How would you spend $1 million dollars and get no sellable value from it?

[Andy Black]

I found ultimate solution to Bio's challenge!

Go to google
Buy million worth of Ads
And point them to Bing!

I worked for a company doing search engine arbitrage about 10 years ago. They spent €120k/day and made €150k/day.

 

[Andy Black]

Believe it or not, i still sometimes get arbitrage ads, mostly for some obscure search terms.
The strangest thing is that initial ads are on Google, and they point to another 10 results with Google Ads as monetization.

I don't know how it works, but i guess its not as profitable as it used to be.

Yeah, they're sending people from Google Ads to Google Adsense.
Since Google got rid of the right hand ads I think that "business model" has struggled.

 

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[biophase]

I was thinking the same thing. I did a quick scan of the comments and I don't think anyone else mentioned charity. And then crickets. Personally, if I had a million dollars burning a hole in my pocket, I'd break it up into 4 or 5 shares and donate to a few deserving causes, and 1 theater troupe.

Yes, donation is an obvious way to go about this. I don't like just donating money, so I'm probably never going to do it this way. I'll find some other way to contribute with my dollars.

One thing I believe that I will be able to do in the future is spend at least $25k-$50k a year on parties or getaways. After reading the Die with Zero book, I'm sort of planning a 50th birthday gathering with a $100k budget, but I don't know if I can wrap my head around spending that much. It will have to wait until covid is over. so maybe by that time I will be at peace with the budget. LOL

 

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[Primeperiwinkle]

I would rather find out what the charity needs and figure out a way to support them in a more efficient (dollar wise) and sustainable way vs. just giving them money.

For example, my current "charity" project is trying to lower the decibel levels at humane societies. When I visited one a few years ago, it was so loud and the sound was just reverberating within the concrete floors and walls. I could see how stressed the dogs were. They immediate solution would have been to donate $1000 in order for them to purchase acoustic panels to hang on their walls. However, these panels cost around $50 each. So instead I have been sourcing the materials to build these panels from China and developing a DIY kit that I can send to rescues for about $10 a panel. Once I get this process going, I can then "donate" these kits to many more places.

I just don't believe in giving the money away to be used inefficiently.

This is a very cool example of giving. I’ve never considered hacking a gift like that by analyzing why a charity needs my money and then going further abd asking myself if I could meet their need more efficiently. Basically, I’d love to make sure that my money wasn’t being spent inefficiently but I hadn’t seen a way to do so until today when I read your post.

I’ve always though charities needed better education but the way you explained it... well its given me something to think about. It made me reassess how I could go about helping others and I wanted to say thanks.

 

[Rabby]

What do you mean "just"? As opposed to, say, donating to the theater and having the atrium renamed after you? Or the bar...

Just to continue on this idea which is the opposite of the thread topic... I ALWAYS sponsor the bar if I sponsor something. It's the most efficient use of money at trade shows and such (when they're not shut down because of COVID). And if I were donating to a social club or something, I would 100% have the bar named after me.

 

[sparechange]

If the ''goal'' is to spend a million and have no value from it I'd have to say art, jewelry, and cosmetic surgeries.







But maybe it's possible to resell some jewelry at a small depreciation rate similar to a car.

High stakes gambling?


$5m could be spent in a single morning but as you said, it would be hard for someone with financial smarts to blow it away.

 

[sparechange]

Unless my dear @Kak you are paying too much in taxes. There is nothing better in order to shrink the spread between your revenue and taxable profit, than a great maintenance program for your plane.

Also, depreciation on planes is under a special program where you can depreciate it 100% in 5 years, all deductible.


Believe me, the average G650 owner is not a dumb person at all.
But if you look at the same situation from the average yearly expense stand point, you could think it is batshit crazy. Not quite in reality most of the time.

Yeh don't uber wealthy just write off jet expenses ? (I have no idea how that stuff works)

 

[minivanman]

<<<<<<<< In my thumbnail picture (mid 90's), my friend set a budget for that racecar (1BK) at $1 million for the year. With 5 weeks left in the season, he had to give the team more money to finish the season. So around 25 years later, I'd have a race team for a few months that traveled to Knoxville every week. It's very easy to blow money when you have a racecar. The quickest way to be have a million dollars in racing is to start out with 5 million.

 

[Kevin88660]

Sounds like you are asking what could destroy a rich person, and try all ways to avoid that in advance.

1) Gambling. I have heard people losing all their 80 million worth of real estates and factories to it in Casino vip room.

