If a person has one million dollars closed up in a bank account and they are close to 40, is it possible to live your life without working?
2006-11-15 01:19:24 · 13 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
Yeah its more a matter of how you live. You can live on the interest of the 1 mil or you could blow it all. Thats one of the things that makes me so mad that I havent won the lotto, so many of these people win and then blow all the money. They dont stop and think and go to a financial planner. Invest, and live on the income you earn from the money not the money. You may not have a huge home or the best car in the world but if you dont want to work and can be happy with simple living then 1 mil should be fine! Good luck to you.
2006-11-15 01:23:33 · answer #1 · answered by workless 2 · 1⤊ 0⤋
If the taxes are paid on it then it's more than enough. Think about it if a person makes about $50,000 a year for thirty years then they would only make 1.5 million and when you subtract then taxes its down to one million and 50 thousand dollars (assuming that the tax rate is 30%, and that a person's raises are equivalent to inflation each year, i.e. cancel each other out). A million dollars is what most people earn in whole life time of working, plus the fact that you have it in a lump sum in the bank means you have better return on your money.
2006-11-15 01:36:35 · answer #2 · answered by M M 2 · 0⤊ 0⤋
That all depends on how much the money earns while it's invested, and how much you withdraw for living expenses.
$1,000,000 earning 7% will spin off $70,000 in interest a year. If you consistently withdraw less than that, you'll never ever go broke, and at age 80 you'll have nearly $5 million dollars in the account.
But if you increase your withdrawal by 3% each year, at age 80 there will be about $194,000 remaining, and the fund will be exhausted in less than 2 years.
All these predictions aren't worth a nickel if you change the interest rate, and/or change the amount withheld, of course.
If it were me, I'd put the money in a mutual fund's index fund, work for another 10 years, and then start tapping it. At age 50, you can start withdrawing more money, and still have buckets of money left over.
I strongly advise that you find a reputable CPA or tax advisor to help you decide what to do with this money. None of my forecasts allow for anything like taxes, market fluctuations, etc. You WILL need to find out how to allow for that.
2006-11-15 01:31:38 · answer #3 · answered by Ralfcoder 7 · 0⤊ 0⤋
Possibly.
2006-11-15 01:28:22 · answer #4 · answered by jeepdrivr 4 · 0⤊ 0⤋
It could be. I'd try to invest it and live off the interest. Why? Do you have an extra million dollars I can have?
2006-11-15 01:26:45 · answer #5 · answered by Bear 5 · 0⤊ 0⤋
Anyone with $1m in a bank acct is killing thier hopes - period. Especially as young as 40. Get it invested in Reits+other investments. I would worry about inflation so TIP or some direct US Treasury Inflation Indexed bonds would be important. IAU - gold etf - also. EFA; EWA; & some other index etfs & you would be set. vegas_iwish@yahoo.com if further qs
2006-11-15 01:22:37 · answer #6 · answered by vegas_iwish 5 · 2⤊ 0⤋
Sure! Just set up a fund that will give you the interest. That should be plenty to live off of the rest of your life!!!
2006-11-15 01:27:37 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Of course that is enough, that with proper planning one could live off of it. The bigger question is what do you want out of life? What have you always wanted to do or be? This is your chance, don't waste it.
2006-11-15 01:52:26 · answer #8 · answered by marvingray 2 · 0⤊ 0⤋
Yes just off of the interest alone
2006-11-15 01:26:25 · answer #9 · answered by Saints friend 3 · 1⤊ 0⤋
If you have it in a 5% interest CD, you'll earn $50K per year. Of course you'll have to pay taxes on that.
2006-11-15 01:22:04 · answer #10 · answered by Anonymous · 1⤊ 0⤋