What would you do if $10,000,000 was handed to you today from a wealthy person as a generous gift?
Forget taxes and all, we’re talking $10 million net that is in your possession to spend however you would like. How would your life change?
How I’d Spend the Millions
Honestly, in my case I would invest most of it to continue growing it so that I have more money and can do more great things with it.
I would buy an apartment complex or a few complexes until I’ve used up my $10 million and using leverage so that I can stretch my money further acquiring more expensive properties.
For example, I could use the $10 million to acquire $30 million in real estate.
These apartment buildings would provide cash flow as well as increase in value from year to year as my property manager and I improve the quality of tenants, increase rents, and improve the net income the building produces on the income statement.
But let’s put aside my real estate bias for this scenario in order to make this article more thought provoking and consider all the possibilities.
How I Would Invest $10 Million Dollars Without Real Estate
First I’ll cover two additional ways I could invest if I didn’t put my money directly into real estate myself. Then I’ll say forget investing… I want to spend it and here’s how I’d do it.
Buy $10 million dollars in dividend stocks which pay an average of 2%-3% per year.
This would give me $200,000 to $300,000 in dividend income each year to live off of. Since dividends are paid quarterly, I would get installments into my account of $50,000 to $75,000 every 3 months which is more than I need to live a comfortable lifestyle.
Meanwhile the stock could appreciate over the years growing my $10 million into a great sum, while I live just fine off the dividends. I’d never have to touch that $10,000,000 until I’m ready to move it.
Make loans to people with interest rates of 3-8% for real estate related purchases.
In the event that someone defaults on their loan, I get to assume possession of the real estate and now have an asset I can operate and manage or sell to retrieve my money.
If they don’t default, I’m living nicely off the interest income from the loans.
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Over the life of the loan pay down, the interest payments to me will shrink so even though it seems I’m getting a higher percentage interest rate than dividends, the average over so many years is actually lower and will be closer to the dividend rate of 3%.
I’m also giving up the opportunity to earn appreciation on my money by doing loans over stocks unless the person defaults and I get possession of the asset and am able to get more out of it on the sale than my loan.
I would make loans to house flippers because the returns will be higher and the money will come back to me sooner allowing me to re-loan it out for the next flip, compounding my returns.
I hope this opens your eyes to why many wealthy people lend out their money to others. It has its benefits to making you wealthier and you feel good helping someone accomplish their goals and dreams through the use of your money.
How Would I Spend $10 Million
Now we’re talking about spending and having some fun with the money. The downside is once it’s spent it’s gone which is why it’s smarter to invest it and then spend the interest income from the investment.
At first, I would probably let the money chill in an account and continue living life normal.
This would give me time to think clearly and decide a game plan for using the money so that I don’t go blow it initially off excitement and irrational thinking.
I would also keep it a secret from everyone. This will be explained more below on why I’d not tell anyone – see point #3.
1. I would get my dream lake house or ocean view home
I’ve grown up living on water and love being able to go out in the boat or jet ski. I would find a home with an amazing view of the ocean or lake/mountains and access to the water to import my boat for cruises and entertainment.
I would want a cabin style home with the logs and wood work and big windows facing the water to look out.
Kitchen would be wood flooring, granite counters, and tiled backsplash, along with stainless steel appliances or custom appliances to fit the design of the home.
Price Range: $750,000 or less
I would keep it modest and around 2,000 square feet or less. Million dollar homes have high maintenance costs and you get nailed by property taxes. If you don’t have a big family, huge homes just don’t seem necessary and have a lot of excess waste in terms of space and maintenance costs.
I would also sell my current home or possibly turn it into a rental so that I can recoup some income that can be applied towards my cabin water front home to keep more of my $10 million in my pocket still.
2. I would purchase a nice SUV or Truck
My dream car is an Italia 458 and I may splurge some money to lease one for a short period of time but then I’d settle down with a nice truck or SUV that can be used for my real estate business as transportation to and from properties as well as carrying my tools & supplies.
