You've won £1m - what do you do?
Discussion
Steve H said:
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Yes, but you could have withdrawn interest from the bank regularly, whereas the S&P investment had to stay there.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?
One thing I would not do it put it all into equities. Sure - there has been phenomenal growth. But that would just make me more nervous. Only invest what you are prepared to lose, etc.
You are looking at capital protection ad your priority. Cash and (liquid) bonds. And for that peace of mind you may need to pay by losing a very small (fraction of a percent) against inflation. It is what it is.
Back on track - until I read the “Moving to Scotland” thread and the midges I would have said some kind of fixer upper bungalow with a loch view. Pootle about slowly renovating it myself. Perhaps something with a little bit of land for a holiday let to pay the bills.
No real neighbours. No hassle. Lovely views in summer. Hunker down with the log burner for winter.
You are looking at capital protection ad your priority. Cash and (liquid) bonds. And for that peace of mind you may need to pay by losing a very small (fraction of a percent) against inflation. It is what it is.
Back on track - until I read the “Moving to Scotland” thread and the midges I would have said some kind of fixer upper bungalow with a loch view. Pootle about slowly renovating it myself. Perhaps something with a little bit of land for a holiday let to pay the bills.
No real neighbours. No hassle. Lovely views in summer. Hunker down with the log burner for winter.
Buy 200 hectares of land in New Zealand, plant pines trees, absorb 5000 tons of CO2 a year. Sell carbon credits as required.
Present price is 25 pounds a ton. Supposed to hit 100 pounds a ton at some point. Total income over the next 18 years, 6,000,000.
Sell trees at 28 years old - should bring in another 4,000,000.
Replant, wait another 28 years for another 4,000,000. (No more carbon credits).
All these values will probably keep pace with inflation.
Make sure you have enough money to pay the 10,000 pound a year rates bill until carbon credits come onstream.
Randy Winkman said:
Roofless Toothless said:
Tell nobody.
Excuse me for skipping from page 1 to page 8 - would nobody you know spot anything? What about your family - would they not ask where you got a load of money from? And wouldn't keeping it secret take away some of the fun of it?If I told my boys, then the bank of mum and dad would become a factor, which in the long run I don’t think would be of good to any of us.
Roofless Toothless said:
Randy Winkman said:
Roofless Toothless said:
Tell nobody.
Excuse me for skipping from page 1 to page 8 - would nobody you know spot anything? What about your family - would they not ask where you got a load of money from? And wouldn't keeping it secret take away some of the fun of it?If I told my boys, then the bank of mum and dad would become a factor, which in the long run I don’t think would be of good to any of us.
I'd want to give a couple of people I know some cash though - ones that could do with a bit extra.
Edited by Randy Winkman on Sunday 19th May 10:14
RSTurboPaul said:
Please can I borrow all these crystal balls that are guaranteeing 8% growth per annum / stock market returns of 100%? 
I don't think anyone has guaranteed anything have they?I think people have simply said if you look at history as a rough guide that's what you can hopefully accept over the long term.
It doesn't need to be all stocks either there are plenty of options.
Point being more that cash in the bank always loses to inflation in the long run.
And for most people a low cost multi-asset fund is a much more suitable proposition to fund their lifestyle than a box of gold sovereigns buried in the garden "just in case".
Randy Winkman said:
Roofless Toothless said:
Tell nobody.
Excuse me for skipping from page 1 to page 8 - would nobody you know spot anything? What about your family - would they not ask where you got a load of money from? And wouldn't keeping it secret take away some of the fun of it?We are at the age where early retirement isn't uncommon so we'd just be saying we are retiring early.
Downward said:
TwigtheWonderkid said:
Faust66 said:
I'd retire...
I'm 49 and I've only got 75k left on the mortgage, so I'd pay that off and live off the interest from my winnings.
So you've got £925K and you're going to live off the interest. That's about £37K / year. That's ok for now but if interest rates don't increase, that £37K/year is not going to go up. Each year it buys less and less. And because you're living off the interest, your £925K is staying fixed. £925K is a lot today, but in 30 years time when you're 79, it's not going to be worth that much. And your £37K/year in 30 years won't even pay your council tax. I'm 49 and I've only got 75k left on the mortgage, so I'd pay that off and live off the interest from my winnings.
Christ that’s plenty enough for the average person. Anyway 300k per annum also available to spend if desperate !
Deep Thought said:
Randy Winkman said:
Roofless Toothless said:
Tell nobody.
Excuse me for skipping from page 1 to page 8 - would nobody you know spot anything? What about your family - would they not ask where you got a load of money from? And wouldn't keeping it secret take away some of the fun of it?We are at the age where early retirement isn't uncommon so we'd just be saying we are retiring early.
Even in the provinces, it is not going to give you the means to live off your wealth in a well-preserved castle with 100s of acres of land.
98elise said:
Easily. Mortgage free my household bills are about £800 a month.
Some empathy may be required.The self-respecting PHer will surely be servicing an enormous mortgage on the family home, various rental properties and another on their pad in Monte Carlo, monthly car rentals, school fees and a mistress.
These things do not come cheap.
