I greatly enjoy my little secret life. We live on a modest street where no one knows about my Mr. 1500 alter-ego. My neighbors would soil their pants if they knew that we have investments worth north of a million dollars. However at least two neighbors have suspicions. I’ll call them Neighbor 1 and Neighbor 2.
Neighbor 1
A couple months back, out of nowhere, Neighbor 1 asked us if we were multi-millionaires. It was my turn to soil my pants. How on earth did she suspect this? I play everything close to the belt, but it turns out that Mrs. 1500 is a little more chatty and let the early retirement cat out of the money bag.
I am not thrilled with this. I asked Mrs. 1500 why she told anyone and her response was that ‘they would have found out anyway when I quit my job.’ My plan all along was to stay elusive. On the rare occasion that someone noticed me on my bike on a Wednesday morning and questioned it, I would have said that the nature of my job allows me to work when I want. That’s sort of true, right? It just so happens that I did all of my work in the first 15 years of my working life.
Neighbor 2
I had this conversation with another neighbor a couple months ago. Again, it came out of the blue:
- Neighbor: So, I hear you’re retiring soon?
- Me: What, huh!!!? How do you know that?!?!?!?
- Neighbor: Well, Mrs. 1500 told Katy and Katy told me.
Katy is another neighbor who warned us on more than one occasion that she is incapable of keeping a secret. So now, I have to assume that the entire neighborhood knows about our future FI life.
Back to Neighbor 1
In reality, Neighbor 1 has no idea what to think of us. While she suspects we may be multi-millionaires, she also suspects that we’re poor. She looks curious and confused when she sees me working on cars or (gasp!) mowing the lawn. Her family has a lawn and house cleaning service, so why would someone with more money not live at least as richly as they do?
I love it that she has idea what to think of us. I’ll play this little game for as long as I can.
The difference
Of course, the difference between us and her is the way we view money.
She is defined by money. It rules her.
I define money. It is nothing more than a tool for me to rule my life.
If someone asks what I’d do with a million dollars, the evil Mr. 1500 who dwells deep down inside wants to put on a cocky smile and say this:
Been there, done that. ***yawn*** What else you got?
What I actually say is this:
No matter how much money I have, my life wouldn’t change. If I came into $10,000,000 tomorrow, I wouldn’t move. I wouldn’t trade in my car. I wouldn’t get a new phone. I’ve reached my level of Enough and I’m perfectly content.
However, Neighbor 1 is the exact opposite. Every increase in income leads to a lifestyle change. Her husband works his ass off and just got promoted. It took about two weeks for a “For Sale” sign to sprout in their yard. Our little street suddenly isn’t good enough.
Does money define you?
So now I ask you Reader, what does money mean to you?
- How would you deal with a $10,000,000 inheritance?
- Is money a means to buy stuff like cars or clothes?
- Or, is money a tool that you prefer to put to work to make more money?
Think long and hard about your relationship with money because it’s critical to your long term well being. If you let money change and dictate your behavior, those dollars are a parasite controlling you. It’s always better to be in a position of power.
Use money to gain control over your life. Put those dollars to work for you. They will free you.
And in the meantime, keep those nosy neighbors guessing.
And something else: One of my favorite financial writers in the world, Morgan Housel, just had a son. Morgan’s advice to him is wonderful.
Money used to control our lives because we didn’t have a plan for it and like your Neighbor #1 when we used to get a raise we would increase lifestyle. Once we took control of it, it did become a tool, a means to achieve the important things in our lives. The stress associated to money was washed away. We don’t ever want to go back to those feelings.
I’m sure there are some interesting conversations when Neighbor 1, 2 and so on get together and discuss the 1500’s. Keep’em guessing.
Brian @DebtDiscipline recently posted…Credit Report Check Up
Money stress is the worst, isn’t it?
Yeah, we are a mystery to the neighbors. Every once in a while, I’ll throw out a bone like a Buffett reference. I have a feeling these sail right over their heads though…
We have historically been pretty disciplined when it comes to our money. We don’t normally let lifestyle inflation affect us because we have realized early that things aren’t what matters. I have seen people like your neighbor #1 and that lifestyle just feels exhausting. I’d rather enjoy life with less stuff than stress myself out trying to get more.
Thias @It Pays Dividends recently posted…Weekly Dividend Payout #13 – Avoid the False Hustle Trap
Exactly. Less is more. Much more.
How would you deal with a $10,000,000 inheritance?
I would try to keep it hidden from everybody but my wife. Only one thing would change immediately, I would go on part time for some time and later move into early retirement. I want to spent even more time with my family and have time to sell most of my stuff.
Move? Yes. After the retirement we would move to a cheaper place. My current flat would be sold to harvest the crazy prices that are currently developing in Germany. Hello to Mr. Landlord – he can take care of maintenance from now on.
New car? I would keep my current car, but would get the best Honda NSX available (Yes, I am also very fond of this. Looks of a Ferrari but Japanese built quality and reliability.), since I would have the money to keep this car in great condition.
– Is money a means to buy stuff like cars or clothes?
For me it is means to buy back my time.
– Or, is money a tool that you prefer to put to work to make more money?
