The 10 Million Dollar Question

What would you do if you won $10 million, after taxes. I've seen this on a few people's journals, and feel compelled to answer.

First off, I would not make it public knowledge. I would wait as long as possible before telling even my closest friends or family. Partially to give myself time to adjust to the change before dealing with other people's reactions, and partly to make sure it had as little impact on how people treat me as possible. Once I did start spending the money, however, it would probably go something like this:

  • $2 million to buy a house for my mom to live in. This would include about $1 million to buy a nice estate in Shingle Spring (like this one, this one, this one, or this one) and another $1 million in a joint savings account, the interest on which she could use to pay for housekeeping, gardening, maintenance, and such. After the life she's lived, she deserves to spend her last few decades in style.

  • $1 million to buy a home in the bay area for myself to live in. Although I would have to hunt for quite some time to find one that I really, really liked, since I still think that's a disgusting amount of money to spend on a home, and I wouldn't want to live anywhere *too* ritzy-looking. And my options might be a little limited, since I would still want to live within bike riding distance of work.

  • $500,000 would be dedicated for stuff that would make me happy. This includes paying off my debt, upgrading the hell out of my electronics, visiting Italy, Australia, and a few other places, and paying off the credit card debt of several people I know whose lives would be imminently more satisfying if they didn't have that weight around their neck (this includes my family and several friends).

  • $500,000 would go into a savings account to be used for paying off my nieces/nephews (and kids, should that ever happen) college fees. Although they and their parents would not be informed of this until they were already in college, and they would not have access to the money until after they had completed their degree. The last thing I want is for the next generation of my family to grow up spoiled and never work an honest job because they didn't have to. If they want to go to college, they'll still have to bust their ass to do it, so they're not just pissing away the money and not really paying attention, like several rich kids I know. But at the same time, they wouldn't have to abandon their college plans for fear of lifetime debt, like I did.

  • $1 million would go into a savings account, so that I could live off of the interest. This would be supplemental income, since I would not want to quit my job. I might eventually decide to use this fund as a nest egg for starting my own company, but for at least the next several years I'd want to keep working at eBay, since I get a lot of personal satisfaction from helping small business succeed, and working at eBay is a great way to contribute to that goal.

  • The remaining $5 million would go into a separate savings account, with the interest from that account being donated to whatever charity or worthy cause I decide to support each year. And, of course, the amount in that account would probably go down steadily year to year, as I am unable to resist donating more than just the interest amount to particular causes I hear about on NPR or through friends (I have a hunch both of the Alison's would inspire me quite a bit in this area).

What have we learned from this experience? Housing and credit card debt are the two biggest money sinks in most people's lives. Remove those, and most people can support themselves without a lot of stress. But beyond that, $10 million is a disgustingly huge amount of money, that no real person could ever really spend on anything worthwhile, beyond charity. Which just makes me sick to think that there are so many people out there for whom $10 million is a small amount. Just think of the good that could be done if people like Bill Gates or George Lucas were to keep $10 million to support their lifestyle and dedicate the remainder of their wealth to solving some of the more fundamental problems in our world.

The more I think about this, the more sick I feel.


  1. What places are *you* finding that are “too ritzy” for only a million in the bay area? I can’t find anything ritzy until I get past 2.5 million.

    • Ok, maybe my price point is off. I really don’t know the exact price ranges for houses around here (the only actual price hunting I’ve been doing is in Shingle Springs). Barring a lottery windfall, I don’t think I’d really ever buy a house down here. There’s just too much of a gap between houses that I really don’t think are worth the asking price, and houses that are worth the (huge) asking price but way to fancy for me to ever feel comfortable living in. So if I were going to buy a house down here, it would be a very long process of finding one that fit into that thin margin between the two.

    • Oh, and even looking on CraigsList, I see plenty of places that are way too ritzy for me, in the $1-1.6M range. But I realize I have a lower “ritzy” threshold than most of the people in our industry.

      Remember, my AA is the most advanced degree in my family, and most of my family is very solidly entrenched in the blue collar world. So all these instant-millionaire software folks I’m friends with are just a little bizarre in my world view.

      It’s hard to really imagine how I would react to that much money. I think my primary motivation would be to eliminate the major sources of debt and financial strain in the lives of those around me, put enough away so that I won’t have to dive into desperation/depression if I lose my job (a constant fear for me), and then get rid of the rest in some morally satisfying way as soon as possible, to prevent it from irrevocably changing who I am as a person.

      I know some people who grew up relatively well-off, and who always figured they’d end up being richer than their parents, who would be likely to adjust to the uber-rich lifestyle better than I would. But for me, too much of who I am has been defined by the struggles in my life, and to completely distance myself from that world would be a form of identity emasculation.

      I am the kind of person who would be much more depressed if I were too rich than if I were too poor. The struggle to survive is something that I get. It inspires me to fight harder, even when I see nothing to live for, because I’m a stubborn, defiant bastard who would rather not go down without a fight, even if there is no hope. But to lose meaning in my life when I had nothing to struggle against… I doubt I could make a decision to keep living under those circumstances.