98elise said:
Easily. Mortgage free my household bills are about £800 a month.
If I didn't have a mortgage we could live on the following:Council Tax = £225
House Insuance = £30
Internet = £25
Mobile PAYG Sims X 2 = £10
Electricity Gas = £200
Food = £500
Car insurance/Tax/MOT = £50
Netflix = £11
Petrol £50
So roughly £1100 a month to live, easily doable on a state pension for two. We could have a fantastic lifestyle just living off the interest of £1 million at 4.75% in a Marcus account. That would give us £47,500 a year, assuming 20% tax would give us £38K a year, or just over £3K a month.
I know this is pistonheads though and the average powerfully build company director needs £10K a month just to live and that would mean turning off the heated swimming pool.
ThingsBehindTheSun said:
I know this is pistonheads though and the average powerfully build company director needs £10K a month just to live and that would mean turning off the heated swimming pool.
I cannot remember the title, but there was a thread a couple of years ago so in which various people described having lots of money, earned, inherited or otherwise, and what they should do with it.I remember it being a fairly miserable and glum thread. I suppose that looking a bank statements with large numbers on them doesn't provide lasting pleasure for most people.
Having enough wealth to give you life choices is a good thing. Whilst people should be free to be able to accumulate more (whilst being subject to taxes for the common good), and some people.enjoy the process of making money, actually having large wealth certainly does not automatically make people happy.
For most people of modest means, an injection of £1M (20+ years of extra income) would make a noticeable difference and allow them to make choices that were previously unavailable to them.
For a self-respecting PHer, it would just get lost in their investment pot.
Edited by MC Bodge on Sunday 19th May 13:26
MC Bodge said:
Having enough wealth to give you life choices is a good thing. Whilst people should be free to be able to accumulate more (whilst being subject to taxes for the common good), and some people.enjoy the process of making money, actually having large wealth certainly does not automatically make people happy.
I agree with this. Money gives me relative freedom from stress and hassle, which is what I want in life.Most of my friends are better of than me - some markedly so - but I have no sense at all of trying to keep up with them. My financial choices bought me freedom.
Slowboathome said:
MC Bodge said:
Having enough wealth to give you life choices is a good thing. Whilst people should be free to be able to accumulate more (whilst being subject to taxes for the common good), and some people.enjoy the process of making money, actually having large wealth certainly does not automatically make people happy.
I agree with this. Money gives me relative freedom from stress and hassle, which is what I want in life.Most of my friends are better of than me - some markedly so - but I have no sense at all of trying to keep up with them. My financial choices bought me freedom.
I have a relative who is Rich List wealthy but the most miserable sod I know - just their misery is caused by different problems. Their Rich List entry would also omit the ‘and family’ part too
The happiest is a mate who is a kitchen fitter, works a bit, does his hobbies, has a great wife etc
I would spend the rest of my life not worrying.
Mortgage is already paid off but I would buy something abroad, Spain, Portugal, Italy something like that to spend time as when we wanted.
Work a little bit as sitting around is not for me.
Buy what I wanted when I wanted and go to any gig, race, football match etc I wanted.
Take advice on what is best for the rest and follow that advice.
Mortgage is already paid off but I would buy something abroad, Spain, Portugal, Italy something like that to spend time as when we wanted.
Work a little bit as sitting around is not for me.
Buy what I wanted when I wanted and go to any gig, race, football match etc I wanted.
Take advice on what is best for the rest and follow that advice.
TwigtheWonderkid said:
Malcolm E Boo said:
Work a little bit as sitting around is not for me.
I don't work because sitting around is not for me. No more office, I'm out and about every day. 
Not working doesn't have to mean doing nothing. For many, working does. 
Edited by Doofus on Sunday 19th May 21:05
menousername said:
One thing I would not do it put it all into equities. Sure - there has been phenomenal growth. But that would just make me more nervous. Only invest what you are prepared to lose, etc.
You are looking at capital protection ad your priority. Cash and (liquid) bonds. And for that peace of mind you may need to pay by losing a very small (fraction of a percent) against inflation. It is what it is.
Back on track - until I read the “Moving to Scotland” thread and the midges I would have said some kind of fixer upper bungalow with a loch view. Pootle about slowly renovating it myself. Perhaps something with a little bit of land for a holiday let to pay the bills.
No real neighbours. No hassle. Lovely views in summer. Hunker down with the log burner for winter.
Actually, if I was to do that, I would build a couple of houses in conjunction with the local Housing Association, to their spec. Then, I would hand them over. You are looking at capital protection ad your priority. Cash and (liquid) bonds. And for that peace of mind you may need to pay by losing a very small (fraction of a percent) against inflation. It is what it is.
Back on track - until I read the “Moving to Scotland” thread and the midges I would have said some kind of fixer upper bungalow with a loch view. Pootle about slowly renovating it myself. Perhaps something with a little bit of land for a holiday let to pay the bills.
No real neighbours. No hassle. Lovely views in summer. Hunker down with the log burner for winter.
I would use what is left to build something for myself.
That way, I know I deserve my spot. I'd have given to, rather than taken from, the locals.
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