Definitely YES, I just love to invest into ETF and dividend stocks and see the dividends coming in. I try to reach the goal that EEE set with: Do not spend money before it is re-earned! (“Sorry, my love, but we can not fill up the NSX yet, Coca -Cola is paying a day late this quarter.”)
NXX! Love it! If you get the $10,000,000 first, I’m flying over to Germany to drive yours on the Autobahn.
Deal! (Let’s hope CC is paying in time that quarter!)
Those are easy questions! Probably because I think about it too much. First I’d deposit 90% into Vanguard and keep 10% cash. Then I’d give away all my crap in my little apartment. Buy a nice travel backpack and hit the road. I’d travel until I got homesick, maybe it would be 3 months, 6 months, or 6 years. Then I’d come home and visit friends and family all over the US in my RV/trailer that I would buy. Once I was bored of RV living, I’d buy a modest house and “settle” down. Maybe create a blog about my travels. Coach youth teams. Create a business. Mow my lawn and my neighbors’. Who knows. But I know that once I croak, that pile of cash will definitely be big enough to help lots of people out.
Fervent Finance recently posted…Moved to Manhattan to Make More, Save More, and Speed Up FI
Nice! I love the travel idea and during the summer when the girls are out of school, I’d be doing the same thing.
Also, can you move next door so I don’t have to mow my lawn?
Great post as always Mr.1500. I’m very much like you in that I don’t want those around me in “the real world” to know that I have lots of cash socked away and plans to retire early. At one point I made an off hand (almost joking) comment about it to my Mom, and even she looked at me sideways. The whole idea is just so foreign to 99% of the people in our society.
What to do with $10M? I like to think I’d invest 90% of it in index funds, not tell anyone save my wife, and quit work immediately. Then I’d take an epic trip of a lifetime before settling back into a quiet routine where I just do whatever projects, work, or fun things I want to. Sooo…pretty much the same plan as now…just accelerated. And maybe business class tickets on the trip! 🙂
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“The whole idea is just so foreign to 99% of the people in our society.”
Only 99%? 🙂
Although I blog with anonymity, I am a bit more chatty with those that are close to me about money. About earning. About investing. About long time financial goals, and how we plan to get there.
What usually starts out as an uncomfortable conversation for most (when talking about money) becomes comfortable for them after a while. They start to become interested and ask questions.
The coolest thing I have witnessed is people slowly making changes in their lives. Sometimes it is as simple as upping the contribution to their 401K, paying off their credit cards so they can start saving. Asking about ways to earn extra money.
I constantly tell people that if they are willing to live like most won’t for a few years, they will have the privileged to live like most can’t for the rest of their lives.
Not being of the super frugal type like the 1500’s and others in the community (although I still enjoy the writing), I always present people with two ways to attack the whole “live below your means.”
The most touted way to live below your means is to cut expenses as low as possible and learn to live a simpler life. Or my favorite is to expand your means by earning more income each and every year. Yes, in the beginning you have to watch you expenses a bit more closely, but at some point you will hit critical mass, and you won’t help but be able to save 50% or more of your income.
To me the law of 50/50 makes the most sense to aim for when it comes to money management. Spend 50% guilt free as long as you save 50% (no extremity here). It’s a very balanced approach. And for many more palpable, and the fact that it does allow for some lifestyle inflation if so desired doesn’t hurt as well.
There is nothing wrong with getting enjoyment from spending your heard earned money as long as it is balanced with the same amount of effort to save and invest.
Over time you will likely come to enjoy saving/investing a bit more than spending. It’s a natural progression when you get to this stage.
Dominic @ Gen Y Finance Guy recently posted…Freedom Fighter Interview #17 – Selina @ Financial Buddha
That’s awesome that you’ve been able to influence some folks to make positive changes. How awesome does that feel?
“There is nothing wrong with getting enjoyment from spending your heard earned money as long as it is balanced with the same amount of effort to save and invest.”
I have two thoughts on this:
1) As long as you’re well adjusted and doing it for intrinsic means rather than showing off for others, go for it.
2) Everything is relative. To most of the world, my lifestyle would seem extravagant. Find your happiness and stick to it. As long as you understand that genuine, long term happiness and contentment doesn’t come from stuff, it’s all good.
I love it when I get that confused look. My co-workers have a good feeling that I have a decent net worth. They were shocked when I accidentally let it slip out that I paid cash for my used car. What…you didn’t finance it??!! They probably think I’m a cheapskate when I don’t spend money on things that they do…(home cleaning service, extravagant gifts on holidays, etc). Money doesn’t define me…but I’ll have to admit, I would probably have some things I can think of getting if I came into $10,000,000!
Andrew@LivingRichCheaply recently posted…Life, Liberty and the Pursuit of Financial Freedom
It’s funny how the rest of the world lives, isn’t it? My mom, who was about 50 when she said it, bragged that her and my dad had $25,000 saved up for retirement. I nearly choked.
Another time, I told someone I had $25,000 in a certain companies stock. They looked at me and questioned it like I was friggin’ Warren Buffett.
Really people, really?!?
I let my 401k balance slip into a discussion with my boss one time, and the look on his face was priceless. Of course, he eats out for every meal, owns an older house that was in poor condition and is being renovated by others and has a wife with poor financial habits.
