Frugal Investments for the Future

We've been discussing the inevitable question of, 'what if...?' and come to a rather surprising conclusion. Being a frugaleur means minimising overheads and general expenditure whilst establishing a clear distinction between needs and wants, enabling us to do as much as possible with as little as possible. The list of necessities for modern day living has to include hard cash because society can neither function nor progress without it. So, what if you were rich?

 

What is 'rich'? I don't mean you live in a large, mortgage or rent free house with a luxury car, a few acres of land, no outstanding debts and upwards of  £100k pa salary, I mean really rich, to the extent that your interest payments on savings alone amount to hundreds of thousands of pounds every year. Being a frugaleur means I don't actually know anybody who is this rich, but the question still remains, what if...?

 

On a bog standard, 1.5% interest rate, you could easily expect £1,000 per month per million after tax. On your current income and lifestyle combination, how many millions would you need in order to live off the current interest? Let's say we won £50 million on the lottery - that's tax free - and decide to live off the interest. What would you do with your £50,000 every month, bearing in mind that, as long as you don't touch your capital, that 50k is going to be heading your way every month for the rest of your days and then to those who inherit? (Not sure on the inheritance tax aspect of this scenario, I'll assume that there would need to be about 40% of the capital paid out in tax before it was passed on to the family, so they might only get £30,000 per month.)

 

I'm stumped! And therein lies the problem of becoming a frugal millionaire - personal spending just isn't our 'thing'. Personally, I reckon I'd need to turn to securing a sustainable and environmentally friendly future for those around me - save the forests, help clean up the mess and invest in others' futures by way of clean energy, safe drinking water and healthy food. In the best interests of all, helping others to help themselves to a healthy lifestyle seems like a good idea. But now I'm asking myself the question - how many really rich people care enough to provide what's needed without it bringing them more money every month? Mr Bannatyne, I take my hat off to you because you've ploughed on relentlessly to provide leisure & fitness opportunities for all who can afford it and care facilities for the elderly. All you need now is the facility to provide prospective parents with the ability to invest in their procreational activities and you have the big three covered - birth, life, death - or perhaps that's a gap in the market that needs filling by some budding entrepreneurs who convince you of their ability to follow through on their ambitions in the Dragons' Den?

 

What would I do? I guess I'd start by investing in someone else. What would you do?

 

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