I found this to be a fun exercise and conversation for my husband and I. It gave us an opportunity to define what some of our goals are. I decided to join in and come up with a plan should a get a million dollars (after taxes).
Pay off Debts ($130,000)
Between our student loan and our mortgage balance, we have debt total of $130,000. The first part of our spending will be cleaning our slate and taking care of our financial obligations.
By not having debts in our budget, that frees up about $1,100/month. We can use that for other goals, like travel or exploring hobbies. Believe it or not, we won’t quit our jobs just yet – we love what we do. If anything, we’d try to adjust work location.
Long Term Income Stream ($400,000)
We’d take our time in deciding how we’ll use this money. We would hold off for a few months and speak with some financial advisers about viable options. I have a few ideas, but before committing the money, we’d have to sit down and work out a plan together. We both want the other to feel comfortable with how the money is invested for our family’s future.
I’m thinking of something along the lines of getting a rental property (a building with 4 apartments for example).
I personally would not feel good if I didn’t help out my loved ones. First, I would top off my mother’s retirement accounts and finish paying off her small mortgage balance. My husband would want to finish off his parents’ mortgage as well.
For our siblings, we’d create a small family fund to help them as a safety net should they have an emergency. It’ll be set up as a no interest loan, so if they pay it back there’s money for any future crisis. If they spend it though, then it’s gone. We would keep tabs to make sure one person doesn’t clean out the pot.
Our hope is that siblings can create their own income streams to support their dreams. It’s our hope that once that occurs, we can transfer over that money into our charity fund.
Set Up a Charity Fund ($200,000)
I want to help others, but I feel like passing out lump sums would go too quickly and wouldn’t do much. I would set aside money to set up a charity to pass out a small amount of money perpetually.
This would be another area where we would work with a financial and legal professional to get this off the ground. We like to this project to continue for years down the line.
What Would You Do With a Million Dollars?
What about you? If you had a million dollars, how would use it? What would be the biggest challenge? What would be the most fun?