
Ask HN: I just won $150k. What do I do? - tinyjackpot
I just won $150,000 in cash, and I have no idea what to do with it. This is about a year&#x27;s worth of salary for me, and I have no outstanding debts or big expenses other than rent.<p>I&#x27;m in my early twenties, have never had this sort of money in the bank before, and I am totally lost.<p>How do I best use my tiny jackpot?<p>EDIT: To clarify, I _also_ have a job where I make ~$150k&#x2F;y, regardless of this jackpot.
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tomato2juice
Estimate your tax obligation and pay the IRS before you lose it or spend it
all: [https://www.irs.gov/businesses/small-businesses-self-
employe...](https://www.irs.gov/businesses/small-businesses-self-
employed/estimated-taxes)

Then invest the remainder into an index fund or retirement fund. If you don't
know where to start, then look here: [https://investor.vanguard.com/mutual-
funds/target-retirement...](https://investor.vanguard.com/mutual-funds/target-
retirement/#/)

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surfsvammel
If you are putting this into any kind of security, be that equity or fonds,
spread the investment over time to minimise the risk of temporary flux on the
markets. Spread it out over a couple of years.

Also, there are even lower risk alternatives you can go for, if you are
anything like me, who does not sleep well knowing your investments move with
the markets.

Another tip I got for you, is to spend some of the money. As you said, it's a
jackpot, you should celebrate. Spend some of it. Travel maybe?

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iJohnDoe
General advice without knowing anything about your life.

Your nice $150k a year job could disappear tomorrow.

Put $100k in your savings account.

Put $50k in one of the investment recommendations given here. Index fund, etc.

Save it for a rainy day. Forget about it and move on with your every day life.

You’re young. You have your whole life ahead of you. That money could come in
handy one day.

Congrats!

~~~
smabie
Why would you put 100k in a savings account that has a real negative yield? It
makes no sense, and I'm just going to say, savings accounts are for suckers.
The only point is for your bank to earn some extra cash on the money you
decided to loan them.

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quickthrower2
You first need to decide what your plans are for the future and what your
appetite for risk is, if you desire to own real estate one day, or not, etc.

Research all the different ways you can invest it and come to your own
conclusions.

Or blow it on a 5 star round the world trip.

Stock market is volatile and is at all time highs during a pandemic, so think
about that and only invest if you are prepared to hold for many years to ride
out a big crash. Not saying there definitely will be, but it's a risk.

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saluki
y, I would hold off on investing it till we get a little closer to the end of
the pandemic. Now seems like a risky time to invest.

Buy your parents or a mentor something nice.

Buy yourself something nice.

Save the rest and invest once things are more stable.

Congrats!

~~~
quickthrower2
It is not necessarily "don't invest" but do it with eyes open.

The problem is stocks are valued based on macro factors (interest rates, money
supply and demand, lack of anything else good to invest in) and sentiment as
much as the intrinsic value of the company itself. So a great company could
drop in value if money stops being cheap. Let alone will corona virus cause a
depression? People say stock market is not the economy, but who will be
spending money on Google Ads in a depression, and if they are, what are they
selling and who is buying it?

OTOH this could be a cheap time to buys stocks looking back from 2030.

I think if you can hold for a long time and ride it out it's a good time to
buy (is that always the case though?). But a better time than January!

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chrisbennet
Put it in Vanguard and forget it.

[https://ritholtz.com/2014/02/the-best-investment-advice-
youl...](https://ritholtz.com/2014/02/the-best-investment-advice-youll-never-
get-2/)

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codegeek
Don't try to over optimize it immediately. My suggestion is to park it in a
high yield savings account (e.g. capitalone360 gives almost 2%). Then sit on
it for a month or so while you research the best options for YOU.

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arkis22
Keep working and dump all of it into a basket of etfs. high quality stocks
that pay dividends. the sp500. a little in the russell.

those are retirement and extreme emergency funds.

dont feel bad about buying something fun. just make sure it isnt stupid and
fun.

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tinyjackpot
What's the process for investing in S&P500/Russel2000? Do I need to pay
someone or can I do it myself through my bank?

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GaryNumanVevo
Vanguard / Fidelity are also good options. Look for a low-fee index fund. Also
congratulations!

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tinyjackpot
Thank you!

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zozbot234
You got a one-time windfall, the source and form of it doesn't really matter.
Use it to pay down high-interest rate debt (e.g. credit card and the like) if
you have any, and save the rest.

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DamnYuppie
After calculating your taxes I would do something kind of nice for yourself
and after that put the rest and put it away in an index/mutual fund.

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tinyjackpot
I don't have _any_ debt.

Which index should I use? What are the differences between using an index and
a mutual fund?

