If I Had A Million Dollars

I noticed this post over on Couple Money (after I read my own guest post there titled Find Deals on Diapers ) and thought I’d get in on this action. I of course have given some hard thought about what I’d do with a million dollars and since my mind tonight was swimming with some very deep subjects  that I couldn’t sort out or decide on which one to write about, I thought I’d make Friday laid back like it should be. Here’s the breakdown:

No more Debt! (-$310,000)

Obviously the very first thing I’d do with my million is pay off my debt. We own two houses, one in which we live and one in Florida. Then I’d pay off my school loans entirely.

Yowsa. There goes a cool 1/3 of my million! But you know what? That’s still what the first chunk would go to and I wouldn’t regret it for a second. Debt is prison and I can’t wait to be free of all this debt even if it isn’t the dreaded consumer debt we all fear. Debt is debt.

That leaves close to $700,000 left over.

Necessary Lifestyle Inflation (-$35,000)

I wouldn’t necessarily call this lifestyle inflation in the tradition sense but the condition in which my family and I live, while optimal for saving money, isn’t always the most comfortable. There are repairs our home has needed for 5 years. There are things we’ve wanted to do to the home to just make it more livable for the same amount of time. It’s not even about the money sometimes, it’s about the time it would take for me personally to do some of this stuff and with money I could just pay someone else to manage other people to do it all for me 🙂

So I’d spend an estimated $35,000 in our current home getting it much more safe, liveable and comfortable. We’d put a pitched roof on the home since a flat room in Utah winters just really doesn’t make much sense. That would account for the bulk of that cost (I was loosely quoted $20,000). We’d redo the kitchen with tile and new cabinets, finish the final unfinished room and redo the driveway.

Business is Business (-$155,000)

There are some business ventures I’d really like to try out so with another $150,000 I’d open up a Subway. The franchise cost is only $12,000 and the rest would be used to secure a location. If I found something already vacant I could be up and running in no time. Subway is the most popular franchise in America right now and the most inexpensive to join when you consider royalties.

I’ve also got other ideas I’d like to put into action and money would make that possible. I’d put a couple thousand into AdRavage.com development (I can develop it myself but that takes time) and I’d also get some of my inventions manufactured/prototyped that have been bouncing around in my head for a few years.

That leaves us with half a million dollars.

Sit on that nest egg

With half a million remaining and lots of projects taking up my time, I’d sit on it for a bit. I’d put it in the highest yielding savings account I could find or throw part of it into an index fund. I may throw a few thousand here and there into stocks I fancy but at this point, with no debt, lots of fun projects, very few expenses (without mortgages, our expenses are only about 500 a month), I’d have the means to pretty much do whatever I wanted and live off any freelance jobs I felt like doing. There would most definitely be other business ventures I’d like to get involved in or start myself but until those come into view, I’d just enjoy life.

OK ok I’m not that selfish

I really would like to set up a charity, but not a charity of money. I’d set up something to help people find out what they really want to do, what they are really good at and teach them exactly how to get there and do that – all at no cost. Like, a Dream Academy “become who you want to be!”.

I would set up small funds for my kids education too, but nothing huge. I want my kids to have to work for what they get because I know how important that is. I’d do a match policy and match their income to a certain percentage or something until they were 18.

I know that probably sounds pretty boring, but honestly without our debts, I’d be happy. I’d be free and could just live out my life with my family working on whatever I felt like, whenever I felt like it.

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15 People have left comments on this post



» Retirement AdviceNo Gravatar said: { Jul 22, 2011 - 07:07:37 }

If I had a million dollars, my plan would be very similar to yours. I don’t have a mortgage to worry about, but student loans would be first on the list to pay off. I would also set aside at least half to a savings account for future use. But, while I’m dreaming, if I had the finances I would love to take a year just to travel. It may sound like I would spend, spend, spend while doing this, but I think that it can be done rather cheaply. The only thing stopping me now is not being able to take a year off from work.

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Jesse MichelsenNo Gravatar Reply:

Wouldn’t it be great to just be free? I work because I have to on account of my debt, but without that debt I’d be free to do whatever I wanted! Just thinking about it makes me excited. I’d travel the world too, no doubt about that, but I’d try and live off freelancing and odd jobs vs the million even if I was traveling.

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» Harri @ TotallyMoneyNo Gravatar said: { Jul 22, 2011 - 08:07:28 }

Clearing debts would definitely top my list of priorities too. It’s amazing how debt can drag you down. I’d use a great big chunk of the money to buy a property which I’d rent out.

Amazing how that one million gets swallowed up pretty quickly, isn’t it?!

