What would you do if you had $3,000,000?

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elkend
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What would you do if you had $3,000,000?

Post by elkend »

I imagine frugality is part of ERE’s core personality, not just something done out of necessity. I’m finding as I make increasing amount of money, some areas of frugality start making less sense or I stopped doing. I still consider myself frugal, but also I wonder sometimes parts of my personality and interests are what currently suit me best at the time. It got me wondering how much of our personality is “determined” by how much money we have.

Chris
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Re: What would you do if you had $3,000,000?

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IlliniDave
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Re: What would you do if you had $3,000,000?

Post by IlliniDave »

The personality part I'm not too sure about--that is complicated.

I could probably say I have something like adaptive frugality, meaning frugality is one of a wad of factors that I balance in search of an optimal base lifestyle. A few years back I did some experimenting initially aimed at finding my break point--how low I could push my spending before it interfered with contentedness. Once I had a sense of that and as I passed through increasingly robust levels of FI, I began experimenting with loosening up. I had a sense of my limit on the low side, and was informally looking for more of an optimal balance. I didn't think of it in terms of "making sense" as much as getting to a tranquil point that minimized any feelings of constraint or waste regarding outflow.

The combined experimenting validated on a visceral level my intellectual belief that any correlation between spending money and happiness in the overall sense was loose and weak and unreliable. As a result I've meandered into a pattern where compared to my peers I'm pretty frugal, enough that I get some good-natured teasing about it at times. Relative to the group here I'm decidedly on the drunken sailor spendy side. The advice I give my Millennial and Z coworkers when they ask is to push frugality as far as you can for a year or two as an exercise in getting to know yourself, then if necessary back off slowly/incrementally until you find a point that you think you can maintain for a few decades.

Seems to me there are four aspects to frugality. One is that it is a tool that can be wielded in pursuit of a goal. The second is that it does seem to be a personality trait (or a manifestation of traits) that some come by more naturally than others. It is also a facet of some ideologies where it can be pursued for its own sake in service of a greater good. Lastly, it sometimes seems to be a neurosis where people practice it to the point of self detriment. I'm starting to see that in my dad, although its tangled up with some other things that makes for a long and ironic story I won't get into here.

My first thought is that frugality practiced by a person can change without it necessarily signalling a personality shift, especially when it is employed as a tool.

horsewoman
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Re: What would you do if you had $3,000,000?

Post by horsewoman »

I've often wondered what I would do with even a take-home salary of 3000 - 4000 or more Euros a month, which is not uncommon here in our heavy industry area for a lot of folks, even blue collar.
Apart from some frivolous spending in regards to musical instruments I can think of nothing that my PT salary won't afford me.
In my case, frugality is definitely a personality trait, I've been born frugal and can't imagine to be otherwise. Same as @IlliniDave wrote, money and happiness are not closely related for me.
If I suddenly had a few millions I'd buy some real estate, engage a manager to handle most of it and rent it out for fair prices. A small profit for me and affordable housing for my tenants, that would be great.

7Wannabe5
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Re: What would you do if you had $3,000,000?

Post by 7Wannabe5 »

Well, I don’t want to increase my spending, and I’m naturally not super concerned about security, so I would mostly consider how possession of such a lump sum might improve my optionality or, perhaps, control of a situation.

For instance, I could buy a very big house in a good location and maximize occupancy. What I have to question is why I prefer this to simply being one of the occupants of such a house at maximum occupancy? Probably same reason why I prefer being self-employed.

2Birds1Stone
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Re: What would you do if you had $3,000,000?

Post by 2Birds1Stone »

Interesting thought exercise.

If the $3M was suddenly and unexpectedly received, I would invest a 1/3 in hard assets like land and real estate, 1/3 in a conservative portfolio to live off of the proceeds, and give away a 1/3 (slowly over time, funding causes, projects, and activities that benefit the natural world/others).

I don't think lifestyle or spending levels would change all that much, history has shown that with an income which would be the equivalent to a 3-4% drawdown on $3M, spending only made up 20-25% and the rest was saved........

ertyu
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Re: What would you do if you had $3,000,000?

Post by ertyu »

I would use 15k to fix up my place and I would put the rest in a passive portfolio. I would probably go to scotland and share a house with my autistic friend who wants to move out but can't afford it. I would enjoy the coast and irn bru, and I would work on my English insults.

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jennypenny
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Re: What would you do if you had $3,000,000?

Post by jennypenny »

I've completely changed my mind from what I wrote in that older thread. Interesting.

