Imagine for a moment you had a sudden windfall. Pretend it’s a surprise inheritance from a rich uncle.
This inheritance is large enough you could make some pretty significant changes in your life, but not enough that you would never need to think about money again.
How would you change your life if you had this sudden windfall? Could you use the money to buy more happiness?
How Much Money?
Let’s start by putting some boundaries around this hypothetical windfall. It has to be enough money that your current financial constraints won’t matter, and not stupid levels of money. I want you to imagine the life of a normal person, not the life of a billionaire king.
$2 million should be enough. You could do practically anything with $2 million, but not everything you could dream up. That’s $2 million USD, after taxes.
Add this amount to your current net worth and start imagining what kind of changes you could make to your life.
Would You Change Anything?
The question is about how you might change your life to find more happiness.
Would you eat out more? Would you quit your job, and travel the world? Would you volunteer more? Would you spend more time with your kids?
We haven’t received any windfalls, but I’ve been thinking a lot about this question.
The Tako family would change 3 main things about our life: Work, Weather, and Travel.
For our family, a sudden windfall would accelerate our plans ahead several years.
Investment income would become almost an afterthought. With a extra $2 million dollars, our investment income would jump from $48k/year (at a 3.5% withdrawal rate) to around $120k/year. That would be more than enough for most families, including ours.
Mrs. Tako would quit her job right away. Less work and more fun with our boys! She makes good money, but her job isn’t especially rewarding. She’d rather not be working, but we’re taking this early retirement thing slowly.
Some people think we’re too conservative with $2 million in assets, but I think we still need to be cautious.
That said, if we had an extra $2 million, I could throw a little caution to the wind.
Obviously we can’t control the weather, but we can move to a place with better weather!
With a $120k income, we’d quickly sell our house in the Pacific Northwest and move to Hawaii.
We already planned to sell the house, but Hawaii never seemed like a real possibility. Mainly due to its high cost of living. It’s a place we like to visit, but only dream about living. Having a $2m windfall would make those dreams possible.
Why Hawaii? Mainly because it’s warm, and gets a good amount of sunshine hours per year.
Here in the Pacific Northwest (where we currently live), we don’t receive much of either. It’s cold, dark, and rainy 9 months out of the year. As I write this, I’m wrapped-up under a blanket in the middle of June. It’s supposed to be summer!
Unless you’re some kind of die-hard rain lover, this kind of weather traps you indoors much of the year. It’s great for playing board games, but we need to get outside too!
We live for the summers around here, as it’s the only time we can comfortably get outside.
In “retirement” we need to solve this problem. We need to be outside nearly every day, getting exercise. Our bodies need regular physical exercise to stay healthy and keep our healthcare costs low.
Moving to a warmer climate would insure more sunshine and palatable weather for outdoor activities. This would mean a healthier life, with fewer medical problems. It would be great for the kids too! We’d probably end up living longer, like most Hawaiians.
Our original plan was to sell the house and move away in the next year or two — Somewhere with a lower cost of living, and more sunshine hours. We hadn’t decided on a location, but with an extra $2 million we could pick the best possible option (and the most expensive), Hawaii!
Travel seems to be on every person’s list for early retirement, and I’d be lying if I didn’t say I was interested.
I’d like to see us travel more in retirement, but it’s not very likely in our current situation — Having to drag around tired, cranky kids through crowded airports is not my idea of fun.
We’ll eventually travel more, when the kids are older. Right now, travel is just not a fun time.
Money won’t solve this problem either, but it could help increase our travel budget. Instead of one trip per year like we currently have, there could be multiple.
Where would we go? We have friends in Texas, and family overseas that we need to visit occasionally. I’d also like to visit more of our national parks.
What Won’t Change?
Having more money is always nice, but it wouldn’t really change our lives that much.
We’re already blessed with a great life. We have plenty of food, a safe place to live, and everyone is healthy. We already have most of what we need in life without sudden windfalls.
Sure, we could consume more, but it wouldn’t make us much happier. Increasing our consumption might actually make us less happy.
You’ll notice I didn’t say things like “buy a sports car”, “buy a bigger house” or “buy a bigger TV”. Buying a bunch of consumer junk would not improve our lives. Expensive consumption is usually more trouble than it’s worth!
What keeps me sleeping well at night is the knowledge that our future is secure. Having a couple extra million would just add to that security. I would sleep even better at night.
Mrs. Tako might complain about the snoring though.
Why The Thought Exercise?
I’m asking this question not because I’ve had a financial windfall, but because I’ve been thinking a lot about life lately.
Back when I was working, I was too focused on the day-to-day noise of existing. I was focused on my job, and I felt chained to it. It made me unhappy.
Once I left my job, I came up for air and looked around. Life is actually pretty darn great!
For the first time in years I feel like I’m in control again. I can make changes that will improve my life, not the life of my employer.
Try to take a few minutes today, and really think about your life. Put down the mobile phone. Close the laptop. Turn off the T.V. Forget about work for a few minutes.
Go find a park bench, and think about what would make you happier if the chains were off.
What would you do with your time left? What would you change?
[Image Credit: Flickr]