What would I do if I came into a significant amount of money? I was asked this a wee while ago and these are my sort of serious musings.
The answer really depends on how much money I came into.
A million isn’t enough to retire on. Not quite. More accurately, it is not enough for MLW and I to retire on and still have the same level of material comfort in perpetuity.
A million invested in treasury bonds at 3.5% would yield £35k. Split between MLW and I with some judicious tax management we’d probably not pay any income tax and pocket the whole £35k. £35k is a nice income but between two of us it’s not exactly living in the lap of luxury. There would still be the mortgage to pay.
Also, with inflation running at 5% we’d really need to tuck away some of the income and re-invest it to maintain the value of our investment over the coming years.
We could invest in a more risky balanced portfolio and perhaps make 5%. We’d pay a little tax, still tuck away a little against inflation and probably have about £40k a year to live on between the two of us. It’s getting there but there’s a risk that we could lose a big chunk of the capital and have to go back to work after some years of idling.
I could, of course top up my income by writing, *ahem* literature for discerning adults.
Three options remain.
We could invest the capital and not touch the income and retire in about ten years.
One of us could give up work.
We could keep working, buy a big house on Gray Street, invite my mum to live in the granny flat and have several more Captains.
Personally, I’d probably vote for door number 3.
Now this is retiring in affluent luxury. Post tax and inflation income about £300-400k. That’s proper house in the city, house in the country, flat in Barcelona terratory.
So, taking Door Number 3 as a given (That’s safe, you’ve won that and it’s yours to keep what ever happens) what would I do with myself with such a handsome living and plenty of time.
I’d go travelling. I’m very aware that apart from living in Australia I’ve not seen too much of the world. So I might pack up the Captain and the rest of his Crew, MLW and the au pair and take a turn around the world.
I would certainly spend some time in Australia reconnecting with my family out there.
I’d help my sister out financially over the long term as she’s not well.
Then once I’d returned I’d need to find something to do.
Options would include .
Doing a PhD in something really intersting. Probably to do with low carbon economies.
Offering my services as a person of some small intellect to one of two politcal parties, one of two constitutional reform societies and / or a handful of environmental charities with the added advantage that I could buy in some admin help of my own.
See above for Door Number 3 (with the possibility of having two crews and two au pairs).
I think with £100 Million one could just about buy an election. Not the next one or the one after. The election I would buy would be a Referendum on adopting the Single Transferable Vote. This assumes that by the time I come into this fortune the Scottish Independence referendum had been and been lost.
If I came into it tomorrow I’d set up a think tank to critically evaluate the case for independence from a broadly supportive point of view i.e. assuming that the whole thing is a not a grade A cluster fuck from start to finish how does an independent Scotland feed and clothe itself. Naturally I would be CEO of this august body and I would hire a really good executive assistant to make sure I turned up and a really good coach to make sure I worked well.
See £100 Million but I’d buy the STV election early. I’d buy a couple of newspapers and rent a load of bloggers and get cracking on installing democracy in the UK.
I would also bank roll substantial educational initiatives in Scotland. I’d try and fund each of the 11 universities in Scotland up to the standard of the Russell Group and I’d pick Aberdeen and Edinburgh to begin with and try and lift them up to Oxbridge standards.
As an alternative I might create a large number of generous bursaries so Scottish students could pick the domestic courses and institutions that suited them and therefore only those Scottish universities that supported a good student experience would get hold of my cash.
I’d want the focus to be on science and engineering and business and economics. It’s not that I don’t think the Arts and Humanities are worth studying. I think Scotland has a business creation problem and improving the number of economically investable spin-offs from universities in Scotland along with the business tool-kit of Scots I think would give us a long term and self re-enforcing boost.
I’d be tempted to create a charitable trust to send working class teenagers to Eton so large that 51% of Etonians were working class. Then I’d promise / threaten to do the same to all the other public schools in the UK. Just for laughs.