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If you were given $50,000 USD (tax free) today, what would you spend it on?

Posted by Sean | Posted under Contests, What-If | July 25, 2008

If you were given $50,000USD (tax free) today, what would you spend it on? Hank’s Holiday Handout #3 (drawing on August 6)

The first thing I’d do if I won the 50,000 is try and work through some questions…

"Is it a financial windfall? Do I need to watch for any psychological pitfalls?"

I’ve seen articles that say financial windfalls can play tricks with your mind. While I’d like to think I’m immune to illogical thinking, the cheesecake I ate recently suggests otherwise. :-) I’m not sure if this would quality as a windfall since it is not life-changing. But what about Mrs. Ramblings? Would she react to it differently?

"Should I spend or invest it exactly the same way as my normal money?"

Again, I’d like to think my money is 100% fungible, but way too many counter-examples…

While I think it makes sense to spend a windfall almost like any other money, is it logical to aim for 100%? Do I just push future goals into the present, or do new goals emerge? Hmmm…

"If I had an extra $50,000USD (tax free) today, what would I spend it on?"

$25,000 - early principle payment applied to our mortgage. Psychology wins over math. Despite my hunch that we are trying to inflate our way out of the housing mess.
$12,000 - medium-term investment. Maybe EWJ, hedging for possible relocation.
$10,000 - upgrade Mrs. Ramblings’ car sooner than expected. We expect to do it within the next year, but we could be tempted to pounce on a good deal sooner. Something like a 3-year old Hyundai Sonata with unusually bad resale-to-reliability.
$1,000 - frontload payment for my church’s capital campaign. I might do this anyway, instead of splitting it over the life of the project. Less obligations to remember.
$1,000 - other local charities, related to food and necessities. This has to be a bad time for food pantries. The prepayments above will free up future donations, too.
$1,000 - extra "funny money" for our next trip to Tokyo & Kyoto. With the stipulation that we should spend it in ways we would NOT in our normal frugal mindset.

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5 Comments so far
  1. hank July 25, 2008 12:51 pm

    Yea, you absolutely have to have some fun money! Digging in on the house is a big one to think about too and you may be one of the first to touch on that with such a big piece… ;)

    Thanks for participating!

  2. Moneymonk July 28, 2008 1:49 pm

    10% charity
    60% invest
    10% fun/spend

  3. Sean July 29, 2008 9:47 am

    Moneymonk, you have inspired me to learn how to enable avatars, to show your snoopy graphic. My 2nd choice would be to spend $50K on beagles. :-) Maybe eliminating all my obligations is dangerous after all…

  4. Dena L August 15, 2008 9:39 am

    If I had $50,000 me and my boyfriend would pay of ALL our debt. $12,000 would go to our credit cards which I maxed out for school and the move in to the new apartment. Then $3,500 goes to the personal loan that was taken out to pay of the other credit cards. Next $18,000 goes to pay off the truck we bought. Next $11,000 goes to pay off the student loan that I have. The remaining money would go for the wedding we have been putting off because we can’t afford it.

  5. Sean August 22, 2008 9:05 am

    Hi Dena, I feel for you. If you have not done so already, I’d check out these sites (among others):

    http://getrichslowly.org/blog/
    http://www.thesimpledollar.com/
    http://www.ncnblog.com/

    Besides dealing with the psychology of money, they have great tips for doing more with less. I’m trying to find ways, too, but it will take a long time to rival their archives.

    As for the wedding, I guess it depends on your expectations. Don’t take the wedding industry’s word on how much everything must cost. The best weddings I’ve attended probably cost much less.