How big of a pile of money do you need?
What is more important, money or money as income?
As kids almost all of us dreamed of being a millionaire I was raised in a small town in Idaho, we had one millionaire. People would always talk about her (yes, a her) about her cars, her vacations, her house and especially the Christmas party she always hosted. My parents went to the party every year; it was all so grand, at least by our small town’s standards. One year I got to park cars for the party and earned $20, a really huge payday for me.
Now as I look back and wonder about being a millionaire I have realized that a big pile of money isn’t really an answer — it is what that pile of money can do that is important. I am not speaking of helping our kids or charity; those are all very important things. I am speaking of the pile of money and what we should do with it to make sure it is enough?
Lots of financial people want to help you invest your pile of money and they all have different ideas of how: Should we keep our money in the bank? The stock market? Where?
The first question is really simple, a simple question that is not EASY to answer. What is the purpose of the “pile of money” and what do we want it to accomplish? If you can answer that, then you already know the answer.
For me, I made that decision years ago; I decided to forgo the pile in return for income. I bought annuities, lots of annuities. Now my pile of money isn’t big, but it is a big monthly income and guess what? It comes every month. I can spend every dollar every month if I choose because next month it comes again.
What was that you said? What about leaving funds for the kids, the church, the charities?
I have done that also. I have used a portion of my monthly income to create a large estate once I no longer need money, an estate which will be paid tax free to all of them. I have created a “life insurance” estate. When I die, my heirs will receive exactly what my “annuity money” represents — a big pile of money.
It was an easy decision because in choosing annuities as my investment choice, I removed all chances of risk and all chances of losing money. I also made sure we will have sufficient income for almost any contingency and still have the big pile ready for heirs.
Smart aren’t I? No, not really, what I am is informed, informed about the fabulous benefits annuities can provide. Income, safety, security and a whole lot of stress reduction.