Let's just say that I give up. I want out of the rat race. I want to cash out and trundle through life-- not a capricious life: just a life where I don't need to punch a clock. I also want some insulation. I don't want to have all the cash I need, then listen as my relatives are besieged by wolves. I need to get others insulated or get them the cash to cash out as well. When I was a kid-- even before the Bare Naked Ladies' song, I thought, "If I had a million dollars...?" I recently re-did that mental exercise. And I have to say that $1million doesn't go as far as it used to.
Let's see what I need to have and financial bill attached. Here's my math. Note that it's my math-- your situation may be different. If you don't live in Victoria-- one of the most expensive places to live-- you can likely accomplish what I suggest and become your own six million dollar man-- or woman.
I want to own my home. A friend actually wrote a cheque for his first house. A CHEQUE. We're into a 30 year mortgage. I could pay it off in five years and still not violate the terms of the mortgage, but it's not like I have $60k extra on any one year. So let's say I settle up for the house, then trade up to a house that would fit out style (eg. one with a dining room (ooh-- Mr. Fancypants) and a workshop). The bill: $300,000.
I don't want to work. It's not that I'm lazy. I just find it unpalatable-- like eating worms. You can do it, but you'd rather not. I am excellent at making bad decisions on my own, I don't need to be urged to make bad decisions by others. If I didn't have to do a job-type-job, I'd likely split my time between volunteer work, sculpting, kayaking, walking and gardening (well moving around buckets of dirt). And maybe being a bit of a jackass (that is my sole true calling).
I have 30 years before I'm in the nursing home (though I am technically senile now). I want some money to keep my life going as is-- some cash to dally, but not enough to give Bill Gates a run for his money. Without a mortgage, this could be $50,000/year (net). Keep it going until I am back in diapers and being fed soft food. Let interest accumulation keep inflation in check: 30 x $50k = $1,500,000.
I don't want my wife to work. She gets grumpy when she's working. At least that the current excuse for her grumpiness. My wife, statistically, will outlive me. She also needs enough money to buy craft supplies, etc.. 35 x $50k = $1,750,000.
My kid needs to have a future. I envied a girl who had a $500,000 trust fund waiting for her-- it must be nice to know that age 25 packs along a half million dollar payday. When I was 25, I was at Eatons subsisting on $9,000/year. So, we're going to rescue my kid. $350,000 to put down on a house/condo (in Victoria, $350k buys a closet) for when the day comes. We're also going to give kiddo some cushions. We're going to toss $80,000 to fund a degree-- tuition + bare living essentials. While I don't want to work, I want kiddo to work a little through university to stay out of trouble. That's my contribution to the incompentant intelligencia who run academia. Let's also provide a $30k cushion per year until the rest home: 60 years x $30k: $1,800,000.
Get out to the extended family now: My nieces and nephews also need to fund the tweed elbow set: 5 children x $80k per degree/living expenses-- $400,000.
While we're at it, I don't want to visit three of them in their separate Gorge Road apartments in the coming years; (the other two of them will be okay, so let's way all I need to do for them is a degree). I need 3 down payments-- I better insulate those a little, so they can each get a closet with a bathroom: 3 x $400k -- $1,200,000.
Now the parents. My father is dead to me, so I have three parents to consider. I have pegged 70 as the year that the diapers kick in. But that's me. For them, let's give them until 75 before they can hide their own Easter Eggs. They need to have condos without mortgages. They're not in freestanding homes now, so this is sort of a trade across. 3 condos x $400k = $1,200,000. Don't forget the crappy strata councils-- they love to roger their owners. So, $100k apiece to either pay for the dubious decisions of councils, or fund legal attacks versus same: 3x$100k = $300,000.
While we're at it, I'm middle aged and I want to retire. They're retirement age, so they MUST retire, but do it with cash: 3 parents x 10 years x $40k/year = $1,200,000.
Oh yeah: new cars for all those who should on the road (that's 4 cars-- the others should not be on the road); and we're going to keep each car 10 years before we swap out our cars. 4 drivers x 2 swaps x $40k per car = $320,000.
The bill for my financial plan: $10.4 million. Sadly, the coat tails aren't long enough to let friends ride. For that, I'd need a lot more as my friends deserve a taste of this gravy train.
Next time you hear about a lottery winner and how they lost it all in a couple years, don't be surprised. If they didn't get $10+M, they didn't have enough.
