Here, I give you a lot of money. What do you do with it?

[MirrorMask]

Hypothetical scenario: I am a generous billionaire.

I'm walking down the street, I suddenly faint and you help me.

I want to thank you for your help, and I give your 500.000 $ (or euros. or whatever the currency is in your nation).

What do you do with it?

(I picked on purpouse a big but not exagerated amount, 500K is a lot of money but it's not a "buy an island and live on it forever and ever" amount of money, and it will eventually run out.... in order to be a bit more realistic and creative with the answers).

[The Walrus]

500k? I buy this house that I'm looking at, fix it up, go back to school. Put 100k in savings and spend the rest on my parents. Whatever's left I'll divide between my two siblings and my 2 best friends.

[Chino]

I'd pay off the $129K I still owe on my mortgage, and then buy $371,000 worth of cannabis stocks. I'd carry on living life as usual.

[Stadler]

I do not pay off my mortgage; I do pay it to a point I can refinance it at a low interest rate and with no PMI, etc.

I pay off any debt I have over, say, 8% interest.  Credit cards, etc.   With the remainder I split it to buy rental property, and, for the time being, index funds.   At some point the index funds will go into real estate as well, but for now...



Either that, or I call Roslyn Capital and buy gold. 

[King Postwhore]

I do not pay off my mortgage; I do pay it to a point I can refinance it at a low interest rate and with no PMI, etc.

I pay off any debt I have over, say, 8% interest.  Credit cards, etc.   With the remainder I split it to buy rental property, and, for the time being, index funds.   At some point the index funds will go into real estate as well, but for now...



Either that, or I call Roslyn Capital and buy gold. 

I'd be like Jimmy G and hook up with milf porn stars.

[MirrorMask]

As for me, I'd try to live on my same life, but with added securities and benefits.

I'd try to calculate how much the money would last according to an imaginary inflated raise: "If I'd get 3000 $ or euros per months, how many years the amount I won would last? how many if I'd get 4000 or 5000 monthly?", and so on, until I'd calculate the perfect ratio to say "well, it's like I can have 5/6/7 times my actual salary monthly until retirement", and live accordingly.

For sure I'd finally book a two weeks cruise in Norway, and then piece by piece I'd do a revamp of all my music collection, and buy just about any CD and complete collection I still miss. Also it'd be time to get a better camera since I'm an amateur photographer. For the rest I'd go on with my life with the added serenity that money wouldn't be such a prime necessity.

[bosk1]

I pay off any debt I have over, say, 8% interest.  Credit cards, etc.   With the remainder I split it to buy rental property, and, for the time being, index funds.   At some point the index funds will go into real estate as well, but for now...

Why would you buy real estate before paying off debt?  That's backwards (unless trying to stay broke).

[mikeyd23]

As for me, I'd try to live on my same life, but with added securities and benefits.

This was my first thought. My wife and I have been kicking around the idea of building a house. So I'd probably pay off interest accruing debt (credit card, student loans, etc...) sell our current place, build a house and then continue living my usual life.

[Destiny Of Chaos]

I'd promise you that I'd be a good steward of this money.... then help my family as much as I can with it.

[Cool Chris]

Short of dumping my wife and abandoning my children, there is absolutely zero about my life that would remain the same. My wife would keep working since she loves her job, but I would quit mine in a heartbeat, take up some new hobbies, do some more house projects, and otherwise be lazy. I'd keep our house, since we love it here. Then I'd invest the rest and ensure financial stability for my kids.

[The Walrus]

I take it back. In the words of Grits N' Gravy, "I'd buy my mama a car... and spend the rest on PCP."

[King Postwhore]

Now to be serious.  I'd pay off debt.  Still work and live comfortably.  You can't retire on $500,000.

[Adami]

500K? Hmm. Not enough to do a lot, but let's see.

1) Pay off all my student loans.
2) Wait till the new Mac Pro comes out and fully upgrade my studio (new everything)

[Phoenix87x]

1. Pay off $120,000 dollars of student loans
2. Pay off $70,000 left on the mortgage
3. Buy a 2nd motorcycle. some type of Harley Cruiser $15,000
4. Buy a modest 3 bedroom home with a garage and little bit of land (somewhere rural) like $300,000 ish range

[bosk1]

Fun to dream.  My knee-jerk plan would be:

1.  Pay off remaining mortgage to become 100% debt free.
2.  Gift $14,000 each to my mom and sister.
3.  Put some in each of my kids' college savings accounts.
4.  Put $15,000 in our vacation account for next year.
5.  Put the rest toward maxing my 401k and Roth contributions for year, and then into other index+ funds.

Honestly, at my age and with our given situation, $500k would be enough of a boost to seriously set us up.

[Chino]

Fun to dream.  My knee-jerk plan would be:

1.  Pay off remaining mortgage to become 100% debt free.
2.  Gift $14,000 each to my mom and sister.
3.  Put some in each of my kids' college savings accounts.
4.  Put $15,000 in our vacation account for next year.
5.  Put the rest toward maxing my 401k and Roth contributions for year, and then into other index+ funds.

