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What would you do with $ 1 million?

What would you do for a million dollars? Well, a stupid set of questions asked by Buzzfeed 2018 found that 15% of respondents would stay in a sewer for a month and 67% would waste through a rat-infected garbage bag for the money.

Fortunately, few of us will ever have to do such things. In fact, some will simply get $ 1 million in a windfall. If you suddenly got a million dollars, what would you do with it? Here’s a look at what many Americans said they would do, along with some tips on how to realistically raise a million dollars – without wind power.

A young couple is very happy when dollar bills fall around them.

Image source: Getty Images.

Schwab 2019 Modern Wealth Survey asked respondents what they would do with $ 1 million, and here are the results.

21%: Save

About a fifth of those surveyed said they would save money. It’s a great thing to do – especially if you don’t already have a stock-filled emergency fund.

Most of us need such a fund, which would be filled with living expenses of three to six months – if not a little more. A job loss can occur at any time, as well as a costly health condition or even an expensive repair that is suddenly needed for your car or home. Make sure you have access to enough money to keep the roof over your head, food on your table, your taxes paid, the lights on and so on.

You probably don’t have to spend a whole million dollars in an emergency fund. Putting much of it into investment accounts, such as those earmarked for retirement, is also a top idea.

23%: Invest

About a quarter of respondents said they would invest the money, which is one of the most powerful things you can do with them – because the more money you have, the more you can grow. For example, here is the type of table you can see that shows what you can collect over time and sock away meaningful sums each year:

Grows by 8% for

$ 5,000 is invested annually

$ 10,000 invested annually

$ 15,000 is invested annually

10 years

$ 78,227

$ 156,455

$ 234,682

15 years

$ 146,621

$ 293,243

$ 439,864

20 year

$ 247,115

$ 494,229

$ 741,344

25 years

$ 394,772

$ 789,544

$ 1.2 million

30 years

$ 611,729

$ 1.2 million

$ 1.8 million

Source: Author calculations.

It’s fantastic, but if you suddenly had a million dollars – or even just half of it, see how it could grow over time:

Grows by 8% for

A one-time investment of $ 500,000

A one-time investment of $ 1 million

10 years

$ 1.1 million

$ 2.2 million

15 years

$ 1.6 million

$ 3.2 million

20 year

$ 2.3 million

$ 4.7 million

25 years

$ 3.4 million

$ 6.8 million

30 years

$ 5.0 million

$ 10.1 million

Source: Author calculations.

It is much easier to get really rich if you start with a lot of money. Still, let the first table remind you of what you can do without any cases whatsoever – just some determination. It is difficult to beat the stock market to build long-term wealth. (Tip: Using index funds is the easiest way to do that and is perfect for most of us.)

28%: Pay down debt

More than a quarter of respondents said they would use their wind power of a million to pay down debt, and with a million dollars, most people with debt should be able to pay off All of the. This is a very smart move and arguably the best use of your money if you carry any high interest rate, for example from credit cards.

Also note that you do not need a windfall to get out of debt, even if you owe many thousands of dollars. There are a bunch of effective strategies, like making more money, spending less, consolidating debts, targeting your debt with the highest interest rate first, and using balance transfer cards.

54%: Spend it – on a house, car or trip

Finally, more than half of the respondents said they would spend the money – on a home, a car and / or travel. There are good uses for a windfall, though only if you have:

  • No high interest debt
  • An emergency fund with expenses for three to six months
  • Retirement accounts on track to provide what you need in retirement
  • Sufficient assets to cover other important financial goals, such as college

A million dollars is a lot of money, so you might be able to use it to handle a bunch of the above – get out of debt, set up an emergency fund, invest a lot of it for your future and then .. … maybe make a payout again home, buy a new car and take a great trip!

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