To think a Million pounds isn't actually that much?

[BernardlookImaprostituterobotf]

To me it might as well be a million billion but -

Reading the story about another couple who won £1.8 mill lottery prize but are now worse off than before as they are bankrupt.

They bought a £750,000 house - ok, just over a mill left.
They bought 2, I think, sports cars - hmm, you'll be under a million now.
Both gave up work - on under a million?
They both financed independent business projects - I've lost the figures now but I'd be worried.
They both haemorrhaged money and yet the daily spending was on 'investment piece' £1500 bags, expensive guitars & a generally luxury lifestyle - but how? With what money?

In their specific case, she was left in the shit & I do have sympathy for the situation they're in now and have used them more as a general example of what I'm trying to articulate.

Do people ignore financial advisors? I don't understand how you can sink 3/4 or a million in a house and then expect the remaining money to support a luxury lifestyle if you don't work.
Surely you can either not work and live frugally trying to make good investments or you can keep working and the extra lifts you into luxury.

You can't buy a mansion and a yacht for a million quid but this seems to be how people spend it.
Aibu to think it's not much now? What would you do with it?

Income on £1m, before tax but taking into account the need to reserve a little to counter inflation and investing without huge risk of losing the lot is about £40,000 pa. Not enough for jet setting

haha Thane, you could buy the whole of Scunthorpe for a million quid.

that couple were so dim I am sorry, they both gave up work, put their kids into private schools, he started jetting round the world and she had loads of work done on her face and was buying 'investment' handbags. Thick as mince the pair of them.

Vixsatis - although of course there's no tax. 40k net pax isn't bad..

It would be perfectly possible to live comfortably on 1.8 million, but not a jet setting life style. If you bought 5 flats for £200K you could rent each out for £800 per month. The rest of the money could pay off your own mortgage to live in a nice house, but not a mansion. You could probably even afford private school if you wanted to and were prepared to compromise on size of house.

I suppose a lot depends on what assets/ debts before you had the 1.8M. Certainly some people are as thick as they come when it comes to money.

Where would you keep it if you wanted to keep it as cash? The banks aren't safe and the govt will only reimburse you something like 83k per bank so you'd have to spread it about. I think I'd just spread it between banking groups and take the risk - it's rare for banks to actually lose people's money anyway - did it even happen at all? Thought the govt bailed them all out

That's if you couldn't be bothered to invest it properly, or pay a wealth advisor to do it for you!

If I won a million I'd pay off our mortgage, might move to a slightly bigger house.
Then I'd quit my job - or at least look to go seriously part-time.

Personally, If I won a million on the lottery I think I'd go with £500,000 on a nice family home (3/4 bed normal suburban house around here), divide £100,00 between varoius relatives (my parents, PILS, DBro and BIL) and then stick the rest in the safest savings account I could find.

It wouldn't be enough to give up work forever but not having a mortgage would would give the option for one of us to go part-time/be SAHP in the future/retrain.

Oh and DP could finally buy a PS4

Ofcourse 40K is not a bad income if you are mortgage free. School fees holidays become far more affordable.

I'd pay off the mortgage, but a new car (nothing flash - and only because our current one is 12 years old and needs replacing anyway). I'd also book a nice holiday for my family (my dad's 70th and my parents 45th wedding anniversary are in August, so we'd go and celebrate those).

I'd keep working (I like my job and spent ages getting the necessary professional qualifications). I might drop to part time though.

We'd be very comfortable and be able to lead a nice life so long as we kept working.

Insert, the interest would be income so yes, it would be taxed - no NI to pay though.

A million pounds is easily frittered away. Or, you could live a fairly modest lifestyle off the income. Or, you cold invest it wisely, wait until it has doubled then have a million to fritter away and another million nicely invested.

I inherited a significant sum. DH still works , I still drive my 5 year old Mondeo and we haven't moved, although we did pay off the mortgage. Our only "extravagance" has been to start DS at a private school a year before we had anticipated. What we have been able to do, for example, is put DH's entire bonus and a year's salary into his pension plan and use dividend payments to pay the bills for the duration.

I once read somewhere that a majority of people who unexpectedly come into significant sums of money end up blowing most of it within 3 years.

