What Would You Do With A Sudden Windfall?

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?

kona coffee sample
Would you use the money to improve the lives of your children?  Or, would you just spend more time with them?

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.

Hawaii Beach 3
Being able to spend the whole year outside would dramatically improve our lives.

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!  

Board game shelf
There’s a reason why we have so many board games.  We’re stuck inside nearly 9 months of the year!

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.

VNP entrance
Traveling to more National Parks would be ideal.  I wish the kids traveled better!


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]

24 thoughts on “What Would You Do With A Sudden Windfall?

  • June 17, 2016 at 5:29 PM

    I think you’ve hit the high points of what I would do, but we’re already retired. (more vacation & travel)

    Add to that helping out a grown daughter that is considering dental school, shoring up some grand-kids college funds, and buy a small house in the Pacific Northwest where it is not forecast to be 117 this Sunday. 😉

    • June 17, 2016 at 8:20 PM

      The forecast only says 70F for me this Sunday. Oh well, better than 50F.

  • June 17, 2016 at 6:41 PM

    $2 million would move up my RE date to yesterday. Maybe the day before.

    I don’t think much would change in our day-to-day living, though. I guess our long-term plans are pretty up in the air, so we would have to start making some decisions. We’ve also got a couple young boys, and they’re both in school now, so nothing would change drastically in the short term.

    I think Hawaii is great to visit, but I wouldn’t move there. Once you’re there, there’s not really anywhere to go… except the other islands of Hawaii. I might be able to enjoy that for a few months or possibly a few years, but we’ve got too many friends and family and places yet to see in the continental 48 to consider a drastic move like that, even if the calamari is outstanding in Hawai’i.

    I like a good thought exercise. Keep up the great work!

  • June 17, 2016 at 7:26 PM

    Hurray for Texas traveling! I would do something very boring like invest in a low cost index fund and live in a very quiet city.. Very weird goals for a recent college graduate but hey, I think I’ll get happiness! 🙂 You said you’ve been thinking a lot about life lately, so just as a question to know you better, are these some things that you value that would make you happier?

    • June 17, 2016 at 8:24 PM

      Yeah, I guess you could say that. We love warm weather and being able to spend time with our boys (i.e. not working). I’m also big on continuous education; I view travel as another form of that.

  • June 18, 2016 at 3:36 AM

    I hear you on the weather. I would leave the Pacific Northeast as well (or basically any location described as “North”).

    With $2M already in the bank, I doubt you need my permission, but seems like you already have license to make a lot of these changes (if not now, soon).

    For me, I don’t expect to receive a windfall like this so I don’t think about it much. If I did, I know the first place I would go is to the Bogleheads wiki on the subject:


    • June 18, 2016 at 8:22 AM

      I don’t expect a windfall either. I’m mostly just thinking about what changes we should make to our lives.

  • June 18, 2016 at 3:45 AM

    I think you hit on a lot of the points for me. $2m would get us to our savings goals that we would be able to stop working 9-5 and could concentrate on family and projects we are excited about.

    I would also consider moving out of Wisconsin finally. I think we have had 1 too many bitterly cold winters and I think I could convince my wife to move somewhere warmer!

  • June 18, 2016 at 5:43 AM

    Hi Mr. Tako,

    I like your website and your conservative approach with the save withdraval rate. Having ~1,4M in investable assets I could not sleep with a 4%SWR with this high market valuations and zero real bond returns.

    If you want better weather for outdoor acivities you should seriously consider the Southern East Coast of the US. My personal favorite is Coastal Northern Florida. Not as humid as South Florida + year round outdoor weather, affordable housing + beach live and also a good location for traveling by car with your family ( in Hawai you would need four plane tickets every time you leave the island for the next 15-20 years wih your family). You can get a real nice 2500sft 4 bedroom house for $350-400k close to the beach in a good school district there. There is no need to spend 9 month per year below the clouds if you live in the US.

    Regarding traveling with kids: My kids are 7 and 5 years now and the last 2 years things got much more easy. You can travel with them for many hours; they invent their own games on the road and in general are playing the whole time together. Have a nice day!

  • June 18, 2016 at 7:32 AM

    Great article and something to think about. Just the other day the wife and I were watching TV and somebody just inherited a similar amount. Mrs. iFreebies noted how nice that would be and how we could do different things. That started a difficult conversation we have yet to finish. While we are saving for early retirement we are still a little conflicted on what the end goal (daily life in early retirement) looks like. I might bring up this topic again and see where it goes. Thanks for the inspiration.

    • June 18, 2016 at 8:26 AM

      Perfect! These kinds of conversations are a great way to stay on the same page with the wife (or SO). Aligning (or at least supporting) long term goals is pretty darn important in my mind.

  • June 18, 2016 at 11:57 AM

    I think we would focus on work and travel. We would probably stop working, or maybe work just a year or two longer. Then we’d really start traveling more, around the school schedule of course. We are pretty happy with the climate here in Charlotte. We would probably start living a little more confidant and experience a bit of lifestyle inflation, but we wouldn’t be buying a bunch of luxury goods or anything.

    Good thought exercise. It’s nice to think what life will be like with total financial independence!

  • June 18, 2016 at 3:03 PM

    2mil if more then we plan to have when we retire. So it would open up a lot of options. Would definitely pay off house. I would explore teaching part time at the college level. Would spend more time with my husband and birds. Other then visiting the ocean more often don’t expect spending would change.

