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?

Back in the 90s, just after the lottery started there was someone on Radio 4 I think, who said that with a million pounds someone of 40 couldn't afford to stop work.

Their point was, that even with interest rates at 10% as they were at the time, the value of the capital has to be protected to keep on giving sufficient income.

So, invest it at, say 3%, gives £300k, £150k after tax, and then you have to put, say £100k, back in the pot to protect the spending power, and you're left with £50k.

Yes, it's a lot more than many people have as income, me included, but it's not exactly the amount of money that you can bath in champagne and stuff the consequences.

I hope they bought and kept some gold leopards and zebra print chaise lounge.

Bit daft isn't it! I've enjoyed planning what I'll do when 1.8m

Those saying that £1million isn't enough to give up work and just live off the interest for the rest of your life, clearly aren't as old as me . Believe me, I've done the maths in my daydreams head, many times over, and I wouldn't be going back into work

I think a million is a lot if you invest it properly and only spend the interest. they spent the capital. you can not finance an expensive house re running costs etc unless you have more money coming in.

Of course it's a lot of money. Their problem is that they failed to grasp the principle that once you have spent money, it's gone, usually on stuff that isn't worth anything like what you paid for it as soon as you've used it even once. Obviously their house isn't necessarily what this applies to, but the sports cars and other luxury goods represent money they had, not money they have.

I would buy a place of my own (not a big fancy house, just a standard 3 bed. If I stay down here (Hampshire) it is somewhat cheaper than London.
No car, I don't drive. I would spend a bit on clothes, shoes and a holiday. The rest would be kept aside for a rainly day.

If you wanted to push for maximum immediate income you could as a rule of thumb take 1% on top of index dividends, so an extra £10,000 initially.

Though on second thoughts that rule-of-thumb would be cutting things to fine with respect the world high-yield tracker I mentioned, as you'd be spending all the underlying earnings yield.

I suppose it depends how old you are when you receive the million - if you only have 20 years left of working life, you may want to quit. It probably wouldn't support 40 years of not working. For me, it would just be nice to be free of rent - I'd buy a property, but wouldn't expect it to be anything fancy.

(slightly depressed at the number of PPs who would immediately set up BTL empires).

WTF is an "investment handbag"?

backforgood me too! DH and I are both only a few years off retirement and we have a small mortgage left, so a million would do us very nicely thankyou! We could easily give up work, pay off the mortgage and have enough left to see us out, carefully invested.

Presumably the people in the original post were given/offered financial advice, but it sounded too boring for them and they thought they new better. Stupid, but don't most big lottery winners end up no happier than before their win?

If I won a million I would buy a bigger house. Not a mansion, just big enough so all 3 dc have their own bedroom, and maybe a playroom and study would be nice, say around £300k in my town. I would share some with all immediate family. So now we probs have about £500k left. I would bank it and keep working. Spend a bit here and there on a car, any work needing done to the new house and a nice holiday every year.

Aside from that, we would be careful to save it for an early retirement and uni funds etc for the kids.

Not that I have thought much about it or anything

£1 million invested at 5% interest = £1000 per week income.

£1 million invested at 2.5% interest = £500 per week income.

I think most people could get by, although you'd do better to have 10 kids and claim benefits.

SuperSophie if you know where to get 5% interest at the moment, please share

Don't ask me for investment advice.

My last client was Gary Barlow!

I'd live off the interest or invest in houses and live off that income. DH would not be allowed to give up work although I might let him work for himself or something.

I'm early 30s but could easily live a comfortable life off that amount of winnings without any additional work.

Easy peasy.
Spend the 800k on a house, spend the million or just under after fees on flats to rent out at say, 800 a month.
that would be £3200 a month before taxes.
One of us would have to work at least part time if we wanted the lavish life but could live on that.

Or blow the lot on a country estate and live off the garden, hold fairs and sales on the land, livery, run a shoot, rent out a field.

The first option is the most sensible but I would go for the second. I want to live in my own castle and have chickens and game of thrones parties and stuff. Much more fun.

A million would buy 6 smart little houses around here. Even allowing for repairs, voids, insurance etc, I reckon you would make a decent £38k or so minimum. With our own mortgage paid off, and £100k or so in the bank for a rainy day, I'd be happy with that.

Yanbu.

It's not that much these days.

They were stupid with it. A million is a lot of money just not enough to live a rock star life style. If I won a million I'd buy a sensible sized house so I wasn't over stretching myself in terms of council tax, heating and maintain ancestors of the house. I but a new car but not a flash one and I could afford to cut my hours.

I'd love to carry on working but with £1million in the bank. Without the stress of paying the mortgage and worrying about the pension and the children's education, I could work differently. Take a few risks, try a project or two., Ironically I might make more money. As things are, I play it pretty safe.

I would take longer, better holidays though. And buy as many books and CDs as I wanted. Oh, bliss.

If you're early 30s a mil would give you enough to not have a mortgage and not to have money worries for life.
But that assumes you carry on working and use the million for a house, cars, holidays and fun things.
I wouldn't want to be a landlord, but could quite happily invest in various projects.

I think this is where living in the North comes into its own. For a touch under £300k I could buy next door's house, pay off my mortgage and pay for the building work to knock the 2 houses into one. That would give me a 6 bedroom house with 2 bathrooms (bliss! No more dancing in the hall waiting for someone to get out of the bath!), a monster sized kitchen, a very nice sized living room, a dining room, a study and a playroom. That would of course also double the size of my garden as well. Another £100k to redecorate and furnish the new half of the house and jobs a good 'un.

That would still leave £1.4m. After setting aside enough for school and uni fees for the kids, I could still quite easily buy half a dozen 2-3 bed houses and do them up to rent out. The rental income would be around £3-4k a month before tax and fees so call it conservatively £2k a month. There would still be enough left over to front 2 years wages for a new employee in DP's business until their work paid for itself and allow him to drop from his current 70 hour week to a more civilised 35 hour week and leave a tidy sum to sit in the bank to cover emergencies.

Had I stayed in the south, I'd have managed a 4 bedroom house for us, a 2 bed to rent out and uni fees for the eldest two, no school fees for the youngest.