On What I Would Do If I Came Into a Lot of Money

[danieldwilliam]

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.

£1 million. 

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.

£10 Million

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.

£100 Million.

 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.

 £1,000 Million

 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.

Comments

Re: If I Had A Million Dollars, I'd Be Rich.

[f4f3.livejournal.com]

My brother won something around £100k on the lottery a few years ago, and it was totally life-changing for him. He paid off a good lump of mortgage and bought a nice car, but that wasn't the life changing stuff (both of them went when he split up with his partner). What changed things was being able to take time off work and go to university to get a qualification in social work. He now spends his time working with young people who suffer from multiple deprivation and substance abuse issues. In a lot of ways, he's my hero.

(Going to university also meant meeting a new partner, and having beautiful twin daughters with her, so I guess you could include that in the life-changing stakes)

Re: If I Had A Million Dollars, I'd Be Rich.

[danieldwilliam.livejournal.com]

Yes - the opportunity to use even a relatively small amount of money as a fulcrum for the lever of education is probably the most life changing thing going.

Re: If I Had A Million Dollars, I'd Be Rich.

[f4f3.livejournal.com]

I really can't overestimate the extent to which my life has been enriched (materially, socially, spiritually)by free access to education. It was my ladder out of what was basically slum living, and it's the tragedy and stupidy of our generation that we're concentrating on removing that ladder for those who come after. Nothing epitomises the difference between Scotland and England more than the fact that Scottish (and EU) students don't pay fees at our univerities. One of the first things the Oil Fund should do is replace the Student Loans organisation with the Student Grants organisation.

Re: If I Had A Million Dollars, I'd Be Rich.

[danieldwilliam.livejournal.com]

I'm second generation for this sort of life transformation.

Conflicted about the student loans vs student grants thing. I think it's all the same money coming from and going to the same peole at the same time so I'm not sure that there is a huge difference and I wonder how much of an effect the badging has.

Re: If I Had A Million Dollars, I'd Be Rich.

[f4f3.livejournal.com]

The difference, I guess, between being given a gift or an obligation. Which would you rather be given?

A huge difference. A grant means you're being given a gift, something valuable that you can repay in later life.

A loan is a financial transaction, that you can pay off in monthly instalments. Once the debt is paid off, why would you be grateful?

It makes the difference between an education being a gift and a commodity, I think.

Re: If I Had A Million Dollars, I'd Be Rich.

[danieldwilliam.livejournal.com]

Eloquently and movingly put.

To answer your question, in this context I’m not sure that I see a difference here. In the context of a collective social or socialist democracy the gift of a good education confers on the donee the obligation to use that gift for the benefit of the wider community. That I have a good education obliges me to contribute, according to my enhanced abilty, to the commonweal either by paying higher taxes on my higher wages or by using my skills for a social enterprise for a lower wage than I could earn elsewhere.

I’m sure I’ve said before that I would be a communist if I thought everyone would gladly join in. I think the difficulty here is that not everyone shares the sense of obligation that comes of receiving a valuable gift and some formality of balancing input and output, ability and need seems indicated.

Perhaps I am too steeped in the habits of thought of my profession but I’m not so sure I would describe as a gift something that the receipient will end up paying for themselves. It’s like buying a partner a birthday present from your joint account.

Re: If I Had A Million Dollars, I'd Be Rich.

[f4f3.livejournal.com]

" In the context of a collective social or socialist democracy the gift of a good education confers on the donee the obligation to use that gift for the benefit of the wider community. "

Yes, I'd agree with that - however, there is no gifting in a loan to repay tuition fees, or a loan to live on. That's a commercial transaction. That doesn't confer an obligation, it teaches you that everything has a price, and only an idiot pays more than they have to. Which contributes to the mind-set that avoiding tax is a moral duty.

I don't agree that giving a student grant is like dipping into the joint account for a present. It's closer to an investment - giving someone the tools which might let them pay society back by paying more taxes, or by passing on useful skills, or becoming teachers in their turn. Granting these things is an investment. Strangely, the current system recognises that you start to repay your student loan once you become eligible to pay a certain rate of tax. Surely it's better to realise that the higher rate of tax IS your repayment?

Re: If I Had A Million Dollars, I'd Be Rich.

[danieldwilliam.livejournal.com]

The higher tax rate affects both people who have benefited from a state provided education and those who haven't.

Loan repayments only affect those who have received the education.

Your mileage may vary on whether this is bug or a feature. Which may turn on your view on human nature.

I would like to think that being confronted with the actual cost of the education would make people a little more respectful of it and the opportunities that are foregone to provide it to them. I'd also like to think that students who realise they are paying for their own education will require that they actually be provided with a useful education.

The state is still providing a useful subsidy in the form of removing the risk from the decision about whether to take on a student loan.


I would prefer a grant system if students were twinned with people working on minimum wage and told "Everytime this guy buys anything with VAT on it he's paying for you to be educated."