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What would you do with a windfall?

Manchild_Unbound

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After reading through Unscripted, it really impacted me how that NBA basketball player was worth over $80 million and lost it all by excess consumption. I'm sure we've all heard about the statistic that most lottery winners end up broke after a few years.

But let's say one of you had a windfall, be it a lottery win, a rich relative leaving you a fortune or trust fund, or whatever. You are now a millionaire. To be specific, let's just say it is $5 million.

What would you do? How would you avoid going broke and make that money last for the rest of your life? What would you produce? Would you still be entrepreneurial?
 

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jon.a

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This happened to us.
We changed almost nothing.
We have the same truck (we had it painted).
We live in the same house. It's our worst rental property.
We wear the same clothes.
We buy maybe one new thing a year, about $1000 or so.
Our income has multiplied, but our expenses are about the same.
We have been studying investing a lot.
We add one new money system about every year.
 

Bennu

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I would spend all my spare time becoming financially literate and learn how to invest wisely. I would spread it out among several kinds of investments. If the earned interest was enough to live on, I'd quit my day job and make my own business my job until it can sustain me, and would keep funneling money into investments and new businesses and just keep building and learning until I have enough passive income from my investments and businesses that I could do whatever I wanted.
 

ironman150

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depends on the amount...but if large enough $1m+
1) debt be gone
2) Buy multifamily
3) Repeat step 2 until passive income exceeds expenses X4
4) retire.
 

AnAverageJoe

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This happened to us.
We changed almost nothing.
We have the same truck (we had it painted).
We live in the same house. It's our worst rental property.
We wear the same clothes.
We buy maybe one new thing a year, about $1000 or so.
Our income has multiplied, but our expenses are about the same.
We have been studying investing a lot.
We add one new money system about every year.
This is perfect. It's kind of like that scene in office space. I'd do...nothing. I'd relax. I'd breathe a little. I'd have fun with my kids and show my wife a good time. But I wouldn't change anything. I'd learn finances to be sure I don't do anything stupid with it and I'd learn to invest to multiply it.

But I'd have what I've wanted all along, freedom.
 

Late Bloomer

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To be specific, let's just say it is $5 million
That happens to by my goal number for comfortable retirement from working just for money to survive, with good health, personal enjoyment, and personal business productivity, for the rest of my life. If it's a sudden windfall, about half would go to taxes, but the technology equipment I'd like to use can be bought pretax in the U.S. via a Section 179 deduction. The remainder would go about half to capital expenses, and about half to operating expenses.

Most of the capital fund would go to a basically nice home in each of the two places where I'd like to divide my time throughout the year. Some would go to a couple of nice cars.

The operating expense fund would get conservatively invested, with the help of a financial advisor whose approach I already understand and trust, in a conservative portfolio reliably generating enough cash flow to cover all my ongoing living expenses, without depleting the principal.

I would take some time to get some health care I've not been able to afford, and then to enjoy some travel. During this time I'd write the two books and do a couple of other projects that I've wanted to do, which would go better if I could entirely focus on those ways to create long term value.

I'd be back from that within a year, to market what I have to offer, knowing that if there's market value in it that funds distribution and further development, and if not I'm still safe and fine and can move on to test my next idea.
 
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biophase

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I had a nice windfall earlier this year when I sold my business. I haven't spent a penny of it yet. Can't find anything I really want to buy. Sometimes the allure of something is only because it's expensive.
 

Late Bloomer

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I had a nice windfall earlier this year when I sold my business. I haven't spent a penny of it yet. Can't find anything I really want to buy. Sometimes the allure of something is only because it's expensive.
If you're still stumped, I've got a plan for how to use $5m wisely and I'm ready to implement it any time you'd like to fund it. :rofl:
 

Johnny Bravo

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We add one new money system about every year.
1) debt be gone
These.

We made a killing in the crypto world and paid off all of our debt. The continuous debt cycle is probably one of the most destructive financial holes a person can be in. Once you're out, stay out!

We almost made the mistake of buying a massive piece of land and building a ridiculous ranch on it, but thankfully we came to our senses. Now my story is a lot like jon.a above. Same house. Same truck. Same clothes. Same shitty internet. Even still working at the same job.

I've got a MA in economics and always thought I had a pretty good handle on financial stuff. Perhaps one of the most mind blowing concepts in MJ's book was his use of assets to create income. Not sure why I never came across this previously, but putting cash into dividend/interest paying instruments is genius. With relatively little cash (it's almost silly that I'm calling a few million "little"), you can essentially retire. Best of all, once your debt is paid off (and assuming you don't go off the deep end buying a bunch of crap) it doesn't take much income to live quite comfortably. Everything you don't spend can go into other income generating instruments which will continue to compound and just keep getting higher and higher.

I hope for your sake that this isn't just a hypothetical! Good luck!
 

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