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Stocks are the smart option, but I'd heavily consider a 5% Treasury for the $50,000/year guaranteed.
5% treasuries mean you lose money to inflation. It’s $50k/yr today but in many years it isn’t worth that. Broad market stocks are much more reliable if you want income forever.
Read about the financial independence movement and boggleheads.
What I said is simplified, but it captures the big picture.
If you’ve just received this 1M suddenly then the best thing to do is to put it in a normal bank account for a year and not touch it. This is because money is very psychological, you need to get used to having 1M before you can safely invest/spend it. If you start trying to spend or invest this money immediately then you’ll be broke within a year.
I have ~$1.5M after ~10yrs in software w/ ~5yrs being in big tech. Live in the US. Almost all is in S&P500 index. It doesn't feel much different than when I had ~$100k in the bank. It is nice to have some safety net and know I can weather most any storm and get back on my feet. I took a few months off a few years ago. I did an expensive masters for fun. Otherwise no big changes. It isn't enough money to stop working…
Oh right. I guess I took it to mean “what would you do if you woke up tomorrow with an extra million”
I would hire some students, mentor them, and we would build all of the open source projects that I want to build (that I'm already slowly working on/planning out on my own).
Things are constantly coming up in my life where I start thinking "The world really needs a ..." One would be a computer vision assorted nuts and bolts sorter.
If you're careful you can get a lot more done than people who have spent 10x the money or even $100 million sometimes.
I never really wanted less than 10x the progress I could get in an academic or industrial institution, and for that it really helps to build it your own way.
Even though I made more than a million using my own technology, there was no windfall, I never had that much in the bank at one time to work with.
So it's really just the same thing I would have done when I still had the first lab I owned, if I would have managed to accumulate a million, which is build me another lab.
Actually I was already setting up a second location for a lot less than a million, where it would also be able to do enough invoiceable work to pay its way too, but it turned out to be too late, the final disaster came too soon.
Had the equipment standing by, and the infrastructure at the more disaster-resistant location over halfway ready for deployment too.
That's all ancient history, now I might be more likely to get a million worth of equipment onto benches and start turning them into money-making machines, without having any cash outlay at all.
After that if I had a million in cash I would put deployment on steroids and do the exponential growth thing (within limits) like normal but from a much more advanced starting point, and at a scale that can return funds to the bank faster than they can be drained by disaster.
For me a million cash would be critical mass toward financial growth, primarily for people other than myself who need a leg up.
I wouldn't let it stop me, I'll probably go forward with a million less than that even if there are more survival activities involved.
Earlier quoted context omitted.
5% treasuries mean you lose money to inflation. It’s $50k/yr today but in many years it isn’t worth that. Broad market stocks are much more reliable if you want income forever.
You "lose money to inflation" no matter what asset you hold or what return you get. If you mean the real interest rate is negative, the CPI inflation rate is currently 3.4% in the US.
The other option is you pull a fixed 50k/yr, but then your purchasing power decreases dramatically over time. In 10 years at 3% inflation per year you would need 67k/yr to have the same purchasing power as today.
https://www.theonion.com/bankrupt-dot-com-proud-to-have-brie...
If you put $1M into a globally diversified stock market index fund then you can withdraw 3%-4% for the rest of your life. That’s an annual salary of $30,000 - $40,000. Alternatively you could leave it invested and let it double every 10 years. In 40 years it’ll be 16 Million. Read about the financial independence movement and boggleheads. What I said is simplified, but it captures the big picture. If you’ve just rece…