How long would $12 million dollars last?

Question

How long would $12 million dollars last for a person in their mid 20s?

Answer 1

Several things need to be known before that can be answered:
1. In terms of today's dollar, how much will the person withdraw each year?
2. What will be the future rate of inflation.
3. What rate of return will the money earn?

Assume an initial annual withdrawal of $240,000
Assume a constant rate of inflation equal to 4.5% per year
Assume that each year an additional 4.5% is withdrawn to keep pace with inflation.
Assume that the money is invested at a guaranteed 5.0% per year.

The money would be gone when the 20 year old person reaches age 77.

Answer 2

This depends on what they decide to do with the money. If they want to live an extremely lavish lifestyle, they will run out of money very quickly. If they want to live average, they will always have money. If the person wants to live well but not in an extreme since. Their money should last them until they can get on social security with the right budget and making an effort to save as well as invest.

I would say if you buy a house or car. Pay for it fully in cash this way you avoid all the extra payments you make by using credit or leasing, mortgage etc. Buy ONE house that is big not six. Buy a couple nice cars, not ten! Do spend lavish but in a moderate way whereas you do not end up bankrupt like MC Hammer. Actually, he is no longer broke. He may not be a multi-millionaire but he does okay.

It should last for the life time assuming that you only spend a small percentage each year. 2% each year (50 years) This means living large but on a budget. No outrageous spending every day or anything.

Answer 3

If you're smart about it, it'll last you for the rest of your life. The stock market returns about 10% annualy, on average. 10 percent of 12 million is 1.2 million. This means that without spending a cent of the original 12 million, you would have 1.2 million to spend each year for the rest of your life.

When you invest in the stock market, there is risk, and so possibly your 12 million would go down over time. The way you offset that is either not spend the whole 1.2 million each year--spend 600K and save the rest. That way your investment money grows each year and bad years are offset easily.
You could also just stick it in T-bills, that have essentially 0 risk. You'd get about 5% return, which would mean 600K each year to spend.

If you're idiotic with the money, you can blow it in a matter of days, but if you're smart you would never need to work again.

Answer 4

12 Days

Answer 5

It depends on how you invest it. If you are earning 4% in a Certificate of Deposit, going rate, you should earn enough to support a comfortable lifestyle without jeopardizing the principal. There's always rainy days ahead, don't blow the money (speaking from experience when my dad died). Get yourself some life insurance if you qualify to pay the probate taxes and put the money in a trust that you control. Go see an attorney and check them out with the bar before you proceed. Get references! Don't take anyone's word for something and don't get suckered into "get richer faster schemes" - do your homework, the internet is a valuable tool if you know how to compare and contrast the information. Public or government sites offer the highest level of accurate information from which to start.

Answer 6

well I am exactly 27 today, and 12 million would last me a life time, and my kids would still have plenty to live out a well off life, after that I don't know, I guess it would depend if they saved any for there kids. Personally I could live happy off the yearly interest of one million dollars!

Answer 7

How could you possibly blow through 12 million dollars
in a year? I'd think investing it would last you generations.

Answer 8

Depends on how you will spend it.

If you plan on living a lavish life; New 200+ thousand dollar cars, million dollar house, dining at restaurants every day, spending tens of thousands on clothes, and getting massages daily, it'll last up to 2 - 5 years.

But if you spend the money wisely, you can have enough money to give your grandchildren a few millions.

Answer 9

As of today, the yield for municipal bonds (which are tax-free) is precisely 4%. Allowing 2% for inflation, $12 million would provide $240,000 in untaxed income per year, forever.

Answer 10

Put it all in cd's

guarenteed about 5% interest every year.
live on the interest

if you're greedy then invest it otherwise

that 12 million should last your family forever as long as you don't go stupid with it...