What would you do with $5,000?
The experts have spoken. Now it’s your turn. What would you do with five grand? Would you hire a mentor to boost your skills, or a personal trainer to build your biceps? Would you spend it on a vacation, or put it towards your child’s education? A new car or a new dog? Revamp your portfolio or just your kitchen cabinets? Let us know.
I would invest 3,000.
I would pay off bills with 1,000.
2 weeks away from being homeless.
I would go back to school for a career.
I would get my bill caught up and would not loose my house I lost my job after 15yr due to company shrinking but the 5000 would keep me from loseing my home .
I would look for people who would like to start an internet based business with an innovative business model who don’t have any financial resources.
I would try to find 5 of such entrepreneurs and invest $1,000 in each of them. I would also help them in managing the business (on a strategic level) in order to increase the chances of success.
If only one of them becomes a success I will already be very happy. It happened to me before. I invested the equivalent of $2,700 for a 15% stake in a small company and when the company was sold 10 years later my shares were worth close to $2,5M.
I have 4800 in debt. I’d pay it all and put 150.00 in the bank and take the other 50.00 and do something nice with my kids.
I would give 500 to my parents, put away 1000 in cash and buy gold jewelry with the rest! I don’t have a lot of jewelry and no heirlooms :(. I would buy beautiful gold jewelry to wear and leave to my children.
I have about 3 K in credit card debt, but other than that I am okay. I can pay the debt off in a couple of months and it’s interest-free.
I’m maxed out on my 401K and IRA and even though I have a mortgage, I feel robbed because my hubby and I had a civil wedding ceremony. No diamonds, no silver, no gold jewelry. Sniff. I have been trying to build up my silver collection myself ever since, and I am going to have some heirloom-worthy gold pieces if it kills me. :}
I would send money over seas and put that money Fix deposit. That money currency can worth more in 5year way the us$ is falling.
Like most people, I would use it to pay off my bills, some of my student loans, and get my car repaired.
I would pay a tithe of $500 to my church and pay off my visa with $3000. Invest $1000 in stocks or mutual funds. Then I will treat myself with the remaining $500.
$2000 Fly on Concorde and travel.
$1000 Hit the slots in VEGAS BABY!
$500 Arts & Crafts supplies for hobby.
$500 Eco-friendly Landscaping
$500 EE Series savings bonds
$500 (5)$100 Gifts, various charities.
Spend it all in one place at one time. A long dreamed of, awaited, and hard earned vacation in Tahiti with my wife.
I took some money out of our savings account recently & paid off BOTH of our car loans so now I’m trying to beef it back up again.
$4000- savings
$1000- fun money for husband b/c he’s married to a very frugal woman which can be frustrating at times!
if $5000 fell in my lap or hands today, i would pay 10% to my church and invest in a house with a basement for my family daycare home.i would want a place so that i could help with parents that works night and day or go to school. also a place for pregnany teens to state. we need a 24/7 place for childcare and pregnany teens to stay here in cartersville. we donot have one here. i want to open one here.
thank you. queen chisum,cartersville,ga.30120
$5K? Savings account for an emergency fund, or, all towards my truck payment principal. Probably the latter. Or, travel, gold or euros. Recently received $5100 and paid off 5 consolidated credit cards. Or, mattress, washer/dryer and fridge. Or, investment, but not in my 401K because I should be making a lot more than I am from it, and the fund managers don’t return my calls or emails.
Well, since I’m 30 and a multi-billionaire, $5000 is not even pocket change….
Yeah right - Don’t you love the bragging going on here? Actually, I’d just drop it on my student loan, which, aside from my mortgage, is my last debt. Even though $5k would be a significant chunk of change for me all at once, it isn’t enough to change my life, and definitely isn’t the $450-$500k I need to start the coffee micro-roastery I want to start…. Look out Starbucks…in 20 or 30 years.
Let’s see, with $5,000, I would go to an auction, buy a car, slightly fix it up a little, and sell it for a slightly higher price. And profit from the sale. Then I would continue to buy more cars from the auction, and repeat the process. Although, if I did not buy a car from an auction, then I would invest in the stock market! And if I did neither, then I would add the $5000 into my savings, to start business in the future.
