I think everyone has thought at one time or another about what they would do if they won the lottery. Typically when they do this, the amount of money is assumed to be more-or-less infinite. Anyone who has ever won a scratch-off ticket may appreciate my more pragmatic approach; orders of magnitude. Note: For you pedants out there, assume my numbers are net winnings. I don’t want to hear anyone giving me guff about “Well, but after taxes you’d only really have such-and-such.” Oh, and we’re also going to assume I can get a lump sum, so no griping about the the number and amount of actual payouts. If that’s what you came here for, just move right along.
So…without further ado:
Up to $1,000: Blow it. All. I’m not talking about going to Vegas or anything (although it’s not out of the question at the upper end of the spectrum, I suppose). I’d just have a generally extravagant month or so with my winnings. Maybe take The Wife out for some nice meals, treat the bar to a round of drinks, whatever.
$10,000: Pay off credit cards. Yeah, yeah, I know – “Boring!” – but this is my blog, and that is what I would do.
$100,000: Pay off credit cards, put the rest toward my mortgage. Again, rather boring…but hear me out. Putting that much loot toward my mortgage would allow me to re-finance – likely at a much lower interest rate – and drop my PMI, both of which would make my monthly payment so ridiculously low that I could either pay my house off early by putting down tons of extra dough toward the principal or spend my money almost as though I didn’t have a mortgage at all. The difference in my monthly amount of disposable income would be so drastic as to be absurd.
I though briefly about student loans here, but the fact of the matter is that the interest rate there is already so low and the term so much shorter that the mortgage clearly wins out.
$1,000,000: Ah, so we’ve come to the quintessential order of magnitude for cash. The one (most) folks probably think of when asked “What do you consider ‘a lot of money’?” The one people write songs about. This is an amount of money – again, for most folks – that is actually potentially lifestyle-changing.
For me, $1mm would probably mean moving. Not necessarily away from the city where I live, just to a nicer place in a better community. I’d take a look at the high-priced property in, say, urban renewal areas close to downtown and be able to say “Hey, I can afford one of those now.” With this amount of money I could buy it with cash, have no worries about how I was going to pay two mortgages while trying to sell my old place, and maybe upgrade the car, to boot. The rest – and there damn well would be a “rest” – would get dropped into savings. No reason to go completely bonkers.
Note: This is the point where I give myself a funny look as if to say “You have no idea what you’re talking about, dude. Maybe you’d do the house thing, but you’re no good at this ‘savings’ thing of which you speak. You’d find a way to blow the rest of it.” Well, I’m probably right about me, but the above is what I’d like to think I’d do.
$10,000,000: Okay, now we’re talking actual life-changing amounts of money. With just about any reasonable level of management, this kind of cash can easily support a couple for their entire respective lives. $200K/year for 50 years, not including interest. Even a lower-end savings account is going to give you an APY of around 1% ($100K/year) and I have a feeling if you walk into a bank with $10mm cash you’re going to get some “special treatment”, to speak nothing of other higher-yield investments. Hell, I could buy my entire immediate family and mebbe a coupla close friends houses – nice houses – and still be able to quit my job. Forever.
In all reality, I doubt I would be able to quit having some kind of a job long-term; I’d probably drive myself nuts. However, this kind of money would allow me the opportunity to pick-and-choose what I want to do (and where I want to do it) without having to worry about paying the bills. Maybe I would go back to school. Maybe I’d start my own business. Tough to say.
$100,000,000+: …and now we’ve reached the point where it may as well be infinity. 100 years on $1mm/year (again, not including substantial interest yield). I know it’s a bit of a cop-out, but while I have lesser amounts relatively well-planned-out my mind just kind of boggles at this kinda cash and I end up thinking “Hell, I’d buy two of everything and then have ice cream.” Buy a yacht. Mebbe a helicopter to land on the yacht. Fill a room full of $20 bills and roll around in it like Scrooge McDuck. Et cetera.
Okay, that’s probably a sufficiently long post that nobody will read past the first few sentences. Zero pictures, too – bonus! At least I provided a few fun links so the Bloggy Gods won’t smite me too hard, I hope. Mebbe some day I’ll come up with a nifty diagram and do a redux.
tl;dr summary: I’d do super-boring shit with just about any amount of lottery winnings up to (and including) $10mm. I’d go all MC Hammer once I hit $100mm.