What I would do with a million dollars

Ever asked yourself what you would do with a million dollars?

I have. Lots of fun things come to mind. Buy a really nice piece of property. Go on a long vacation to Hawaii, or Cancun or some other tropical beach paradise. Invest. Fight world hunger. I might be able to do all of those things depending on how I spent it.

But, then reality kicks in.

Let’s say I have no expenses. Just earned the $1 million selling 495,050 books. (Woohoo!) No overhead this year. According to tax-brackets.org, I’d pay $312,314.50 in federal taxes and $103,597.62 in state taxes. In a literal blink of an eye, $415,912.12 gone. But that still leaves me $584,087.88. Can’t complain, can I? Still better off than many other people.

Now, if I earned $1 million in a year, I’d also pay tithing on it. That’s a choice I make, certainly, but after I wrote the check for $100,000, that would leave $484,087.88. Still not crying, but before I got to really any fun stuff, over 50% of my money is out the door.

So, now what? Am I going to make $1 million next year? If so, I’m doing pretty good. But what if that $1 million is a one time deal? Let’s say, for some reason, Amazon, Barnes and Noble and iTunes all decide they won’t carry self-published books any more, ebook or otherwise.

Might want to hold onto the leftover then, and use it to meet my living expenses.

Well, let’s see. Our family expenses are roughly $3,500 a month. That doesn’t leave a whole lot of discretionary spending, though (no meals out, no movie nights, no saving for trips, etc.). So, let’s up it $500 to $4,000. That means in a year, we would need $48,000 to cover our moderate living expenses and to cover some pretty mundane wants.

I’m an author, it’s what I do, so I keep writing and trying to sell my paperback books so I can make more paperback books so I can sell more. I don’t try to work doing anything else other than promoting the books I’ve published and writing others. Over the next ten years, I more or less break even between my earnings and my expenses, so I really don’t have anything to help with household costs. Thus, within ten years, $480,000 is spent. I’ve got $4,087.88 left over to get me through January, 2023.

Now, I can’t say I’ll live luxuriously during that period of time. I have a nice home in a nice neighborhood, but I’m certainly not jet setting all over the world or yachting or playing polo in the Caymans. Maybe I got to take my wife out to dinner twice a month, we celebrated our birthdays and Christmas, we took a trip to Hawaii for two weeks, or something similar, every year. There might be a few more things in there, but my $1 million didn’t get me very far.

Certainly not as far as what the perception of a $1 million should do.

Especially since I could realistically have 40 years to go before I die. That’s 30 years unaccounted for. According to tax-brackets.org, I’d have to make $3.5 million in order to live out the rest of my life. That’s of course, assuming 0% inflation in expenses, which of course, never happens, and the tax rates stay the same. (Good luck.)

Just for fun, I estimated how much money I would have to make each year, for the next 40, to take care of $48,000 worth of household expenses and discretionary spending. If I earned $67,000 a year from here on out, and taxes never changed, I’d have $48,832.22 annually (after tithing) to take care of things. Looks like I get a slight raise in my net! Curiously, I would only need to make $2.68 million over the next 40 years, as opposed to $3.5 million in one year.

Okay, so I only need to sell 33,169 books a year for the next 40 (1,326,760) instead of 1,732,674 in 2013.

Whew!