Although My husband and I have a lot of financial responsibilities (mortgage, property taxes, kids in daycare, parents and in-laws rents…) our combined salary sufficiently covers everything. Besides the mortgage, we have no other debts. No car loans for the 3 cars that we own, no credit card debts, nominal amount of student loan which can easily be paid off in full. If I were to receive 5K, I’d invest the money. Then, use the dividends/income from the investments for donations, savings (MMDA or retirement), take classes, invest some more. If my husband were to receive the money, he’d use it as a downpayment for a car that he’s been wanting to buy for years.
Since I *gasp* just bought a yatch, $5,000 wouldn’t be that much to me. I would buy AA rated bonds with the first $1,000. I would then open that shoe store I always wanted with some of it. I would payoff that last medical bill for my tummy tuck and the rest I would invest in pork bellies in case the stock market crashes and the Chinese flood the market wiith yen and dollars.
I would look for a used car from direct owners worth under $5,ooo and buy it below blue book value, and resell it for about 10 to 20 percent higher than what I paid for it. Then, I would keep on doing it until I can start to buy a property which will give me a larger profit.
I would take some time off and spend it with my wife.
Then I would take all of if and invest it into my own buisness that I am expanding. I would end up seeing a larger payoff in a shorter amount of time than in stocks.
With the $5000, i will give the $1,000 as my tithes & offering, then invest the rest in a high yield investment. This is to make money work for you, and gives me more opportunity & financial capacity to give more offering for the missions of our church.
Since I *gasp* just claimed bankruptsy I would invest it into an IRA (4,000) and the other 1,000 I would split and save 500 and invest 500 in the stock market. I’m currently trying to learn the stock market and 500 would be a nice small number to start with.
I would use 2000 to pay on a repo that is tearing my credit score apart. Then 1000 would go to my current car note Then I would give my dad 1000 becaus he always helps me out. I would put the last 1000 in a CD or education acct for my 5 yr old.
I would invest it (and have recently invested it) in Gold Funds. As the economy slows and foreign countries are abandoning the dollar for the Euro, expect to see the dollar slide and interest rates continue to climb. Also, there seems to be a concerted effort by many, like the Chinese, to dump the dollar after large investments in the same. I expect our enemies to take oil revenues to try to alter the markets to hurt us financially. Finally since there is an upcoming election, I expect to see the major media outlets to kick into high gear to convince the masses that the economy is in the toilet, which will cause a slowdown in hiring and spending, thus contributing to the perception making it a reality. The result, in my opinion, will be increased Gold prices.
Open a Roth IRA and drop the 5K into an emerging markets mutual fund. You’ll thank yourself in 20 yrs.
Robert
Stuttgart, Germany
Military Overseas
I’m 29 and making close to 300k annually. I live pretty conservatively. My house is under 200k (looking to build dream home in a couple years). I have an Escalade (paid off) and an 07 Lexus (owe less than 20k). I have no credit card debt and a good chunk of change in the bank (could live without a job for a couple of years). 5k doesn’t have the value to some people as it does for others. If it was just givin to me, I’d probably give it to charity.
I’d go to TreasuryDirect.gov and put it all in six month T-Bills. I would like to buy a house within the next couple of years, and Treasury Bills seems like the best way to keep my money safe, earn a modest amount of interest & have the money in a place where I’m not tempted to touch it.
Let’s be reasonable here: if we didn’t earn the $5,000 then the smart thing to do is make a $5,000 anonymous donation to a charity.
In my country it’s a huge money.
If given a changce to have that amount, I could start my garbage collection project and recycle those items that can be recycled. With that I could help this planet and the poor.
An extra $5000! Send the whole family away on a long summer vacation of course. Either that or new cat toys.
I don’t have any credit card debt and my 401K is looking good, so I would put it into my existing non-retirment S&P500 index mutual fund for future use (perhaps wait for a bigger investment opportunity but still get reasonable returns in the meanwhile).
$4000 would go to my credit card debt. $1000 would go to vacation.
