If I Had A Million Dollars...

**Jeronimo Mora** · 05-17-2012, 02:34 AM

More late night procrastinating shenanigans.

If you had a million dollars to frivolously spend on one, or a couple of objects, what would it be? This money was transferred to you from a wealthy relative you have never heard of from West Africa who recently passed away.

I would purchase my own rural town in Mexico, just because I can (probably).

**acidfrost** · 05-17-2012, 07:11 AM

Hmmmm hard question but that would probably be the non-original way for most RR peeps here:

Buy a huge ass house with a huge ass studio in it and produce my own album and then hire musicians to tour with me and pay everything with the money so I can say f-you to labels! lol

**bobbybovine** · 05-17-2012, 07:30 AM

I maybe the "boring" one here but I would throw it in an investment account. If you can make 10% annually (which isn't a stretch) that is a salary of $100,000 per year which would allow me to do the music thing and not worry about money. What a treat that would be!!

**Firedance** · 05-17-2012, 08:31 AM

Originally Posted by Jeronimo Mora

This money was transferred to you from a wealthy relative you have never heard of from West Africa who recently passed away.

Ya know I just knew I should have responded to those emails requesting bank details etc

I would:

1) Build a modest studio in a nice climate in a fairly remote location
2) Drink and eat lots
3) Drift off into oblivion

**brandondrury** · 05-17-2012, 09:50 AM

I'd want a $200k recording facility, $30k more in recording toys, $200k house with land that may attract bears, and then I'd like to live to lock myself out from the cash for a year and maybe live 2013 with $4,000 or so.

That sounds like the dream to me.

Brandon

**richiebee** · 05-17-2012, 09:54 AM

Lucky bastard... can't buy shit for $200k here.

Originally Posted by brandondrury

$200k house

**richiebee** · 05-17-2012, 10:01 AM

How much talent can you buy for a million bucks?

**Jeronimo Mora** · 05-20-2012, 12:11 AM

This asian family bought three houses next to me (all adjacent) for maybe 70-80k each. Granted, we live in a DISGUSTING neighborhood, but when this economy gets up and running, these guys are going to make BANK.

**garageband** · 05-20-2012, 04:38 AM

You knew someone was going to put it up so here it is:

**JayGee** · 05-20-2012, 05:17 AM

A pound of blow, and a bus full of high school cheerleaders.

**bobbybovine** · 05-20-2012, 07:15 PM

Originally Posted by JayGee

a bus full of high school cheerleaders.

Too whiny!! Just go for the porn stars!! They know what they are doing.

**bozmillar** · 05-21-2012, 10:28 AM

$1,000,000? Do we have to pay taxes on it? because that makes a pretty big difference. I'm going to assume it's under the table and I don't have to give any of it to the government.

1) Pay off the house. I'd wait at least a few years before moving to a new house, mostly because I just moved in a month ago and I can't stand the thought of moving again.

2) Set up college fund for kids (which would cover a modest tuition/books [not 50k/year] but still require them to have a part time job during the school year and full time job in summer).

3) Spend a couple thousand on music gear. Probably an edrum kit and a good orchestra sample library. I can't think of anything else I want. Maybe a better violin.

4) Run my A/C a couple degrees cooler in the summer.

5) Invest the rest.

$1,000,000 is a lot, but you can blow it fast if you just spend it on crap. You can easily spend that much money in the year and have nothing to show for it. It's not enough to let you quit your job and live a high standard of living, but it is enough to give you a huge fallback buffer and take financial risks that you wouldn't have been able to before. I'd keep my job, but without a house payment, I'd be racking up money a lot faster.

I'm pretty sure my lifestyle wouldn't change much at all. I'd just have a bigger security buffer, which to me is worth a lot more than a microphone.

**bobbybovine** · 05-21-2012, 10:43 AM

Originally Posted by bozmillar

$1,000,000? Do we have to pay taxes on it? because that makes a pretty big difference. I'm going to assume it's under the table and I don't have to give any of it to the government.

