The Million Dollar Question

What would you do if you had a million dollars?

This question seems to come up regularly as a conversation starter. I’ve found that the answers tend to fall into two groups.

In one group, you tend to have answers that involve radical life changes. That person would just move to another part of the world or go on a bunch of vacations or buy a ridiculously expensive home.

In another group, you have answers that involve financial security. That person would pay off debts, maybe buy a modest home or a reasonable car, and put the rest away for big future goals.

You might see a mix of the two, where the radical life change person does pay off credit card debt first or the financial security person does go on a great vacation, but most of their planning centers around their main objective. It’s either radical life changes or financial security, and it’s pretty clear which one is the focus.

I’m clearly in the “financial security” camp. If a million dollars suddenly fell on my lap, I’d put all of it away in investments with the intent to live off of 3% withdrawals for the rest of my life. That would add up to $30,000 a year just from the $1 million, not counting the other retirement savings we already have, nor counting the other investments we have. This would probably hasten our retirement to the pretty near future, but I don’t think we’d retire tomorrow. We’d just sit down and talk through what’s next, but it would mostly center around preserving the life we have right now.

Answering this question and daydreaming about that situation is a lot of fun, but there’s actually something really useful buried in this question. If you give it some serious thought, it’s actually an indication of what your personal plans should be, and thus what your financial plans and professional plans should be like.

For example, with my own million dollar dream, it’s really just an extension of the path I’m on, which happens to be the path I want to be on. I like my life in most ways; no life is perfect, but mine is pretty good, and I simply want to fortify and secure the life that I have and move early retirement, which is already in the plans, a bit earlier.

In other words, the real division between the kinds of answers that people give to the “million dollar question” is whether the answer is just an extension of the life path they’re already on or whether it constitutes a radical change in your life.

Those two types of answers point toward two completely different schools of financial and life advice.

“A Million Dollars Would Simply Accelerate My Already-Existing Life Plans!”

This is definitely the group I’m in and, I suspect, the group that many Simple Dollar readers find themselves in.

People in this group already know what they want out of their life and they’re working in that direction already. An infusion of money just contributes to the plans they already have in place.

My question to people who are in this group, and a question I ask myself all the time, is this: what can I do to hasten those plans? If having a million dollars dropping on my lap means I accelerate and secure the plans I have for my future, what can I actually do right now without that million dollars to accelerate and secure those plans? If this plan is so obviously important to me and so front and center in my life, what else can I be doing to secure and accelerate those plans?

For me, I’m already on a path to complete financial independence and early retirement. A million dollars would merely accelerate my journey down that path. This path is something Sarah and I have carefully considered and we’re in strong agreement on. It’s where we both want to go.

So, what can I do to get us there faster? What can I do to move that point of early retirement a year or two earlier? That’s the real question that the “million dollar question” is asking me.

The answer to that question, of course, goes back to spending less than I earn and doing something useful with the difference. Keeping a firm grip on my spending, looking for opportunities to bring in a little more income, and then using that gap to accelerate our goals is the recipe, and I’m always on the lookout for those things.

However, at the same time, chasing a bigger “gap” should not come at the expense of what I value in my current life. This is such a key personal finance lesson. You have to be able to distinguish between what’s actually important in your life right now – what makes it worthwhile for you – and what isn’t important, and be willing to discard the things that aren’t important for the things that are.

The recipe for accelerating your existing plan really centers around deciding what’s important in your current life and what really isn’t, discarding that unimportant stuff, and using those discards to accelerate the things that are important.

The really interesting side of all of this comes with the other answer to the million dollar question.

“A Million Dollars Would Change Everything!”

If you are in a situation where a million dollars would cause you to make radical changes to your life, altering your profession or your relationships or where you live or how you spend most of your time or some combination thereof, the clear question is why aren’t you orienting your life toward making those changes anyway?

The magic of the “million dollar question” is that it eliminates the issue of financial need from the question of what you want to do with your life. If the things you want to do with your life are drastically different than the things you are doing with your life, then there’s a good chance that you’re in a relatively unhappy cycle in your life, one that’s held in place solely by financial considerations.

If there’s ever a call in your life to start making some financial changes, it should be this one. If the things you most want to do with your life are significantly different than what you’re actually doing with your life, and the only thing that is keeping you on the current path is finances, then it’s time to radically reboot your finances so you can have that life.

I should know, I’ve been there.

For roughly a year before my financial turnaround, I felt like my life was stuck in a serious rut. My dreams and visions and plans were in one direction, yet day in and day out, I felt like my life was heading in a different one. I actually recognized it as it was happening; I wrote about that feeling in my journal and tried to process what it meant.

I knew only that my daily routine was one that was comfortable, but only in the most surface of ways. It was a life that, at a quick glance, should have brought me substantial joy, but what it brought me was fleeting tastes of pleasure and comfort and an underlying feeling that life wasn’t what I wanted it to be.

As I wrote back then:

Sometimes I feel like my life is completely without purpose and I’m just following some invisible pattern that someone else has put into place.