If i did not have credit card debt, i would put the $4000 in a retirement plan.
I will donate EVERY Penny of $5,000 to the local Police or Firefighting Departments. It gives me a great pleasure when I do $donation or some charity work. I remember every penny I donated very well or every minute I spent in charity work. I almost have zero recollection of many thousands I wasted on meaningless items.
being 29 years of age and already maxing my 401k fund I would have to think of the future. With the looming jumps in inflation I would have to invest in a Roth. Paying around 500 dollars in taxes now would be a minor inconvienence but paying taxes later on that investment would hurt a little more. Basically youth and retirement equal maxing a Roth account.
i would put the half of it into mutual funds and the other half into a CD, and then let it rise slowly… even though this would be a long process but over a greater period of time, one could retire with a pretty decent amount of money
Put it all in a ROTH 401k and bite the bullet on taxes now, only to watch the returns add-up. It’s fun and can be gifted to the next generation without any mandatory withdrawls.
It would be a small step for me to reaching my goal of world domination. Kidding!
I would use it to pay for my college tuition. If not that, then I would buy 5k worth in lottery tickets so see if I could win the mega millions!!!
I would simply add it to the rest of my savings that is getting 5.05% interest.
I am never surprised anymore to read of how people have NO money saved and think 5K is a lot of money. These same people are saying they would buy this and that.
Hey fools, save money, pay yourself first.
Read the books The Millionaire Next Door and The Wealthy Barber.
I would invest it in a CD for about 6 months and keep rotating it like that to make a little extra money. Bank interest rate don’t give you much for the five grand anyways.
If I were to invest $5,000 and over 50 years old, I would invest it into a Roth IRA. Being that I am under 50, 26 years of age, I would invest $4,000 into a Roth IRA and put the other $1,000 into the stock market, for future investments.
I would save for retirement! The American population, you have to admit, is very self indulgent, wanting and wanting and wanting. I’ve heard statistics that American’s are terrible savers, millions are declaring bankruptcy, and being very IRRESPONSIBLE WITH THEIR MONEY! I think it’s time for people to grow up, manage their debt by paying it off, and then concentrate on investing their money for retirement.
If I were to get $5,000, it would go toward some much needed upgrades and remodeling around the house and yard that I otherwise wouldn’t have the spare cash for. What ever is left goes to savings.
I’d buy some artwork. Bluechip drawings or low edition lithos. Maybe a cool painting.
In addition, I’d love to pay down some debt…
I am amazed looking at all the comments and nobody is willing to donate money to a Non-Profit or charity. I would give at least $2,500 to a cause that I care about.
to be honest I would invest it in my companies stock purchase plan which contributes up to 15% to the dollar. let that ride for a little than pull out and think about repeating. better than any savings or short term “safe” investment…
I feel we are in for a correction fairly soon, so would put it in a fairly safe instrument for the next 6-12 months. (CD or Money market accounts) After the correction there should be some pretty good buys out there. Large Cap Mutual.
Actualy I would use 2,500 towards medical checkup for my parents and save the remaining in my 401K (which has been idle for about 8 months.)
I would place all the money in a CD and let it draw interest for the next 4 years that my grandaughter is in college.
I would use this towards my parents and spend it for their annual medical check up (which they keep avoiding) despite their old age.
Invest on 401k/IRA and save on tax as well as let it keep growing for years to come at about 18 to 20% at high risk.
Since the house,cars,and the credits are paid in full, the 5000.00 would go towards remodeling my house.
Buy another small house as a rental. Down payment, closing costs and repairs run me between 5K and 7k. Return on investment averages 26%. This does not include tax deductions from mortgage interest, taxes, insurance and depreciation.
Buy another small house as a rental. Down payment, closing cost and repairs run me between 5K and 7k. Return on investment averages 26%. This does not include tax deductions from mortgage interest, taxes, insurance and depreciation.
$2000 for rainy day and $3000 in stocks. The $3000.00 will eventually turn to $30,000 or even $60,000 within a year and that can knock off my credit card bills.
I would spend it as follows:
1000 for credit card debt.
2000 for savings.
