Every year Money magazine has an issue or a specific article or two dedicated to the idea of what you would do with an extra $1000, $10,000 or $100,000. It is easy to think about specific things we would do with an extra $1000 or $10,000. In fact, most of us might actually do one thing. For example, if I had an extra $1000 I would probably just save it or pay down some debt. I wouldn’t divide up the money into different things.
If I had an extra $10,000 I would probably do something similar. Invest or pay down debt.
However, when it comes to $100,000 or even $1 million I would definitely do multiple things.
So I thought I would do a bit of a thought experiment. What would you do with an extra $100,000?
Here is my list if I had that money right now:
- I would max out my Roth IRA and my wife’s IRA–$11,000
- I would pay off our car: $17000
- I would put $50,000 into the stock market (e.g. a taxable account)
- I would have some fun. Most likely, Mrs. ROB and I would take a nice vacation or something–8-10k
- I might use the rest to shore up our emergency fund-$10-12K
Some people might use it to pay off their house or other debts. However, because we are doing PSLF and we have a low interest rate on our mortgage it doesn’t necessarily make sense to pay down those debts because we wouldn’t totally pay it off so I would rather get rid of stuff that would totally pay off the debt or invest the rest.
So what would you do with this extra dinero? How would you divide it or would you just put one big lump sum on something specific?