Sunday, January 5, 2014

If I Had a Billion Dollars ...

I like to think about what I would do with an unmanageably large sum of money. It's pretty entertaining. You should try it sometime.

My wife and I will occasionally say things like "If we were ridiculously rich, we'd re-do our master bath and utility room just so we could have a laundry sink," or "I'd pay full price for car insurance," or "I'd buy you real diamonds.1 "

It's also fun to think about all the morally superior things you would do with the kind of money the ultra-rich spend on yachts, racehorses, and gold-plated staples. You could provide clean drinking water to an entire city in Africa, or sponsor an entire South American village of children through 12 years of schooling, or fund a program that helps college students meet 8th grade writing standards. (jk, lol)

On top of all that, I want to quantify roughly how much I would wantonly spend. I know; planning kind of defeats the purpose of wanton spending, right? Well, my Microsoft Excel spreadsheet says to shut up and keep reading.

Once you have the house of your dreams complete with panic room and a private E.R., and the right car (repair costs are meaningless, so go ahead and drive that 15-year-old car you love into the ground2), and a sweet $400 per person per month food budget, what else would you spend money on? How would you live differently?

Here are three rules I would live by.

First rule: Have less stuff.

Yes, with the freedom to have anything, I would have less. Probably. Well, at least in the house. Today, I keep a bunch of things on hand because I might need them again. With unlimited resources, I could donate, recycle, or burn anything I own, knowing that I could buy or rent another one if it turns out we needed that dining room table after all. They don't make it any more, you say? I have a theory that things that you can't find anywhere are magically put on the market when you offer $1,000 for Season 2 of Human Target on DVD, and hire somebody to search for it full-time for a fortnight.3, 4 Using words like "fortnight" probably helps somehow. With that kind of freedom, I would actually do what experts tell you to do: If you don't use it for a year and it doesn't make you smile, get rid of it.

Second rule: Digitize it.

If it can be digitized, I'd own it digitally. I've already waded in to the Ultraviolet and Amazon digital movies world, and although the content usually buffers at least once (I definitely blame my AT&T U-Verse fiber-optic internet connection, but has some issues also), I still think it's the future of my movie collection. So, being ultra-rich, I would gladly and painlessly pay $20 per movie for the HD (blu-ray quality) version of any movie that I want to watch. Besides, with Ultraviolet, you can have multiple people on your account, so I could share the wealth.

I'm currently accepting friend applications.

I'd buy tons of Kindle books. Currently, with a 2-7 day wait for each e-book, I can read the entire Dresden Files and Jack Reacher collections for free through my local library, without ever leaving my home. But in the immortal words of Homer5, "40 seconds? But I want it now!"

Third rule: No more wasteful impulse buying.

Make no mistake, I'd be all about buying crap on impulse, but I'd have rules. Do you own any movies/books/music that you haven't seen/read/heard since you bought them? I most certainly do.6 To keep myself in check, I would have a rule that if I'm not going to use it right now (books7, movies, and CD's), or if I bought something similar and haven't used it yet (clothes, food, and stun guns), I can't buy anything new.

I’m sure I'll think of another rule when I win the lottery without playing, and I'll update you then.

So how much would this new lifestyle actually cost?

- Go on two amazingly luxuriously suite8 14-day cruises every year ($1000 / month)
- Pay someone to do beautiful things with my yard ($200-ish per month? Maybe?)
- Get a premium car wash and wax every two weeks ($100 / month)
- Go to the movies twice a month ($120 / month including concessions & babysitter)
- Buy up to 2 Ultraviolet HD movies per week ($240 / month)
- Buy a Kindle book a week ($10-75 / month)
- Buy a top-of-the-line computer at least once a year ($200 / month)
- Buy a top-of-the-line smartphone at least once a year ($85 / month)
- Get a data plan ($50-75 / month), 'cause I don't have one
- Get Netflix Instant Streaming and DVD's. And Hulu Plus. AND Amazon Prime. ($31 / month)
- Write in my blog more often (priceless)

So apparently, excluding the yard care and travel (you know, the boring stuff), I would feel irresponsibly rich with only $11,112 in additional discretionary funds per year. That's all it takes.

A few years ago, I listened to a caller on the Dave Ramsey show who was concerned that his mother might spend his family into bankruptcy. She could spend up to $50k in a weekend! It turned out the family fortune was in the ballpark of $20M, so at that burn rate they would be bankrupt (assuming no interest income) in 400 weeks (7.7 years). If she only spends $10k per week, they're good to go for over 35 years. Based on my extremely frugal wish list above, give me that money and I'll make it last a lot longer.

No seriously. Give me that money.

1 Just kidding, I wouldn't.
2 Or into your jerk boss's Tesla. No need to worry about the increased insurance premiums. Just make sure it looks like it was an accident.
3 It's deliciously wasteful, right?
4 Okay, I don't even know if they ever released it, but I'm jonesing for it, so if you can find it, TELL ME!
5 Simpson
6 Ugh. Now I feel guilty about my existing (much smaller scale) reckless spending habits. … Okay, I just listened to Awolnation - Sail. I don't need to feel bad about that $0.74 any longer. … And now I just re-listened to my favorite "Sail" cover. And then the Pentatonix Daft Punk remix. But wasting time is what being ultra-rich is all about (I presume). I'm just getting in character.
7 I just went to Amazon to price their Kindle books, and I almost bought their $0.99 Natural Born Thrillers Box Set. I don't even like thrillers, but there are 12 of them! How can you pass that up?!
8 See what I did there?