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Jesse MichelsenNo Gravatar Reply:

I’d probably do some additional property investing as well, but on the commercial side or vacation homes, not the kind of rental I have now. Vacationers want to pay for their home because it’s fun to have, regular folks don’t like to pay their mortgage I’ve found 🙂

1M really isn’t enough any more is it, that’s why the target number for middle class to reture on now is like 2.6M..nuts.

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» Melissa @ BrokeTONo Gravatar said: { Jul 22, 2011 - 10:07:50 }

I really love your idea of not just showing your kids with things, just because you won a million dollars. Especially when it comes to their education. I totally agree about the value of working hard for things, and I feel like I came out of university so much better off than my friends whose parents paid their way entirely (I did have some help), and they just squandered the money, their time, took five or six years to graduate with a four-year degree and STILL have no idea how money works, so they’re racking up debt like crazy. I think your plan is great, and I’m sure your kids will appreciate it someday.

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Jesse MichelsenNo Gravatar Reply:

Thanks! After all, money even to the tune of 1M isn’t everything, kids have to learn to grow up! (sadly) Don’t get me started on the entitlement generation but I don’t want my kids to be dependents forever. I want them to be able to function in society, manage their own lives and pursue their own dreams! Without ever wanting, they won’t be able to dream. 🙂

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» AmandaNo Gravatar said: { Jul 22, 2011 - 12:07:23 }

Subway?? Come on, you know you want to open a Chick-fil-a! (they’re even closed on Sundays so you can still go to church!) 🙂

Oh and I’m pretty sure my husband could do your roof for a lot less. At least, I think so.

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Jesse MichelsenNo Gravatar Reply:

Well, Subway’s franchise fee is one of the lowest around at only $12,000 (whoops, my article had a misprint!) and their royalty fee is 8%.

Chik-fil-a beats that franchise fee at only $5,000 which is great, but their royalty fee is %50 net profits!! Plus they are very controlling about not only who gets approved but exactly how each and every store operates. If I’m owning a business, I’d want more control and more % of profit than that! Too bad though. They only approve close to 1% of applicants a year anyway, I’d probably never get in 🙂

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Jesse MichelsenNo Gravatar Reply:

Oh, and tell your husband he’s welcome to occupy our guest room any time in exchange for some construction work 🙂

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» BethyNo Gravatar said: { Jul 22, 2011 - 12:07:57 }

Love this, Jesse! I think my husband and I, after paying down debt, would try to buy a place in San Francisco. That’s definitely one of our dreams! One of these days we’ll be owners, not renters.

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Jesse MichelsenNo Gravatar Reply:

Thanks Bethy! If you asked my wife, she’s allocate about $300,000 to buy/build her dream home here in Utah. For San Fran it’d probably cost 3x that 🙂 but she’d still want it.

That would be another route to take too, fix up our current home after paying off the mortgage then rent it out and build something exactly how we want it.

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» JoeTaxpayerNo Gravatar said: { Jul 23, 2011 - 07:07:04 }

I like your list, Jesse. I’ve see the Million posts these past two weeks, and plan a “million dollar roundup” tomorrow (7/24/11).
As I replied to Lynn at Bucksome, I’m at a point where the whole amount gets put toward retirement. The mortgage has 6 years left, but I expect the stock market to return well above a post-tax 3% over these 6 years, no need to pay early.

Every so often, our regional lottery goes over $200M. Now that’s a number you can have some real fun dreaming about. Not a $1M lump sum, but about $5M/yr net. Of course it runs out in 20 years, so a bit of planning is in order. Spend half, save half each year? Would you be able to spend that much each and every year?

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» Selling ThetaNo Gravatar said: { Jul 25, 2011 - 04:07:09 }

On the Subway note, I work with a guy who knows everything about franchises (it’s his professional focus)… I’ve heard that Subways are the absolute worst franchises to own. Basically it relates to a couple of items including how close in proximity they are to each other (remember you’re not doing MCD volume), general management guidelines (be open for breakfast), and forced promotions.

Most franchisor’s essentially bought a job; if you try to outsource the management there is virtually no profit in them and plenty of risk through the personal guarantee of the lease agreements.

If you get a million bucks and want to run a quick service restaurant buy a Taco Bell…

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» EmmaNo Gravatar said: { Oct 23, 2012 - 08:10:10 }

You know – I recently wrote a post on this very topic: http://gamerindebt.co.uk/i-wanna-be-a-gillionaire/ Although I was a lot less decisive than you! Opening a subway is a genius idea!!

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» Adam @ Money BulldogNo Gravatar said: { Nov 22, 2013 - 02:11:00 }

I like to think I’d go the Warren Buffett way and keep things pretty modest. Too many people get rich quick only to blow it all and face bankruptcy a few years later.

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