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Nobel prize – what would you do?

by retirebyforty on October 10, 2010 · 2 comments

in fun stuffs

First of all, congratulations to Liu Xiaobo.  The 2010 Nobel Peace Prize winner is recognized for “his long and non-violent struggle for fundamental human rights in China.”  Thank you to everyone who is trying to make the world a better place.

This post is a variation on the usual what would you do if you win the lotto question. The hypothetical noble prize is better because it means you earned this somehow and it’s not just a windfall.

And I went to Alfred B. Nobel Jr. High so I feel a strong connection to the prize. 8)

Let’s say you get 1 million dollars if you win the Nobel prize.  I know it is actually around 1.5M, but let’s keep it simple.  What would you do if you get the prize for inventing a world-changing widget and are not rotting in a cramped Chinese jail?

In my case, after federal and state tax for married filing jointly, I would be left with around 550k or so.  This is a huge amount of cash money, but probably not enough to live on for 40 to 50 years.  It is certainly not enough for the standard retirement plan where you put the money in 60/40 stocks and bonds, then withdraw 4% a year.  Can I live on $22,000 a year? It’ll be pretty tough when there is a lot of life left to live.

The question is would you keep working at your current job or would you pull a Terminator and say “Hasta La Vista, Baby”?

Personally, I’ll be out of here so fast you won’t even hear my Road Runner “Meep, Meep” sound effects.  I’ll grab my lunch box, my gym bag, the one plaque I have left at the office — and that’s really about it.  The money is not enough to retire on, but it will give me a cushion to figure out what to do next.

This is an easy call for me.  It is basically telling me I want to leave the corporate world. What would you do?

{ 2 comments… read them below or add one }

Jon October 10, 2010 at 8:32 pm

An as your friend, I’d slap you around for quitting your cubicle job with just $550K and no knowledge of making money with money. However, I believe your problem is set up incorrectly. If you won the Nobel Prize, the net $550K is insignificant compared to book deals, lectures, etc. For that, I would say quit your day job and reinvent yourself as the next Al Gore. He’s a billionaire now by the way.

But if you won the lottery and netted $550K, then it would be extremely stupid for you to quit your day job. Instead of retiring by 40, you’ll probably be broke by 40 and too unskilled to return to the work force, and have to live off social security until you are 50, because that’s when social security will be bankrupted. You will wish that you kept your day job, learn how to make money work for you instead of you working for money. Then you are qualified to quit your day job and retire :-)

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retirebyforty October 11, 2010 at 12:48 am

I limited the scope to the money for simplicity sake. I would work to make the world a better place if I have more influence and make a little money along the way of course.
If I have an additional $550k, then that would give me a big enough push to meet the criteria that I set. I’ll write more about the criteria in a later post. If I was 25 with no saving and minimal investment knowledge, then I agree that it would be a stupid thing to quit working. However, I’m a bit older and wiser and pretty close to my goal. I am not counting on social security.
When I quit my corporate job, it will be a new beginning and the faster I do that the faster I can get started. I doubt I will miss my day job, maybe the paycheck though. :)

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