1000 on furniture, tv, ext.
1000 on a trip with my BF.
invest in a local electric company and set up a DRIP account, municipal bonds (AAA rated, short-term 3-6 yr), or put it away for a rainy day.
$5,000 is not much to do all I want/need to do:
1. Add to goal of having 6 months living expenses savings (currently only 3 months saved)
2. Pay off balance on car loan
3. Send them to mortgage principal
4. Open additional retirement savings account
5. Some one (a child, an old person, an animal) is now hungry or being mistreated somewhere in the world…. Make a difference in someone’s life or at least in someone’s day…
I WOULD INVEST THE 5K IN MID TERM CD OR MM AND KEEP ROOLING AS LONG INTEREST IS AT LEAST 5%. LETS FACE IT THE MARKET IS NOW AT AN ALLTIME HIGH (AGAIN!) AND ITS GOT TO STOP SOON. ALL THE PROS CONTINUE TO PREACH GROWTH BUT I THINK THEY ARE WRONG AND SAFETY SHOULD BE UTMOST FOR INVESTMENTS. FEW PEOPLE BECOME RICH ON THIS AND THOSE WHO TAKE THE RISK ARE NOT IN A POSITION FOR RISK!
I would throw every penny into my federal student loan which I am trying to pay off this year. Then I could manage my private student loan more effectively. I am drowning in college debt the way others live with a mortgage. But I’m still renting apartments and I bicycle to work in Los Angeles because I cannot budget a car right now. I am 25 and I always dreamed of going to graduate school, while I realize the true price of education in this country. I may not drive a BMW but I can honestly say that my priorities are in other places. Besides, if some magical fairie had paid for my college I would own a 70’s Corvette Stingray. I’ve wanted one since i was a little girl. And I would still bike, because it’s beneficial to the environment.
Place $1,000 (20%) in our savings account to go towards federal and state taxes. The remaining $4,000 would be applied to balances owed on credit cards.
2000 towards my mortgage and the other 2000 in my IRA. the remaining 1000 would be placed in my savings account for routine house repairs etc…
$5000 this days is not that much, but I divide the money this way,
1000 -credit card and it will go to cero for the first time in 2 years.
3000 on a bigger ring for my wife
1000 on a trip to St.Maaten to gave the ring to my wife.
I would send all the money back to my father in India who took a huge loan for my education in the U.S.
I have no debt. I would put $4000 in long term savings. The other $1000…a gift for family and some donations…probably something to support our troops!!!
I actually did inherit $5000 from my grandmother a few months ago. We used most to pay off a credit card balance, and the rest we spent on a trip to Ireland.
Buy a high quality early American painting, as early in the 19th C as possible; doesn’t have to be signed.
IM not in any kind of debt except my morgages, I have $20,000 in ING/savings for rainy days So $5,000 I will put it in Roth IRA. Hopefully when I retire IM ALIVE.
I’d put $200 on my student loan. This summer when car prices fall, I’d use the rest as a down payment towards a hybrid or fuel efficient car.
I would find the highest Cd Rate for 10 months and let it make money for my land taxes which I’m doing !
I would spend as follows:
$1,000 on credit card
$2,000 on car loan
$1,000 on mortgage
$1,000 in rainy day savings account
Like many mentioned above, I have no debt (OK, I have $150 on 1 credit card, give me a break). Currently, I’m working to build my emergency fund, then I want to start saving for a house. I’m also maxing out my 401K and Roth IRA. I would take $5000 and use it to start the savings fund for my first home.
I dont have any debt except mortgage. So what I would do is put:
$1000 in money market that I use for emergency funds
$1000 in ING Direct acct that I use for long term savings
$1000 in Roth IRA for retirement
$1000 in Citibank savings account that I use for overdraft protection
the rest I would blow!!!!
$5k dropped in my lap? I’d be on the next plane to China. I’d mix in trolling for investment opportunities with some sight seeing.
If I was given $5000, I would zero out my credit card with $1000, put $2000 into my Roth IRA , pay an extra $500 principal on my mortgage, and blow the remaining $1500 as fun money - like a cruise, a plasma TV, or some new furniture.
