Marry a Millionaire!

Rich elderly man with gold-digger companion or wifeTiffany has met a millionaire looking for a trophy wife. She could quit her job and live in luxury the rest of her life! Should she marry him?

Here’s a case where Excel can help to visualize the future. How much can they (she) spend each year?

I’ll start building a mathematical model to predict where they’ll be financially each year with what I know and what I assume. The nice thing about Excel is that you can change the assumptions all you want and instantly see the outcome. I’ll start by assuming that they’ll spend $100,000 a year, a modest life style for a rich couple. I know they’ll have assets of $1,000,000, well invested, and that she’s 22 years old. I’ll assume that their spending will increase with inflation, which I’ll take to be 3%. I’ll assume that the assets will grow at a rate to 8% per year. I’ll enter all these as inputs to the model and name them.

millionaire inputs
Now let’s see what happens over the years. Here’s the spreadsheet, called millionaire. It uses simple calculations to predict how they’re doing each year. Click on any cells in the second row if you want to see the calculations; these were AutoFilled to figure the subsequent years.

millionaire results


Under the assumptions I made, they run out of money before she’s 35! Millionaires just aren’t what they used to be. Try changing some of the assumptions and see what happens. You could use Goal Seek to answer the following questions:

  • How much can they spend each year and not run out until she’s 85? (Answer: $48,637)
  • How much money should her next boyfriend have? (Answer: $2,056,208)

Tiffany breaks up with him and goes back to her crummy job.

This is an example of using a simple spreadsheet to peer into the future and get answers to tough questions. You can apply this spreadsheet to other, less frivolous questions, such as, “Can I afford to retire?” Have you used techniques like this? Do you have questions to answer that might be helped by techniques like this?

Were you surprised at the answer? I recall a show a few years back in which women competed for the hand of a “millionaire.” The gimmick was that he was actually just a regular working stiff. A better joke seems to be to check up, a few years later, on someone who married a real millionaire and see how she’s doing.

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