The only part of my frugality that has changed is that I buy better quality stuff (BIFL level) and I feel like I have more time I have to find what I need. Funny how the more money I have, the more patience I have. This may be the wrong analogy since I'm not good at them, but increasing wealth feels like getting closer to the speed of light ... everything slows down. Maybe that just happens as we get older. Dunno.

OTCW
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Re: What would you do if you had $3,000,000?

Post by OTCW »

1/3 would go towards care of a disabled family member. This would fund that responsibility for myself and the other family members that currently cash flow that cost.

1/3 to my ERE portfolio.

1/3 would be quietly given away in some manner into my local community.

It wouldn't change my lifestyle but I would quit my 9 to 5 (7:30 to 5:00 plus commute) and work solely on my side business with the goal of spending more time on learning, my health, my hobbies, friends, family, and community. Just ditching the commute would save 5 or 6 hrs a week.

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Jean
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Re: What would you do if you had $3,000,000?

Post by Jean »

I don't know about 3'000'000, but if i had 150'000'000, that would afford me 4 ton into a mars orbit. Landing durably with that litlle weight is out of the question, but surviving a few decades in orbit might be doable. From there, I'll start emiting on short radio waves toward earth, playing my music, insulting world leaders i don't like, and describing the surface.

suomalainen
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Re: What would you do if you had $3,000,000?

Post by suomalainen »

I would wake up, every day.
I would go for a walk, run, bike or ski, every day.
I would read, every day.
I would make and eat one or two meals, every day.
I would touch base with kids or friends, every day.
I would watch a movie or show or play games, every day.
I would go to sleep, every night.

Occasionally, I would do these things in a new geographic location, but in short, I would live my life in loops, as tight and closed as the hosts do.

Scott 2
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Re: What would you do if you had $3,000,000?

Post by Scott 2 »

I gradually walked my consumption up as I got more money. Nowhere close to 3MM levels, but I learned from it.

I saw benefit in paying for help. Essentially buying time back. There's really no upper bound to this, but it comes at the trade off of making your lifestyle dependent on the help. Depending what material items you scale (ie a big house with a pool, now that others will clean it), that makes you less resilient to non-financial disruptions. You avoid the lifestyle design tradeoffs, that would have eliminated the need for help in the first place.

Buying more and nicer things wasn't necessarily a clear win, because of the time and energy involved in consuming them. Get a fridge with an ice maker, now that needs to be connected to a water supply and can break. Upgrade to a luxury car? Now you need to deal with the luxury car mechanic instead of whatever local auto shop. Even replacing can be more work than fixing, because there is a time floor on the transaction.

There's also the problem of quality not scaling linearly with cost. The $50 bottle of scotch might be twice as good as the $15 bottle. The $150 bottle vs $50? It's hard to say it even gets better. Just a harder to obtain experience. This stops 3MM from buying the lifestyle inflation one might initially expect. You are still travelling through the same airport, but maybe you get a nicer seat on the plane. The $300 a room hotel has a nicer bed, but now staff are constantly in your business, and the building is designed so you need their help.

I have to LOL at the "I'd give away 1/3" responses. 3MM is a lot of money, but it's not "I'll never run out of money." At end of life, sure - it probably means leaving a financial legacy - charity or heirs. Retirement? It provides a strong back stop for long term care and medical expenses. You can be more confident of never leaving your home during infirm years. Scenarios that wipe out 3MM are easy to create.


I'd bank the money, simplify my investing and exercise less discretion optimizing my purchases. I'd revisit the estate plan, maybe pickup some long term care insurance, and then get back to living my life.

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unemployable
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Re: What would you do if you had $3,000,000?

Post by unemployable »

We're doing this? OK.

A bit more than half in a portfolio of stocks and REITs that yield 7%. They're out there; quite a few of them in fact, although I suspect you're running out of time on XOM. Principal should roughly grow with inflation. This gives me about $100k/year after tax. Call it eight grand a month. Substantially more than I've ever lived on, so I'd be plowing some back in to the portfolio.

The rest, 300k for a house, nice but not too nice because stuff requires maintenance and attracts people and I'd be traveling a lot anyway, plus a reserve for carrying costs, maintenance and improvements. This leaves about a million, which I'd allocate some 70% to traditional global diversified equity and 30% to speculative stuff.

2Birds1Stone
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Re: What would you do if you had $3,000,000?

