one MILLLION dollars...

[Payman]

Yup

Groceries - 1K

Booze - 20K

You'd be lucky to have 5g's left in your pocket.

Hookers.

[FlatBlackCaddy]

Hookers.

I figured 2K worth of booze would turn just about any women into a hooker, so that cost was rolled into the booze budget(it works better that way when it comes time to file my taxes).

[Payman]

I figured 2K worth of booze would turn just about any women into a hooker, so that cost was rolled into the booze budget(it works better that way when it comes time to file my taxes).

No, because then you can claim them as employees. They'll clean the house, mix drinks and make sammiches too.

[FlatBlackCaddy]

No, because then you can claim them as employees. They'll clean the house, mix drinks and make sammiches too.

Employees... Hmmm.

I always filed them as services rendered.

I suppose she does technically spend enough time with her head in the toilet to legally qualify as a house keeper for IRS purposes.

[Rupert]

a high estimate of 5k for furniture? That's gonna be one cheaply decorated house!

Small house (yeah, high estimate for the house, too), used furniture. Craigslist is your friend.

[Payman]

Small house (yeah, high estimate for the house, too), used furniture. Craigslist is your friend.

Ugh. Used furniture? With a million bucks in the bank? No, IKEA is your friend. :-0

[Rupert]

It's that way at work.  1MM = 1*1000*1000. 

Uh, k is 1000...

k = kilo = 1000
M = mega = 1,000,000

M*M would be T, or tera, which is 10¹². Unless the 1 in 1MM stands for $0.001...

[Rupert]

Ugh. Used furniture? With a million bucks in the bank? No, IKEA is your friend. :-0

Ew, IKEA sucks. Do I look like a dorm living college student to you? Used furniture has more character.

OK, maybe $10k for furniture. Why not?

[Payman]

Ew, IKEA sucks. Do I look like a dorm living college student to you? Used furniture has more character.

OK, maybe $10k for furniture. Why not?

Yes, rubbing your cheek into someone else's spooge stain is much better than paying a few hundred bucks for a new sofa. 

[TBR]

Funding my remaining two years of school would require ~$80k; I'd spend ~$15k on a new Focus SES Golf 2-door (worth the extra $600 and the loss of a few gadgets; $15k is pretty ambitious though with MSRP over $20k with a sunroof and upgraded wheels); I'd probably buy a few odds and ends (new tv, a couple of camera lenses, etc) and everything else would go into the bank (figure $900k). Once I had a stable career I'd used $250-300k to buy a nice but small home (plus furniture) and then save the rest for when I am bored of the corporate world and want to go out on my own.

[Rupert]

Yes, rubbing your cheek into someone else's spooge stain is much better than paying a few hundred bucks for a new sofa. 

Rule 1 of used furniture: Don't buy from college students, unless you don't mind ^.

[sportyaccordy]

Damn this presents an interesting opportunity. I would go one of two ways.

Way one- Move to Tejas, buy a modest home near Dallas (250K), a 997 C2s for myself (60K), E39 wagon for the GF (20K), Save + invest 570K, use the remaining 100K to take a year or two off to chill & travel. Man having a house paid off would be so boss. With my current salary..... man I could prob put away 30K a year. I'd be fucking rich.

Other way I would go... invest like 900K of the money, basically "retire" in Ghana. Get a late model diesel Benz and provide engineering support for my dad's projects there. Only problem with that would be what to do with the gf. Maybe I could buy her a house or co-op or something and we could shuttle back and forth between Ghana and the US. That's actually not a bad plan either, and I could free myself from the US eventual collapse.

[S204STi]

Decent $200,000 house in town, STI, Tacoma, Street Triple, PRS electric guitar, Breedlove acoustic, Baldwin piano, Gibson mandolin, nice recording and music gear, put wife and I through school to pursue our goals with that, invest the rest.

[Eye of the Tiger]

I'll take the cash.

[Raza]

I'd move to Philly, find a nice apartment (Around $1200 a month plus parking).  Since I'd lose the Jetta, I'd replace it with an R56 Mini Cooper JCW (used, in red with white stripes and white roof, or gray with black stripes and black roof, or black with white stripes and white roof, roughly $25K) and get a 996 Turbo Cabriolet (roughly 80K), 2002 Range Rover (10K), and a Triumph Thruxton (9K).

That's 124K.  I'll put the rest away. 

[Vinsanity]

I'd move to Philly, find a nice apartment (Around $1200 a month plus parking).  Since I'd lose the Jetta, I'd replace it with an R56 Mini Cooper JCW (used, in red with white stripes and white roof, or gray with black stripes and black roof, or black with white stripes and white roof, roughly $25K) and get a 996 Turbo Cabriolet (roughly 80K), 2002 Range Rover (10K), and a Triumph Thruxton (9K).

That's 124K.  I'll put the rest away. 

that's a lot of parking spots to lease

[Raza]

that's a lot of parking spots to lease

It's really only two.  The Rangie would likely stay at my parents' house, as I wouldn't need it often (the Mini and 911 are going to be more than practical enough 99% of the time) and they would be able to get some more use out of it.  The Triumph and the Mini could share the same spot.  I assume it'll be around $400 a month to park them (200 per spot is about average in Philly, I believe, if not a little high), and they may charge a small fee for keeping the bike and the Mini in the same spot.

