Sandy @ Yes, I Am Cheap has posed the question: What would you do if you inherited $1M from your cousin Bertha, a cousin who you haven’t seen since you were a baby?
The first thing I’d do is wonder why on earth this woman I haven’t seen in 34 years has left me $1M. Then, I’d call my parents to find out how I’m related to Bertha and if she’s legit and not something akin to the Nigerian prince schemes. Once I find out that she’s kosher (and a relative), then I start making a plan for the money. Here’s what my plan looks like:
- Hire an attorney. I’m not exactly sure why but I remember reading somewhere that if you win and/or inherit a large sum of money, you should hire a lawyer. So I’d do that.
- Pay my taxes. I’m not cut out for jail and I don’t want to go, even if it’s good enough for Wesley Snipes and Martha Stewart. I like not having a criminal record.
- Set aside money for retirement and my daughter’s college education. This is because I need to be responsible. $1M, while a lot of money, is not enough for us to retire on. Both my husband and I would need to continue to work but we could work a little easier knowing that our sad little retirement accounts and our daughter’s pathetic 529 have sufficient funding.
- Pay off our house, car, and my husband’s student loans. These are our remaining debts and I’m tired of them. So I’d pay them off.
- Donate some. There are several charities that I know could benefit from donations, so I’d give about $25K (each) to 4 different charities. I’d handpick them, and I wouldn’t make them compete for the money a la trashy reality shows. I’d just fork it over. ‘Cause I’m awesome like that.
- Be completely irresponsible. For one month. Lest you think I’d go all Brewster’s Millions, I wouldn’t. I’d buy clothes that fit properly for both my husband and I, outfit my daughter for the upcoming year, book my dream vacations, put aside money for my dream kitchen and buy Mets season tickets. And I go spend a weekend getting spa treatments.
(See, Dave Ramsey? Even in a hypothetical scenario, I still follow the spend, save, give mentality. It is at this point I kindly ask you to extract yourself from my head)
While I think that the Barenaked Ladies had an admirable plan, what with their macaroni and cheese and monkeys and green dresses and Elephant Man bones, I like my plan better. But I may buy some mac and cheese anyway.
What, no Porche in the garage and you're donating money?!!! Where's the wild side. Just kidding. 😉
A very responsible plan! Mine would be somewhat similar, with paying the taxes, retirement, payoff our home and vacations. Being older then you and having grown children we would pay their student loans off and buy them each a new vehicle and probably set money aside for future grandkids.
I would want to buy a house on a small lake and get some water toys(boat, jet skis,etc). It doesn't have to be big and fancy, just on the water.
There are also a few charities I would want to give to, my daughter has epliepsy and there isn't a lot of funding for research for this condition, so that would get top priority, plus something for animal rescue/fostering type charity.
Oops, I forgot about giving in my post. 🙁 Thanks for the reminder.
sounds like a great plan!!!
Judy
Neat, and very responsible plan. Sounds like one I would come up with!
@yes, i am cheap–i have no financial wild side, unfortunately. not even in fantasy. sad, isn't it?
@paula–that is a plan that makes sense!
@retirebyforty–glad i could help!
@judy–thank you!
@amanda–i'm glad that someone else is responsible to a fault
I immediately had the Bare Naked Ladies song stuck in my head with that title. 😉 I think I'd pretty much do the same as you except go crazy for a month. I'd want to maybe take a 2 week trip somewhere, but other than that, after taxes it's only around $550,000 and that's just not what it used to be. 😉
That's a pretty balanced plan. $1mil isn't quite enough for the Porsche and spending gone wild approach 😉
LOL – when I first saw the question of what to do with a million dollars, I thought of the monkeys line from that Barenaked Ladies song.
For me, the first thing I'd do would be to immediately interview 3 to 5 attorneys, then hire the one who was the best fit. From there, I'd splurge $10,000 and save the rest (aside from some giving)
I love the "Be completely irresponsible. For one month." part. I bet after a month you'd even be tired of being irresponsible 🙂
Although I could probably figure out a way to make that month fairly costly…
I will buy one fast food franchise
@littlehouse–i agree that $550K is not what it used to be. but it's way more than i have now 🙂
@nodebt–i agree
@squirrelers–another bnl fan. yay! and i'm glad someone else would hire an attorney.
@jackie–thank you!
@onecent–interesting idea. it will definitely get a good return on investment.
Don't hire a lawyer!!! Sit on the money for 3 months before you do anything, then if you want to hire someone, hire a financial planner – but better still, take the time to learn the basics of investing if you don't already have them.