Sounds very sensible Taz.
If it's not too personal a question - were you generally well grounded in financial management or did you seek advice or a bit of both?
This couple took 18 months but 3 years is still nothing really. I just wonder if people aren't seeking out independent advice or if it's just being shortsighted or ? Other.

I know a lot of people who are terrible with money, having more of it certainly wouldn't solve the problem.

Yanbu, but as always, it all depends on your circumstances when you win it. It should safely see out a retired couple who had already paid off their mortgage.

With that sort of money I think I would

a) Buy a house outright. Poss around the £500k mark

b) Give money to immediate family. Poss £150k to parents, £75k to siblings etc.

So now I have £700k left. (2 siblings on my side, 2 on DH's side)

I would put £200k in trust for DS. I probably wouldn't tell him about it until I was sure he had developed a work ethic and some common sense (about 35? ) But it would be nice to think he could buy a house outright or set up a business or something.

With my remaining £500k I would buy a nice (but not stupid) car. Maybe £30k?

Go on a holiday with DS and DH. Maybe £5k and then do a big holiday abroad in a villa with all family. Maybe £10k on this.

So I have about £450k left.

Paying off all our debts would be another £20k.

So I have £430k left.

Not enough to support us for the rest of our lives, but given we are mortgage free we could perhaps work part time, or do something we love / care about but that pays less.

I would take investment advice on the £400k ish I have left and work part time.

I enjoyed spending that :)

Where I live 3 bed flats sell for about 1.2 million.

I don't own a property here for this reason.

I would therefore use the cash to buy a flat and possibly a parking space so I could get a car again. Both would benefit me enormously but not really change my lifestyle (I love my job, anyway) and I would inevitably end up saving my usual rent payments. Might upgrade the holidays a bit - flying business class would be nice!

Think bankrupt lottery winners etc miss the really big point - with that sort of money you can go 'up' massively in lifestyle (yacht trips etc) for a very short time OR stay in a moderate lifestyle 'band' for a very long time, they expect to do both. 1.8 mill would set me up for life, but you'd never see the difference (apart from me and DP looking FAR less stressed!)

I'd spend 350k on a very nice 3-bed house near us (near a city but not London obv) and a few associated treats, and spend the rest on 7 small but decent houses round here which even being pessimistic should give us more than the income we currently live on, and then there's the chance of building up a portfolio by borrowing on them and buying more, plus the capital would still be there. Nowhere near a millionaire's lifestyle granted, or even a GP's wage, but security and comfort for life. You can either have security OR flashiness.

It's something to do with if you're not used to a large amount of money and have a sum like that given to you.. you feel uncomfortable and subconsciously try to get rid of it as quick as possible.

Summick like that anyroad.. it was explained to me once.

It depends where you are and what you want. £1 million wouldn't buy a house near me. £1.8 million would. I'd probably spend £1.3 million on a house, £100k on car, holiday, friends and family and stick the rest in savings. But I wouldn't quit my job and nor would DH. But no mortgage would be a lovely place to be in.

I might consider buying some Boodles diamonds as the little treat.

I would buy a nice 5 bed house which would see the .8 gone, the remaining million would be invested in some sort of business to provide an income with a small amount frittered on holidas/ clothes etc

Bernard The money was originally from my great grandfather and has been handed down so I don't really view it as my money, if that makes sense. I've always known I would inherit it eventually and was brought up by a father whose idea of a brilliant Christmas present for a 15 year old was company shares in an obscure high risk venture. Before I became self employed I worked in the financial services industry for over 15 years and much of this time was spent aligned to various fund managers and I used to bore them silly with endless questions. I also have an MBA and my dissertation was stock market related.

Having said all that, I think what has the biggest impact is the fact that I don't like things . I don't want expensive cars or £1.5k handbags. I'm quite happy with what I had originally.

Where they the couple who were on Location Location? Didn't he want to be a rock star and ended up sinking loads of money into pursuing that as a career, without much success? Easy to see how you could get through £1 million doing that.

Where I am a million buys you a 4 bed Victorian terrace.

I have spent a lot time pondering this dilemma for when it happens to us . With £1m we could afford for one of us to give up work, (me, naturally), pay off the mortgage and cover both sets of school fees until the dc leave at 18. DH would carry on working to pay our day to day living expenses, which would be considerably cheaper without the childcare fees. I have it all planned out. But there would be no luxury handbags, sports cars or the like.