What would you do if you had a million dollars (tax-free)? Now, wouldn’t that be a million dollar question.
I’ve been thinking of what I would do with my imaginary million dollars for years now.
One night, while browsing the Internet, I came across an article about how a young Canadian couple were able to quit their jobs after they had accumulated a million dollars in their portfolio.
I was so inspired by their story that I started investing and even started this blog.
It never crossed my mind that I could also become a millionaire until after I read their story. They were just your average, typical couple. Hey, if they can do it – why can’t I?
BUT IS A MILLION DOLLARS EVEN ENOUGH?
Enough for what? It really depends on you. But for me, it is enough. Enough for me to quit my job the very next day.
Although a million dollars isn’t what it used to be, we can all agree that it is still a lot of money. The truth is that many of us don’t even have that after a whole lifetime spent in the workforce.
If I were to save $20K a year cash and do nothing with it, it would take me 50 years to save up 1 million dollars. By then, it will worth even less.
So…yes…a million dollars is enough for me.
HOW WOULD I SPEND MY MILLION DOLLARS
1. Buy a House
I live in one of the more expensive states and I could easily blow a whole million dollars on a house and it’s not even an oh-wow-kind-of-house.
With 20% on a down payment for a $700k house – I would be looking at $140K. It might sound like a lot, but it is not for where I live. Sure, I can move to somewhere else cheaper, but I really like where I am.
I would use another $60K for furniture and anything else that needs fixing. Total = $200K for the house.
I am now left with 800K to invest in index funds. I would invest 700K and assuming the annual return rate is 8% – that would generate $56K a year in passive income. Balance my portfolio once a year and I am good to go.
I only started investing a little over a year ago with a lot less than $700K and I have already generated $15K at the time of me writing this post.
3. Give to Family
My parents and brother deserve some love too – $100K to be exact. My parents have worked hard all their lives and this extra money would allow them to travel and just enjoy their golden years.
My brother would probably use it to invest in index funds and maybe travel a little bit.
4. Quit My Job and Travel
Here comes the best part – quit my job. It’s not that I plan to never work again. I just want to take a break and do something else with my life. The only thing holding me back from quitting now is having a steady paycheck.
I would travel the world while working on my blog. I would turn this blog into my full-time job.
What about the house I just purchased? I would rent it out to generate an income while I am away.
I actually don’t really have anything that I want to buy for myself. The only thing I would want to splurge on is to fly first class once on an international trip – the one with an actual bed. But knowing me, I probably won’t be able to bring myself up to waste that much money on a flight ticket.
Now that I think about it, I would rather use that money for a new car.
WHAT AM I DOING TO ACHIEVE THAT GOAL?
1. Keep my 9 to 5
My goal is to achieve this number in 5 years. Fortunately for me, I do make decent money from my job but I won’t be able to achieve this goal with my income alone in 5 years.
I wasn’t raised to take risks. I was raised to never live paycheck to paycheck and to always save for rainy days. Security is great, but I will never be able to get out of the rat race if all I do is work and save. Index funds has been doing well for me and my next step is to buy a house as an investment property.
The housing market in Orange County is ridiculously expensive, but it also means people are willing to pay good money just to rent the spare bedroom. Airbnb is also another good option – but safety is also another concern.
3. Side Hustles
I actually never thought much about side hustles because I can make a lot more money with my overtime, but what I didn’t realize was that I could build a business with these side hustles. I have always wanted to work for myself and blogging has really opened my eyes to a whole new world.
While most of us won’t wake up with a million dollars next to us, we can still accumulate that amount by investing and be wise with our money.
I hope to achieve this goal one day and be able to work anywhere with just my laptop.
What would YOU do with a million dollars?
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