How wouldn't it?
First, I would immediately pay off all existing debt: student loans, credit cards, car note. That would take me down to a little over $70,000. However, I'd also be saving nearly $4000 in student loan interest alone (and probably an equal amount on my car note) so it'd be worth it. Continuing to pay regularly would cost me nearly 10k more over the loan-lives. The most immediate impact of this is that my disposable/take-home-non-bill income would skyrocket. I would increase my automatic transfers etc and essentially double my current savings rate. Meanwhile I could still live plenty high on the hog at the bar and so on. I would pre-pay my car insurance for 6-12 months. This wouldn't make a significant dent in the $70k, but it would mean that I would have to worry about bills on an extremely minimal level. I would make my 6-month emergency fund more robust and maybe more of a 12-month fund. This I keep locked in a relatively high interest savings. Emergency funds need to be liquid...We can say this would take me to about $62k. I'd give my parents $10k and my brother $1-2k (he is moving across the country to Portland for grad school, and my parents deserve it). If i were feeling very generous I would put the same amount in a trust or something for my little sister but I feel like that would just create problems so I wouldn't. I'd keep on my short-term plan for the next year which is take the GREs, and apply to grad school. What would be great is that this windfall would mean that nothing could prevent me from going to grad school except for them actually saying "OK! You're accepted, you're in!" I guess I'd take that remaining $50k and put it in short-term CDs (if they had good rates) and a couple other "safe" but relatively accessible investment vehicles for at least the next 6 months. I would keep my job at least thru the end of 2015. Probably through March 2016 because I would want to know if they were going to reward my hard work (aka promote me, or give me a raise and bonus, and so on). However once I heard about grad school assuming I got in, I 'd use this as an opportunity to quit my job a little early. I'd pick up a shit paying, flexible, customer-service part-time position somewhere so I'd still have some income coming in and I'd coast for the last 3-6 months before grad school. If I didn't get money I'd use my nest egg to help pay for grad schools. I would probably do 50/50 loans and cash payment in order to make the nest egg last longer and provide for things like food, etc. Idk. Whatever I had left at the end of grad school, I would first ensure I had about a 6-12 month fund to live on, and then put the rest towards paying off any student loans immediately. Then I would have to face my big bright starry future, but with no loans and no debt, and I think it would be pretty great. :)
Either: - Pay off student debt and start applying to doctoral programs without the concerns of cash or - laser hair removal, Gender reassignment surgery, etc. or some combo of both.
Primarily, it would buy my mother a much nicer gift than I can afford right now. Secondly, it would pay off all my student loans (and then some). But overall, I don't think it would change my actions or path right now. I mean, I still need a job to put on the resume, I still need to finish school. I have no idea what I would do if "money were no issue" or w/e. Maybe I would take a semester off and blog full-time for a few months/get in touch with myself a bit better (maybe on a cross-country road trip). I'd also adopt a cat, definitely a cat.... But yeah, still not sure what to do with it in the grand scheme of things. Back to essay writing! Great question!
I think that's a good point, it could be a nice cushion, or a small time return on investment annually, but as far as a big game changer, it is not. That said, I think it was kind of you to remind us all that Mother's Day is upon I think that's the point, it could be a nice cushion, or a small time return on investment annually, but as far as a big game changer, it is not. That said, I think it was kind of you to remind us all that us. Go buy a card!
OMG y'all are nuts. 100k would be a huge game changer. I have been meaning to check this thread as I find it pretty interesting and I like talking about money/finance/budgeting. I am going to pull out my budget spreadsheet and tell you all about how I would just destroy my debts. Maybe it is just that 100k seems like a lot abstractly. But I very well might quit my job! Ha!
Pay off my student loans, pay off my car or maybe trade it in for a more efficient one, pay for my girlfriend's master's degree, and invest the rest. Maybe a short trip somewhere inexpensive yet exotic. An extra 100k would go far towards easing those back-of-the-mind stressors. It would have a large impact, but I know the money would go quickly.
If I had paid for my college girlfriends masters degree, I'd be pretty bitter about it at this point of my life. I mean, we had some great times together but that's no small investment and I bet I would have thought it meant we'd be together forever and well.... we weren't. Good luck though and it's sure nice of you to think of someone other than yourself.pay for my girlfriend's master's degree,
-Is it cynical of me that reading that made me think, "oh gosh, that's probably a bad idea?"
Nah, same reaction, but we don't know how deep that goes either . . . Even so, taking on someone else's debt is a huge financial decision that should not be taken lightly.Is it cynical of me that reading that made me think, "oh gosh, that's probably a bad idea?"