  • June 19, 2016 at 2:26 AM

    Good topic. Got me thinking.
    We have been fortunate to have two careers that allowed us to build a sizeable portfolio and our last two years before FIRE will solidify the portfolio further. We will sleep fine with our withdrawal rate.

    A large windfall could open up more choices for kids college. Would our kids benefit significantly from that? I doubt it.
    Travel to diverse parts of the world would open up the minds of our children even further.
    Giving sizeable chunk of money to siblings to ease their respective journey in life would also be high on the list.

    • June 19, 2016 at 9:17 PM

      I like how you thought of using it for the benefit of others!

  • June 19, 2016 at 7:13 AM

    Tako San, This is hypothetical for me. Never had a windfall and don’t expect to. My dad who passed away last year left behind a paid-for condo and about $180k in financial assets, now on my mom’s name. I am managing them for her and she receives a tiny spousal pension. She says the pension is enough for her and the financial assets are for me but I wouldn’t touch it – would keep it as out of pocket medical cost cushion for my mom. My life wouldn’t drastically change if I received a windfall in the 7 figure except maybe my wife and I would take more international vacations and cruises. Still, at $41k passive dividend income from my portfolio (all of which was self-earned), I feel we can live a decent life in mid-west or southern parts of US till SS comes in by our mid-60s (20 years away ) and bumps up our income to the mid-60k region. I choose to remain in 100% dividend paying equities regardless of market valuation.

  • June 20, 2016 at 6:39 AM

    I’d find someway to give it to my parents without a tax penalty, or just buy them everything they ever wanted and upgrade them to the best cabin on a cruise as they are always cruising. Giving them the money would optimize the money b/c I wouldn’t use it.

    How long is your wife willing to work? You and Joe from RB40 have a fantastic arrangement. I’ve found that when each spouse has a part-time consulting job to be out of the house and work 15-20 hours a week is the best arrangement. Both at home felt too much.


  • June 20, 2016 at 9:13 AM

    $2m – that’s easy.

    The money – I would instantly invest $1.5m in my brokerage account in my current asset allocation. The $500k would remain in cash for a potential home purchase and maybe help some family members pay off some debts so they can concentrate on their financial goals.

    The job – I would work another 3 months or so until I received my bonus and then would put in my two weeks.

    I would take 3 or 6 or 9 months to just hang out and let it sink all in before I did anything drastic like purchasing a home or jet-setting across the globe. Maybe I would want to start a business since I am only 28 years old. Maybe purchase a house and settle down in a community. Maybe buy an RV and tour North America for a while. I wouldn’t rush because that’s when accidents happen, and I would want that windfall to last a lifetime.

  • June 20, 2016 at 11:22 AM

    A nice windfall, yes please! Would go straight into the investments and speedup our path to FI. We may use a little to travel, but we reckon about 95% would be invested right away.

    Day dreaming…….

  • June 21, 2016 at 2:00 PM

    “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.”

    Thank you! My wife apparently doesn’t understand this. We went to Canada for 10 days, and overall it was a good time, but I keep telling her it would be better to postpone that kind of “abroad trip” for when the kids are older. We’ll get more bangs for our bucks when all of us are able to enjoy the thing completely.

    About a $2M windfall: I’d quit my job instantly. My family would need much less than this to live, especially if you assume this would be added to what we already have.

  • August 4, 2016 at 2:08 PM

    This happened to me when my father passed away in 2015. The inheritance was closer to $1.5M rather than $2M. I’ve been grappling with these questions ever since. Random thoughts – many sources say you shouldn’t do anything after receiving a large windfall for one year. This is to allow time for your mindset to adjust and to go through one tax cycle (there may be tax consequences you have not considered). “The next phase of my life” has been delayed due to my deliberate approach in clearing out my father’s house and a car accident. The responses to this question assume the $2M is liquid but in my case, it has taken some work to unwind/sell the assets to extract the money.

    W.r.t. your Big 3, travelling is certainly something I would like to do. I spent most of my vacation time visiting my father for the past few years so there is a pent up urge to travel. I like the area where I live so I would prefer to stay here. Work is the wildcard. I’ve always chosen jobs based on my expected enjoyment of said jobs. I’ve accepted job offers without knowing the salary or taken the lower offer when I had competing salaries. When I was younger my attitude was “if I have to work, I may as well do something I enjoy.” Now that I’m older this attitude is almost anti-FI/RE. “If I like my job, why would I want to stop doing it?” The answer is that there is an opportunity cost and the older I get, the less time I have left to do other things.

    I consider myself lucky to be paid a good salary for doing something I enjoy. I ask myself, if they stopped paying me, would I still do this job? The answer is no. Carrying that thought exercise a little further, if they cut my pay by 25%, would I still do this job? I think I would assuming I could get over the resentment of such a large pay cut. If everyone at the company was forced to take a 25% pay cut, I’m certain I would stay in the job. Maybe the dynamics at work would change but I would definitely stay to take stock of the situation. There has to be an inflection point which would essentially allow me to impute a retirement date.

    Sometimes I think I’m near optimal in terms of my life goals…so any change would lead to a less satisfied state. Does that mean my goals are set too low? Actually, the things I still want to accomplish in my life have very little to do with money so an extra $2M won’t help in that regard. I suspect that I am still thinking with a pre-inheritance mindset so I have to grow my goals into my new net worh which is a strange concept for me. If you are a millionaire, you have one set of goals but if you are billionaire, you have a different set of goals?


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