What would you do with a million dollars? I recently asked our Facebook fans to tell me what they would do with a million dollars. The answers I received were nothing like what one would expect as they were kind of all over the place. Real Estate and Investments were the most common answers but are these correct answers?
We are going to take a look at how you should spend $1 Million Dollars…
Real Estate: Buying Real Estate is very important and probably the wisest choice, especially if you don’t already own multiple properties. Real estate, despite having taken a major hit in the great recession, is still a very worthwhile investment. Buying 1 or multiple homes in key locations with major down payments may not be a bad idea. Allocate $300,000 of your $1 Million, as not only will you enjoy additional income from rental money made over small payments as well as increased equity over the course of a few years but mainly because the tax benefits of a mortgage are more than those of a paid off home.
Car: Having a million dollars wouldn’t be complete without some hot cars in the mix, buying cars can be costly and a significant loss but buying the cars properly and understanding the logistics can transform the hottest cars into short-term investments as well as recognition to yourself and pleasure for getting to drive them without the cost. Make sure to read our most baller cars under $30,000 to understand how you can make a statement without breaking the bank. We figured two of those and one exotic should hold about $150,000 of your money. Make sure to check out the upcoming e-book “Driving a Luxury Car for Free” to understand how to invest in the right cars and ensure you can get out at anytime without major losses.
Watch: Watches are a fantastic way to hold money, as well as make money. The right watches can help you earn significant amounts of money over time. Wearing a nice timepiece on the other hand will also enhance your appearance and buy-in when necessary. You do not need to spend $30,000 on watches, however $15,000 for 4 nice time pieces should be in order. We recommend Panerai as your main choices but Rolex, Cartier and Breitling should be somewhat included in your selection. Buy used quality pieces from reputable used dealers to ensure you are able to get a return on your investment as you need.
Investments: Everyone knows that basic short and long term investments are a great option and necessary. Investing $200,000 of your money should be a generous amount and should yield you a 7-12% return over a 5-year period. Having a mixture of stocks, mutual funds, and retirement products is key. We recommend using a super regional bank as the initiator or Vanguard with an adviser.
Business: As discussed briefly, taxes at the end of the year will be the one thing you should avoid and therefore starting a business is a mandatory venue to take when you are dealing with 6 or 7 figures. Starting a business involves business expenses, which can be cars, watches and other necessary life items. Make sure your business is relevant to the write off you seek. Allocate another $200k to perhaps buy into a franchise, as well as start your own businesses. This will create future income, as well as keeping you occupied.
Savings: The last $135,000 should be broken into two different segments. The first being money you keep cash/liquid in the bank. Keep about $125,000 in your day-to-day bank, under FDIC insured products and make sure to only reach in your saving in case of dire emergencies. The second segment is to take the $10,000 and have your wardrobe match the level of perfection that $1 million made you look like.
This is how Secret Entourage would spend one million, which is primarily no money spent at all and yet all the fun in the world. If you have done your homework and are able to understand how easily you can get out of it without losses, then you show that you truly understand the value of what you are doing and the value of your money remaining in your pocket.