The reality is that if most people received one million dollars, half of the money would be gone to taxes, a few hundred thousand dollars to paying off debt, and the rest spent on expensive cars, vacations, etc.
The majority of this money would go to causes and organizations where we already contribute.
Next, $200,000 would go into trust accounts for my two young children under the age of five.
Giving each of them $100,000 would be good starter money to buy a home, start a business, or pay for college. However, not too much money that it would make them feel entitled.
I would give my parents $100,000 to use on whatever they want.
An extra $100,000 would help them pay off some remaining debt, add money to their retirement portfolio, and maybe go on a nice vacation.
An additional $100,000 would go into emergency savings. Since we are completely debt free including our mortgage, we won’t have to pay down any significant debt.
Having an emergency cushion of $100,000 would cover two to three years of living expenses in a worst case scenario situation.