      • Being a software engineer, I enjoy the lack of stress knowing I can buy groceries and not have to look at the bill too closely. I’m not a millionaire and the roof over my head is tied to my job (and job security doesn’t exist in this area), but I admit I’m living in a nicer apartment than I might otherwise and a good deal of that is enabled because I live with someone else.

        But I can’t even begin to attempt to purchase a house. It is simply not within my means with the housing seller’s market in the bay area. And I want to buy at least a single family house. The starting prices look like 800k for anything that has three bedrooms and isn’t run down.

        • I know what you mean. I’m actually making an amazingly good salary right now. But I spent so much time unemployed and living off my credit cards before getting the job (not to mention the evil, nasty lawsuit), that I still have a massive amount of debt. And I was pretty irresponsible with my money this year, what with all the Firefly/Serenity stuff going on, and wanting to repurchase everything that I sold off when I was struggling to pay rent. So my debt hasn’t gone down any in the past year.

          So right now I’m in that weird middle place. Technically, I make good money, can afford my rent and groceries without worrying about it, and can even buy a new iPod or other gadget when I want to. But if I spend the money as if it were mine to spend, I’ll never make any progress towards paying down that debt. So I have to keep reminding myself to live like a pauper even with a price’s paycheck, or I’ll be VISA’s bitch forever. Which is hard.

          The thing I have to deal with that most other software engineers don’t is the fact that I don’t have a college degree. HR folks use degrees as a way of thinning out their stacks of resumes, so if I lose my job, it will take a very, very long time to get one again. Which means as long as I still have debt, I am perpetually one bad day at work away from being on the verge of bankruptcy and living on my brother’s couch in Sacramento.

          This terrifies me.

          • Yes, degrees are sometimes overrated. The managers have employee degree wars for pay going on behind closed doors. I’d hoped that as one got more experience, the degree would matter less (as it should, especially in the field of computers where everything changes).

            The jobs available down here are slim pickings for *anyone* who isn’t currently employed. I watch my friends on livejournal how they go through the job search gauntlet and just come up with crap.. but at least it is a job. My loss of job would probably be moving back in with my parents… in Washington. I couldn’t afford to wait out the time it would take to get another one down here.

      • I also grew up on a quarter acre which was a *small* piece of land in my rural neighborhood (compared to the acres that most folks had). Even ritzy places here in the bay area look tiny to me land-wise.

        • I know what you mean. I spent my childhood living out in the country (in Coloma), where we had five acres of land. It was cheap because it was in the middle of nowhere, but it was quite a shock to move from there to the Sacramento suburbs, where the nearest neighbor could hear you if you had the music too loud, rather than being half a mile away.

          I guess that’s why my mom is so fond of Shingle Springs. It’s still pretty close to Sacramento, but the houses there are a bit older (ie, nice without being ritzy) and have some land around them. And since they’re past Sacramento, where the commuters haven’t ventured in large numbers yet, they’re still fairly cheap.

          For the price of your starter home down here, I saw a beautiful 4 bedroom home on 5 acres, with a two story studio “pool house” next to the pool in Shingle Springs. So the starter home on an acre of land if a fraction of that.

  2. Many savings accounts are only federally insured up to $100,000 per depositor against bank failure, so you may want to, at least, think about splitting up that money into separate financial institutions. There are better places to put money than savings for generating interest. You may also want to put making a will or living trust one of your first items otherwise if something happens to you, your money won’t be distributed the way you envisioned.

    • The chances of me or anyone in my family ever having anywhere close to that amount of money in savings are pretty slim. Most of us have enough credit card debt that even having a savings account to begin with is a silly idea.

      But if that ever were to happen, I have plenty of friends who know the financial end of things better than I do, and could hook me up with the details. It’s pure fantasy at this point, so little things like reality don’t come into the picture much. :)

  3. So if I had $10 million tax free dollars, here’s is what I would do.

    $2 million into safe interest bearing investments, maybe savings account (split into $100,000 acounts each) or maybe Treasury bills (safest investment in the world.). Right now, treasury bills should pay a bit more than 4%, so $80,000 (before taxes), that’s just fine. That could probably cover a house payment along with my current lifestyle. And the principal is not even being touched.
    I would keep a job, or pehaps go to school to get skills for a job.

    $1 million (together) for my niece and nephews college education fund. They are about 1 and 2 years old right now. Put in mutual funds, so better chance to grow over the long period.

    $500,000 (with an option for some more) for Parents so they can retire extra well and $500,000 for Grandparents (who are already pretty well off, but they won’t mind).

    $1 million to play with, in stocks, bonds, foreign currency exchange and whatever else I felt like.

    $2 million to the uninsured friends medical fund. Because I’m tired of seeing people I know having to postpone medical treatments simply because they can’t afford them. This would operate off of interest. Perhaps I would invest in some really secure corporate bonds as well as Treasuries to get some better yields. Any interest left over at the year, would go towards organizations that supports a national health care plan or local free clinics.

    2 million for the “watch out! Liberal with Money!” political action and charity fund, to

    and $1 million for whatever the heck I felt like. Maybe part of that to set up a microcredit operation.

    Or maybe I would donate $4 million to my workplace, KPFA and enjoy a year of no pledge drives , I could probably come in just twice a week… :)
    Yeah, something like that

    Yes some people have a huge amount of money and others don’t, and it’s not always based on completely on merit.

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