I forgot that you poor American bastards have to give up 40% right off the top. We only get taxed on the interest earned on that money here in Canada.

1) Pay off the house. I'd wait at least a few years before moving to a new house, mostly because I just moved in a month ago and I can't stand the thought of moving again.

You should think twice about this if you ever get in that position. Most mortgages are under 5% right now (well at least in Canada, mine is I think 3.9% or something). So by not paying off your mortgage and instead putting that lump sum into an investment account that can easily bring in 10%, and much higher. You are essentially making money (5% or more) on the banks money. The big boys call that leverage, why not use their own tactics against them?

$1,000,000 is a lot, but you can blow it fast if you just spend it on crap. You can easily spend that much money in the year and have nothing to show for it. It's not enough to let you quit your job and live a high standard of living, but it is enough to give you a huge fallback buffer and take financial risks that you wouldn't have been able to before. I'd keep my job, but without a house payment, I'd be racking up money a lot faster.

I'm pretty sure my lifestyle wouldn't change much at all. I'd just have a bigger security buffer, which to me is worth a lot more than a microphone.

You hit the nail on the head there. How many people thought that now all of a sudden they could get that Mercedes and a big truck, and a big house and throw parties for all their friends on yachts. Money can make you do funny things if you haven't planned it before hand.

**bozmillar** · 05-21-2012, 11:22 AM

Originally Posted by bobbybovine

You should think twice about this if you ever get in that position. Most mortgages are under 5% right now (well at least in Canada, mine is I think 3.9% or something). So by not paying off your mortgage and instead putting that lump sum into an investment account that can easily bring in 10%, and much higher. You are essentially making money (5% or more) on the banks money. The big boys call that leverage, why not use their own tactics against them?

I've put a lot (a tooooon) of thought into this in the past few weeks. For a while there, I was pretty convinced that paying off my mortgage faster was not a good idea, but I've changed my mind on that, and here's why:

Personal finances and business finances are different. Leverage is only good on a macro scale. If I own 20 houses at 3.875% (my current rate) and I'm renting them out for $400 more than the minimum payment+insurance, then I'm bringing in $8,000 a month. That should easily cover repairs plus a healthy buffer in case I have a month or two where one or more of the houses aren't filled. This is a pretty healthy sustainable way to grow, and as I grow, I can get more houses and make more money, etc. I can shuffle funds around to make up for losses.

But on a personal level, if I own a house and make $400 in rent more per month than I pay for the minimum payment, it's still plenty to cover repairs. But what happens when I go a couple months with no tenant? Then I'm losing $1.3k per month. 2 months of that, and I'm 3k in the hole. What happens if I lose my job and can't fill the house at the same time? It doesn't take long to drown when you have zero income and two house payments.

The guy with many houses can absorb it and survive and grow without problems. The guy with one house gets screwed. Big time.

It's like casinos. They have a bottomless pit of money. I don't. If I go in and play a game like blackjack (where the odds can be in my favor) the casino still makes money off the game in the long run. Why? because if I have $250 and lose $250, I have to go home. If the casino loses $250, he can keep playing. If it's a staring contest, the casino will always win, even if statistically, the odds are in my favor.

With personal finance, the statistical loss and the actual loss are very different. I can't look at an investment and say "I have a 35% chance of losing $3,000 and a 65% chance of gaining $3,000." If that was the case, the choice would be easy. But since I don't have a bottomless pit of money, that $3,000 loss is actually a lot larger than $3,000 because I have to start taking out loans to cover my other needs, and then I get into more debt and owe more money and if I can't come out of it quickly, that -$3,000 turns into me giving my house to the bank. Then you look at the equation and say "I have a 65% chance of gaining $3,000, a 20% chance of losing $3,000 and a 15% chance of losing $250,000," suddenly the choice isn't so obvious.

Mixing personal finance with business finance is a major reason you see so many foreclosures on the market today. People thought that the houses they were buying were good financial decisions, but didn't have the bottomless pit to backup the down times, because there are always down times. it doesn't scale linearly.

How you deal with your personal finances are what determine whether a down time means eating out less, or giving your house away.