Post by 2Birds1Stone »

Scott 2 wrote:
Sat Jan 16, 2021 10:57 am
I have to LOL at the "I'd give away 1/3" responses. 3MM is a lot of money, but it's not "I'll never run out of money." At end of life, sure - it probably means leaving a financial legacy - charity or heirs. Retirement? It provides a strong back stop for long term care and medical expenses. You can be more confident of never leaving your home during infirm years. Scenarios that wipe out 3MM are easy to create.
It depends on ones spending, and not everyone plans to age in the USA.

The type of lifestyle DW and I dream about would cost roughly $36-40k/yr, with all of the luxuries we could want.

I personally wouldn't just doll out money on whims via check. Maybe 50% in a DAF and the other 50% would be used to support things like small scale ecology projects, community gardens, investing in sustainable business ideas, and enriching a community that I would want to be a part of anyway. That $1M could last indefinitely if it was used sustainable while invested to preserve capital.

More or less, this is what I strive for in the bigger picture anyway, just not on a $3M dollar scale.

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Sclass
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Re: What would you do if you had $3,000,000?

Post by Sclass »

Good question. Makes me think.

I used to play this game with my college pals. “What would you do if you hit the lottery.” Which is arguably a different question than what would you do if you had lived frugally and invested a number of years and arrived at a princely sum of $3,000,000?

The answer to the former ranged from I’d buy an exotic super car to I’d fund my own potable water research project. Both were unrealistic and what inevitably happened to the majority of my friends is they failed to save a million in liquid assets...thirty years later. But those were the negative results. How about positive outcomes?

I think asking yourself this question when you have not attained the indicated NW is asking the wrong person. I mean you are the same person as you will be but maybe not a person with $3,000,000 future assets. Some indication is the common quote of millionaires saying they feel poor. Perhaps they feel some of the same emotions common savers feel when they go from $3-$3000 or $3-$30,000? They may have 10,000 times more money but it doesn’t change their underlying psychological wiring.

I buy the $4 water bottle without hesitation. But I passed multiple kidney stones over my life. :lol:

Laura Ingalls
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Re: What would you do if you had $3,000,000?

Post by Laura Ingalls »

My late father used to joke that when he graduated from high school in the mid 1950’s that he thought he would be set if he made 10k a year. Twenty (inflationary) years and three kids later when it actually happened it was a non event.

Anyway I am not sure how much it would change for me. I think there are some high end experiences I would spring for but probably wouldn’t make a habit of. I would maybe give up once and for all at getting DH to give up his beloved cable tv. I suspect it could easily happen someday but it will be the nonevent that 10k was for my dad.

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Sclass
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Re: What would you do if you had $3,000,000?

Post by Sclass »

:lol: That’s a scary thought. $3,000,000 loaves of bread post stimulus.

Laura Ingalls
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Re: What would you do if you had $3,000,000?

Post by Laura Ingalls »

@sclass
The post says $3,000,000 not $3,000,000 more. The magnitude of chance is going to be smaller if 30 year old goes from zero to $3,000,000. Might not be that big of a deal if 70 year old get an inheritance and her net worth goes from 2,700,000 to 3,000,000. It’s impact for me would be somewhere in vast in between.

Scott 2
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Re: What would you do if you had $3,000,000?

Post by Scott 2 »

@2b1s - you nailed my US bias. Living anywhere else isn't part of my framework.

Running sustainable programs makes way sense than writing a check. That's a good answer to "what will I do all day". I've generally been surprised how well financed local charities are. Not that individual contributions don't matter, but business relationship seem to be their lifeblood.

mathiverse
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Re: What would you do if you had $3,000,000?

Post by mathiverse »

I'd probably stop working for a while since I'd easily have enough for my familial obligations and personal expenses even with my relatively high expenses compared to more people on the forum. In fact, I think my expenses would drop when I stop working, so even better.

Once I quit, I have a few projects I'd try to get off the ground that may make money and would be fun. I work on some of these projects when I can while having a job, but not as much as I would without a job. Every time I have more than two weeks off of work, I am reminded of how much I get done without a job.

I guess this is the same as what I would do if I had any amount of money enough to cover at least 1.5 times my expenses with investment income.
Sclass wrote:
Sat Jan 16, 2021 12:21 pm
The answer to the former ranged from I’d buy an exotic super car to I’d fund my own potable water research project. Both were unrealistic and what inevitably happened to the majority of my friends is they failed to save a million in liquid assets...thirty years later. But those were the negative results. How about positive outcomes?
How about the positive outcomes? I always like reading your stories, so I'm curious to hear.

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