2) Reinvesting heavily back into their business. For business that are investment heavy placing big bets on expansion could go bad quickly. A lot of business owners are self-funded still.

Spending to boost one’s ego and impress others could be a problem but no ways it kills wealth as fast as the first two.

 

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[LordGanon]

I'm wondering why nobody has mentioned "Have a big wedding and get divorced" yet. That'll bleed you dry.

 

[Kevin88660]

I'm wondering why nobody has mentioned "Have a big wedding and get divorced" yet. That'll bleed you dry.

It is a hyperbole.

The court views assets, marriage and divorce like a business.

It is a big concern if your wife had a Phd and quit her job after having a baby to look after the children. She had made a “major sacrifice” for the union and once a divorce happens there will be surely a hell lot of ailmony to pay.

Most of the time i do not think the extreme cases apply for most couple these days.

If you made your millions before marrying your wife the court knows that she didn’t contribute to that.

 

[Dwight Schrute]

Fun fact:
Lots of adult actresses are also available as escorts, even the ones that don't advertise it if you ask nicely and open your wallet wide enough. I'm just going to leave this here...

 

[csalvato]

I know that many of them are meant to be jokes, but this goes to show that it is really hard to do.

I think it's actually really easy to do. I think a problem with your original assertion is that you are implicitly time boxing to a short time period.

In your example you use the example of an exotic car, then selling it 2-3 years later.

But, let's say you buy that Lambo for $300k and keep it for 10 years. It will be worth, at most, 80-90k at that time, assuming you've taken amazing care of it and haven't wrapped it around a pole without insurance. This isn't something that wealthy or responsible people are immune to - Elon even did this with his first super car.

Within a year or two, it won't be worth 0, but cars are depreciating assets. So, as time goes to infinity the value will be zero (vs. real estate, which *should* appreciate as time goes to infinity).

You're also putting a subjective constraint on it - that the person who is accountable is also "reasonable". Even "responsible" people do crazy, wacky things (refer up to the example of Elon wrecking a $500k car without insurance within his first week of ownership). And a lot of people with 5M+ are far from responsible (think about musicians who got their big break or pro athletes).

If it wasn't so easy to do this, generational wealth wouldn't be so hard (most future generations squander previous generations wealth within 1 generation!), nor would we hear about epic rises and falls from grace where net worth shoots up to multi-millions and the person in question ultimately dies penniless, even if they are extremely intelligent (e.g. Nikola Tesla, tons of pro athletes, etc.)

 

[biophase]

I think the problem with the lack of "real" responses here is that you limit the outcome too much. Getting absolutely "no value" back is basically impossible because stricly speaking this even excludes "feeling good for a second while buying it". Maybe the question is more about "how would you spend 1 million dollars and make it depreciate the fastest"?

The only thing I can think of in regards to the original "no value" question, besides taxes (that wasnt a joke), is "loaning" money, where you are 100% sure you will never get it back. But even then you will probably feel good about helping out.

Regarding the point behind the post (if I understand it correctly): I noticed that the more money I make, the more careful I am with what I spend it on. Always a question about ROI in the back of my mind.

There is a German documentary about a big real estate developer here who basically went from zero to 9 figures. They interviewed him in a private jet. He basically said (translation):

"If you have €250 million, you throw money out the window, and it comes back in through the door on its own. You can't destroy it. You buy cars - they appreciate in value. You buy real estate - it appreciates in value. You buy gold - it appreciates in value. You can't destroy it with consumerism."

Starts at 20s (if you understand German ):

View: https://www.youtube.com/watch?v=2Y2WxM2Srlc&t=20s

Maybe no value is the wrong term. I guess what I really mean is something that you cannot sell to someone else after you purchase it. Something in which you spend money on, because you get value from it, but is essentially worthless to others, which in turn lowers your net worth.

 

[sparechange]

kinda funny how $1m is ''alot'' of money, when in reality it isn't. I think the people that win lotteries or get some lucky windfall / pro athletes consider it a large sum and start balling out, parties, gifts, cars etc. Then Uncle Sam writes a personal love letter to cough up some payments after you've already blown a significant portion of the loot.

So actually bio does have a good point, you would have to be a total moron to blow through 7 figures.