Doesn’t effect me in anyway due to the nature of my job, he has no control over my pay/nor would he want to let me go.
If I got a $10,000,000 inheritance, I’d shake everyone’s hand at work, tell them it’s been great and kick off our Fully Funded Lifestyle Change as I walked out the door. We’d invest almost all of it, and honestly I can’t think of anything I would want to buy, except for a house that is NOT in Houston. 🙂 I’d tell no one else and when we relocated we’d be much like your family.
We would be living frugally still, but meanwhile sitting on piles of $$. We’d travel more, and that sort of thing, but we’d still be doing VRBO or camping, and we’d get some more international travel on our schedule.
I used to be defined by money, as I grew up poor and thought that defined success. “He with the most toys wins” sort of philosophy. Now I don’t want all those toys. I might get a modest john boat or something for fishing, but I like fishing from my kayak and I don’t like all the clutter buying all that crap leads to. 🙂 Even with something I’d use, means a boat needs a trailer, then insurance, then a hitch to tow the trailer, then somewhere to store it when it isn’t in the water… See, lot of headache and clutter. Never mind, I’ll keep my kayak. 🙂
Mr. SSC recently posted…“Our Next Life” Series – The SSC’s
Love it! Stick with that kayak and move to somewhere near water! Stuff just usually creates the need for more stuff.
If I had the $10,000,000, I’d be out the door too.
How would you deal with a $10,000,000 inheritance?
– Pay off mortgage, figure out what to do with life, give family money, travel, invest
Is money a means to buy stuff like cars or clothes?
– No, it’s not
Or, is money a tool that you prefer to put to work to make more money?
– I prefer to put it to work
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If you have any trouble figuring it out, you can just give it all to me!
I think about money a lot. I don’t really stress about it much because we too, leave well below our means. Things that do stress me out is when my checking drops below a certain amount and when our monthly cashflow is negative (This isn’t including automatic savings though). We have had a few months of negative cash flow because of the house renovations, so I gotta keep reminding myself that it is for a specific reason. Its not like we are just blowing it on big screen tv’s and expensive nights on the town.
If I came into $1M, my lifestyle wouldn’t change. If I came into $10M, it definitely would. My wife and I would take a year off from work and travel the world. I’d go back to school to get my PhD. I’d start an after school/summer kids tutoring program.
Home remodeling, I know how that goes. Argh.
What would you get a PhD in?
I’d get my PhD in Chemistry (either organic or medicinal). I want to go back but selfishly, I think about the lost income and lost retirement saving for the 3-6 years I’d be back at school; because there is no way I could work full time and work on a PhD concurrently. I suppose the future earnings potential would make up for that but I haven’t done the math. I am in no rush though, so I will go back eventually when I am ready. Looking back at my undergrad, I realized I rushed through it and went too young. I should have taken a gap year and grown up a little bit more. I’m won’t make that mistake again.
Interesting. I was a Chemistry and Biology major. I enjoyed organic chemistry very much, but I don’t think I’d want to go back for more formal school.
I wonder how different the experience would be? I put a lot of pressure on myself in college because I thought it was the key to earning good money. It was fun, but there was always that self-imposed pressure. However, if you’re just doing it for the love of education, perhaps it would be, dare I say, enjoyable?
I’ve always thought that if I came into a huge amount of money (like a 10mil inheritance), I would set up a charitable fund with the money and make it my “job” to give that money away. I’d spend my days meeting with scrappy startup humanitarian efforts and cool non-profits that want to save the world, and partner with them.
Lifestyle wise, things would stay the same. We really don’t want to upgrade anything in our lives.
This may be the best answer yet! How awesome would that job be?
I’d buy a motorcycle. you?
🙂
You got me! Since I wouldn’t have my job anymore, I’d definitely get a motorcycle! Probably the electric one though, not the 919. I’d buy one for you too.
Thanks, you are the best. 🙂
Well, I’m glad your wife is excited about retiring! I have a hard time keeping my yap shut sometimes too with close friends, but only because I’m trying to get them to discuss the subject of money in general (very taboo for some reason).
I’m with you though – a large sum of money really wouldn’t change much for me except to accelerate the retirement plan so I could quit the regular career earlier than planned. Other than that, it would be the same old… after maybe a quick celebration in Vegas! 😉
— Jim
RouteToRetire recently posted…The Rental Property Investment Chase [Part 1]
Why the hell is money so taboo? Parents unwillingness to discuss finances is probably a big part of why so many people are lost!
If I get the $10,000,000, I’ll buy you a cruise vacation.
Sounds good to me! 🙂
RouteToRetire recently posted…The Rental Property Investment Chase [Part 1]
Since my wife and I are currently working towards FI, our lives would certainly change if we came into a $10M inheritance. We would FIRE and create a sustainable life that we enjoy. Our current goal is to FIRE and travel the world for at least a few years, while spending some time back in the states each year visiting family and friends. With a large inheritance, we would probably just live a little more lavishly and would probably purchase a home or two in the states (maybe one near family and one where we really want to live…like on the beach) so that we still had a place to go home to once in a while. We would definitely be able to live off of a very low withdrawal rate.
