Suppose you win 100 million. What do you actually do with it? Banks only guarantee 250,000. Do you have to invest it? Is there anywhere you can just let it sit and draw interest?

  • MrFunnyMoustache@lemmy.ml
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    1 year ago

    Considering that quality of life won’t improve much beyond a net worth of 5-10 million dollars (heavily depends on the cost of living in your area, as well as stuff like cost of healthcare), there is no point keeping that much money.

    If I got 100 million dollars, I would donate 95 million do various causes, pay whatever tax I owe for the other 5 million, and retire with the 2.something millions I have left.

    As for where to keep it… First I would pay off my mortgage, and then I would invest in index funds and bonds.

    • snowe@programming.dev
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      1 year ago

      Two million is hardly anything for retirement. If you’re in your 50s then that’s only 66k a year until you’re 80. Unless you’re about to die that’s an absolute pittance. If you’re younger then that’s even less per year. You can’t think of retirement as “oh I only need this much money”, you have to think of it as paying yourself your yearly salary until you die. Life expectancy has massively gone up, so has inflation. If you live to 65 in the USA you have an average extra expected years of 15-20, so up to 85 years life expectancy in certain states. If you’re retiring at 30 you’ll be looking at 55 years of paying yourself. If you want a decent “salary” you’re looking at at least 5.5 million.

      • MrFunnyMoustache@lemmy.ml
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        1 year ago

        First, I am not from the US, and I did explicitly mention that it highly depends on the cost of living where you live.

        I live in a place with a solid transit system, so I don’t own a car. I live in a place with universal healthcare, so I don’t need to worry about massive medical expenses later in life.

        By investing 2.5 million dollars, using the 4% rule would give me 100k a year which is really high and I would never get anywhere near that.

      • applejacks@lemmy.world
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        1 year ago

        You would not just store it in a bank account collecting no interest.

        You would invest it and could easily live off the dividends.

        • snowe@programming.dev
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          1 year ago

          That really isn’t how stuff works. I don’t understand how you’re getting upvoted at all. Do you have a financial advisor? Do you actually have investments and accounts for retirement? Investing two million and trying to live off the dividends would give you pretty much nothing each year, from a cost of living perspective.