Honestly, at my age and with our given situation, $500k would be enough of a boost to seriously set us up.

Hold up... You can make contributions to your 401K plan outside of your employer? Like I can just take $5K out of my savings and add it to my 401K?

[bosk1]

Fun to dream.  My knee-jerk plan would be:

1.  Pay off remaining mortgage to become 100% debt free.
2.  Gift $14,000 each to my mom and sister.
3.  Put some in each of my kids' college savings accounts.
4.  Put $15,000 in our vacation account for next year.
5.  Put the rest toward maxing my 401k and Roth contributions for year, and then into other index+ funds.

Honestly, at my age and with our given situation, $500k would be enough of a boost to seriously set us up.

Hold up... You can make contributions to your 401K plan outside of your employer? Like I can just take $5K out of my savings and add it to my 401K?

No, but I am contributing less than the max because that is all our budget will allow.  If I had extra money, I would max my contribution at work because I could afford to by not having to make a mortgage payment or save in other areas, like the kids' college accounts.

[Chino]

Gotcha

[pg1067]

I want to thank you for your help, and I give your 500.000 $ (or euros. or whatever the currency is in your nation).

Hopefully, this happens in Bahrain since 500,000 Bahraini dinar is about $1.9 million U.S.

Anyway, assuming you give me $500,000 U.S. (the gift part being important because it would mean I have no resulting income tax liability), the first thing I'd do is pay of debt.  Then I'd buy a new car, upgrade some electronics, make a few needed household repairs, and make a few charitable donations.  That should leave me with somewhere between 60-80% of the money left.  I'd probably invest the rest at various levels of risk.  I know...boring.

Fun to dream.  My knee-jerk plan would be:

1.  Pay off remaining mortgage to become 100% debt free.
2.  Gift $14,000 each to my mom and sister.
3.  Put some in each of my kids' college savings accounts.
4.  Put $15,000 in our vacation account for next year.
5.  Put the rest toward maxing my 401k and Roth contributions for year, and then into other index+ funds.

Honestly, at my age and with our given situation, $500k would be enough of a boost to seriously set us up.

Hold up... You can make contributions to your 401K plan outside of your employer? Like I can just take $5K out of my savings and add it to my 401K?

No, but you can contribute to an IRA, which can be administered about the same as a 401(k).

[gmillerdrake]

Pay off:

 1.) $24,000 left in Student Loans
 2.) $251,000 and some change left in Mortgage
 3.) Plunk $50k in each of our kids Savings accounts for their college
 
That leaves $75k. $25k goes into the savings account we have for emergencies. Then the final $50k I’d seek the best advice I could to figure out how to invest it wisely towards retirement.

[MirrorMask]

Another thing I'd like to do with a sudden big load of money is having enough headstart to kick off an activity that grants an income and requires little work.

For example with the right amount of money I could turn a house into a Bed and Breakfast, hire someone to actually run it, and enjoy my free time as I get paid by visitors. Same could be done with a shop, have enough money not only to have a shop, but to have a big enough margin to hire someone to be there. Even better would be to have enough money to buy a luxury apartment - if I could rent it even for just 2000$ monthly, my job would basically be allowing someone to live in a house I own, check in monthly the cash, and do whatever the hell I want (which would mostly be trips and never caring anymore about concerts distances and if they happen on a weekday).

I know, it's lazy daydreaming, but "I won the lottery, I bought an apartment and I rent it for twice the amount of what I was getting paid at a full time job and I travel all around the world" is kind a wonderful thing to be able to say 

[TempusVox]

I would donate every penny of it in your name to a couple of elephant conservation organizations that Mrs. Vox and I already give generously to each year. Thanks for your generosity; glad I was there to help you out. When you fainted everyone was really worried about you there for a minute. Seeing as you're a billionaire, let me show you how else you can get involved in this important effort to save these magnificent creatures. 

[TAC]

Elephants? Just say it...Democrats. 

[Cool Chris]

They certainly do seem to need a lot of our money...

[Indiscipline]

Kudos to MirrorMask for picking the right sum in order to spark an interesting conversation devoid of "I'm buying an island and booking DT to play the soundtrack of my top model orgies" (which I would naturally do with a larger amount of money).

100000: Step-daughter account
50000: My brother's son account
50000: My brother's daughter account.

They are inheriting a shittier world than the one we grew up in, they might as well do it with a funny headstart.

50000: Travel and gifts wife funds. She deserves it.

250000: Saving and forgetting they are there, helping me fulfill my plan to retire at 50.

[lordxizor]

Glad to see almost everyone would do the responsible thing with the money! It's similar for me:

1. Pay off my one car loan
2. Pay off the mortgage
3. Set aside $10k in the vacation fund
4. Put $10k into each of my kids' college funds
5. Invest the rest in index funds or consider buying a rental property.