Logan @ Millionaires in Ten recently posted…September 2015 Financial Update
Oooh, I love the water. I’ll volunteer to cook and help clean if you invite me ot your inaugural party at the beach place!
Maybe if we had $10M in the market, I could convince Rob to take a few weeks off of grad school for a vacation. I’m not counting on this though. We also might pay someone else to do the bathrooms. We got a smaller windfall last year and neither of these happened though, so I’m probably lying on both accounts.
Rob is a dedicated man. If I was him and not close to finishing, I may never go back.
Hmmm, need help with those bathrooms? Carpentourism! After I quit…
Any inheritance might cause an increase in lifestyle by not more than 4% of the inheritance of course :-). Note that lifestyle might include giving or something but I see no reason not to spend a responsible bit more, esp on experiences and connections, if the moneys there. 400k/year (4% of 10MM) wouldn’t be my style but I could enjoy another 30-40 before I’d be out of utility I think.
I’m mostly commenting to say the truth will set you free wrt disclosure once you quit. Or you know live a closeted life where most interactions are cautious and fearful. Being stark on purpose – I’m cautious sometimes but only where I fear people will infer weird perspersonality traits if they knew, otherwise (99% of time) I’m straight up and the conversations are fascinating and frequently insightful.
Hmm, you have me thinking. So, in my case as in yours, more money would lead to an exaggeration of our current lives. I’d surely travel more and find more time to bike. If we continue with that thought, more money is an awesome thing as long as you’re in a good place to begin with…
If I get a $10,000,000 inheritance, her are some things I’d do:
1. Donate $1,000,000 to a charity of my choice.
2. Break the remainder into two piles.
3. Invest the first pile ($4.5 million) for living expenses
4. Invest the second pile ($4.5 million) for yearly donations.
5. Stay the same lifestyle. Maybe re-consider about this whole “job” thing.
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Regarding #1, may I suggest the 1500 Days Travel Fund?
Really though, sounds like your priorities are in order. My job would end exactly 2 weeks from the time I learned of my new wealth.
Heh. I hope you said “why would you think that” (deflecting) rather than “how do you know that” (confirming). The latter lets the cat quite out of the bag. Consider getting or updating your umbrella insurance policy …. :-b
It was clear that she already knew, so there was no way to deflect it. She still has no idea of our egg size though. Oh, and I have one more good story:
Katy, the neighbor with the big mouth asked us once if we were millionaires. At the time, our investment accounts were at something like $995,000. So, Mrs. 1500 put on the her stunned face and said, “No, of course not!”
I let the cat out of the bag on accident. This neighbor can push my buttons, and she had made some sort of comment about something and I said that Mr. 1500 was retiring in a few years. I can’t remember what it was, but I have regretted that comment ever since. Sorry honey!
YOU RUINED MY LIFE! Just kidding! Maybe! 🙂 🙂 🙂
Hey Mr. 1500, I clicked on your link in this post to re-read the old article about the secret millionaires on your street. Any updates on the SeaCaptain? Did he sell his house after all and set sail? Or is he still walking to the store to pick up ramen noodles?
The Sea Captain is long gone! As far as I know, he’s cruising the Bahamas now in his sailboat.
Some of our neighbors know about my blog and that’s fine. They haven’t asked me about our net worth or anything like that. I don’t want money to define me either, but we probably would make some changes if there is a $10M inheritance in the picture. Mrs. RB40 probably would quit her job earlier than her target date of 2020. I’d probably loosen up a bit on our monthly expenses. $10M is a lot of money and it would give us a lot of breathing room.
Joe recently posted…Is Contentment The Enemy of Progress?
Our neighbors are far nosier than yours…
Money used to rule me because I was in debt. Now that my loans are gone I’m team make-money-work-for-you! I must admit, with a 10,000,000 windfall I would do some crazy travel, probably to the tune of $40,000 for a year of travel. I’d pay off some friends and families debts, I’d buy a house, I’d donate a chunk to Planned Parenthood and then I’d invest the rest. I think even after all my spending I’d be looking at investing about $7,500,000.
Crazy travel would be cool. How awesome would it be to hit the road with no end date or end place? Just wander until you don’t feel like wandering any more…
My daughter (20 y.o.) and I have this conversation often.
Me? I’d still keep it simple. I’d finish renovating the house but not much else would change. Certainly, the neighbours would have no idea I’d come into a heap of money.
My daughter? Wants an Astin Martin! Ha ha ha!!!
Age and stage, I guess!
diane @smartmoneysimplelife recently posted…In Search of Simplicity: How to Start Living a Simple Lifestyle
Aston Martin! Tell her to go for an NSX instead! Cheaper to buy and cheaper to maintain.
Yeah… but does it sound as good? 🙂
Crazy thing is, there’s nowhere to drive a car like that the way it should be driven: fast!
Not too hard to see where she gets her obsession… But, I’d just rent one for the day.
diane @smartmoneysimplelife recently posted…In Search of Simplicity: How to Start Living a Simple Lifestyle
I love cars, but I’ve never had an expensive one. Like you inferred, I’d probably just drive it fast, get speeding tickets and Mrs. 1500 would eventually have to bail me out. I like my freedom.