**brandondrury** · 05-21-2012, 02:46 PM

That's the difference between 22 year old "bad asses" and 32 year old corpses. The 22 year old doesn't care about the bad times or dramatically underestimates the quantity and likelihood of them. The 32 year old is 10x more cautious. A few 22 year olds get lucky, don't die, and end up as "geniuses". Most 32 year olds just kind tread water. I think both mentalities are scary.

**bozmillar** · 05-21-2012, 03:10 PM

yeah, it all depends on what money means to you. For some people, money means more opportunity to make more money.

For me, money = stability. As long as I make enough to keep that stable status, then I don't see a need to add risk hoping to increase it by small amounts. I've seen enough people who make a lot of money who are in massive debt with little to show for it. I've also seen a lot of people who don't make a lot of money but manage to stretch it far.

I know a guy who owns 6 houses (lives in a big house and rents out 4 of them, has one as a backup house in case he loses his job). He doesn't owe any money on any of them. He makes a decent amount of money, but not a ton ($100k-$150k range). He said that one day someone told him to pay off his mortgage, so he did it religiously. The moment it was paid off, money just became a non-issue.

I have a brother who made 85k a year, living alone in a small apartment for a couple years. He just had to take out a load in order to buy a $13,000 car. Dumb. He should be buying a house with cash by now.

I know very few risk takers who end up on top. It happens, but far less often than the slow and steady types.

**bobbybovine** · 05-21-2012, 06:58 PM

I get totally what you are saying. You can never leave yourself without a backup. But this conversation was talking about winning a million dollars. That was the angle I was taking. If you have the buffer due to the Million or so in the bank then using leverage on everything makes that pile grow that much more. In either case you gotta be smart about it or you will end up in a worse position than you started with.

**Stan_Halen** · 05-21-2012, 08:37 PM

Originally Posted by JayGee

A pound of blow, and a bus full of high school cheerleaders.

Hey, it worked for John DeLorean!

**Stan_Halen** · 05-21-2012, 08:59 PM

Originally Posted by bobbybovine

I forgot that you poor American bastards have to give up 40% right off the top. We only get taxed on the interest earned on that money here in Canada.

True, but we generously donate those funds toward toppling vicious dictators and battling oppression worldwide. Of course, you guys save lots of baby seals from blunt-force trauma and all, so I guess it balances out.

Originally Posted by bobbybovine

Most mortgages are under 5% right now (well at least in Canada, mine is I think 3.9% or something). So by not paying off your mortgage and instead putting that lump sum into an investment account that can easily bring in 10%, and much higher. You are essentially making money (5% or more) on the banks money. The big boys call that leverage, why not use their own tactics against them?

Bob, this sounds like a speech by an investment salesmen, oh excuse me, I mean "certified financial planner". That pitch used to 'kind of' make sense over 4 years ago, but I'm not aware of many investments that have realistically come even close to that in a long time. They might convince you 'on paper' that you 'might' accomplish it, but as Mr. BigBucks is required to inform us in the U.S. - "past performance is no guarantee of success", and "you're results may vary"! All investment is a form of speculation, win or lose. Just ask JP Morgan!

Mark Gongloff: Jamie Dimon Complains More, As JPMorgan Chase Losses Eclipse $30 Billion

**bobbybovine** · 05-21-2012, 09:40 PM

Originally Posted by Stan_Halen

True, but we generously donate those funds toward toppling vicious dictators and battling oppression worldwide. Of course, you guys save lots of baby seals from blunt-force trauma and all, so I guess it balances out.

True enough, I don't know if we save any baby seals. I am pretty sure it is only Sir Paul McCartney that is into that. If you haven't had anything that came with genuine Saskatchewan Sealskin Bindings then you are missing out. (I wonder how many will actually know what I am talking about there)

Bob, this sounds like a speech by an investment salesmen, oh excuse me, I mean "certified financial planner". That pitch used to 'kind of' make sense over 4 years ago, but I'm not aware of many investments that have realistically come even close to that in a long time. They might convince you 'on paper' that you 'might' accomplish it, but as Mr. BigBucks is required to inform us in the U.S. - "past performance is no guarantee of success", and "you're results may vary"! All investment is a form of speculation, win or lose. Just ask JP Morgan!

