If I Had a Million Dollars

Million DollarsPerhaps you’ve heard the Barenaked Lady’s song, “If I Had a Million Dollars.”  If you haven’t, listen to it now – we’ll wait…..

Back?  O.K.

So obviously many of the things mentioned in the song would be nice to have.  With the exception of the green dress, the Elephant man, and the Kraft dinner, I think I would like to have many of the things in that song, especially the tree fort.

But if you went out and bought all of those things, your million dollars would be gone.  With the exception of the house (and the fir coat, if they had bought a real fir coat), most of the things purchased would be worthless.  Their $1 Million would be gone after their little spending spree.

If they had chosen more wisely, they would be able to buy stuff and still have the million dollars.  They would have assets that would continuously replenish their funds as they spent a portion of the money, provided they didn’t spend too much.  If I had a million dollars, here would be my list:

1) $12,000 in bank assets.  This would include $6,000-$7,000 in a money market fund and the rest in CDs.  I would use this fund to cover the float – the money needed until my next paycheck or interest payment comes in, little emergencies that come up, and other events.  If I had to spend some of this money I would replenish it before I did anything else.

2) A $250,000 house.  Where I live, this would be nice house.  Get anything much bigger and it would cost a ton to heat and cool, plus I’d spend all day working on the yard or cleaning the floors, and who want’s to do that?  Paying cash for a house means that no matter what else happens, I have a roof over my head.  I know, the tax man can take it away, but you get the idea.

3) $500,000 in interest and dividend paying assets.  Things like bonds, bank and utility stocks, REITs, and the like.  I would try to get an average return from interest and dividends of something like 6%.  This would mean I’d have $30,000 in income coming in each and every year to buy things like Kraft dinner and pay my property taxes so that the government wouldn’t take away my home.  Note that I probably wouldn’t buy bonds at the current time due to the low-interest rates and the likelihood that they will get hammered when the Fed starts raising rates, but during normal times I would.  I would also only buy this many income stocks if I needed the income.  Otherwise I’d invest this money in stocks until I needed the income.

4) 200,000 in stock mutual funds and ETFs.  This is money that would grow over time so that I would be able to increase my income and keep up with inflation.  As I said above, I’d invest a lot more in stocks if I didn’t need the income right now.  I could also invest in stocks and sell a portion of the portfolio each year to raise money, but I would be taking the risk that I could lose a lot in a market downturn if I couldn’t afford to stay pat and let things recover.

5) $38,000 in individual stocks.  I’d have a small portion in 2-3 companies that I thought had great long-term prospects.  If I picked the next Microsoft or Home Depot, I’d have another million dollars in ten years or so.

What would you do with your million dollars?

 Got and investing question? Please send it to vtsioriginal@yahoo.com or leave in a comment.

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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.


  1. Sober and wise decision on the groups, perhaps not everyone would agree with the proportions, but I can fully understand the decision.
    Of course people at different ages might have different tastes, but this would be a long discussion.
    Again, nice article!

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