Thats what track days are for 😛
Actually you can get on track relatively cheaply, any old miata will do, if you want to look into low cost racing, 24 hours of LeMons (the racing series for $500 cars) is the way to go.
https://www.24hoursoflemons.com/
Interesting questions. I think that, in some respects, when you are in debt or attempting to come to FI you are defined by money. I mean the money is specifically restricting you to a larger goal. Now, of course, you define the goal, but debt especially really places the shackles on you. Therefore, I would say, at the moment, I am defined by money. I do extra tasks for money (so I can pay off debt and ironically not be defined by it). I write a personal finance blog and thus somewhat money defines who I am and what I am doing.
In terms of the questions:
How would you deal with a $10,000,000 inheritance? I would do a couple of things: 1) Pay off all debts, including my in-laws. 2) I would put that money to work (e.g. investing); 3) I would give to charity; 4) I would have some fun. And fun for me is travel. I don’t think I would buy a new car (although I might buy a nicer used one) or a bigger house or the like because then I feel obligated to take care of it.
Is money a means to buy stuff like cars or clothes? Money, for me, is a means to do the things I love (travel, golf, sporting events, etc). I prefer experiences over stuff ANYDAY of the week.
Or, is money a tool that you prefer to put to work to make more money? I use it is as a tool, but it is a means to a larger end. Also, if I were to have children I want to make sure that they have a legacy that they can use to further their dreams. I think of John Adams when I write this (and considering this is what I study it is ironic). John Adams writing to his wife Abigail stated,
“The science of government it is my duty to study, more than all other sciences; the arts of legislation and administration and negotiation ought to take the place of, indeed exclude, in a manner, all other arts. I must study politics and war, that our sons may have liberty to study mathematics and philosophy. Our sons ought to study mathematics and philosophy, geography, natural history and naval architecture, navigation, commerce and agriculture in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry and porcelain.”
Jason recently posted…Financial Tip Friday: Dollar Cost Averaging and Why You Need to Do it
I know almost nothing about John Adams, but that is a neat quote. I need more time…
Where would you travel to and for how long?
Well if i got $10M I would say by by to the job and travel around/live to find some place warmer to call home base. Invest the majority, travel, give some to kids but enjoy a modest life as I always have.
Funny thing is I recently got a high 6 figure windfall but still plan to work for 4 more years, live in the same small home and drive a 12 year old car.
Nice, so you’re almost there! Keep that car going and sail off into the sunset before the decade is up! I thoroughly approve!
Well, if I inherited 10 million I would help out many of my loved ones.
Too, there wouldn’t be a need for plan B! 🙂
Just don’t tell them how much you’re worth! Danger Will Robinson, danger!
Haha I seem to be so much more ‘middle class’ than you and most other PF bloggers! Inheriting $10M would definitely change my life! I would buy a house, which would be both a lifestyle upgrade and also making the money work for us (at a slow pace). I would move to my forever city. The safe withdrawal rate on $10M is way, way more yearly income than we’ve ever had so we could easily keep growing the money and vastly upgrade our lifestyles if we wanted to (though I’m sure we would keep many aspects the same). The first thing I would do is spring for a high quality financial advisor!
High quality but no fee ( insurance salesman) I hope
Sorry but I said that wrong you want a fee only adviser.
Yes, fee only!
It is so easy to invest by yourself these days though too. I’d even do it with $10,000,000. I sure as hell would pay for a good accountant though!
I have learned this past year that my husband and I can’t be bothered to rebalance. 🙂 So I think it might be worth it to pay for someone to manage things for us. Plus, we’d be getting all the advice and wouldn’t have to do a ton of research ourselves. They work with high net worth families all the time but it would be new to us of course!
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Of course fee only and reputed. I have one in mind already. 🙂
Emily @ evolvingPF recently posted…Living in Someone Else’s Awesome
You don’t even have to rebalance! Betterment will do it all for you! Give your money to the robots!
Interesting question. If you were to ask me this question five years ago when I was in debt to my eye balls my answer would be different than today. I probably would be more concerned with spending the 10 million. But today after completing my journey to become consumer debt free my outlook on money has changed tremendously.
Now, I would tithe first and then the wife and I would let go of our careers and travel the world.
My wife would prefer to continue to live in our small home were we have raised our six kids which is fine with me but one thing we need to do is get the kitchen redone for we still have kitchen cabinets that are damaged to the point were they are missing doors and some the frames are broken. Some damage is from our kids and some is the way it was when we bought the foreclosed home. So that’s the only thing we would spend a bit on. The rest would get invested to produce income and grow.
As far as keeping my financial status secret- I do not. I have no problem talking to people about financial freedom and building wealth. If some one wants to learn I gladly help them. The reason being- it was a fellow co-worker who took the time to guide me and show me his own outcome from doing what he spoke of. He too showed me his net worth and that changed my life. I am not afraid nor fear my net worth and actually share it with the world (my website) to hopefully help others who are looking for their own way towards financial independence. I also keep my kids informed of the steps we take to build wealth and actually show them our finances and accounts. This way they too can learn. I especially love including them on the monthly budget numbers. The looks on their faces when they see what it takes to keep the household going is priceless.
“As far as keeping my financial status secret- I do not. I have no problem talking to people about financial freedom and building wealth. If some one wants to learn I gladly help them.”