Here is a very famous one

View: https://www.youtube.com/watch?v=wMpZgt6agpU



Cool series you could watch @biophase

View: https://www.youtube.com/watch?v=La1lj4mYpc4
There's a bunch of episodes where pro athletes talk about how they blew through a million


I'm still fasincated how Mike Tyson went through $500m, that must of been alot of effort




Most players in the NFL make considerably more than that and would be taxed at the 37% rate of their income from the FED. This does not factor in state taxes. State tax is a powerful factor as well and where it gets interesting. Many players play in income tax free states such as Texas, Florida, or Washington.

I'd guess pro athletes don't have to pay taxes on their cheques upfront similar to entrepreneurs, instead they get a bill later on down the road? 37% is insane, $1m gets cut down to $630k!!!

 

[csalvato]

The purpose of my question was a mind exercise. Because everyone here is trying to make money and lots of it. I think sometimes we think we need more before we pursue dreams or things that we really want.

For example, you mention, "For example, if I had a million dollars sitting around I really didn't care whether it went to zero, I'd very likely start a really high end local arcade. " My reply would be, well you can start a high end arcade for much less than $1M. And there is also a chance that it could sustain itself. So do you really need $1M to try if it is a dream of yours? Because these things that you may want might not really lower your net worth that much, or could possibly even improve it.

Another example is my friend waiting to build his dream home. He can easily afford it now, but there's a psychological mental block to spending $1.5M. However, he's not really blowing $1.5M. He's just converting it from cash into real estate.

It seems like your point is coming from a place to point out that there's not much to lose if you pursue your dreams.

I think that's valid, and in most cases, the downsides are not nearly as bad as we anticipate.

I think it's invalid to say that it's not possible to spend $1M and get no equity/value.

What if you're Elon and you dump $20M into SpaceX from 2003 to 2009, get to the final launch attempt you can afford, and the rocket launch fails? (At this point in SpaceX's history, no one would have given additional funding or loans - Elon had already tried to do another raise).

That's $20M gone in the space of 6 years.

Luckily, his rocket launched, which landed him a huge contract with NASA. Could have very easily gone the other way.

 

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[levelupinnovator]

kinda funny how $1m is ''alot'' of money, when in reality it isn't. I think the people that win lotteries or get some lucky windfall / pro athletes consider it a large sum and start balling out, parties, gifts, cars etc. Then Uncle Sam writes a personal love letter to cough up some payments after you've already blown a significant portion of the loot.

So actually bio does have a good point, you would have to be a total moron to blow through 7 figures.

Here is a very famous one

View: https://www.youtube.com/watch?v=wMpZgt6agpU



Cool series you could watch @biophase

View: https://www.youtube.com/watch?v=La1lj4mYpc4
There's a bunch of episodes where pro athletes talk about how they blew through a million


I'm still fasincated how Mike Tyson went through $500m, that must of been alot of effort




Most players in the NFL make considerably more than that and would be taxed at the 37% rate of their income from the FED. This does not factor in state taxes. State tax is a powerful factor as well and where it gets interesting. Many players play in income tax free states such as Texas, Florida, or Washington.

I'd guess pro athletes don't have to pay taxes on their cheques upfront similar to entrepreneurs, instead they get a bill later on down the road? 37% is insane, $1m gets cut down to $630k!!!

I love you input. These video are crazy!

I'm surprised players haven't tried to get around the taxes by becoming "contractors/1099" so then write off their expenses.if I was an athlete, I'd definitely try working as a contractor and not as an employee.

 

[ljean]

You could live here for a month.

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www.zillow.com

Or if you needed a longer stay you could afford almost a year here:

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www.zillow.com

 

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[Kid]

One pair of women shoes.

 

[Bobby_italy]

Paying celebrities to hang out with you or be at your party, a guy I know spent 80k to get his favourite singer to his wedding, tons of value for him but zero possible return.
Let's say you keep up this habit and 1m can be burnt through very fast, also let's say you want to start a music career with one of those and spend 250k on a featuring and the song sucks etc..(there's an italian rapper who made a featuring with a famous american rapper and the song was so bad the american rapper asked to get his name removed from it).

gifts to gfs/family since you get nothing out of them, renting out a luna park for a week shit like that.

 

[socaldude]

In económics it’s called monopsony. A market where there is only one buyer. That buyer has to be YOU because another person sold you the 1 million dollar product or service and you wrote a check for it. Hence if you turn around and sell it there are no buyers because YOU where the buyer.

A monopoly selling to a monopsony? WTF?

 

[whyphilip]

First, I'm shocked nobody has mentioned the film Brewster's Millions (1985). Plot:

A minor league baseball player has to spend $30 million in thirty days, in order to inherit $300 million. However, he's not allowed to own any assets, destroy the money, gift it, give it to charity or tell anyone about the deal.

