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What To Do With 1 Million Dollars (Invest it? Pay off your house?…)

When people think about financial freedom, having a million dollars typically pops up. But, what can 1 million offer you? Is it enough? And, how are you supposed to know what to do with 1 million dollars?

Here’s what you need to know about having a million dollars, and how you can spend it.

What can you buy with 1 million dollars? What can be done with 1 million dollars?

Let’s start off with a fun section. What does 1 million dollars look like? What can you buy with a million dollars?

If you had a million dollars, you could buy:

  • one Ferrari Monza SP1 (want to know how to spend 1 million dollars in 30 minutes? …this would be the easy way to do it!)
  • one modest house on the beach
  • a house on 352 acres in the upper peninsula of Michigan
  • 30 years of retirement with $55k a year!
  • 12 years’ worth of vacationing in Jamaica
  • Or…if you really like pizza…a million dollars could buy you 100,000 large pepperoni pizzas (which I would HOPE would last you for life!) 😉

It’s pretty fun to think about what can be done with 1 million dollars, but let’s get real here. You’re not going to blow a million dollars on a Ferrari or 100,000 pizzas. What should you really do with 1 million dollars? Can you live on it?

What to do with 1 million dollarsCan you live off 1 million dollars?

If you’ve got 7 figures…is that enough? Can you live off 1 million dollars?


There are many people who live well on 1 million dollars. However, depending on your lifestyle, this may mean you have to live lean. Depending on your location, if you have debt or a mortgage, and other costs like healthcare, you may want more than 1 million.

However, there are many people who live on less than a million, so it’s completely possible. In fact, many people are retiring early with less than one million saved, and are still able to live healthy, happy, and fulfilled lives.

Related: How to Live On 1 Million Dollars (And Not Run Our Before You Die!)!

Can a couple retire with 1 million dollars?

If you follow the 4 percent rule for retirement spending, $1 million would provide about $40,000 per year for 25 years. The Bureau of Labor Statistics reports that the average 65-year-old spends about $35,000 a year
So, if both people are retired, $40,000 a year may be a bit tight. However, if you retire with no debt, in a low-cost of living area, and live simply, $40,000 would work!

How much interest does 1 million dollars earn per year?

Do you just want to save the million dollars? What interest can you get on $1,000,000 per year?

If you’re saving in a regular savings account, you’ll only make about 1% in interest (or about $10,000) on your million bucks.

If you’re willing to invest it, you could get a return of 7%-10% on average, or about $70,000-$100,000 a year.

How to Invest a Million Dollars to Live Off The Interest

Want your money to last a while? Maybe you want to make 1 million dollars last forever?

Here’s how you can invest a million dollars to live off the interest.


  • earn 6% on your money and spend $57,000 a year, or
  • earn 6% on your money, and spend $40k each year for the first 20 years, then bump up your withdrawals to $80k a year for the rest of your life!

To earn 6%, many people invest in an S&P 500 index fund, they own some real estate, and they have some guaranteed income from annuities. It’s definitely not rocket science!! You can certainly do it too! 

Related: What Is The Interest on 1 Million Dollars? (Is It Enough to Retire??)

What can you do with 1 million dollars?What To Do With 1 Million Dollars

So, what can you do with a million dollars? Or maybe better put…what should you do with a million dollars?

Now that you know that you could retire, you may be wondering how else you could spend the money. There are lots of things!

Here’s what you could do with a million dollars.

Pay Off All Of Your Debt

First things first, if you receive a windfall of a million dollars, pay off any debt you have!

It feels good to live a debt free life. And consumer debt (like car loans, credit cards, etc) is fairly useless and can affect your credit score negatively.

Plus, why pay extra in interest when you know you can pay it all off?

Related: The BEST Debt Snowball Excel Template (And It’s FREE!!)

Max Out Your Emergency Fund

Next thing to do if you have a million dollars…max out your emergency fund!

