What Would You Do with a Million Dollars?

by Vered DeLeeuw · 153 comments


It’s a fun game, isn’t it? Imagining you have won a million dollar windfall and trying to figure out what you would do with it. Or, a different scenario: you work your butt off for 40 years, saving and investing wisely, and eventually get to a net worth of a million dollars. Phew. Now what?

A Million Dollars Isn’t That Much!

I think we’re all very aware that a million dollars isn’t what it used to be. In either scenario, whether you have worked and accumulated a million dollars, or whether you’ve received a windfall, you absolutely cannot go crazy and start spending uncontrollably. Let’s take a look at what you CAN do with a million dollars.

Invest for Income

This applies to the second scenario – the one where your net worth, after years of hard work, is a million dollars. Assuming your investment mix can generate an annual taxable income of 8%, a million dollars can generate an admittedly nice income of $80,000 per year – for many this is all it takes to comfortably retire, and for those of us living in more expensive areas, in major cities along the US coast, it would still be a major boost to whatever other retirement income we might have.

Spend Wisely

If you get a million dollar windfall at some earlier point in your life, when you still have many working years ahead of you, I would advise against viewing this as your ticket out of the workforce. As we saw above, this kind of money generates a nice income – but not necessarily enough to retire on, especially if you’re young and still need to raise kids. In addition, if you start using all the income that your nest egg generates at an early age rather than reinvest, your money will be gradually eroded by inflation.

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What Would I Do?

The things on my own list if I ever received a sudden windfall include non-exciting items such as paying off any credit card debt, student loans and home mortgage. I would also reserve a small percentage (anywhere from 1%-5% or up to $50,000) for helping close family members such as parents and siblings with repaying their own debts and give another 1%-5%  to charity.

No Splurging At All? You’re So Boring

I actually do not rule out splurging a little. It’s normal to want to splurge when you receive an unexpected, large sum of money. I guess in my case I would allocate 1%-5% for splurging – this could go towards buying a new car, renovating the house or buying new furniture or art. Whatever floats your boat, by all means splurge a little on it, but do limit that splurge. It’s very easy to waste away a million dollars.

And the Rest?

So I repaid debt, gave some to family and some to charity, even splurged a little. Let’s assume I was left with half a million dollars. Now what? Now I invest, and I treat this as any other investment, creating a mix of stocks, bonds, cash, commodities and REITs – Whatever asset allocation I’m generally comfortable with. Now I sit back, watch the money grow, rebalance once a year and resist the urge to do anything else with that money, except for enjoying the extra security I now have.

What would YOU do with a million bucks?

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{ read the comments below or add one }

  • Kenneth Ray Lee says:

    I’m really a very private person and have a very small circle. With that be said, no one would know my worth, I mean NO ONE! So, here we go. I would place a large portion into my retirement and stock. Money back for my family. A new vehicle (a truck from Ford or Chevrolet). Have to a nice home outside the city, nothing that will attract attention. A Yamaha motorcycle (Stratoliner Deluxe). Give back to my home town. Work only one job, enjoy being spending time with my family. I will also continue to travel twice a year. Enjoy living a simple life with no one knowing my worth in the world.

  • idil says:

    it is a good way to get facts- things to do with a million dollar

    • idil says:

      I would have fun. I would buy a place to live settle down in my own home to relax with friends. I would go on vacation to make myself happy . I would start a business I will invest half on my company then save the less of my money

  • Raquel Gonzalez says:

    I would have fun. Everyones always worried about paying shit. Forget that life’s too short. I would take a long ass vacation to make me happy. Maybe with someone maybe not. Then settle down in my own home to relax with other people doing the same thing. Truth.

  • Raquel Gonzalez says:

    Someone once said, “Give a man a fish and eats for a day, teach a man how to fish and he eats for a lifetime.” First thing I would do is get a college education. Pay for my own dang education and not owe nothing upon graduation. How can I help others and myself? I want to be a nurse. That’s all. I want to be the nurse you trust to help your grandpa, your grandma, your whole family get better when they’re sick. I want to pay my basic bills on time without worrying if I can. I want to know I have rainy day savings. I want to own that place I can always call home. You know? The address all your family uses because they know you own your home? As in it’s paid off so they can count on getting thier mail there forever? I want to raise kids in that home. I never want to talk to a bankruptcy lawyer again. I don’t want to be cold, or hungry ever again. I want to have the money that gets me the kind of resources to enjoy life and be recognized in history for doing something. That’s it.

  • Sam says:

    I would basically try to live off of the million dollars for the rest of my life. It would be a great supplement to my regular income. Not really interested in big investments but I would finally buy a 3 bedroom house in a decent neighborhood. I would buy railway passes to travel the USA. I am single and without kids so don’t have to worry about mouths to feed. I can live fairly comfortably without a lot of excess luxury (I don’t need an escalade).

