Seahawk Sailor":8yub1dcy said:
SonicHawk":8yub1dcy said:
HawkWow":8yub1dcy said:
randomation":8yub1dcy said:
a million in the bank I can pretty much live on for the rest of my life paying for school off investing 20k so yeah a million I'm pretty much set for life. So I will take a repeat please.
You mention school so I assume you're still young. To make a million last a lifetime, you'd have to move to a 3rd world country and sell babies to Hawk fans to subsidize your existence. Set your sights higher, bro. It's not what it use to be.
$10/hr job would pay you $1M in 48 years. So I guess if you want to live at the poverty line for your whole life then yes, you probably can about do it.
This is why many Americans do not get rich. With only one million, it would be quite easy to make that money grow exponentially. Few people have debt in excess of $500,000 even when you take into consideration home, cars, credit cards, etc. And once your major expenditures were paid off, the money you need to live off is pennies in comparison. Investing half a million, while paying off debts and living off the other half, would reap bucketfuls of cash.
Take the repeat every time, and use your money wisely.
This is not always true. It depends on the debt owed, interest rate on the debt, and most important - the amount of capital on-hand.
Remember: money makes money. When you commit capital to debts, you lose that earning power right out of the gates. Smart money
ALWAYS looks for income potential first and considers debt payments last. I'm not worried about debts because all I really have to do is make a minimum payment and cover the interest.
The truly wealthy understand (or have hired investment analysts who understand) how to properly utilize debt, which can be used as an investment vehicle in itself. One common tactic with equity investments is to take a low-interest equity line of credit for 50% of the equity value, channel this money into another income-earning investment, and watch your money earn you even more.
With an income-generating investment, I can redirect earnings to cover my interest on debt, commit surplus earnings to reinvestment, and leverage the capital to invest further (rinse and repeat). When I'm done paying off that debt, I'll have all the original capital sitting in my bank account, with any accrued interest and inflation and other earnings. That will put me WAY ahead of the guy who paid off all his debts, lived simply, and tried to invest the rest. In fact, it's highly likely that I'll have earned more just from the debt capital than the other guy has earned in total from all of his debt-free capital.
One of the keys to successful real estate investment is to understand how to properly balance capital exposure to maximize income per invested dollar. If I can generate $700/mo income from a $30,000 cash investment (easy), then I'm earning 28% annual interest on that $30k, not including growth on equity. I'm not aware of any legal credit lines that can charge that kind of interest.
One of the worst decisions that can be made with a lump sum of cash is to pay off all of one's debts in total.
As to the OP's question:
$100k is petty cash. It's depressing to even consider the question. Take the Superbowl and enjoy living it up. For the average person, $100k would be spent in a few months on stupid disposable goods and you'd be left wondering why the hell you would ever consider such a dumb thing. Enjoy that boat or SUV 5-6 years from now when it's covered in dirt and dents and your wife is nagging you to get it out of the yard.
