As fun as it would be to go nuts and party- don’t. Take care of your health and avoid acting like an arse. Try to remain as humble as possible given your personality and remember, easy come- easy go!
At least as mine was given, the investment advice is exactly what will prevent the kind of downhill slope you describe. My advice is about finding stability and security. It’s about putting down roots.
What causes people to end up worse off than they started is when they get into the kind of cash heavy impulse spending that a certain lifestyle encourages. If your dream is to be the big man at the strip club, well there will be plenty of people there who are ready and willing to ride you down the slope like a flexible flyer. Sex workers, drug dealers, black market investment advisers, straight up frauds, they will be the first to notice and feed your ego as they take your money.
If your goals and purchases are as I described above, then you’ll be surrounded by neighbors, and family members, and possibly fellow students. A group far more likely to promote long-term happiness.
Threesomes with twins are actually more work than you’da thought.
I agree with the other folks, that a million dollars nowadays is not any huge amount of money. It sounds impressive, and it is, but when folks get older and if they have to live in a place for older folks (nursing home) it may cost up to $250 per day. This is about the same amount of money as staying at an up-scale hotel per day. Medical expenses as one ages can be costly.
As pointed out above, $1M is no longer what we’d would call “rich”. Assuming that’s $1M after taxes, invested conservatively, it should provide you with a $50K/yr income forever. Invested less conservatively, it could earn you more, or disappear completely.
In the US, $50K/yr is near the median income, so it’s far from rich. If you already earn $50K and keep working, you’d be in the top 10% or 20%, but … working. You could not afford multiple fancy homes; you could manage to buy one rather nice one (upper middle class at best, and you’d be “house poor” meaning that you’d have too much of your income dedicated to paying a mortgage.
Or you could buy a rather nice upper-middle-class house outright, but then barely afford to live there on $50K/yr. Whether it’s a “rather nice” or “very nice” house depends on where you buy. In some places, $1M is hardly enough for a modest home or apartment; at others it can buy a veritable mansion.
Shall we start over with $10M? With that, you could invest conservatively at 4% and get a $400K/yr income that would grow as you age and possibly even keep up with inflation. (Actually, I think you’d have to settle for $200K/yr to keep up with inflation, assuming a 5% return and 3% inflation, but I’m not sure about that.)
$200K doesn’t make you seriously rich among Americans, but you’d be rich by the standards of the vast majority of the world. You could eventually afford multiple very nice homes or one really nice one and perhaps a summer cottage on the beach, and still have enough left over to travel (upper-middle class, not “lifestyles of the rich & famous”) and do fun things like ski, rent yachts, do adventure travel to exotic locations, and eat out frequently at very nice restaurants.
And at that level, the moral question comes into play nicely. You could donate quite a bit, but each donation would come at the cost of something you find valuable and interesting. Yet you could still donate quite a lot and still lead a very rich lifestyle. All without depleting the principal.
At $100M, you could donate scads to charity and the only way you’d miss it would be by comparing your excesses with your new rich friends.
At the $1G level, your job becomes figuring out how to apply this vast fortune in a manner that benefits mankind rather than squandering it personally. It’s big enough to really make a difference, but not big enough to actually solve most problems, or to make much of a dent in more than one (sadly to say).
I’d hate to wind up with $100 or more. It’s hard enough to maintain a good sense of values as a normal person. I’m sure it’s far more difficult if you can easily afford just about anything you can imagine, and the burden of public responsibility would weigh on me. So, if anyone out there is thinking of bestowing me with a fortune, please keep it to $10M, which I’d have an idea how to manage!
Best advice, and true regardless of income.
As Dickens’s McAwber said,