I sponsor a child in Indonesia and I would invest the money in something her village could really use like reliable fresh water supply, fruit trees or something similar to help them for the long term.
I would put $5,000 in an American Legacy Variable Annuity invested in American Funds Capital World Growth and Income Fund……then I would Immediately Annutize the contract with annual payments for life and pay my property taxes…..
Since I carry little credit card debt, I am actually getting ready to spend $5,000 that has been saved. I am looking at European ETF’s. I think the EU is going to continue to grow at a good rate relative to the US economy.
I would pay down my student loans, credit cards, auto payment, and of course my mortgage. I hope it rains money! What a far fetched idea, but you never know. Oh, how I could use that kind of money right now as life would be a little easier for me.
I HAVE A 16 YEAR OLD, GOING TO COLLEGE IN A COUPLE OF YEARS. I WOULD PUT $3500 IN HER PUTNAM MUTUAL FUND 529. PAY FOR TRIP TO IRELAND WITH HER ADVANCED PLACEMENT HISTORY CLASS NEXT SPRING WHICH SHE’S WORKING AND PAYING FOR HALF. THAT’S IT.
BY THE WAY I’M A SINGLE MOM AND TRYING TO TEACH MY DAUGHTER FINANCIAL INDEPENDENCE.
THANKS
I would take $1500 and put it into a higher interest online savings account.
The remainder I would take and spend on hiking the entire Pacific Crest Trail next year (after I quit my job).
The vintage watch market is booming and mint condition examples of watches are going for 3-4 time the market value. I would have to invest in a vintage Patek or Vacheron.
As with Jane from EL Cajon, I received around $5k from my tax returns. I am placing $2k into my ING account at 4.5% APY, $500 into opening a Scottrade account to take advantage of tips like those here and good stock buys, $300 into a Secured Credit Card (I have no [good] credit, therefor no high interest debt either), $1k into vehicle repairs, $250 to a house cleaning service, and the remaining ~$1k will sit or go into purchasing precious metals.
I don’t have any debt so I would put $4000 into my Roth IRA and $1000 in my Emigrant Direct savings which is giving 5.05% interest.
Throw it in a wide array of medium risk stock, where all my other money is. For you people saying you’d open up a CD because it’s not enough to pay off your high interest debt, you are complete IDIOTS. Throw every available penny into paying down your debt until you have NONE. Don’t spend ANYTHING on yourself, your spouse, your kids, or any fun, until you are debt free. DISCIPLINE! LEARN IT!
I would use it for vacation. Since we don’t have any CC balance and Mortgage and car loans have low interest rate and will not make much diff. with 5K. I will make my family by taking on vacation…
It would go into my startup business. Preferably 5k would not be given to *me* but to my business in the first place. I don’t care to screw up my tax situation at the moment.
I actully have $5k that I got from my tax return. I took it as my jackpot and opened a certificate account, coz I figured it wasn’t enough to pay off my debts. I thought it would be nice to just keep it aside for a rainy day.
I would invest it in Citibank. Collect my 4 and percent divvy while waiting for the stock to go to $65.
Wow! I surely don’t need to spend $5000 on a new dog when an absolutely fabulous one is available at the local city pound for $38 to $63.00. I probably would revamp my kitchen cabinets.
I would invest it in my new business start up. Nothing can beat the return in a (successful) business.
CD rates are at 5% and inflation is roughly 3% so the 5% CD yields 2% over time. With this 2% you have to pay taxes on the 5% return so you are just about where you started.
The moral or the story it that I cannot afford to put my money in a CD because I need a real rate of return which historically has been from stocks.
After reading all of the great comments on what to do with a $5,000 windfall, I put some thought into this $5,000 blessing and decided to do the following:
$2,000 investment savings
$1,000 to spend on my grandkids
$1,000 to pay off a few bills
$1,000 to take a needed vacation
I don’t really have much debt but a school loan that I am currently paying, 2 low balance credit cards and monthly living expenses. Don’t do car payments, I pay cash for my cars and I’m in the process of buying my first home next September 2007.