Edit: humanodon -One thing I DO KNOW is that I'd love to read some new poetry from you. You been writing?Even so, taking on someone else's debt is a huge financial decision that should not be taken lightly.
Yes. That's a much better way of putting it. That said, I took on my wife's debts when we were married and vice-versa. Perhaps he's not down with the institution of marriage but would still like to care for her via helping financially? So yeah, we don't know...
Not cynical, but you should probably make her into a wife with part of that $100k haha.
No, that's a totally reasonable reaction. I would ordinarily agree with you, and I may be naive, but that's one of the first things that came to mind. We are at the point in our relationship where we are seriously discussing marriage and our financial situation and what that would look like. Even if we had a horrible falling out in the future, I think I would feel comfortable with my decision. The smarter plan would probably be to just invest the money and let the interest work for me. Assuming everything works out, we can have a happy retirement together Perhaps imagining a $100k bonus has just put me in an exceedingly benevolent and optimistic mood!
It depends. It would be worth comparing the interest being charged on those student loans vs. the potential ROI you could get from investing the same amount. If she has 0% loans or loans at a very low rate, then it might make more sense to invest instead. However, (I'll just assume for this that you are married and treat her debt as truly yours, and therefore sidestep the ethical/'should I?' questions) it's likely she has loans at interest rates of 6.8% (standard gov't loan interest AFAIK) or higher (if private) in which case you wouldn't be able to earn the money back via investment, and you should save yourself on all that interest by paying off immediately with the $100k. I feel like the "standard" ROI that a person is told they can "expect" is around 6%, maybe up to 8%. I have seen wider-ranging numbers but I think anything above that gets to the "counting your chickens way before they have hatched and maybe before they have laid eggs" point of reality. I like reading personal finance advice and stuff. I'm mostly crap at managing my money but I still find it all interesting! :)
Pay off my condo. With the leftover money I'd plan a nice, long cruise for my gf and me and the leftover money I'd give to my mom. She doesn't necessarily need it, but sometimes I wish I could do more for her and she will put the money to better use than me wasting it for gadgets and video games :D How it would change my life? When my condo is paid off, I'm less dependent on my job, and may or may not change my office job for something I'm more passionate about but which has less job security or worse income!
Despite both of my parents being unemployed for the last ~20 years, it wouldn't really change much right now. I'd probably spend 20k on transportation with a new car and petrol so I don't need to feel bad about my parents driving me places, and the rest to move out when I'm older.
I would pay off my debt. I'd be left with about 87,000. Then I'd consider investing. Would it change my life? Absolutely, as I would be paying no interest on incurred debt, and I'd have multiple options besides invest. Tax free savings account would help to put 5,000 in it every year (wouldn't have to pay taxed on it, so 13% saved from that investment,assuming government of canada would see my income as 5,000 less)
Okay, so you would have interest. At what percent do you think you be getting interest? Let's say you're really, really good at this and you are getting 12%. On $100,000 that's $12,000 a year. How does that change your life?
I wouldn't accept interest personally. So I can't answer the question in the sense its expected. I'd be taking away from peoples income, something they need as they work hard for it. They would be poorer, and I richer. It would ruin my life, morals, integrity, and heart.
A tax free savings account is a fixed yearly amount someone can deposit - $5,000 yearly saves you paying tax on it at the end of the year. I'm personally not interested in the interest the savings account would earn me. I may just have to leave it in the account if I were to withdraw and close it. Risky stock market investments can ear quite a bit, if there's no fail, thus an investment worth while. Property is another good one, as it gives you income, which subsequently would end up being used on repairs/maintenance. If the property goes up in value you gain should you sell one day. If your property is fully paid off, your expenses are below that of renting, so you gain. Starting up a business is another good option, if managed and marketed property. Sorry for the confusion earlier.
Don't forget stocks and bonds, which will most likely earn you more than a savings account these days, but are much less risky than the stock market. The only problem is they are not very liquid. If I had 100k I'd never put it in a savings account - or at least not all of it - just because there are other financial products which are just as safe (CDs for instance, even if we just totally eschew stocks & bonds) that will earn more. Interest rates are awful right now, savings, checking, AND CD accounts, but CD accounts will get you the most and are still FDIC Insured. Plus while they aren't liquid-liquid, they are nearly so - you forfeit something like 3-6 months' worth of interest for an early withdrawal, that's it. (The penalty is federally regulated to boot.)
I think the first part of your sentence is right on. I wouldn't change my behaviors either. That said, I think $100k is a LOT of money. If that much money was just introduced in to my life, I could make it turn in to a lot more....
I would use that money to set up a little dive shop/hotel in SE Asia. This way, I could have some income on the side that family members could be part of. This means more reasons to hang with extended family and money I could put away toward retirement and that junk . . .