It’s been done to death and comes up in the office every time someone the news announces a new winner, but I’m going to give this little thought experiment a shot with a FIRE mindset.
After finding five Premium Bonds from the 1960s a few weeks ago, I thought I’d list what I would do if I ended up winning the top price.
I have broken this down by monetary amount:
£0 – Not tell ANYONE
You really know who your friends are when things get tough, but all sorts of people will come out of the woodwork once it’s been made public that you’re in the possession of life changing amounts of money.
These individuals will want nothing more than to get their hands on some of your winnings. The best way to combat this? Tell no one.
If I wanted to help someone out, I’d do it anonymously, or at least as best I can.
It’d certainly be difficult keeping it under wraps, especially after a couple of pints deep down the pub, but for the sake of my sanity (and potentially safety) I’d keep it shtum for the time being.
£0 – Continue working
I’m not ready to retire yet in my 20s. I want to keep learning and developing skills and networks and challenging myself in a professional capacity.
However, this new found wealth would give me the option to pursue personal interests on the side. I’ve always wanted to convert an old van into a mobile coffee shop and travel around different fairs and events selling locally roasted coffee to people. Maybe one day…
£800,000 – Fund investments
Incredibly boring, but I’d want this money to work for me for the rest of my life. £1million after eventually buying a property (here in the south), treating yourself and helping a few closest to you, doesn’t go as far as it used to, especially being in my 20s.
I’d drop this into a mixture of Index trackers and active funds like I do now, and pound cost average so I’m not risking the full amount straight away. It will also allow me to take significant advantage of any considerable dips with the amount of capital in reserve I would have.
I’d drop in £16k a year until I use the LISA to buy my house (see below), and then up it to £20k a year to fill my ISA allocation. This is obviously going to take years, and I would probably have to resort to putting in more than my ISA limit, but this is a general idea of what I’d do with the bulk of this windfall.
£50,000 – Investments in renewable energy/ green companies
This would need a lot more research, but I’d like to invest in some companies that are, at least, attempting to do good in the world. Whether that’s solar, wind, water treatment or alternative energy investments, or looking at sustainable, meat alternatives. These could also turn out to be incredibly good, long term investments as humans seek new ways of powering the world and our attitude towards animal consumption changes.
£50,000 – Premium Bonds
Considering my ISA allocation will be used up by other means, this serves as a helpful place to keep my cash reserves within a tax-free wrapper.
£20,000 – Buy more of a significant stake in my favourite companies
Most of my investments are tied up in index trackers and a few active funds, but I do like hold a number of satellite stocks in specific companies.
I’d probably put a significant amount into Disney, Tesla, Berkshire Hathaway and a number of other big names just to see what happens. There’s something fun about the idea owning a part of a big company like those.
£20,000 – Lifetime ISA
I know, I’ve just one a million, why not just buy a house outright? With mortgage interest rates so low, I’d rather take out a mortgage and invest the rest in the market, hence continuing to max out my Lifetime ISA.
I’m also not ready to own a home, and don’t think I will be for about five years yet. Hence the £20k allocation (£4k limit per year times the five years). This also gives me an extra £5k in government bonuses.
£20,000 – New car
I’m now a millionaire, but I still want the best deal. I probably wouldn’t need the full £20k as I would trade in my current car to get some money off, but I’d get myself a brand new Ford Fiesta ST.
I’m not a big enough car person to go out and buy a Jaguar or a Tesla or something a little flashier, but I’d love a bit of an upgrade on my current car so an ST would be perfect.
£20,000 – Holiday of a lifetime
I’ve always wanted to travel around Japan, but it’s not the cheapest country in the world. With £20k I could comfortably travel for many, many months and not worry about budgeting too much.
I’d cycle, train and drive from Sapporo to Fukuoka, taking in a mix of sociable, budget hostels and expensive, luxury hotels and apartments.
£10,000 – Donation to local causes and start ups
I’m a little fed up with seeing only big name chains and the same old, same old on my local high street.
I’d like to invest my money into local businesses without the expectation that I will get this money back. It’s not a great amount – I could probably pull a little more in from one of these other options – but it’d certainly be a decent amount to help some 18 year old get their clothing brand off the ground, or give their coffee shop a starting boost without them having to take out a hefty bank loan.
£5,000 – Alternative vehicle
Something else I’ve always been interested in is getting myself a little Vespa to run around town on.
Especially if I end up living in a city or busy town, it’ll mean never having to pay for parking again – forever thinking of ways to save money, even after coming into a million pounds.
£3,500 – Nomos Ahoi Atlantic
I’m a big watch person, which is dangerous when pursing FI, but if I came into such a significant sum, I would treat myself to something that is, certainly at the moment, an unjustifiable purchase.
£1,000 – Donation to the Royal British Legion
They’ve done wonders for forgotten veterans and gave me and my grandad a week we’ll never forget together; this will be something to say ‘thank you’.
£500 – Night out for mates
This would only be for a select few close friends, and I’d keep it to just £500 saying I’d won it on a scratch card or something, but I think this would be a nice way of letting lose for an evening and maybe going to places we would otherwise not want to go because of the cost.