While investing your money is a smart idea, you should still keep a good nest egg on hand in cash. Sometimes, pulling out an investment is hard, or not a smart move, but you won’t have to do that if you have cash on hand.

Many people save up an F Off Fund, which typically covers all expenses for up to a year. I think this is a great way to save money but still have the flexibility should you need to use it in case of an emergency.

What can you do with a million dollars? Pay off your house?Pay Off Your Home

If you earn a million dollars, why not pay off your home? Depending on the interest rate and how much you owe, and if you want to live there permanently, paying off your home can set you up for success later in life.

Plan on moving or downsizing in the future?

Don’t make this move. Instead, move on to the next step.

Invest As Much As You Need

Sometimes, paying off your home isn’t the smartest move you can make with your money. If you don’t plan in your current home being your forever home, then perhaps you should prepare for the future by investing your money instead.

You could max out your 401(k), Roth IRA, and other investment accounts that can start earning interest on your money right away. And no, you don’t need to invest the full million if you don’t want to.

That’s the beauty of compound interest. Whatever you invest will continue to grow for years as long as you don’t touch it.

Related: Keep Investing Simple: The Secret to Wealth

Try Out Other Investments

Also, don’t be afraid to invest your money in other ways too.

  • Real estate,
  • angel investing,
  • and even investing overseas are fairly decent bets that could yield high returns.

And, you don’t have to be a landlord in order to invest in real estate.

In fact, you could invest in REITs, so you can earn interest on your money, without the management. If you don’t want to be a landlord to long-term tenants, try buying homes and turning them into vacation rentals or Airbnb’s!

The possibilities with investing are truly endless, and there’s always a new venture you can try. Just make sure to watch your money so you’re getting the best bang for your buck.

Related: How to Invest 1 Million Dollars (…to Make Another Million!!)

What to do with 1 million dollars? Start a business!Start A Business

Have you ever wanted to work for yourself? With a million dollars, you could easily start your own business.

And in reality, it can be anything you want it to be! However, I’d recommend starting a business that meets the needs of your customer base.

  • E-commerce,
  • marketing and social media,
  • and even graphic design/art are all different ways that you could earn money for yourself.

And it doesn’t stop there. You can honestly create a business with any idea, as long as you can market it to people who will pay for it.

Related: 12 Unique Side Hustles to Boost Your Income


Many people say they would donate more if they had more money to give.

And while every little bit counts, it is true that more money can go further. So, if you’ve ever wanted to help a cause, or start a grant or scholarship, or just make someone’s day better, why not donate?

This is not to say that you have to donate all of your money. But, if you’re feeling philanthropic, there are many ways to use your money for good. And bonus points, you may even be able to write it off on your taxes, so it’s a win-win for everyone!

Related: How to Give a Million Dollars (Not Save…Give!)

Live A Little!

Of course, I would never tell you to spend ALL of your money, but I think it’s okay to treat yourself (no matter your income). So why not take a few thousand and do something you want to do?

You could…

  • go on vacation,
  • buy yourself your dream car,
  • take a sabbatical from work,
  • or anything else your heart desires.

Just remember not to go overboard. While 1 million dollars may seem like a fortune, it can be gone if you’re not careful (just ask these lottery winners). But, there’s nothing wrong with allowing yourself the freedom to splurge a little bit on what you truly love.

What To Do With 1 Million Dollars – What Will You Do??

As you can see, there is a lot you can do with 1 million dollars.

And, if you play your cards right, you could easily turn that 1 million into multi-millions. But, if you just want to live comfortably and not worry about money again, that’s okay too! The possibilities are abundant.

So what will you do with 1 million dollars? Will you invest most of it? Save some? Spend a bunch? What’s your plan?

Battle of the Mind Grow Rich Money Passive Income

AUTHOR Kimberly Studdard

Kim Studdard is a project manager for online entrepreneurs and small businesses. When she isn't spending time with her daughter and husband, or reading her growing pile of horror books, you'll find her working on her HR degree and working towards FIRE.

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