[Vinsanity]

Man having a house paid off would be so boss.

I thought the same thing until I realized that just the annual interest you earn would be enough to finance a decent mortgage. Not to mention the tax deduction you could take from the mortgage interest you pay.

[sportyaccordy]

I thought the same thing until I realized that just the annual interest you earn would be enough to finance a decent mortgage. Not to mention the tax deduction you could take from the mortgage interest you pay.

Why put the money you make from interest into a home when you could just pocket + reinvest that? 10 years at 5%, you make back 60+% of your money before Uncle Sam takes his cut, and I don't think you pay tax until you cash out. I'd rather take my risks with that and pay lower property taxes on a more humble home than live in a McMansion.

[Vinsanity]

I'm not necessarily talking about moving into a McMansion. Let's look at 2 scenarios:

Scenario 1: put down $100k toward a home, and use investment earnings to finance a $300k mortgage
investment earnings: $75,000/yr @ 8%
mortgage principal+int: $1600/mo = $19,200/yr
net remaining: $55,800/yr

Scenario 2: buy $400k home with cash on hand and invest the remainder
investment earnings: $50,000/yr @ 8%
mortgage principal+int: $0
net remaining: $50,000/yr

you come out slightly on top if you finance a mortgage with the interest and investment earnings, and that's before taking the tax deduction into consideration.

[TBR]

I'm not necessarily talking about moving into a McMansion. Let's look at 2 scenarios:

Scenario 1: put down $100k toward a home, and use investment earnings to finance a $300k mortgage
investment earnings: $75,000/yr @ 8%
mortgage principal+int: $1600/mo = $19,200/yr
net remaining: $55,800/yr

Scenario 2: buy $400k home with cash on hand and invest the remainder
investment earnings: $50,000/yr @ 8%
mortgage principal+int: $0
net remaining: $50,000/yr

you come out slightly on top if you finance a mortgage with the interest and investment earnings, and that's before taking the tax deduction into consideration.

It'd be worth $6000/year to me to have the peace of mind of not having a mortgage.

[sportyaccordy]

I'm not necessarily talking about moving into a McMansion. Let's look at 2 scenarios:

Scenario 1: put down $100k toward a home, and use investment earnings to finance a $300k mortgage
investment earnings: $75,000/yr @ 8%
mortgage principal+int: $1600/mo = $19,200/yr
net remaining: $55,800/yr

Scenario 2: buy $400k home with cash on hand and invest the remainder
investment earnings: $50,000/yr @ 8%
mortgage principal+int: $0
net remaining: $50,000/yr

you come out slightly on top if you finance a mortgage with the interest and investment earnings, and that's before taking the tax deduction into consideration.

8% annual return is pretty optimistic, no? Esp in this economy. Ur plan does make sense though. I would just get as short a loan term as possible...

[Vinsanity]

8% annual return is pretty optimistic, no? Esp in this economy. Ur plan does make sense though. I would just get as short a loan term as possible...

In this economy, it does seem quite ambitious, but remember that the S&P 500 has averaged about an 8% annual return since it started: http://en.wikipedia.org/wiki/Standard_%26_Poor%27s_500#Total_Annual_Returns_.28b.29

[Lebowski]

Not much would change, lifestyle wise.

[Lebowski]

If I was in my 20's I might agree with you. But this is my retirement plan

The rainy day liquidity is more important the older you are, not less.

[Payman]

The rainy day liquidity is more important the older you are, not less.

How so?
And don't forget, no mortgage or debt of any kind... $10,000/mo income.

[Minpin]

How so?
And don't forget, no mortgage or debt of any kind... $10,000/mo income.

When young you have years of working ahead of you. When old you are about to retire, and not having any cash saved is silly.


I just hope you think you need more than 25k to retire on IRL...

[Lebowski]

How so?
And don't forget, no mortgage or debt of any kind... $10,000/mo income.

Shit breaks.  Things go wrong.  You get sick, etc.  You've got an awful lot of assets in your scenario that could require repairs, and at the minimum will require significant upkeep (maintenance, property taxes, insurance payments, etc).  You've also got a house to furnish, etc.

The $10k/mo income is great, but doesn't really help if something big comes up today.  Unless you want to borrow ... which defeats the whole purpose of being "debt free".

You need to have liquid cash available for unexpected contingencies, and the older you get (and more assets you have) the more important this becomes.

[The Pirate]

I would purchase:

2003 Toyota Tacoma 4x4
1998 BMW M3 sedan
AP1 S2000

That's ~$45K worth of vehicles. 

I'd buy a small house just across the border in Vermont (Something like this).  Figure between $5k and $10K to furnish the house, but closer to $5K, as I have no issues with used items for some stuff.

So that's around $245K.

I'd take another $80K and keep it between a checkings and a savings account, to have a decent amount of money immediately liquid.

That leaves $675K.  I'd pay off my student loans and set money aside for the year of schooling that I have left.  That leaves more than $655K, which would be put into an investment portfolio (on which I would consult with a financial advisor).

[Payman]

When young you have years of working ahead of you. When old you are about to retire, and not having any cash saved is silly.


I just hope you think you need more than 25k to retire on IRL...

Again, did you miss the groceries and booze part? And I have absolutely no clue. Please tell me why I can't retire on $25,000.