Adding to what others wrote:

I understand the average consulting engagement from a top firm is $1M over 3 months. What you get might have little value.

Bad advertising can destroy brands. That's negative value.

Art. People have lost far more making movies nobody wants to see. Same with music, fine art, etc. Vanity projects.

Finally, do something illegal with that money and get caught.

 

[Gasyhustler]

I adore this thread. I shall now endeavor to be entertaining and witty. I have had caffeine!!!

I sincerely doubt if any thread on the forum more clearly highlights the differences between a wealth mindset, which puts systems in place to create more wealth, and poverty mindset which lacks any such system.

But the fact that you actually don’t know how to lose all your money makes me want to giggle hysterically. Oh dude. Yet again, I wish I could travel back to the Summit and spend another week just hanging out with everyone there until I could say without a shadow of a doubt I had made you and about 26 other people into friends for life. Thankfully, the ones I did get to hang out with were and are so wonderful I don’t feel too bad for not buying you and many, many other ppl a beer. But alas, I digress.

Here are the two ends of the spectrum with no negativity attached.

Disciplined Money Systems + Respect For their Time that Makes Money .

vs

A Casual Disregard for One’s Own Time In General + A Generous Nature

The answer to your question is in the latter equation, more specifically and practically explained, as follows... impulsive, ridiculous giving will make anyone lose a large inheritance in approximately 1.7 years.

(Don’t ask me how I know..)

Yes, I know that being too generous lead nowhere but in extreme financial mess.



When I started freelancing when I was still in college, I didn’t mind my time at all and I thought it was my duty to pay my parents for everything they did to me. (I know now that they made me think like that because of the guilt they gave to me as I’m the one of the very few who went to college in my family.) So I began to pay them every time I get there. I paid my own food, treated them with fancy restaurants and started to give all of my money to them for all of their expenses even if they both have a stable job and to help my sister in her special school for stylist. Each time I earned money, all of my expenses came last but helping my leeching family members came first. It was like 80% for them and only 20% for me, my life and my future.



And that is how I ended up having nothing in my studio beside a bunk bed that I separated and a table for my desktop. That didn’t bother me much until I started to live with my boyfriend (my husband now). People started to treat me differently thinking that I was a starving jobless person who had nothing to do but searching for few pennies here and there online.



What strike me most is that my sister didn’t do anything like that when she finished her studies. She started to gather furniture for her own place and she even has some savings. She even continued to ask my parents for help from time to time when she had money difficulties. They didn’t mind helping her at all and they continue to do so now so that she is also married with a toddler right now. I didn’t know that we could do that.: o and I was not aware that we cannot pay our parents to love us (because they made me think that I don’t deserve their consideration without money because I made them spend all of theirs in me).



I thought that we were supposed to pay back if we still wanted to be considered by them, but I was totally wrong. It took me all of my hearts to tell them that now that I have my own family, I’m not going to fulfill their dream of building their dream house and I was going to stop to provide them with everything they need because they still have their own jobs and will even have a retirement plan which will not be the case for me as I’m a freelancer and you don’t have that privilege here in my country if you’re not an employee.



So yes, be extremely generous and never think about your own needs if you want to blow all your money fast. That is how I ended up having nothing and even financially struggling in 2017. But I’m aware of that now and I try to be financially smart since 3 years now.

 

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[Kid]

I worked for a company doing search engine arbitrage about 10 years ago. They spent €120k/day and made €150k/day.

Believe it or not, i still sometimes get arbitrage ads, mostly for some obscure search terms.
The strangest thing is that initial ads are on Google, and they point to another 10 results with Google Ads as monetization.

I don't know how it works, but i guess its not as profitable as it used to be.

 

[Sethamus]

For example, my current "charity" project is trying to lower the decibel levels at humane societies. When I visited one a few years ago, it was so loud and the sound was just reverberating within the concrete floors and walls. I could see how stressed the dogs were. They immediate solution would have been to donate $1000 in order for them to purchase acoustic panels to hang on their walls. However, these panels cost around $50 each. So instead I have been sourcing the materials to build these panels from China and developing a DIY kit that I can send to rescues for about $10 a panel. Once I get this process going, I can then "donate" these kits to many more places.

When you get this worked out make a post. My wife would love to buy some for the shelters around us.

