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August 01, 2003
What would I do with all the money?
In a recent entry, [On Government: Mammoth Lakes vs. Santa Monica], Ice Slider asked what I would do with a ton of money. I started responding, but my response got so long I decided to make it an entry.I just had a conversation regarding this with a friend of mine. I had the obscene sized soda-cup from a Shell station. On it, you could pull a tab, get a code, enter that code online (after registering) and wait anxiously by the phone, computer, mailbox, while you get 2 tons of new junk-mail, hoping one will give some indication that you've one the 2 billion dollar grand prize.. I think thats the largest prize giveaway ever. The QVC zombies must be having a field day asking their psychic friend whether they'll win. My friend asked, "What would one possibly do with 1B dollars." I immediately had an answer.
I'd take some quantity of the dirty loot, somewhere close to 10 million, and put it in lower risk, decent interest bearing mutual funds or super funds. I'd want to match the markets 10-12% return over the long term at least. I'd then live on the interest for the rest of my days. To account for inflation, I would always reinvest some of the interest. The rest I'd give away. Not to one person of course. I'd combine traveling with finding people and/or agencies who would use the money wisely and dole it out to them based on their need. Before starting on this venture, I'd get a good money manager and invest the rest so that it'd be earning interest while I work on figuring out who'd get the money.
This reminds me of a thought I had a couple weeks ago on how to beat the juggernaut once and for all. Its somewhat idealistic and requires the cooperation of multiple generations, which may be wishful thinking. Basically, the idea is to, first and foremost, pay off and never have any debt. A house is equity, so that doesn't count, but its important to not be paying ANY money in interest for anything (with the exception of a house). Then, begin putting money in decent mutual funds, always putting money in, NEVER taking money out. UNTIL! Until the fund makes enough money in interest to live off of. Being the first generation of this experiment, it would likely not be a lot of money. But I have a very liberal definition of 'enough to live off of'. It would be important not to live off ALL the interest, but reinvest some of it, so the ledger keeps getting greener, no matter what. The planning would have to be good because the idea is that once your offspring gets to a certain age, they too would get a certain percentage of the interest. Enough to live off of (very VERY meagerly). They would be taught the cost of the sin of debt is death. Meanwhile, money is ALWAYS put back. Enough that further siblings always have their share of the interest to look forward to.
"Where's this all going Adam? You're insane, you know this right?" The idea is that each generation will have options. The option to choose a profession they enjoy, regardless of the money. They can LIVE (remember its a liberal definition) without working. They could travel if they want, they could go get a real job and make more money if they want. They can become a writer or a painter that does not pay well. The REAL trick will be making sure no one messes it up by getting in debt. Debt throws it all off because the money you'll be getting monthly in interest will likely NOT be enough to live on if your fueling the machine with your monthly debt nut. I know, it still sounds crazy, but the reality of the 'system' is that once you reach a critical mass of $$, compound interest ensures you can continue sticking your middle finger at the credit card companies as hard as you possibly can without pulling a tendon. I believe the system as it stands is built mostly by debt. You beat them at their own game by making sure they always owe you.
Ok, everyone on board now? Do you understand the genius that is Full Frontal Investing? If you are as excited about this amazing opportunity as I am, please send six monthly payments of $69.99 to The Church of Financial Slavery and we'll rush you our amazing packet on how to change your life through our simple money saving techniques. And remember. "Set it! And Forget it!"
Posted by wonko at August 1, 2003 11:01 AM
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