3. Help out family and friends
I mentioned above that I’d keep my money a secret. I feel like if everyone found out you had $10 million dollars they would start getting entitled and feel like it’s expected that you help them.
I would ask friends and family their situations and do some investigating to see who needs financial assistance and then I would take care of that person paying off their problems for them.
It would feel good knowing you did it because you wanted to and not because they expected you to having so much money.
4. Setup a perpetual giving fund
I once took a finance class at Ohio State and remember an example problem about a wealthy man who wanted to set up a scholarship fund for students.
He invested money into an investment fund that would produce interest income.
Then the interest income would be paid out as scholarships to students each year while the initial investment stayed in the account to continue generating more interest every year forever. This is called a perpetuity.
I would set up a growing perpetuity fund so that over time more and more money can be distributed to the charities and causes I’m passionate about.
A growing perpetuity will also stay ahead of inflation as a $10,000 scholarship today won’t be the same as $10,000 many years from now, especially the way college tuition is escalating, ruining people’s financial futures and setting them back from retirement.
5. Invest money into Under30wealth.com
I could create some really awesome resources and products for everyone to utilize to improve their financial literacy. I hire someone to build an app or hire software developers to create other things I’ve thought about that are in the works someday.
I could spend more on marketing so that more people become aware of my site which would help more people learn. I would have money to do fun giveaways and contests with my audience. Much love and thanks to everyone supporting this site!
But in the mean-time, I appreciate organic free growth such as when you guys share my posts to your social media so that we get in front of more viewers and young people who need to learn money and financial management!
College never teaches a class about how to make money and the education system has few classes implemented that cover money management.
6. I’d consider paying off some of my rental properties debt
The only debt I’d likely have would be real estate related. I would pay down this debt so that my rental properties cash flow more and I save the loan interest expense.
One of the days I look forward to is owning $1 million in real estate outright with no debt. Having a portfolio of rental properties that are all paid off and positively producing cash flow is a dream come true.
Your only expenses are insurance and taxes as well as occasional maintenance repairs. You no longer have to worry about foreclosure or burning through money if the property sits vacant.
7. I’d have some fun
I’m huge on traveling someday. I would pack up and go across the country and around the world seeing the many different exciting places on earth.
I’d try the foods in different countries, see the exotic beaches, and spend money on the vacation activities offered at each destination. Life is about living and having fun.
I would also purchase tickets to major sporting events and fly out to see them. I want to one day attend the championship game for each sport like the NFL, NBA, MLB, College Football and Basketball.
I’m a huge golf guy and I teach golf online to people at GolfPracticeGuides.com so I would definitely go to all 4 majors. The Masters would be my favorite course to see (If anyone has a spare ticket, haha jk).
How would you spend $10 million? You never know, maybe you’re one of the fortunate people to be handed down an inheritance.
It could be worth thinking and brainstorming out how you’d manage that much money so you don’t end up broke and in debt like so many of the lottery winners we hear about!
8. Build a Business
Being young and having 10 million dollars would be exciting but I’d still want to have projects and things to do that are work related. One idea would be scaling existing businesses like a realtor business selling houses.
I could spend more money on marketing to grab more market share as a well known realtor in the city and this could lead to more seller’s and buyer’s contacting me to sell their property.
I’ve also considered scaling a service business where I handle the marketing for other real estate agents, managing their Facebook ads and social media marketing.
This way I can still have fun generating business leads and doing marketing work but without the stress of working with those leads (buyers / sellers) by handing them off to other realtors in exchange for a monthly contract fee.
Overall, 10 million dollars is a lot of money and can help you live life comfortably, having some fun and also giving you cash to try out different investments or business ideas you’ve had.
Budgeting the $10 million will be key to setting yourself up for a long term outlook so you don’t lose all the money to soon and cause yourself more headaches than happiness.
Before you go, check out my real estate investing resource library to get tips and lessons on investing in real estate which is something I got started doing at a young age in college and have loved it ever since!
It’s a great way to build wealth and scale your net worth to 10 million dollars one day if done right!
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Be great today,
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