If you were 80+ years old like me, with 20 years to go (at most) you could do it.
You’d get roughly $ 600,000 after taxes. Because any dividends would be taxable as Unearned Income at the highest rate, you couldn’t even afford to rent ($3000 a month) a decent apartment in a city like San Francisco or NYC. Triple taxation (State, Federal & Local) can make dividends and interest worth as little as half than face value. The $24,000 per year dividend you’d get at 4% might only be worth $15,000 per year. Try living on that without working!
So what would I do? If I had no heirs I wanted to leave capital to, I’d buy a Swiss annuity from a big dependable insurance company. At 80 you could expect about $1000 a week for life. Nice retirement income. Probably all tax free till you bite the dust. Annuity recipients generally live 10 stress free years longer than the general population. So I’d expect to make it to around 99.
I’d also move to a country like France or Israel (third choice Italy) where medical treatment for old people is covered and the services are 1st rate.
Most people who get a big windfall —like lottery or inheritance— are broke within 3 years, for reasons I go into at length in my other answers and in my books and reports. Read them if you really do expect to get some money you didn’t earn. Otherwise you will be scammed. I also do personal conferences and mentoring (sorry, not free).
If you are a young person, a million is not very much these days. The annuity if you are 25, would pay you maybe $500 a month net after tax. In some towns like where I live, a million is the cost of a parking spot. So you will need to work at something. Your windfall is best kept as a small cushion for a rainy day. I would get some expertise in something like collector proof quality gold coins or read my book Think Like A Tycoon before you buy any property. Invest only in something you know well. But not all in one basket. Diversify in to 6 areas with $100,000 in each. An income property you can also live in would be good. Like a duplex or triplex. I might take a budget or re-positioning cruise, and spend around $60 a night for 2 months (I know how to get bargains on cruises. I take 2 a year! Good value, cheaper than hotels.)
“Investing” in stocks or bonds where you have no control is very foolish compared to producing or buying and re-selling services or real things — not paper assets which can be (and often are) rendered valueless at a stroke. I did well in several businesses till 1990 when I retired. I wrote books about how to start and run businesses on a shoestring. I mean with little or no investment outside of your time. But once I quit working at what I controlled & knew about, I turned a large fortune into a small fortune with loser stock market investments run by “experts.” Most agents selling you stocks and touting the big returns on securities do not figure in broker’s commissions, holding costs, bank charges, interest, capital gain taxes, etc. On funds, they often get hidden commissions.
If you bought all the stocks in the Dow Jones Industrial Averages of 1900, or in most succeeding decades, you would find out that they are ALL DEAD today. You would not have kept up with inflation; you would not even have preserved your million!
I am 80 years old. All my old favorite securities of 50 or 60 years ago are in the rubbish bin of history. But property I bought near San Francisco back then—you’d need to add 2 to 3 zeros to get the value today. But who could have known? Not all real estate went up either. Look at Detroit! But well located property will beat the stock market by far where there are either a lot of high paying jobs (Silicon Valley) or special features – like the tax haven status of Monaco … Trouble is, you need to look after real estate [unless it is an empty lot] —collect rents, do needed upgrades and repairs. Real Estate is a business, not a passive investment like stocks.
Want to lose all or most of your money? Go to securities. Don’t forget about “counter-party risk” though. That is where you lose because your respected broker (Bear Stearns) goes out of business. Or the guy managing your money is a crook or fraud like the ex-head of the National Association of Securities Dealers —Bernard Madoff. If your broker isn’t a crook, probably your stocks will die— leaving you penniless.
Just have a look at the old DJ lists year by year. They delete all the losers regularly and add hot stocks, keeping the gainers until they are no longer hot. The people who run these averages are always weeding out the losers. In fact, the vast majority of stocks under-perform the Dow, and an awful lot of them simply go down the toilet.
All companies die or go out of business eventually. So too does all paper money die. It eventually become worthless.
Of course just because I like or don’t like something doesn’t mean it is not good for others —I say that often in my answers and in my various books & reports. Don’t listen to me. Get some ideas and perspective from me, then gain some expertise and make your own informed decisions.
I would not go for a vacation in Moscow in the winter, for instance—- but I suppose some people might like to do that. OK It is just my opinion. On the other hand, some scams that I rant and rave about like Binary Option or most Forex Trading programs are just money dumps for the unwary.
Thus, many things you’d see on the TV Program or blog American Greed are no good for anyone except their scammy promoters who run them to fleece people who think they will get rich on passive investing. You won’t get rich and you probably won’t even preserve your capital. If a stock for instance, has an abnormally high dividend, that usually means it is headed for a major dump.
Years ago, British coal mines companies were recommended because they paid a 12% dividend when other companies were paying 6%. I dropped much more than a million on them because the UK mines for the most part, were closed. My companies went bankrupt. Same thing happened when I invested in “growth companies” again in “Dot Com” and again in 3D printing and gold mines.
How to make a small fortune? Start with large fortune and invest in high dividend stocks, hot stocks, leading edge stocks, commodity stocks, or just about any stocks. You will end up like me. Down 90% from my stocks, but fortunately up in real estate and collector items.
The stock market in general is almost as bad as pure gambling in a casino. But for many, it is the “only game in town”… You put up money and don’t have to do any work or even think too hard. Then you lose it.