[lordxizor]

I pay off any debt I have over, say, 8% interest.  Credit cards, etc.   With the remainder I split it to buy rental property, and, for the time being, index funds.   At some point the index funds will go into real estate as well, but for now...

Why would you buy real estate before paying off debt?  That's backwards (unless trying to stay broke).

Not to necessarily speak for Stadler, but it's likely he'll get a better return on his investment than he would pay in interest on the loans. Strictly by the numbers you're better off investing than paying off low interest debt (I personally think 8% is too high, I'd pay off anything above 5% first, but everyone's got their own risk tolerance). However, there's something psychologically really nice about being debt free and it makes it much easier to just walk away from your job if you want to.

I actually debate this with myself frequently. I am choosing to increase my Roth IRA and 401k investments until I max them out (already there with the Roth, a few years away with the 401k barring an unexpected big raise) before paying off my mortgage faster. I should get an average of 6-7% returns on my index fund investments after inflation versus saving 3.5% on my mortgage. Though sooner or later I want to start paying off the mortgage faster mostly for the reasons I stated above even though by the numbers I'd be better off investing my money. Real estate investing if done right should give better returns than low interest debt as well.

[lonestar]

Hmmm, well 500k isn't nearly enough to think about a house, but I can get a decent one bedroom condo for 300. Pay off debts, give my kid 50k to help her out with a down payment or whatnot. Take a sweet trip, and invest the rest for retirement.


Honestly though, I'd probably point and laugh at you're frail weak ass body on the ground and keep on walking.

[TheCountOfNYC]

I would quit my job and go to an audio tech school. With 500K I should be able to pay my tuition and live comfortably through the whole program. Being a sound engineer has long been an interest of mine, but due to my financial situation it simply isn’t something I can pursue at the moment.

[Stadler]

Fun to dream.  My knee-jerk plan would be:

1.  Pay off remaining mortgage to become 100% debt free.
2.  Gift $14,000 each to my mom and sister.
3.  Put some in each of my kids' college savings accounts.
4.  Put $15,000 in our vacation account for next year.
5.  Put the rest toward maxing my 401k and Roth contributions for year, and then into other index+ funds.

Honestly, at my age and with our given situation, $500k would be enough of a boost to seriously set us up.

Also in reply to your first comment to me, but I don't really understand the idea of paying off mortgages right out the gate.   Yes, high interest debt, yes uncollateralized debt (which is often the high interest debt) but why the mortgage?   For the rates we saw for the last 5, 10 years, your money is working harder for you in investments.  Plus (presumably) you're not chasing a depreciation table in real estate, as you are in an auto loan.   

Not all debt is bad.   USELESS debt is bad. Most other debt is, if not "bad" then not helpful in the long run.   Depending on what the debt is, and given employer matches and compounding interest over time, you might even be better off maxing out your 401(k) investments before paying off ALL debt.   Having some debt increases your purchasing power (in the form of increasing your credit score, a pain in the ass, but a necessary reality of our times) and it gives you flexibility come tax time to manage what your tax burden is.  The only absolute with "debt" is that less debt equals more cash flow (assuming that you are paying your debt in installments, and your income doesn't change).   

[axeman90210]

I take 400-450K of that to put a massive down payment on a condo near where I work. Won't be enough for me to buy a nice place all cash, but should result in a very reasonable mortgage. I take what's left and split it between a nice trip for my family and I, and a nice trip for my friends and I.

[TempusVox]

Not to rain on everyone's imagined windfall parade,  it in the US any gift over 15k (for 2018) is subject to federal income tax.  So, knock about 135k or so (ballpark guess) off that number. 

That's why I'd roll it all into a charitable contribution from our generous new pal MM. Goes further,  goes to a worthy cause, and he can reap the tax deduction  as well.

[MirrorMask]

Not to rain on everyone's imagined windfall parade,  it in the US any gift over 15k (for 2018) is subject to federal income tax.  So, knock about 135k or so (ballpark guess) off that number. 

Wasn't this a minor plot point that kickstarted the "prison carrer" of the protagonist of The Shawshank Redemption? that he suggested to a guard to give money to his wife or stuff like that....

[PowerSlave]

I live in rural Ohio. The prices some of you are mentioning for housing has my head swimming...

[Polarbear]

I translated 500.000 U.S dollars, to about 426.000€. That's a lot of money, but let's pretend that it's straight up 500.000€.

I would do the following:

1. I would buy my dad's countryside house, and finish renovating it.
2. Buy my grandmother's summer cabin/lakeside property in rural eastern Finland.
3. Buy a nice car . Not a supercar or anything, but something nicer than what I have now.
4. Probably quit my job, or work very little. At the same time I would apply to a university. Start some new hobbies, maybe write a book?
5. Deposit some money to my sister, mother, and father.

By my calculations, I would still have over 100K at this point. I'll save that for any unforeseen expenses that might occur in the future.