To paraphrase, you can buy fish or fishing lessons. I’d look for the best advice I could buy without a conflict of interest and invest the balance as they recommended. I’d want to see their track record first.
Take a month off work. I haven’t taken a vacation longer than 5 days since I started my business 17 years ago, and I think spending $5000 on relaxation and a little bit of traveling would be a worthwhile long-term investment in my mental health.
Scottish Terrier by all means. Where else can you get so much love, laughter and loyalty - and it doesn’t cost 5K initially… it’s the upkeep, not the cost. 
Install a solar hot water collector for my house.
Since the average adult uses about 15 gallons of hot water a day, and the average home spends about 30%-40% in energy costs to make hot water that eventually goes down the drain. A solar hot water collector has a HUGE return on investment. A good collector can generate up to 60% of your hot water annually, anywhere in the U.S. Factor in Federal and State tax credits for a solar installations, and payback can be in just a few years.
I would bury it in my back yard and hope that I remembered it when I moved someday. At night, of course…
To Curt from Minneapolis: Whether financial planners are flat-fee-based or percentage-based is irrelevant. Percentage-based fee planners take a percentage of what you INVEST, NOT a percentage of the GAIN. They get paid the same amount even if they LOSE you money.
I like your idea though. A financial planner truly worth his salt should receive a percentage of the profit, and no up-front fee at all. They should not receive anything if the investments they make for you lose money. THAT would be true incentive.
If 5 grand fell into my lap… I’d invest the following:
$500 CDs (2 of them)
$1000 money market acct
$1000 IRA
$1000 401K
$1000 put towards house payment or car payments…
Then I’d pray for another 5g’s… :o)
I have no debt, am contributing well to my 401k, and have a nice emergency fund set aside. We live within our means so I think I’d add that 5k to one of those online high interest savings accounts that is going towards the down payment for our first home. Starting a Roth IRA would be a close second but I feel comfortable with my 401k contributions and the dream of owning my first home is too important to me for anything else to be a priority. Must be nice for those of you that already own and are considering rental properties, I envy you! Owning a home is the American dream and I really hope prices deflate a little so it’s an option to more average americans.
Looking for some advice, just about to head off to college. College is paid for, so i have no debts of any sort. Curious what to do with 5k. The only thing I currently would do would put it into companies were i know the people running them, and know that they know what they are doing. Any advice though for a 18 year old?
I would and will put my $5,000 into my IRA. My total credit card debt is under $3500 and I never pay less than $300 to $500 per month payment. I consolidated all my debt to one card. Those of us with excellent credit usually get an offer to transfer our higher interest rate balances to a fixed rate. I managed 4.9% till balance paid in full and I transfered everything to that card. If you do that never cancel the card you transfered your debt from. Just put your paid in full cards away. Someone told me that cancelling cards effects you credit. I don’t know if that’s true or not but I just put the cards away in my safety deposit box. If someone knows for a fact that cancelling cards does not effect you credit let us know. My new moto is, never, ever charge more than you can pay in full when you get the bill. I charged most everything on a card I get mileage on because I travel and free air when you go to for example Europe or just to be able to upgrade to business or first class is real plus.
BUT NEVER EVER CHARGE UP MORE THAN YOU CAN PAY IN FULL AT ANY TIME.
$5000 would be a nice addition to our ING savings account. My wife and I started putting money into an ING account about 2 years ago through direct deposit from our paychecks. This would make our current balance $17,000 which is what we are using for our emergency fund. With this kind of an account and the amount in it, dont have to panic if some major life event happened that required quick cash.
With the U.S.dollar inflated at scalding levels commodies seem fair and Plat. or Gold top the list or maybe food that will keep.
Easy. Invest in precious metals, - specifically platinum, palladium, gold, silver, copper. Then just put it away and wait a few years.
I would buy 3-$1000 gift cards from walmart and hand them out to my grandparents, my great aunt and my aunt who all lost their house in the Greensburg tornado. The rest I would use 1k for a vacation and 1k towards student loans.
