Pardon Mr. du Toit for exploding with rage when a Missouri couple who recently won half of a $261 million dollar Powerball jackpot said they were going to spend the money getting a tractor with brakes and buying a new refrigerator. Whereas Mr. du Toit raged, I understand.
Whereas I understand the urge to splurge, I understand it’s the shortest distance between old money and shining shoes (see also Janite Lee, et al) is philanthropy, big houses, and essentially eating the seed corn. Hey, I read The Millionaire Next Door. I know the secret to attaining wealth, and keeping it, is not spending it all.
Want to know what I would do with $73 million dollars in my fellow citizens’ gambling losses?
- I would pay taxes of some tens of millions of dollars.
- I would pay off all my debts and my mortgage and my poor mother’s mortgage.
- I would invest the remainder in a variety of schemes, such as equities, and other investments, hopefully yielding 7-10% a year in returns.
That’s it. No Porsche right away, no huge house, no yacht to travel around the world. Know why? Because at 7-10%, $30,000,000 principal yields $2,100,000-$3,000,000 each year in mad money. So once we got to the interest, then we’d have some fun!
Part of the beauty of that windfall would be the freedom from worry, and although the tempation to spend more than the interest would beckon, I’d want the peace of mind knowing that I have the steady income AND a pile of money in the bank. I understand the goal is to run out of money as close to the end of my retirement as possible, but this pile of money would ensure that my wife and I would receive the best health care in our near-retirement-end years, up to and maybe including transplanting our brains into cloned and flash-grown facsimiles of our 25 year old bodies for another several decades of not dipping into the principal.
That’s the hypothesis, and I hope to get the opportunity to test it.