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GaryNumanVevo
A stupid simple approach: use a Boggle 3-fund portfolio [1]

[1]: [https://www.bogleheads.org/wiki/Three-
fund_portfolio](https://www.bogleheads.org/wiki/Three-fund_portfolio)

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wcerfgba
Donate a chunk to your favourite charity/cause. Personally I am a fan of
GiveDirectly because their model is simple and efficient.

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zozbot234
Be careful though, donating is not for everyone and charity should begin at
home. By their own admission, OP has never handled this kind of money before
so prudence should be the first priority. Maybe they can donate a chunk of it
in a few years after it's been sitting in the bank for a while, but not right
now.

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dontdieych
Don't do anything.

Don't touch it until you sure about what should do with that money.

Do not bet or spend money at you don't know well.

Just hold it.

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dontdieych
Ignore about how to bet/spend about that money. Hold it till to 6? month or
more.

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rvz
Since you 'won' this cash (well done btw) and didn't work or earn it, I
suggest you save most of it and use some of it in investments.

Otherwise you'd be more likely to spend it on expensive things at once which
doesn't sound very good if you're not earning any extra income.

~~~
tinyjackpot
I still have my usual income (~$150k/y).

What kind of investments would you recommend?

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ApolloRising
If you want some risk put it all in FB and Google and just hold it for 10
years.

If you want less risk put it all in VFIAX Mutual Fund and hold it for 50
years.

If you want even less risk put it all in a Vanguard Targeted retirement fund
and hold it for 50 years.

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askafriend
Spread the $150k across a basket of FANG stocks and hold that for 5-10yrs.
Those companies will continue winning and you can afford to take this
relatively minor risk at such a young age.

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JoeAltmaier
Its 'free money'. Some folks would consider it outside normal obligations, and
spend it freely. Others will advise relieving normal financial pressures. It's
really up to you!

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ksherlock
Take $5k or so and buy yourself something nice to get that out of your system
then save/invest the rest.

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libx
Invest in p2p lending. Maybe you can get between 4 to 10% of interest per
annum.

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matt_the_bass
I agree with saving most of it. Plus make a budget. I like YNAB.

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foobarbazetc
I like tax free Muni bond funds.

Or a high interest savings account.

Or just put it into SPY.

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tinyjackpot
How risky are municipal bonds? I feel like I always hear about cities going
bankrupt.

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EvanWard97
Congrats! There's been a lot of solid object level advice here...I'll just
repeat some basic & meta advice in case anything resonates: \- you can't lose
it if you don't spend it (aside from the real small negative yield from
inflation outpacing banks' savings interest rate).

\- this is enough money to really provide a lot of investment opportunities,
be extremely picky about a number of the first 'good' opportunities that come
your way. There's a very good chance that you'll find better opportunities
just by waiting a bit longer (where rate of return will make up for the
opportunity cost of not investing).

\- this is enough money that's it's probably worth reading at least a few
books about investing and wealth management. You spend thousands of hours a
year to otherwise earn $150k, it probably makes sense to spend at least
1/100th of that amount of time to really become informed about how to manage
an additional $150k.

\- the majority of non-profits and charities suck in terms of their
impact/dollar efficiency. If you are actually trying to maximize your impact
rather than donate to feel good (which is okay too! Just recognize when you
are doing so), I'd hold off on donating to charities until you've done at
least X hours of research per say, $1000k that you donate. Considering you
make around $100 an hour, a few hours of research per $1000 donated probably
isn't unreasonable. Additionally, the best charities aren't just 5 or 10x more
impactful than the average ones, but probably 100's, 1000's, or even more
times more impactful.

\- don't ignore the peace of mind that a solid runway from a variety of
uncorrelated, fairly liquid assets may provide. Regardless of what happens--a
solar flare knocks out our electric grid for months, the US defaults, banks
can't let you withdraw cash for whatever reason--you want to know that you'll
be able to incentivize other's labor and buy goods from other people. Cash,
gold, BTC/ETH/Monero/Zcash/etc. in cold storage wallets, and perhaps even
other 'currencies' like common caliber bullets or cigarettes in a safe deposit
box and/or a safe at home, might be worth storing $5k or even more in.

\- consider using getguesstimate.com, www.causal.app, or at least Excel/Sheets
to try to quantify the different risks and returns of all the options you are
considering. The first two apps allow you to easily include uncertainty in
your estimates of values, as well as do sensitivity analysis, which can help
you decide which model inputs are probably most worth reducing your
uncertainty about by researching them further.

\- when in doubt about a spending decision, especially if you haven't
exhaustively researched and thought about it, just wait a day and sleep it
off. And if you don't feel good the next day, just wait again. For most
people, it's too easy to spend money and too hard to save it. Don't be like
most people.

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tinyjackpot
Thanks for the advice!

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mydongle
Could you give me $5000 so that I could have a roof for like 4-5 more months?

