You've won £1m - what do you do?
Discussion
okgo said:
siovey said:
Put it in the bank, retire and live very comfortably on the £50k interest pa.
In fact, i do the same if i 'only' won £300-500k.
Next year it’ll be 20k interest. Then whatIn fact, i do the same if i 'only' won £300-500k.
£50k per year before tax (interest is taxable) is £38k thats with high interest rates.
Pay off Mortgage and sell current house
Buy a sensibly sized nice house. (3-4bedrooms)
Buy an Audi RS6.
Put the other £500k into investments.
Continue to work for at least another 10+ years as Im still under 40.
Retire when I want to with hopefully a nice nest egg and enough money that I dont need to worry.
Buy a sensibly sized nice house. (3-4bedrooms)
Buy an Audi RS6.
Put the other £500k into investments.
Continue to work for at least another 10+ years as Im still under 40.
Retire when I want to with hopefully a nice nest egg and enough money that I dont need to worry.
okgo said:
siovey said:
Put it in the bank, retire and live very comfortably on the £50k interest pa.
In fact, i do the same if i 'only' won £300-500k.
Next year it’ll be 20k interest. Then whatIn fact, i do the same if i 'only' won £300-500k.
Pensions kick in in a few years so no worries there
siovey said:
Put it in the bank, retire and live very comfortably on the £50k interest pa.
In fact, i do the same if i 'only' won £300-500k.
Surely the problem with that is having a large amount spread over (say) 4 banks is potentially concerning should another GFC crop up and only 85k per account is 'safe'...In fact, i do the same if i 'only' won £300-500k.
DodgyGeezer said:
Surely the problem with that is having a large amount spread over (say) 4 banks is potentially concerning should another GFC crop up and only 85k per account is 'safe'...
There are more than enough banking groups in FSCS to protect your entire £1m, but NS&I savings alone would cover it all.DodgyGeezer said:
siovey said:
Put it in the bank, retire and live very comfortably on the £50k interest pa.
In fact, i do the same if i 'only' won £300-500k.
Surely the problem with that is having a large amount spread over (say) 4 banks is potentially concerning should another GFC crop up and only 85k per account is 'safe'...In fact, i do the same if i 'only' won £300-500k.
This is a grand in the bank at 3% ten years ago (not that you could get 3% for most of that time) -
And this is a grand in the S&P 500 ten years ago (slightly different timeframe but the numbers would have been even higher from 14-24) -
TwigtheWonderkid said:
Tango13 said:
At 52 years old I could take £30k a year income and drip £60k of the £1M into a pension for 10 years plus the governments 20% contribution to give a pension pot of £720k plus however much growth I managed to accumulate.
If you're not actually working, and not earning a salary, how are you going to pay £60K a year into a pension and expect the govt to chip in 20% tax rebate when you haven't paid tax? You'd have to fill in an income tax return for the £60~70k+ as it is taxable income.
You can then sacrifice that income into a pension without getting hit for tax whilst taking an actual income from the £1M lump sum slowly reducing it over time.
Take £50k a year from the lump sum and put £20k of that into an ISA leaving £30k a year or £2500 a month to live on which for a single bloke like me without a mortgage or any other debts is a comfortable income.
Do that for 20 years and the £1M lump sum would be gone but I'd have £400k+ growth in a tax free ISA and probably somewhere north of £1M in a pension pot
I could also reduce the initial £1M lump by using my unused pension contribution allowance for the past three years and earn slightly less interest on the lump sum.
As I posted, it's all about playing the long game and slowly moving the £1M from taxable investments to a tax free investment
Steve H said:
Would anyone really just put it in the bank/banks rather than investing it when over the medium term stocks make a joke of what the banks offer?
This is a grand in the bank at 3% ten years ago (not that you could get 3% for most of that time) -
And this is a grand in the S&P 500 ten years ago (slightly different timeframe but the numbers would have been even higher from 14-24) -
Yes, but you could have withdrawn interest from the bank regularly, whereas the S&P investment had to stay there. If people are talking about getting an income from this £1m, then they can't leave it untouched for ten years.This is a grand in the bank at 3% ten years ago (not that you could get 3% for most of that time) -
And this is a grand in the S&P 500 ten years ago (slightly different timeframe but the numbers would have been even higher from 14-24) -
Doofus said:
Yes, but you could have withdrawn interest from the bank regularly, whereas the S&P investment had to stay there. If people are talking about getting an income from this £1m, then they can't leave it untouched for ten years.
That's not entirely true you can invest for total return but just sell units occasionally.I think the biggest thing people tend not to mention when suggesting stocks v cash is simply the volatility.
Cash loses to inflation over the long term everyone knows that.
But with cash you'll never wake up with your balance showing as half your original capital even if it's (hopefully) only over the short term.
Getting used to that isn't as simple as people make it sound.
Royal Jelly said:
Invest it all in ETFs, in the knowledge that 1m plus what I’ve already accumulated will see to a very nice retirement - then I can spank my entire pay cheque each month, which would be very nice.
This.All of my pension and ISAs are in stocks and shares, with the vast majority in ETFs. They have been great over the past 10 years.
Doofus said:
Yes, but you could have withdrawn interest from the bank regularly, whereas the S&P investment had to stay there. If people are talking about getting an income from this £1m, then they can't leave it untouched for ten years.
Except if you drew on it then it would gain less. It isn’t keeping up with inflation even if you leave it there. And as has been pointed out -
b
hstewie said:
hstewie said: That's not entirely true you can invest for total return but just sell units occasionally.
I think the biggest thing people tend not to mention when suggesting stocks v cash is simply the volatility.
Cash loses to inflation over the long term everyone knows that.
But with cash you'll never wake up with your balance showing as half your original capital even if it's (hopefully) only over the short term.
Getting used to that isn't as simple as people make it sound.
Very true. But it always turns to a win over a decent period of time (so far I think the biggest thing people tend not to mention when suggesting stocks v cash is simply the volatility.
Cash loses to inflation over the long term everyone knows that.
But with cash you'll never wake up with your balance showing as half your original capital even if it's (hopefully) only over the short term.
Getting used to that isn't as simple as people make it sound.
). This is the S&P over that period -
A sharp drop in 2020 that recovered before the year was out and and more persistent one in 22 which is all gone now.
There will be other falls and you do need a bit of self control when it drops, but the actual choice is that after a decade on your £1m you could have made £349,000 or £2,200,000.
Which takes me back to my original question of who would choose the fixed interest option?
Steve H said:
Very true. But it always turns to a win over a decent period of time (so far ).
I know, but as I posted earlier, accouting for interest and inflation, the sum could last you 29 years. Using your 'system', you'd die with millions in the bank, although some posters here have suggested getting an income from their £1m.). I was just illustrating one way of doing that, not suggesting is was the correct way.
okgo said:
RSTurboPaul said:
Please can I borrow all these crystal balls that are guaranteeing 8% growth per annum / stock market returns of 100%? 
If it doesn’t most of the world is fked, so you’d better hope it does!And on that basis, £1m in gold is not that difficult to store...
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