Mark Gongloff: Jamie Dimon Complains More, As JPMorgan Chase Losses Eclipse $30 Billion

Oh man you couldn't be further from the truth. Fact is Up until about 5 years ago, I chose to know nothing about investments and when I saw my reports coming in at 2% to 3% because that is what my banks "certified financial planner" told me was a good rate I didn't question. Then a switch clicked in my brain and I though why am I letting these bozo's make the decisions so I started reading and reading. I would definitely not say I am a even modestly read on the subject but I know that once I took hold of my own investments and started to pay attention to them they have been doing better than I expected. Over the last 4 years my personal investments have averaged around 21% per year. (too bad the bank morons didn't advise me that their investments were going to let my savings go right down the drain so that 21% isn't on a lot of money) When I said 10% is achievable I was being pretty safe with that number. You are right, you can never predict but it is pretty easy to pick out a dog investment just by looking at a chart and its history for 5 minutes. It doesn't matter what investment you are in, when stuff like 911 happens you are fucked no matter where your money is.

**Stan_Halen** · 05-21-2012, 10:24 PM

Originally Posted by bobbybovine

Over the last 4 years my personal investments have averaged around 21% per year.

That's pretty spectacular I think, so congratulations on your financial finesse sir. I believe you should write a book on the topic, thereby increasing your net worth through book sales and royalties, maybe even lectures, seminars, and book signings. I know there are a bunch of American entrepreneurs milking that cow! ("How to get rich quick, after you buy my book and make me rich first") I guess my line of thinking was more toward the average of a large number of investors, and particularly those being spoon-fed by the CFP's, who get charged significant commissions and account maintenance fees, bringing even moderate returns to disappointing levels.

**bholst** · 05-21-2012, 10:26 PM

a million dollars? That would mean that I could finally pull in to the gas station and fill the tank all the way in my truck.

**TimSmith** · 05-21-2012, 10:29 PM

Buy a nice (not huge) Spanish type villa with pool and dedicated HT, somewhere in the Caribbean, probably Dominican Republic. And live a comfortable but not extravagant lifestyle.

**bobbybovine** · 05-22-2012, 05:36 AM

Originally Posted by Stan_Halen

That's pretty spectacular I think, so congratulations on your financial finesse sir. I believe you should write a book on the topic, thereby increasing your net worth through book sales and royalties, maybe even lectures, seminars, and book signings. I know there are a bunch of American entrepreneurs milking that cow! ("How to get rich quick, after you buy my book and make me rich first")

Writing a book is a great idea, about finance however might not be my cup of tea. I still haven't recouped my loses from pre 911. I am very pleased with my investments lately, I hope they continue. Maybe a book on milking a cow?

I guess my line of thinking was more toward the average of a large number of investors, and particularly those being spoon-fed by the CFP's, who get charged significant commissions and account maintenance fees, bringing even moderate returns to disappointing levels.

What is funny is every time I look at the list of investments to choose from, the one marked as "aggressive", where you should technically make the largest gains seem to be the worst. Most of your bank FP's will ask you do you want aggressive growth, and if you say yes they just dump your cash in any old aggressive fund. All of mine are in the "moderate" growth category and are destroying anything in the "aggressive" category that I have to choose from. That may change tomorrow but it is working right now

**kakeux** · 05-22-2012, 06:12 AM

with one million, I could buy a house where I live but I will still need a loan for it. This would be the 1st thing I would buy for me and my family. In my world I should use around 400k as a guarantee for the loan and this would allow me to buy a house around 1.2 million, which is the price for a basic house with almost no ground around (assuming I don't want to quit my current living area).

Then I will surely spend some in stupid recording gears and other stupid unneeded things.

Keep a part of it safe and travelling with the rest.

I have more ideas if I win 120 millions.