$2 mil at a paltry 3% return is 60k/year. one can easily live off of that in Houston. that's a content middle class lifestyle. whatever you don't spend you just reinvest. but yea, finding the guaranteed return is the hard part.
Don't forget about paying taxes and fees on the earnings. I don't doubt that it can be done, it's just hard to project that $2 million and its earnings safely lasting the next 60 or so years (assuming his friend was around 20 and will live to around 80). Will the investments survive a rough stretch? Or a severe downturn that lasts a number of months?
There is no guarantee in life. There will always be risk on investments --- whether it be small or high. But there are various ways to invest the money in low risk investments like blue chip stocks, certificate of deposits, and government bonds to name a few. As of right now, the return on those low risk investments are low. But, that is why I said it won't be a lavish life. As long as you stick to a normal lifestyle, that will be enough. What you will have though is something more valuable --- a time to spend with your family and friends. Isn't that the most important thing in life?
Family time is certainly important, but will that $40,000 - $60,000 yearly income (on safe investments) be enough to support a family of 4 (for example)? House, car, utilities, insurance, college fund, etc.?
Average American income is $51,000. Bobrek, I said no lavish lifestyle. What kind of life do you have?
No. You quote 40,000 to 60,000 as if they won't be able to pay for the things you said. So...what are you?
To add to the discussion, what kind of an example would one be setting for their children to simply not work?
Spent $4 on Mega Millions tickets yesterday and hit the mega ball on one which was 01. Won a dollar. True story.
Winning the lottery doesn't mean you stop working. There has been documented lottery winners who kept on working. Others, decided to focus on their dream --- whether to start their own business or realize their goal. Not everyone will stop working just because they won the lottery. Some may stop but most of these guys will have other ventures to do to keep them busy.
An example that their life shouldn't be defined by their work? I'd hope my acts and the person I am is a better example than my girl seeing me leave every morning at 7 and come back at 6.
Not what I meant. One's life should not necessarily be defined by their work, but nothing wrong with setting an example of working hard to earn a living. I always admired the work ethic of my father even though he never had a glamorous or easy job.
I thought it was a whole new discussion, forgive my previous post then. Since we are talking about the two million winnings, there is nothing wrong to stop working and focus more time with your family. Isn't that more important than working? Do you rather work for someone or would you rather spend that time with your family?
My view includes: 1. Continue to work and use "extra" money to insure my children and grand children can have an easier path in life (savings, college fund, etc.) 2. Continue to work to set an example. 3. Use some of the extra money to help those less fortunate either directly or indirectly (through charitable activity). 4. Realize that the earnings off those winnings are not guaranteed and leaving the work force for a period of time may make it much more difficult to reenter the work force if needed. Your view can be whatever you want.
I would assume you would pay off the house and car before implementing this "invest and live off the earnings" strategy. Me personally, yes, I would CERTAINLY quit my current job. But I would also find another job that made me happy but probably pays a lot less. Tuning pianos full time instead of part time, in my case. This stuff is fun to talk about. It would certainly be a nice problem to have.
