You've won £1m - what do you do?

[Terminator X]

GT3RS.

TX.

[Lincsls1]

Slowboathome 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.

I only earn 29 grand a year. Perhaps that's a pittance so some on here, but it's plenty for me and I don't have expensive tastes (apart from spending too much money on hiking gear ) so the interest may well be a nice increase in income for me.

Free time and quality of life is more important to me than money and flash cars and houses etc.

Same here mate.

+1

[TwigtheWonderkid]

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.

[sjabrown]

Pay off remaining mortgage - £25k.
Do up the house. New glazing, new kitchen, new bathrooms, lose one downstairs bedroom to extend into the loft and put master bedroom up there, fit solar panels and a battery bank - I could see that eating up £100k or more.
Get my 205 restored, get my beige escort made a bit better, buy a Citroen DS - that could eat up another £100k.
Buy in some locum cover to allow more time off work so I can travel more - that would steadily chomp through another chunk.

[thegreenhell]

Another thing to consider is that none of us knows how long we've got left. I'm not saying I'd waste it, but you've got to live a little while you're still alive. There's no point dying with a million quid in the bank when you could have had some fun with it.

[Super Sonic]

Buy a new car. Not BRAND new, obvs, but a nice one.

[OzzyR1]

thegreenhell said:

Another thing to consider is that none of us knows how long we've got left. I'm not saying I'd waste it, but you've got to live a little while you're still alive. There's no point dying with a million quid in the bank when you could have had some fun with it.

Very true, I lost a couple of friends in quick succession 2 years ago; one a pedestrian hit by a drunk driver, the other went to a doctor as he had a headache for over a week - referred to hospital same day, diagnosed brain tumour, died 5 weeks later.

Both in their early 40's.

[POIDH]

Assuming mortgage is paid...
Invest it well. Then...
Rent the house out.
£40k / yr into pension for a few years.
£40k / yr to travel the world.
In a decade I'm ready to retire and I've still got £200k to live on.
Sell the house and self build a super low energy btw home.

[Faust66]

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.

Tell you what, chuck me a million quid and I'll get back to you in 30 years time with a full report of how I've got on.

In all seriousness though, you make a good point. I'm not a money guy (obviously) so I'll revise my plan a spend a few quid on some financial advice and invest accordingly.

That being said, I don't need much. I put a fair chunk of my salary straight into a savings account as it is. I can easily manage on a lot less than I earn now.

[Tango13]

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.

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.

Whilst the £1M would be decreasing by £90k a year the remaining lump would still be earning interest. The pension would also be increasing by £72k a year plus growth/interest. Then aged 62 take 25% tax free from the pension and either take out an annuity or draw down on the lump sum.

Or take £30k income, £20k into an ISA and £50k into a pension so the ISA would have £200k plus growth and the pension £600k plus growth.

Plan carefully, play the long game, don't be a flash wker and £1M would set you up for life at any age.

[Short Grain]

Shhhh, How the hell did you find out? Don't tell anybody.... Oh, st!

[Steve H]

Tango13 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.

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.

Whilst the £1M would be decreasing by £90k a year the remaining lump would still be earning interest. The pension would also be increasing by £72k a year plus growth/interest. Then aged 62 take 25% tax free from the pension and either take out an annuity or draw down on the lump sum.

Or take £30k income, £20k into an ISA and £50k into a pension so the ISA would have £200k plus growth and the pension £600k plus growth.

Plan carefully, play the long game, don't be a flash wker and £1M would set you up for life at any age.

Exactly. Safe sustainable drawdown is considered to be around 4% with long term investment returns more like 8% so you can pull £40kpa and grow the lump by another £40kpa so in ten years time it’s compounding towards £1.5m and worth £60kpa at 4% withdrawal.

£1m and no debts is enough for most people to live comfortably on for life.

[bitchstewie]

To give people some ideas it could be as simple as chuck 90% in a low cost balanced fund like Vanguard LifeStrategy 60 and keep a cash buffer of a few years living expenses.

Returns absolutely are not linear but over the long term I'd be very surprised if it wasn't enough to live modestly off.

Like I said you wouldn't be on a yacht but you also wouldn't be at work unless you choose to be.

Tax and structuring stuff to one side financial advisors usually can't work magic and conjure up returns in excess of what the markets would give you.

I'd certainly be very cautious of one who did.

And whilst financial advice is immensely useful to many people remember many work on the model of you giving 1% of everything to them forever for the pleasure.

[heisthegaffer]

I would probably have the odd treat but chuck it in various investments as I have a nice lifestyle and spend the next few years planning and early retirement on the back of it whilst it's growing nicely.

When the time comes I would treat the family a fair bit.

[NerveAgent]

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.

Alternatively they can not work for the next 15-20 years and likely still have a larger pension pot than they otherwise would have done…

[Seventy-Eight]

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.

Whilst the £1M would be decreasing by £90k a year the remaining lump would still be earning interest. The pension would also be increasing by £72k a year plus growth/interest. Then aged 62 take 25% tax free from the pension and either take out an annuity or draw down on the lump sum.

Or take £30k income, £20k into an ISA and £50k into a pension so the ISA would have £200k plus growth and the pension £600k plus growth.

Plan carefully, play the long game, don't be a flash wker and £1M would set you up for life at any age.

£30k income and £60k into pension?........ Wouldn't your pension contributions be restricted?

[epom]

Hopefully be able to find a classic Ford for under a mill.

[PlywoodPascal]

A lot of people writing ‘pay off the mortgage’ but keep working. I would need to keep working to maintain the same/my desired standard of living given my expensive tastes and youthful age.

A few writing ‘invest to maintain the capital in real terms, but take any income from that’. The people who suggest say they think 5-6% annually is doable. Most people’s annual mortgage repayments will be less than that. Most people’s mortgage interest rate will be, too.

So I think I’d do that and not pay off the mortgage, but just skim enough off from the investment to meet my monthly mortgage payments.

Keep working.
Spend or even perhaps save the relatively unthinkable amount i hand over each month for my mortgage on whatever the fk i want. Some of that money would go on a car and driver to take me to work and back… because I could, and it’d make my life better!

I might take a little off the £1mil initially to extend the garage and renovate the house.

[PlywoodPascal]

nuyorican said:

Balls deep until it's gone. Then back to normal. YOLO.

Yeah its true that YOLO but we all need to think about our retirement too.

[NerveAgent]

PlywoodPascal said:

A lot of people writing ‘pay off the mortgage’ but keep working. I would need to keep working to maintain the same/my desired standard of living given my expensive tastes and youthful age.

A few writing ‘invest to maintain the capital in real terms, but take any income from that’. The people who suggest say they think 5-6% annually is doable. Most people’s annual mortgage repayments will be less than that. Most people’s mortgage interest rate will be, too.

So I think I’d do that and not pay off the mortgage, but just skim enough off from the investment to meet my monthly mortgage payments.

Keep working.
Spend or even perhaps save the relatively unthinkable amount i hand over each month for my mortgage on whatever the fk i want. Some of that money would go on a car and driver to take me to work and back… because I could, and it’d make my life better!

I might take a little off the £1mil initially to extend the garage and renovate the house.

For most, I guess paying off the mortgage is hassle free way of a guaranteed rate (5%+ for many now) without the tax implications of other investments.