I was walking along a path and there were a lot of things that I liked along that path, but it wasn’t bringing me anything deeper or more meaningful. Rather, it was a path to a destination that I didn’t really want to go to. I loved the pleasures of my day to day life, but I didn’t want to find myself at age fifty without having actually achieved anything I wanted out of life. I didn’t want to be stuck at a stressful job with very little to show for it.

I had all of the little things I wanted today, but I was walking away from all of the big things I wanted out of my life.

If you had asked me the million dollar question then, my answer would have been full of radical life changes. I would have moved. I would have changed jobs. I would have likely splurged on a lot of things that I thought would bring me some joy. In short, I would have used that million dollars to try to stumble toward a life that was much different than my own.

If I knew that about my life and my life choices, then why on earth was I staying on that day to day path?

It took us several more months to really figure things out, and that’s when Sarah and I launched into our financial turnaround. Rather than wandering down a pleasant and comfortable path toward a destination we really didn’t want, we chose to wander down a bit more challenging path to a destination we really wanted. In other words, we started living our day to day life in a way that would lead to the things we would do if a million dollars fell in our lap.

That’s my advice to anyone who would make lots of life changes if a million dollars fell on your lap: start living your day to day life so that you’re heading toward those changes you want.

If you would change where you live, then that means you’re probably unhappy in some deep way with where you live. What can you be doing to aim yourself in a direction to go somewhere else?

If you would change who you spend time with, then that means you’re probably unhappy in some deep way with the people around you. What can you be doing to change your relationships and your social circle?

If you would change your job or your career, then that means you’re probably unhappy in some deep way with what you’re doing for a living. What can you be doing to change your career trajectory?

If you would splurge on a bunch of things, then that means you’re probably unhappy in some deep way with the things that you do for leisure. What can you be doing to explore new interests in your life without causing further financial chaos?

Underlying all of those questions is this one: what are the things in your daily life that you spend time and money on that aren’t in line with or guiding you to the things you would do if you had a million dollars?

Here’s the thing: most of the stuff that you’re dreaming about if you had a million dollars are things that are probably outside of your current financial and life reach. You can’t just snap your fingers and make them happen. If you could, then that’s what you’d be doing, right?

The question you should always be asking yourself is this: how can I spend today to move myself closer to that million dollar vision?

What I found, as I was moving through my financial turnaround, is that every day in which I did things that moved me closer to that million dollar question felt like a really good day. I didn’t have to be perfect about it, but I found that if I took several steps forward and only a few inadvertent steps back most days, it felt pretty good. It feels really good to be able to go to bed at night knowing that you spent the day doing things to move yourself toward the life you really want rather than just coasting through the motions of the life you have.

“What about the fun things, the little pleasures?” Don’t worry so much about the little pleasures that you fill your life with. Those are infinite in abundance, and many of them are free or exceedingly low cost.

More than anything, I found that if I started shaping my normal daily routine into something that I both enjoyed in the moment and which resulted in me being a little closer to that million dollar dream at the end of the day, things felt very, very good.

It takes a lot of experimentation. You have to try lots of new things and you have to try cutting out some old things, too.

It takes a willingness to cut some things out of your life that seem very fun and enjoyable and comfortable in the moment, just to see what life is like without them and whether there’s something else that can fill that space.

It takes a lot of commitment to building new habits. Many of your old daily routines aren’t going to work. You can’t keep going into work and going home and doing the same old things and magically expect new results. You’re going to have to knock down some of those routines and do new things.

It takes some frustration, too. You’re going to take steps that are the wrong steps for you. You’re going to cut out things that you shouldn’t have cut out, and part of you will be shouting that the whole plan is wrong. It isn’t. That’s just the animal part of your brain that resists change. Accept that you will make a few mistakes along the way, and that it’s completely okay to backtrack on some details and do them a different way.

It takes patience, and a lot of it. Even if your days are now headed in the right direction, that doesn’t mean you’ll achieve all of your big goals next week. Rather than staring at the million dollar dream all the time and getting frustrated that it’s not right here, right now, look at your daily life, the good things that it contains, and how it’s heading to where you want to go.

You can do this.

Final Thoughts

I invite you to spend some time seriously thinking about the million dollar question. What would you do with your life if you suddenly had a million dollars in after-tax money in your hands? Would you simply accelerate many of the things you already have in place? Or would you make some radical changes and embark on some major splurges?

If your answer is acceleration, then it’s worth looking at your life and asking how you can accelerate things. You’re likely happy with your life direction, so the question is how you can get to that million dollar dream just a little faster.

If your answer is splurges and big changes, then you should consider whether you’re living a daily life that you’re really happy with, considering that a sudden windfall would mean a radical change in direction. What’s keeping you from working on that radical change in direction right now? Furthermore, is it really that thing you’re blaming – your job, your spouse, your kids, whatever – or is it just your unwillingness to give up a comfortable daily routine and upset the cart a little bit?

In my heart of hearts, I truly believe that the best life we can be living is one where we’re living every day as another step or two toward our million dollar dream in each area of life. That might mean that our daily life isn’t quite as comfortable and easy as it could be, but it means that each day is in line with what we want most and each day builds upon the efforts of the last rather than working against it.

What is your million dollar dream? What are you doing today to get there?

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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