If you had £2 million, would you still work full time?

[Summerlovin99]

You obtained the money through early inheritance. You are married, have two very young children and your house is already mortgage free. And if you wouldn't work full time, what would you do with your time?

I would work. My view of inheritance is that it is to be passed on again on your own death, so by all means use it to secure a place to live, start a business or enhance your career or use it to educate, in the broadest sense, the next generation or have it as a safety net in case the risks you take in life don't pay off, but don't take your foot off the gas.

Probably stay in my current job, but bump my pension up to the maximum contribution, and work less overtime, and obviously retire much earlier than expected.

2 million doesn’t buy much in the way of property here, so to have my dream home I would probably still have to work 😬. I think I would need closer to 5 million to have a life style where I wouldn’t need or want to work.

You'd have to really love your job to blow all the money on a house that ties you into carrying working when you don't need to.

It should be possible to invest the money to at least keep up with inflation. I've read that investing the money wisely and drawing 4% pa means that the money will never run out, although you can probably set a drawdown rate that means it should run out by the time you're 90 or whatever.

4% of £2M is £80k, so plenty for a good standard of living when you have no housing costs, but like I said before, not enough for private school, luxury holidays, expensive cars and a designer shopping habit

Or you’d have to be a Londoner. I couldn’t buy my own house for £2 million. So if I started from scratch with £2 million it would mean downsizing to a much smaller house with nothing left over (or moving quite a way out of London).

Typically yield would be 3%, at 4% you’d be higher risk bracket.

I'd probably work part-time. Probably volunteer as well.

@Summerlovin99 I think you want to give up work but your inner dilemma comes from how hard the ‘gifters’ worked to leave you that money. I can only assume it’s parents. Ask yourself, if it were possible to have had your parents around more when you were younger, less stressed by life with no money issues etc would it have improved your childhood? If the answer is yes and your happy to do it then go for it!

I really love my job but no way. I've done 40 years in the NHS with another 7 to go.
I'd leave, get myself a big house by the sea and do whatever I want.

I’d invest 1 million in stocks, between 500-700k on a house, and the rest to be use as and when on vehicles, holidays etc. So yes, I’d still work but probably part time.

@TatianaBis

You'd have to really love your job to blow all the money on a house that ties you into carrying working when you don't need to.

It should be possible to invest the money to at least keep up with inflation. I've read that investing the money wisely and drawing 4% pa means that the money will never run out, although you can probably set a drawdown rate that means it should run out by the time you're 90 or whatever.

4% of £2M is £80k, so plenty for a good standard of living when you have no housing costs, but like I said before, not enough for private school, luxury holidays, expensive cars and a designer shopping habit

Or you’d have to be a Londoner. I couldn’t buy my own house for £2 million. So if I started from scratch with £2 million it would mean downsizing to a much smaller house with nothing left over (or moving quite a way out of London).

Typically yield would be 3%, at 4% you’d be higher risk bracket.

The scenario is £2mil with no mortgage so you already have your London house

@Summerlovin99

Also would you have elements of guilt if you didn't work full time after watching the people you inherited from, work extremely extremely hard to create such wealth and pass on to you

When I inherited money from my dad it had far less to do with hard work than a life time of shrewd investment. His retirement was almost as long as his working life!

Unless you do something that improves the quality of other people’s lives, I can’t see anything inherently good or moral about holding down a job. The world’s certainly no better a place for my 44 years of work.

@Soontobe60

Imagine someone who is, say 30, and is mortgage free with a 2m inheritance. I expect they hope to live for another 50 years. Even without a mortgage they probably want an annual income of 30k taken from their 2m. Given an inflation rate of 5% annually, that means in year 2 they need 31.5k, year 3 33.073, year 4 34.728k and so on. By year 10 it’ll be over 45k. By year 50, they would need over 344k to live on. Their 2m will have run out well before that though.

This needs some adjustment. First, the average annual inflation rate is under 1.8%. Which means in Year 50 it would be 72k to live on.

Also, this is assuming the OP touches the capital, which she shouldn't. It should be invested and the interest used as income. If she wanted to live modestly, she could live on the interest for the rest of her life (though it might get tighter at the end, at which point she could touch the capital).

That said, OP, the longer you can have the money sitting in the bank and generating compound interest without touching the interest or the capital, the better.

So, if you have a 5% interest rate, leaving the money alone for 10 years should generate about another £1.25 million, without any additional contributions. This would mean that you could 'retire' in your early-mid 40s with £3.25 million, which would up the interest from around £100k to around £162k per year, which is a big change in lifestyle.

The extra money could, for instance, fund your children's university with no debt for them. If you have two in uni at once, you're looking at about £40k/year, minimum, for fees and room/board. On an income of £100k, that might be a pinch; on an income of £162k, it really isn't.

I know these sound like astronomical sums. And it also doesn't touch on the moral/ethical/intellectual questions. Or personal questions, like do you hate your job. But in terms of sheer math, I'd get a good financial manager, stay on my salary for another 10 years (maybe switch to part time if I had to, touching as little of the inheritance as possible), let the interest accrue, and then re-evaluate in a decade.

You could put the money in a high interest account and work FT for another say 10 years (interest rate at 5% would be around £100k a year interest alone, that's another million, half each for the kids) and then go PT or retire depending on your age. Maybe set up your own business in something that interests you. This certainly opens up lots of opportunities for you.

I'd work part time and volunteer a day or two per week to a cause close to my heart.

I think if I had a book inside me I'd possibly do that instead though.

It depends on your lifestyle, how old you are and what you wish to achieve for you and any children. Maybe you have elderly parents that might need care but who don't have much money.
It's a tricky one.
At my stage of life and circumstances, I'd leave work as I'd feel guilty keeping a job that someone else might need much more than me. I'm also not easily bored so could happily potter around and do a bit of volunteering.

I would buy 4 buy to let flats at £450k each, which would each bring in around £1600-1900 a month in my area, and live off that

Or maybe buy 3 to keep and use the remainder to flip flats and have that as my job

Even post-tax and allowing for voids and repairs, that will provide a monthly income equivalent to a £120k salary, and the capital is untouched if needed for something else down the track

Fuck no!! I'd take great delight in telling work to shove the job up there arses

Id work part time and then retire at 65 instead of 68/never 😂

TatianaBis

2 million will only yield around 60k per year.

Only 60k? Try living of 12k per year?
Only on mumsnet would you read that comment, where nearly every person earns over 100k.

Why are you asking?

I stopped paid work at about 48 as DH was earning a lot and we didn't need my relatively low salary. I did a lot of volunteer work and retrained as a psychotherapist. I went to uni for the first time at age 50 and got an MSc. I've done lots of cookery and art courses and also indulged my passion for theatre and travel. It's great.

Yep, but I'm only working one more year after this, so worth the time, and I'm completely invested in this role, and want to finish it out.

I'd give half to my DC, another third invested for my 2 grandchildren, then invest the rest to make our retirement more comfortable - that would be wonderful. But also sad, because of how it came.

I would work until 55. And my and DH would go part time.

I would go part time, and i would not feel guilty.

The scenario is £2mil with no mortgage so you already have your London house

My house is already mortgage free at £3 million, which rather skews the point of the OP. Hence the hypothetical.

Even if factoring that in the yield on £2 million is 60k which isn’t enough for me to stop work.

@bakingdemon

There's a book I want to write, so I'd do that.

Me too!