She would say I wouldn’t even spend the $20K, and that I would invest it all. She may be right. I’m addicted to saving and investing.
I probably wouldn’t spend any of it. I actually enjoy investing and would most likely only spend some of the gains. I’d probably use it to buy rental real estate.
I’m working towards living off passive income/interest. It’s a far off goal, but a fun path to follow and work hard at =)
Yep, I think nearly 100% would be invested.
You Wrote:
“Thinking about these types of questions are the reasons why we all buy lottery tickets.”
Um, I have never bought nor will I ever knowingly buy a lottery ticket. For the same reason I would spend less than 5% of that Million. I’m with some of the other people here – I’d invest it all and live off of the passive income.
Then I’d figure out how to make THAT money make more money and so on.
You can’t always save. When my daughter lived at home, I paid rent, utilities, food and car expenses – really basic stuff, and I had $40 a month left over. How the heck do you save on that budget?
I did a spread sheet on all of that and extras (where there were a bunch of zeros) and my daughter quit asking me for money all the time. She thought I was holding out on her or something!
The only way I could work in haircuts, presents for holidays or birthdays was I would OCCASIONALLY get one extra check a month. Seriously, I was making good money at my J.O.B. then. It was all consumed by my expenses – I was in Torrance, CA at the time.
Never mind emergencies.
Now, I work for myself and it’s all going out still, so far.
That’s gotta change.
2008 is going to be the year it will all come together! I’ve got a plan.
Pam Hoffman
pamhoffman@cox.net
I think this post is the best post that I have ever read before. It sounds good. I believe in you that even a single bug would make our savings help..But $1 million may not be a lot for every one, but it makes a lot of difference..