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Hypothetical Money Question

2K views 29 replies 22 participants last post by  craftypam 
#1 ·
I was asked this question today, and found it intriguing to think about.

"If you were given $100,000, tax free, how much of it would you spend each year? And why?"

They gave the following choices:
A. $4000
B. $10,000
C. $20,000
D. $50,000

So.... what would be your choice, and why?
 
#2 ·
Is this just a one shot deal or yearly ?
 
#3 ·
I don't like any of the answers but in the spirit of the question I guess I'd have to say D.

The first year I'd pay off the remainder of my house and put a large chunk down on a rental house.

The second year I'd pay off the rental house.
 
#4 ·
50,000 this year and 50,000 next year.

1) life is short, I might not be around for the following years
2) save interest being charged on my debts
3) anything I buy this year for stockpile would go up in price in subsequent years
4) refer to item #1
 
#5 ·
D) $50,000 - I'd pay down our mortgage debts.
 
#8 · (Edited)
I'd spend 10,000 this year. I'd pay off our car and do a little home maintenance & bank the rest. After the car is paid off all we'll have to pay for food, utilities, insurance and dumb taxes and that we do on dh's pension. We live pretty basic here and have few wants/needs.
Then again we keep talking about moving out of state, that money would put ants in our pants to do so...

So when is the money coming, lol? I'm ready for it.;)
 
#9 ·
"If you were given $100,000, tax free, how much of it would you spend each year? And why?"
I would spend the $ 50,000 and pay off the balance of the HEL and his truck payment. Only bills left would be utilities, food, insurances, etc. Any money left after paying off the 2 bills, would be going into stockpile for groceries. Including a small greenhouse.
The other $ 50,000 would be kept in the bank till we both could agree on the wisest way to spend or save it.

If the same amount of money continued yearly, we would make a agreement with the farmer next to us to buy his farm.
 
#10 ·
From the choices I would spend the $50,000 each year to pay off/down debt including mortgage. This would save on interest payments and would give me more money in my pocket.

I keep imagining what it will be like to have the money I'm now paying to credit cards/mprtage in my pocket and available for other expenses.

If I could pay them off in one swope my month income would feel like I had received a huge raise.
 
#12 ·
We are debt free already. The first year I'd spend $20k. I'd have our kitchen and baths remodeled, and then we'd use some on travel to someplace nice. The floors and cabinets are really dated (original 40 year old installation) and starting to come apart.

We would travel because we could.

The rest of the money would go for retirement/investments and more travel.
 
#14 ·
In answer to Ladytoysdream, the money was a one shot deal, not a yearly pay-out. So you would receive a one time amount of $100,000.

My answer would be to take out $4000 and invest the rest. If invested correctly, the money should recover to the original amount very nicely. I would continue to take out $4000 a year and leave the principle. Our position right now is debt free, so I don't have a dire need for the extra cash, but the $4000 a year would be nice for enjoying some extras in life: vacation, adjust the thermostat, etc. But at some point in the future, I might need a larger chunk of cash, and it would be there waiting for me.
 
#16 ·
D, I would pay off the small personal loan we have and put the rest on the mortgage.

Now I want to buy a scratch-off. But I'd be better off putting that $5 into my ING account.
 
#18 ·
B: $10,000

Our mortgage payment is only $8700 max/year for the next 5 years. once those 5 years are up-we would pay off the remaining mortgage ($30,000)

The extra would go towards putting an addition on the house or finishing out the basement.

If there's any left over after that - put extra towards groceries and school tuition.
 
#22 ·
Ramona, While treasuries, CDs, and simple savings accounts are paying next to nothing, some investments are still worthwhile. We have some money invested, with a financial advisor overlooking it, and it made 8.5% last year. And we choose to invest very conservatively. So it's still possible!
 
#23 ·
Just wanted to clarify that there is no right or wrong answer here, and no answer that is better than others. It really reflects the stage of life you are in right now. Being older folks, we have already gone through some of the stages that you all are in right now. So it's very understandable that you might want to put $50,000 towards debt/mortgage. That's an investment right there! And now...... I'm waiting for the check!!
 
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#24 ·
I'm going to say $4000,00 and the rest would go into a cd drawing interest. Not a big return but it would be making something until something better came along and it would be safe where I wouldn't have to worry about loosing it. I am debt free so the $4000.00 would be set aside and used for house/car insurance, land taxes, oil changes, doctor copays...things like that.
 
#25 ·
I have to say D. The first year we would pay all of our bills off, this would be all cc's, the bike, and the car. Anything left over would be added to the next $50,000 to buy land and use as a downpayment to build our house.

Cat
 
#27 ·
Well, I'd like to split my answer C. $20,000 for the 1st 2 years & then B. $10,000 for the remaining 6 years. If that wasn't possible I'd choose C. $20,000. I'd consider replacing my beater or "restoring" it, but we really don't need another car. Would love to do some home improvements ~ new flooring, painting, new lawn mower, heating/cooling system is 17 yrs old (I'd love cheaper electric bills)... ooh SOLAR PANELS or WIND TURBINES! It would be so nice to tell the electric company to kiss my solar panels! LOL
 
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