I wish I had people I could talk to! I am very hesitant though because folks may take it the wrong way. I don’t want anyone to treat me different.
I’m also a bit hesitant about the wrong person finding out and slipping on my sidewalk or something silly like that.
If I knew it would do someone good, I’d tell them instantly. Maybe that’s why I do it here?
I love dreaming about things like this. I think, if I suddenly (magically) came into $10,000,000.00 (post-tax) I would:
1. Pay off my lingering 1-2% APR debts to simplify my life ($36,000)
2. Pay off my parent’s mortgage and debt ($50,000)
3. Pay off my medical resident sister’s student loans ($300,000)
Leaving me with me with $9,614,000 plus my current stash of $270,000 for a total of $9,884,000. I’d invest that in VSTAX (90%?) and a bond fund (10%?) and commit to living off of 1% of my portfolio each year and allow it to continue to grow while living a splash out life.
I’d quit my job and start travelling full time. This is my plan anyways, but at that asset level, I’d be able to upgrade the level of experience a bit. I think the biggest difference between my planned budget and the dream $10,000,000 budget would be spending on entertainment expenses particularly live theater/opera/classical music/ballet and sporting events. A trip to NYC with a Broadway Show every night (and not having to limit myself to shows offering a cheap lottery or rush tickets)! Good seats to the Lyric Opera in Chicago (instead of the cheap tickets where you can barely see the stage even with opera glasses)! Tickets to the Super Bowl! Glass seats to the Stanley Cup final series! I like gaming the system and travel hacking a bit too much to stop trying to minimize expenses and maximize value, but I love the idea of being able to spend on enjoyable experiences without limit beyond my annual budget of 1%.
Then, I guess it would be time to do some estate planning and identify what I would want to do with my stash at the end of my days. A trust fund for future nieces/nephews? Donations to charities I care about? Endowing a professorship at my alma mater?
Eliza! Sounds like you’ve thought about this a WHOLE lot!
And Superbowl?? Chicago? I hope you’re not holding out for a Bears Superbowl… Sigh…
Yeah. It is one of my go-to thought experiments when I’m bored out of my mind in meetings.
I am a Pittsburgh fan through and through. Although, sadly, a Steelers Super Bowl win doesn’t seem any more likely than a Bears Super Bowl win this year.
Of course money changes behavior, and frankly I think it’s more than a little bit naive and idealistic to think it wouldn’t or shouldn’t. You really wouldn’t move or travel more or give more or change ANYTHING if you got a $10M inheritance tomorrow? I know I would. I’d quit my job (which I like) and go about setting up a charitable foundation. Before doing that I might start a business, depending on my age and risk appetite upon receipt of the windfall.
And I sure as s*** wouldn’t feel guilty for upgrading my house and travel budget either, if that’s what my husband and I felt like doing. There’s nothing wrong with that. I could live a lot cheaper than I do now, but I could also live a lot more luxuriously well before getting into wasteful or guilt-ridden territory.
Putting money “to work to make more money” is all well and good, but at a certain point when you have more than you could ever spend – well into the 7 figures – then it’s time to start thinking about changing the world and changing lives. My goal is not to die with the biggest balance sheet.
Elizabeth recently posted…Why You Shouldn’t Want to Retire
My thought is that my current life would be exaggerated. I really wouldn’t move because I like my neighborhood. My cars are fine too.
However, I’d spend more time doing what I love. I would definitely travel more and work less (bye-bye job!). I’d bike every day instead of the 2 or 3 times a week now. I’d write more…
Oh, I also meant to say that I really enjoy dropping comments into conversation about extreme early retirement. I used to be very secretive about my net worth and savings habits in my 20s when it was REALLY weird to have any money. But now that I’m married and well into my 30s I’ve loosened up and almost have an urge to spread awareness about the possibility of early retirement.
I find myself casually dropping into conversation my husband’s any my “discussions” about retiring in 6 or 8 years. When people’s jaws drop and they inevitably ask if I’m serious, I turn the tables and give them a confused look. Of course, I explain. I mean, “it’s all about expenses.” I almost consider it a public service to broach the topic and plant the seed (especially with people who I know earn enough to make it a reality in short order).
Elizabeth recently posted…Why You Shouldn’t Want to Retire
I love talking about it too! I find that with most people though, their eyes glaze over when I start yapping about money. Others become confused. Some become angry. Very few react positively or seem to care at all. Sigh…
If I came into a large sum of money I’d do what we already have planned. Which is to pay off our student loans, pay off our van loan, pay cash for a house, rip out any grass at said house then turn the lawn into edible landscaping and start a makerspace in our community.
“…rip out any grass at said house then turn the lawn into edible landscaping”
We are in the process of doing this very thing. Grass is a waste of water and space.
10 Million… That’s a windfall and a half! I think AJ and I would be able to buy a house on a nice piece of land. Enough space for privacy, a metal workshop and a huge garden! The house would be smaller but having space is important to the both of us. I would be able to walk away from work, AJ would leave work too. We both would want to take some more college classes. He votes swordsmithing. AJ would want to keep using his metallurgy knowledge and have a hobby forge. I would take some more environmental science and conservation classes and probably get in on that swordsmithing class too. We would certainly travel more, right now we both have the two week limit. We’d be able to spend more time with our scattered families and be able to go on more adventure trips like the one we’re on in Hawaii right now!