  • kerochivas says:

    How about starting by giving God the 10%he asked ?

  • Amna says:

    I am looking to buy a establish business any recommendations?

  • Amna says:

    If I will have million dollars I will invest half on them on my company and rest I will spend on buying luxury cars. ?
    Wish this day come in my life soon

  • Bob Cunningham says:

    It’s fun to dream, isn’t it? With a cool mil, I’d do the following (not necessarily in this order)
    * Pay off all debt except the mortgage (mortgage debt, used properly, is better than having your house paid off… and thereby locking all your equity in an asset that isn’t liquid. Not good. Appreciation is not to be confused with ROR. A house doesn’t have a ROR.)
    * Pay off my older son’s school loans
    * Gift small amounts to my two adult sons (give them a boost for fun and to let them share in the windfall, but don’t give them everything and remove their incentive to succeed)
    * Host a family reunion at a posh resort – this is the splurge
    * Invest in some overdue home improvements
    * Max fund my Roth IRA and whole life insurance policies (living benefits far surpasses other forms of saving, especially government-sponsored programs although the Roth IRA is mostly OK if invested in a mix of index funds and bond funds)
    * Invest most of the rest into a deferred Fixed Index Annuity, for supplemental retirement income down the road in addition to my wife’s teacher’s pension. (low-fee FIAs are out there)
    * Use the remainder to beef up our emergency savings (which is a money market fund at an on-line bank)

    • Bob Cunningham says:

      Oh, and I should clarify that my wife and I already give to a host of charities, smaller amounts virtually every time we are asked. So certainly, we would beef up those donations and expand the number of charities we give to. That would be ongoing, as opposed to single-shot spending. 🙂

  • Tracy Masters says:

    If i had a million dollars i would love to start up my own hair salons . The ones like Regis ,Great Clips,Sport cuts all of them The only thing they want to do is get poor quality workers or just sell lots of products and pay their employees little .. I know i have worked for a few of them .. I woud like to start my own where there are highly trained stylists that get paid alot better and hopefully with really good benefits and a shop that offered quality service with an affordable price to the average person ..I think owning your own building would be better than throwing away rent money and plus you would have equity on the building .. Locations are very important as well … But trained people that can actually make some great money and will not leave you to go to another shop is very important to me .. Fantastic Sams is one of the worst i worked for paying 35 precent of haircuts and then all the cupons … that is just not good at all … a decent price .quality service is what people want .. Not looking for a place to fix the last hair cut ,color or perm ..Thats what i would do with a million dollars and also pay it back to the lender as well

  • Traci says:

    Once upon a time, my answer to,”What would you do with a million dollars?” would have been invest some, give to family, pay for kids college, buy a nice house, and car…… but today in growing and learning that money cannot buy happiness and children as well as adults who are handed money and things generally learn to expect money and things…. my answer would be different.
    Of course I would givesome to family but only the ones who don’t expect it… and I think I would carry cash in my pocket and each time someone did something nice for me for example, holding a door, helping me when I am stranded on the side of the road with a broken car, offer me a drink on a hot day, those people that truly care enough to help people without expectation would be the ones to merit the money I have. I would fold up a $500.00 bill or more…. and stick it in their hand while saying thank you. It’s the people in life and memories of those you love and care about that are important. Just thinking of the surprise on their face later when they realize how much money their good deed paid, well that makes me happy. I don’t know other peoples situation but a small act of kindness could mean more to someone than you might imagine. 🙂

  • Erik says:

    First and for most I’ll get rid off all coeditors and credits I owe. Secondly I’ll get rid of the renters from my shoulder. Thirdly, I’ll take a good treatment of my shoulder which has been giving me trouble to lift my arm and function for every day life what I’ve been denied from the insurance company. Fourthly I’ll fund my brokerage account opened but never has been funded to start trading stocks for self reliance and independence as well as not to ask for money ever again. Fifthly I’ll send my wife home who never had a vacation and a job, but who kept herself strong to bring up 4 children 14, 16 , 18, 20.respectively one in college one in high school, one raping up Middle school,and one at home for luck of fund after 2 years of study in college. So that she can take care of her sick mother. And finally send my daughter back to school. After that if anything is left I’ll visit my family member ,my parent and my siblings including my friends which never had a chance to go back and see them or contact them in 25 years. Or else I’ll wait until I make enough money to help any one I may be able to see and also cover costs take and bring me back. The longer I wait the more people are passing away before they even test my care……..what is immediate solution other than ask for help from some one who has the ability and the good heart to help. Thanks for reading my request.

  • connie bryant says:

    The very first thing would be to pay off mortgage. The second thing would be to help out with the church’s new addition. The third thing would be get all credit cards paid off. The final thing, would be to put on a new set tires on my two pickups.

  • Sharma says:

    I will buy a business of my own choice for sure!!!

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