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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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

113 replies

BernardlookImaprostituterobotf · 14/05/2014 17:00

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?

OP posts:
WyrdByrd · 15/05/2014 10:51

Pay off debts inc mortgage: £75k

Home improvements/DIY/furniture: £75k

New car: £10k max

Give my parents about £150k

£40k fun money

Invest the remaining £600k so I could reduce my hours/give up work.

A huge house and all the trappings would be lovely, but on that money I'd rather improve our current home and have a more relaxed lifestyle than a huge pile of bricks and mortar for the sake of it.

Melonbreath · 15/05/2014 11:44

Dammit. I've had to go out and buy a lottery ticket now

morethanpotatoprints · 15/05/2014 11:50

Its far more than I'll everhave at once, but I agree it isn't a fortune.
When I was a child, long before the lottery, if you won a million on the Pools, you were set for life.
You could give up work and live off the interest left from buying a huge house and ports car. It really was a huge amount of money.

YourMaNoBraBackOfMyCar · 15/05/2014 12:14

catgirl that is exactly how I would do it although I have an extra sibling, uncle and two cousins I'd want to help out. So it'd be more like 45 k each.

FraidyCat · 15/05/2014 12:37

Dammit. I've had to go out and buy a lottery ticket now

Buy a premium bond instead, that way you have a lottery ticket that can be used over and over indefinitely, and if you get tired of having it, you can get a refund.

Rochiana54 · 15/05/2014 12:58

It would definitely change our lifestyle. We would move to a nicer area and pay off whole mortgage - £350k.

I would work part time. Dh would stay in his job.

We would bless close family members.

We would invest.

We would save.

We would upgrade our car - £10k.

I would shop in Aldo, All Saints, Reiss, Whistles, Oasis, Warehouse instead of H & M $ New Look

Our dc would wear Gap, Monsoon, Next.

I would do my nails, attend hairdressers every month.

Our dc would do ballet/drama/play musical instrument/horseriding.

We would go to the theatre, eat out once a month.

We would have one long haul holiday a year plus afew short breaks.

Our life would be so comfortable. I realise that most of the things listed are very normal to some mnetters.

Renart · 15/05/2014 14:29

Hmm...
Pay off debts: £4k
Buy the cottage I currently rent: £150k.
Nice sports car: £6k
Nice sports car repair and maintenance fund: £5k
Tools and supplies to expand self-employed artist career: £5k
Just for fun, year's training to become a stage magician: £2k
Rainy day fund: £100k
Friends and family: £100k

Anyone want the rest? :)

letsgomaths · 15/05/2014 18:40

Big house + big car = big running costs.

Also, if you don't work, you need to find activities to fill the time. These cost money.

NeedsAsockamnesty · 16/05/2014 02:00

How many curly wurlys can you get for 1.8 mil?

Because in my imaginary life where I have no responsabilities,nobodies future to account for,no pressure that's what I would do.

My brother can have my house I will live in the shed like a hermit,growing my leg hair, eating curly wurlys whilst watching daytime tv on a black and white TV,occasionally if I'm feeling sociable I may open the door and yell either "looks like rain" or "it's turning out to be a fine day" then I shall pick my nose and go back inside.

Tortoiseonthehalfshell · 16/05/2014 02:41

I've also read the statistic about most lottery winners going bankrupt. I wonder if it's partly a gamblers' mentality - if you're the sort of person who buys lottery tickets, you're also the sort of person who doesn't think of money in 'real' terms, but in magic terms? I'm not putting that very well, but it's this idea of 'nothing we do now matters that much, because one day we'll make it big!'.

A close friend of mine is a lottery winner. Well, her now-ex partner was. Not sure how much, but several million.

They were both in blue-collar jobs, very modest income, she was a waitress and he worked as a gardener. When they won the money, they decided to have a baby and moved in together. Two years later, they split, she got some (less than half, but I'd guess about $AU2M?), he kept the rest - maybe $AU4M? I don't really know figures, they could easily be three times that tbh.

Three years on, she's doing very well. She went to a good accountant, invested in a diverse shares and property portfolio, from which she pays herself a modest income from the dividends but re-invests the surplus so her capital keeps growing, bought a small house for her and her daughter (2.5 bed in a middling suburb, near a train line to keep costs down!) and bought a small business to give herself ongoing employment. So she's employed, motivated, and secure. Because she was raised modestly herself, she's not extravagant; she has a cleaner, and nice clothes, and can afford things most single parents can't, like babysitting whenever she needs it, but her daughter goes to a state school with mine, she buys school uniform from K-Mart (Primark equiv) because they'll just get grubby and stained at this age anyway, she's very practical and lives well within her income.

HE, on the other hand, gave up his job and has never taken another one. He owns a 6-bed house on an acreage, in which he lives alone. He does things like buy, say, 15 statues for his garden, which just sit there. Between the no-job and the huge house, he got bored and lonely. So his once-modest pot habit escalated and now he's a meth user. Which means he's lost custody of their daughter, because he himself admitted that he was unfit to take care of her anymore, and then entered into huge court battles, so now there's also a restraining order.

He isn't through his money yet, but he will be. One of his ongoing expenditure items, and this kills me, is lottery tickets. Because magic dropped from the sky once, so why shouldn't it do so again? It's a really sad story, in fact.

Gennz · 16/05/2014 03:11

God that's really sad tortoise. Good on your friend though.

I don't think our life would change too dramatically if we won lotto. We would upgrade our house & get one a bit bigger with a pool, but it would still be quite similar to the one we have now (but mortgage free!). Ours cars might be a bit nicer and newer. We could afford to help out some family members a bit. DH and I could go part time at our jobs, or could keep going FT in the knowledge that we could retire at 40. Kids would go to the same schools that we plan to send them too now. We'd be able to travel more regularly than we currently do.

It certainly wouldn't be Cristal, maybachs, diamonds on your timepiece though.

NotYouNaanBread · 16/05/2014 08:01

I'd take 800k to buy a flat in New York, use the 1m to buy three houses in the city I live in here in England, rent them (and my own house) out so that's £1300 x 4 per month, which is just under 60k pa (after you take out letting agent fees), and move us & my business to NY. Healthy income, and the property is going up in value every year by about 9 - 10%.

shanefolan · 20/12/2014 17:21

''Yes was going to mention the interest. I read an article about them and the daily interest was £340 or £380 can't remember which. Of course you could live off that. I wouldn't buy a house outright I'd get a mortgage. It would have been more prudent to invest the money live off the interest never actually having touched a penny of the original sum''

Your plan is not as ''prudent'' as you think, firstly you have been misinformed that they acquire 340-380 pound a day on a million, that equates to nearly 125,000 annually which is way off for a million. In 2014, putting £1m in a high interest savings account paying 5pc would yield gross interest of £50,000 per year, or £38,889 after tax. Plus, if you have that sort of cash you'd want to avoid a mortgage to avoid the extra bank fees and been tied to life long debt, but more importantly to not touch a million and leave it in the bank and live of the interest for life and provide for your family when you die is a mere fantasy simply because inflation means that over time the million loses its value and you and yours lose out. Logically, the interest you are getting will like the original sum decrease in value also. Other posters have it right, your safest bet is to pay off your remaining own mortgage and debts [if you have either] and invest the rest on property [ideally a few modest houses if you can] in a desirable area with guaranteed rent potential like near a university say or urbanised area and rent them out. That way you have sustained rent income through your life and the money is tied up safely increasing in value without you been able to squander it.

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