 

[BizyDad]

I would rather find out what the charity needs and figure out a way to support them in a more efficient (dollar wise) and sustainable way vs. just giving them money.

For example, my current "charity" project is trying to lower the decibel levels at humane societies. When I visited one a few years ago, it was so loud and the sound was just reverberating within the concrete floors and walls. I could see how stressed the dogs were. They immediate solution would have been to donate $1000 in order for them to purchase acoustic panels to hang on their walls. However, these panels cost around $50 each. So instead I have been sourcing the materials to build these panels from China and developing a DIY kit that I can send to rescues for about $10 a panel. Once I get this process going, I can then "donate" these kits to many more places.

I just don't believe in giving the money away to be used inefficiently.

This is great. You obviously know how needed it is. I can see this being something you can sell to kennels or vet hospitals, with a tagline that for every kit you sell, a kit gets donated to support local shelters.

That said, this is "just donating" of a slightly different flavor, isn't it? One in which you still have a good deal of control.

I certainly don't want to take away or diminish what you are doing. It's awesome. And so needed.

But is this the best use of those funds for that shelter? For your consideration....

What most charities need is what most businesses need... Stable predictable revenue so that they can attract top talent. As far as charities go, the humane society is better than most at creating revenue streams.

The big problem charities face is most grants that are written offer little in terms of funding for supporting staff or salaries. Often larger donations get earmarked for project work, not the people working in the project.

And most people (donaters) have a bias as well. They feel like charities are naturally inefficient, so they don't want to donate too much, just have it get spent on salary.

As a result, charities have difficulty competing for talented individuals. Someone working there generally accepts 30% less than they can make in other positions of similar skill sets. (Don't quote me on the exact figure, I read that stat like 7 years ago). And there's often a stigma/expectation attached, not unlike what teachers face, where they should accept less money because, you know, charity, and on top of that they often put some of their own less than standard salary back into their endeavor.

Going back to my example of donating portions of the million to different charities that didn't truly cut it either. If that is a donation of an unusual size for them, the charity is likely to just put that in a savings account. They'll want to hire, but they know they'll have to get rid of them at some point when the money runs out. Better to have a cushion for their existing staff. Of course they also can't keep too much of a cushion, because they'll be accused of being inefficient with the money.

A million dollars could go a long way towards creating stable predictable revenue streams for one or a few charities. But it would have to be managed properly...

This is a problem that I've always had in the back of my mind to solve. Most every charity faces it. I share it here for any enterprising entrepreneurs who happen to have a few charities they support. Food for thought.

Just to continue on this idea which is the opposite of the thread topic... I ALWAYS sponsor the bar if I sponsor something. It's the most efficient use of money at trade shows and such (when they're not shut down because of COVID). And if I were donating to a social club or something, I would 100% have the bar named after me.

Great minds think alike, and fools rarely differ.

While we're at it, we should name a drink after you too. Bartender - two Rabbys please. It rolls off the tongue.

I'm picturing some kind of rum cocktail in a tall glass.

 

[Rabby]

Great minds think alike, and fools rarely differ.

While we're at it, we should name a drink after you too. Bartender - two Rabbys please. It rolls off the tongue.

I'm picturing some kind of rum cocktail in a tall glass.

Look up the "Robert Burns." The Rabby is a nickname for that drink

 

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[Johnny boy]

Charter a big a$$ jet from seattle to London

Then just spend your money on what poor people would spend their money on if they won the lottery

Hotel penthouses + super expensive meals + go to the nicest club and get bottle service and throw bands at strippers

That’s a million in a weekend

 

[Odysseus M Jones]

I'm wondering why nobody has mentioned "Have a big wedding and get divorced" yet. That'll bleed you dry.

Because value is subjective.
Just because one person thinks in terms of tangible, durable value that can be represented on a balance sheet doesn't mean everyone does.

Why hasn't anyone said buy $1m of cut flowers?

 

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[Sethamus]

Bio is not being specific in his question, but examples show clearly he means monetized value.

Different people find value in different things. You could give everyone on the forum $1000-2000(not sure how many members there are) and blow through the million and feel great about yourself, which is value, just not a return on the money.

For an actual investment return, there are so many circumstances that could change a bad purchase into gold. The poor farmers in West Texas, at least some, became millionaires when hydraulic fracturing tech became available to produce oil on the land. Before the boom out there, this could be considered a wasted purchase as most of the smaller farming operations moved to more productive areas.

This is really hard to answer if you do not include donations and purely purchases that would be reasonably done by someone with a high net worth.