Ramblings Thought Experiments

The Million Pound Question

The Million Pound Question! A thought experiment proposed by Saving Ninja.

This is a thought experiment proposed by Saving Ninja – what would you do if you suddenly inherited/won/whatever £1 million?? The only requirement he had was a stream-of-conscious style post, rather than something heavily edited. So here goes…

What would I do with £1 million??

First of all, I would keep completely quiet. I wouldn’t tell anyone, except for my girlfriend, and even then, not immediately! I’d have to take some time to process such  a huge amount of money. My initial thoughts are as follows:

  • £250,000 would be set aside to buy a house in the near future. I figure the house itself wouldn’t cost any more than £200,000, and then the remaining £50,000 could be used to cover any legal fees, costs of moving, furnishing, any renovation, etc. We currently rent, and having to move every year or two is a massive pain! Unfortunately, the nature of university work, which typically offers fixed term contracts of 1-3 years to those early in their career (like me!) means that I can’t currently justify buying a house when we might need to move in another year or two. But, if I had a spare million quid lying around, I would be willing to take the plunge!
  • Another £100,000 would be set aside for what I would call a visa fund. As I have mentioned before, my girlfriend is an American citizen, and currently in the UK on a student visa whilst she finishes her PhD. Once she finishes that, we need to go through the process of applying for a new visa. Thankfully it doesn’t actually cost £100K, but that money would provide us with some more flexibility. At the moment, in order to apply for a spouse/partner visa, which is necessary if someone from outside the UK/EU wants to move to the UK, I need to either earn over ~£19,000 per year, or I need to have around ~£70,000 in cash savings. As my income reports might indicate, I do currently earn more than enough to satisfy the earnings requirements. But what if I lose my job at an inopportune time? Fulfilling the cash savings requirement would just give us piece of mind. The remaining money could then be saved for the cost of immigration – I believe we’ll have to pay for the cost of application and the NHS surcharge, which could add up to £1000-2000. Annoyingly, we’ll have to do this three times! Once at the beginning, again after 2.5 years, and again after another 2.5 years, this time applying for Indefinite Leave to Remain. And then, if she feels like it, she can apply to become a citizen, and pay even more money. I’d keep the money as cash for all this time, and then once we’re clear of the entire process maybe I’d blow it all on something to celebrate! (Or, let’s be honest, this is a personal finance and financial independence blog, so I’d probably stick it all with Vanguard).
  • I’ve worked out that £400,000 is my FI number (not including the house). So I would more or less immediately dump at least £200,000 into a low cost tracker, and then drip-feed the remaining £200,000 into the same tracker over a period of time. I then wouldn’t touch the money for another few years, other than moving £20,000 across to my ISA each year to save on tax. I would also consider opening a SIPP (a private pension in the UK) and look into how much I’m allowed to pay in to that in order to receive the tax relief from the government.
  • That leaves £250,000 left to play with. I would probably split around £150,000 – £200,000 between my girlfriend and family, and then use the remaining £50,000-£100,000 to either help fund some sort of business idea, or to allow me to take time off work and begin something new. For example, pay myself for 6 months to write a book. Having said that, I probably wouldn’t quit my job immediately. I would be keen to finish my current contract, and then look at retraining. The remaining money would allow me to not have to worry about bringing in an income to support both me and my girlfriend. I could work part-time whilst retraining and use a combination of the part-time wage and savings to live. I’d also be safe in the knowledge that, if at any point our income decreased too much, I could just live off of the income from the passive trackers for a few months until we got back on track.

Overall, £1 million is obviously a huge, life-changing amount of money. It’s far more than my current FI number of £400,000 plus a £200,000 house. However, I wouldn’t want to completely retire early, even if the sums added up (even then, I’m not sure they do; £400,000 in stocks and shares should be enough, in theory, to support me and my girlfriend for around 25-30 years, which would only put us at 60 years old!). At most, I’d look to switch to a part time role, and then use some of the newfound time to set up business or some new way of earning money that would hopefully be more fun than my current job.

Looking back at what I’ve written, the first thing that strikes me is that I’m apparently a lot less generous than my fellow bloggers! I like to think that I’ve gone for the logic of “you have to take care of yourself first before you can take care of others.” I’d essentially be able to use the money to ensure my own financial independence, begin working part time, as I mentioned above, and then start to dedicate more time towards helping others. I previously mentioned that one of my goals for the next five years is to try to take part in more charitable or community work, and winning a £1 million would certainly propel me along that path!

In summary

I’m sure this is a question that we’ve all given some amount of thought to, no matter how unrealistic it might seem! However, it was quite interesting to put pen to paper (or… fingers to keyboard??) and actually think through in more detail about where I would put the money. Thanks Saving Ninja for coming up with the idea! Looking forward to the next one. In the mean time, check out some answers from several other bloggers below:

9 replies on “The Million Pound Question”

Best of luck with your adventures on the visa merry-go-round. Speaking from personal experience, this can be a long and hugely expensive process. Stressful too, attempting to navigate any ever changing set of rules.

Should the £1m day arrive, that debate about how much you share with your girlfriend and family would be one you could sell tickets to! I recommend wearing a helmet and a cricket protector (at a minimum!) before broaching the topic… and ensuring you have a very comfortable couch to sleep on for the next few nights afterwards!

Thanks Indeedably. I’ve done a fair bit of reading on the whole process and it does sound like a huge pain. If only the media reported on just how difficult it is to move to the UK from outside the EU, people would quickly drop the narrative of “all immigrants are in the UK steal our benefits.” I’ve seen the cost of a spouse visa increase far higher than inflation over the last two years, and heard many horror stories of applicants making a small mistake on the application form and having to start all over again, including paying the entire fee. Definitely not looking forward to starting the process, but the end result will be worth it! And worst case, we can just move the south-east Asia and teach for a few years!

Haha, you may have a fair point there! Maybe I’ll just go Saving Ninja’s route and keep it all for myself.

Dude I’d give nothing away!

I prefer sharing my knowledge and time rather than my cash. I go by the notion that I’ll know what to do with it more than my family or friends (or even charities). Letting the whole lot compound would give me more of a chance to actually help my family and friends instead of just giving them a lump sum – which they’ll probably waste or get themselves into more debt from (due to ‘getting used’ to spending a lot more than they have). Although my OH has called me a dick a number of times after reading everyone else’s answers :))

Awesome post – thanks for contributing!! Will have to think of a good question to ponder next month 🙂

Hahaha, that is funny. I haven’t got my girlfriend to read these posts yet, not sure what she’d say!

You definitely raise a good point that they will probably just blow it all and be left with nothing! I’d be tempted to give them the money for a specific thing – maybe £20,000 to my youngest brother to get him on to the property ladder, or £10,000 into a fund for the children that I assume my other brother is going to have in the next few years.

No problem! Awesome idea in the first place, and was fun to do see a variety of answers to a question that we’ve all asked ourselves! Looking forward to seeing what the next one is 🙂

I love reading how people will spend their winnings – for me, it’s a life changing amount, hence the reason why I would give a lot of it away. Although it would be fantastic to be a millionaire and stay one, I’d be happy just seeing that million in my bank account for one day, take a snapshot of it and then start planning how to give it away!

An excellent answer and as others have already mentioned, all the best for the visa thing!

Thanks Weenie! It’s a definitely a life changing amount for most people. It’s been interesting to read everyone else’s answers and see the wide range of ideas we’ve all had. Thanks as well for the kind thoughts, fingers crossed it all goes well!

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Hi Smudge. Thanks for stopping by, and thanks again for the kind words! Always good to hear that people are reading and enjoying the blog.

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