I imagine that still wouldn’t come close to denting the $10,000,000 pile in any significant way. If we tripled our spending habits we still wouldn’t hit a 2% withdrawal rate. The way we live now would have a big upgrade because we wouldn’t need to save for financial independence anymore, we’d be there! The investment pile would grow and I’d want to start giving it away. I’d want to be that angel donor that could support conservation groups with supplies and equipment they needed to keep doing their work or even a trust fund to keep them secure. Heck, with that much money maybe I could buy a parcel of land and donate it to a protected status reserve or park!
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“He votes swordsmithing. AJ would want to keep using his metallurgy knowledge and have a hobby forge.”
I had no idea this was a thing! Pretty awesome!
“Heck, with that much money maybe I could buy a parcel of land and donate it to a protected status reserve or park!”
Wow, I love this! I’d do it with a couple conditions: Well behaved mountain biking would be allowed. Having a beer (again, see that well behaved part of the previous condition) after the ride would be OK.
– How would you deal with a $10,000,000 inheritance?
Lets see:
Start enjoying the financial retirement right away
Invest virtually all of it
Buy one nice toy (Tesla S85D / Lotus Exige)
Keep a modest life and live within the 4% rule, using the difference between the two to help family where necessary, donate and travel a lot!
-Is money a means to buy stuff like cars or clothes?
Among others…..see above
-Or, is money a tool that you prefer to put to work to make more money?
Definitely! See point one and two 😉
Team CF recently posted…How much do you need to become financially independent in the Netherlands?
Teslas are pretty awesome. Driving that thing was an epiphany for me. No more hydrocarbon burning vehicles for me…
I always said I would never want to win the lottery, the pressure of what to do with all that money would be too much stress. However I guess you could make it easy on yourself as long as others didn’t find out. I would invest a large percentage, give some away and live a fine life on the dividends. I’d probably do some business stuff to keep me busy but would keep it small scale in case it started to feel like real work again 🙂
I’m no where near your net worth but would be interested to hear what certain people would say/think if they found out we had significant savings tucked away when they are living paycheck to paycheck despite earning similar or larger incomes than we are.
theFIREstarter recently posted…my first two weeks – the highs and lows of semi-employment
Well, if you win, I’ll sent you my address so you can pass the money along! 🙂
“I’d probably do some business stuff to keep me busy but would keep it small scale in case it started to feel like real work again.”
Yeah, keeping busy with meaningful activity is an important part of life. Being able to choose that activity is key.
Great article – love the thinking behind this.. as for me I would rather undo the scenario and keep the person alive who would be so kind to give me the $10,000,000 inheritance. We have enough.
Nice.
Money is definitely a tool to make more money, but with an ammount that large, you can buy your freedom forever and buy some stupid shit too. I definitely would quit immediately and probably move abroad. Money would be invested, and would obviously more than sustain my spending with just the growth. I’m sure I’d end up buying a Ferrari since I’ve always loved them, maybe an NSX as a daily driver :). I think I’d finance them at 2% though to let my capital keep growing…and I could always buy used.
If i were Mr 1500 and won that much money. I’d buy ever house on the street whose neighbors annoy you and put a gate up.
I qoute: We are having a baby! I’m so glad we are financially responsible and have 7k saved up. 4 weeks after baby comes…. i’m so glad we saved up that money the short term disability payments can take a few months to come in.
Um hunny, you gotta long road ahead of you considering you can’t survive on just 1 income and it’s clear you want to be a stay at home mom.
That must add a bit of fun to your day looking around at your neighbors, knowing that you guys have a secret like that.
I’m sure it also feels a bit sad knowing your neighbors will probably never know the true freedom that comes with financial independence. That’s what we’re striving for also!
Keeping it on the down low seems so hard to do when it’s something you’re so interested in though! Once you make your end goal though, I’m sure the big reveal with be shocking to everyone! (assuming you tell them if they ask)
Seeking Saturdays recently posted…Travel Friends & Cheap Trips
I was really nervous when our friends/neighbors/colleagues started learning about the whole Frugalwoods/FI thing, but it hasn’t been too bad actually. Most folks are either mildly amused, confused, supportive, or in a few cases, also working towards FI! It’s been awesome to learn we have friends on the same path who were similarly so secretive about it that we had no idea. So fear not!
We definitely see money as something we control and deploy as we see fit. It doesn’t rule us–we’re in charge of it. And, our plan really wouldn’t change much at all if we suddenly had $10M. We’d still move to a homestead of the same size, we’d just have a lot more money to give away to charity. I suppose we would replace the 19-yr-old Frugalwoods-mobile, but only after she bites the dust (I love that minivan).
Mrs. Frugalwoods recently posted…Finding Peace In The Present Moment
90% gets invested, mostly index funds but maybe it is time for some Berkshire A shares!
