What can you do with $1 million

What can you do with $1 million


I have seen my fellow bloggers aim for the magic number of accumulating $1m in wealth before thinking about retiring/quitting your job for something that excites them more. But what can you really do with $1m? For the remainder of this article, I’m going to assume that $1m roughly equals €1m and £1m.

It depends on what you do with it
Accumulating $1m is only part of a goal, the entire goal should also be thinking about what to do with this wealth:

Invest it on yourself: you could think about quitting your job and start your own thing. I don’t know how many engineers, cashiers, salespersons, therapists do their job passionately but my guess is probably not many, especially after many years on the job. Using your money to invest on yourself could help you be happier and do what you love.

Invest it on markets: depend on your age, your tolerance for risk and dependents, you could aim to increase that wealth further by putting it to work. Sitting a such a relatively large amount of money without putting it to work would be a mistake. Most banks reward you with very low interest rates, and there are a number of options in financial markets to help you grow your wealth (see my article 7 things you must know about investing). Here are examples of strategies you could apply, but of course you need to think long and hard about what you want to achieve with financial markets:
Reach $/€/£xx, xxx of annual income from dividends and/or coupon payments; growth x% of your £1m by y% in the next z years…

Use it as retirement money: this is a tricky one because depending on where you live, 1m can last you a very short time or a much longer time. Taking the example of the United States in 2016 from GoBankingRates.
If you live in Hawaii, $1m would last you about 12 years, which is not enough if you plan to retire at around 65 years old. California is the second worst at 16 years and your money would last around 17 years in Alaska, New York and Massachusetts. Would you still be about 5 years short of your life expectancy… What about states where your money could last longer? Living in Mississippi would extend the longevity of your assets to 26 years, which is more than twice than in Hawaii. Arkansaw, Oklahoma, Michigan and Tennessee follow Mississippi with an expected 25 years.

I haven’t done any comparison for the London area and Britain because I believe any result would be spurious. Brexit causes a considerable amount of uncertainty over house prices and growth in future inflation and salaries, but given that New York could be compared to London in term of living expenses, I would expect similar results.

So what would you do with $1m? Could you comfortably retire with it?