10% for some projects:
move the house to renewable energy source (solar, geothermal), along with other fixes and upgrades (gold toilets from the Baker estate! Just kidding)
Travel! Travel! Travel! (Fly first class for long flights)
Charity – NPR, scholarship funds, animal welfare
Help some loved ones, maybe some strangers ( like folks that give $100 to some stranger)
Education – get some fun training, apprenticeships – like metalsmithing, pottery, carpentry/woodworking, glassmaking
Get some tools needed for cool education topics above
I hate that my husband is so secretive about our money. He doesn’t want me to tell anyone. I am like, why? Who cares if we going to retire early? I mean obviously we don’t want to ruin our jobs but why does it matter if our neighbors or friends know?? I feel like you are making Mrs. 1500 feel bad, and I hate that because my husband does that to me for “over-sharing.”
One time I borrowed my parent’s very fancy car ($130,000+) and it was sitting in my drive way. Apparently, it was the talk of the neighborhood. “Well, they can afford that because they don’t have kids.” Yada yada yada. I don’t care if they think I own that car or what they say about me. Why does it matter if they think we are millionaires? It doesn’t to me…but it does to my husband…and I really don’t understand that.
If I inherited $10 million, we would pay off our mortgages and have fun investing a significant chunk in stocks and real estate. Then I think I’d set up a nonprofit or charitable giving organization and use it support causes near to my heart. It would be awesome 🙂
Dee @ Color Me Frugal recently posted…Retirement Savings by State- How’s Your State Doing?
I love being in control of money and the fact that is doesn’t control us. I think that is one of the most powerful things living below your means gives you.
I love this game! If I had $10mil I would move but that is the plan anyways because we live in a duplex. But I would buy a small (~1200 sq ft) single family home in town. I don’t need or want a lot of space but I would make our home comfortable. I would also buy another investment property (or two) and quit my job and do some part time work doing something meaningful that I enjoy or volunteer. Then I would travel (slow travel) at least once per year.
Mrs. SimplyFinanciallyFree recently posted…DIY Swiffers
Slow travel; we share the same dream! How great would it be to immerse yourself in a place for a month? I can’t wait for that!
Like you, I do my best to keep our financial situation secret. It’s amazing how knowing our net worth affects how even long-time friends treat us. Many people I think feel some weird and destructive combination of jealousy, envy, bafflement, and vexation when they learn that someone they previously considered a financial peer is actually much better off than they are. Of course, 9 times out of 10, they have no one to blame but themselves, and I think at some level they know what, which underlies the vexation part of their reaction.
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Good point Kurt! If I thought it would help or inspire them, I’d tell everyone in the world about our net worth. More likely than not, like you said, I expect that the results would be negative.
I would like to say that I’m always in the “I define what money means to me, it doesn’t define me” group however I know that that’s not always true. I still notice times where my ego is hugely tied to my net worth – although I’m happy to report that this is improving over time.
I wouldn’t inflate my lifestyle beyond where it is now. Sure, I may purchase that NSX for my partner and travel more – however we would be spending more on things that matter to us. I have become acutely aware of lifestyle elevation happening in our friends’ lives as they move up in their careers… And I can’t help but cringe at the idea of it.
Jaymee @ $mart Woman recently posted…Money Myth #2 – Student Loan is Good Debt
I love this. We are the same – very modest neighbourhood, and I’m sure our neighbours think we are unemployed. We even told one of them that we were renting (we own the house) as we didn’t want to draw any attention. I really wish it was more acceptable to talk about money though, then it wouldn’t be such a big deal. Oh, and we totally mow our own lawn – with a hand push mower – which I’m sure only adds to the extreme poverty look we put on!
Emma | Money Can Buy Me Happiness recently posted…The Whirlwind Instant Declutter
So you are experiencing something I had no choice but to experience. A few years ago, it became public knowledge that I sold my previous personal finance blog for a large sum. So that meant all of my friends knew. All of my neighbors knew.
99.9999% of our relationships did not change. The ones that did, well, if it got weird then we’d just see them less. The ones that let money define them were the ones that got weird because now the dynamic changed. The ones that didn’t, things kept on going as usual. I thought it would change more relationships and was happy when it didn’t.
That said, I still would’ve liked to have kept things more of a secret. I don’t think that money defines us but you never know who does.
Jim Wang recently posted…What is your One Money Goal?
Yikes. However, I’m glad that most in your circle took it well. I can see us losing friends if they ever knew about our income. My family would start “depending” on me a lot more too which I would NOT enjoy.
Only you would truly know but you might be surprised… it also might be a good reason to re-evaluate your friends. 🙂
Jim Wang recently posted…What is your One Money Goal?
Interesting…
You know, friends are something that I struggle with. Sometimes, it’s hard for me to find common ground. I don’t keep up with sports or TV . On top of that, my social skills could probably use some polish.
On the other hand, when I’m with my own tribe, I do perfectly fine. There was a Mr. Money Mustache meetup in our town on Friday and I lost my voice from talking.
So, perhaps the problem isn’t me after all; perhaps I’m just hanging out with the wrong crowd…
The folks you choose to hang out with should energize you. 🙂
So here’s something interesting to ponder, most of our friends are proximity based. They’re neighbors, co-workers, etc – we didn’t pick them, they became friends because of proximity.
The internet makes it possible for you to make friends with folks who have similar interests, passions, goals, etc.
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