$5K would go into my 401(k) at work. The New World Fund (RNWBX) with American Funds has had killer returns over the past 5 years…risky maybe, I’ll take my chances. Thanks for asking.
Did it fall into my lap as cash or a check? Just kidding… Like the rest of you (non-investors don’t read these columns) I would invest — in ETFs: “diamonds”, “spyders”, “QQQQs”.
My husband and I have a home improvement loan we took out 4 yrs ago. We did get an unexpected $5,000 this year and put it down on the principle. This will help decrease the amount of interest we pay on the life of the loan.
My husband and I are both 40, have no debt, and our retirement savings are all maxed out, so we’d likely use the $5,000 to pay off the loan on the previously-owned BMW we just bought last weekend. We put $15K down, and will have it paid off by December. This windfall would help us pay it off by September, instead!
I would do what I always do with an “windfall”. Save half and spend the other half on a luxury item…..like new clothes or a trip somewhere.
Everbank gives you 6% as an intro rate and has amazing checking account rates (over 3%). I noticed no one mentioned them…
I have no debt except my car loan but I make more money in interest with savings since the car rate is so low that it’d be silly to pay it off.
I would take the $5000 and daytrade.
With $5,000, I’d invest half of it into Precious Metals of both Gold & Silver since commodities are rising. The other half would go into energy ETF’s with a few share into Exxon/Mobil. There’s no need for an advisor because ‘a fool and his money are soon parted’. Besides why would I ask advice from someone who earns money from the financial vehicles he/she sells ? Think about it.
I am going on maternity leave and would use the $5K to take another month of unpaid leave off. Oh and probably stock up on some diapers too!
I would buy another motorcycle. Eventually there will be more and more of them on the road as the impossibility of raising gas mileage sinks in to most peoples minds. If the mileage figure could be raised the japanese would have done so long ago. The only way to get top mileage now is to use a motorcycle or scooter to get back and forth to work.
Assuming my debts were paid off… I would either (a) pay down my mortgage (a HUGE interest savings over the life of the mortgage) or (b) increase my emergency savings account by putting it in the HSBC Online Savings account… earning a risk free 5.05%, compounded monthly.
I’d skip the CITIBANK account and add it to the APPLEBANK savings account @ 5.25 % , EmmigrantDirect is also over 5% currently…Citibank isn’t the Biggest for no reason!
Buy $5,000 worth of gold. Use it to collateralise a leveraged loan from a Japanese bank for about 1-2%. Use the Yen to buy Swiss Francs and buy an Annuity from a Swiss insurance company.
CH Francs are one of the most stable currencies and Swiss insurance companies haven’t lost money in the last 450 years. With the leverage factor, returns can be in the 30+% range not considering the continuing collapse of the US dollar.
Since I’ve already paid off my credit card debt and have a no-interest auto loan (which is almost paid off, too) I think I would add $2,500 to my IRA for 2006 and blow the rest on shoes. Maybe.
I’d pay may rent up for 10 months and without the worry of the dreaded first on the month due date. I could use the extra money monthly to take care of smaller debts.
If I have $ 5,000 from out of nowhere, I will put everything in a Vanguard mutual fund and let it sit there until I retire (in about 10 years time). That way I will have a little something to spend on a Swiss vacation with my wife.
$5K ain’t much these days, but I would do three things with the money—invest, invest, invest. A good index stock fund would be good. Maybe some in an energy fund and a healthcare fund. REITs are a good bet right now too.
I’ll use $500 for golf, $500 for a four day trip, $2000 on a CD deposit for emergencies, $1000 to invest in individual stocks and $1000 for my business ventures.
I would pick one or two currently undervalued blue-chip stocks and invest in them. I just put a little over $5k toward Johnson & Johnson.
Many of your “professional” suggestions on what to do with $5K are good. I would think twice, however, about using a fee-only financial planner, as you suggested. They have NO incentive to make wise decisions on your behalf. On the other hand, a planner who is paid a percentage DOES.
Simply put: if you’re making money, so is he (or she). Don’t be greedy. Give the guy a bone and he’ll continue to search out the meatiest ones for you.
Money is all relative to the individual and how much they make. If you take a look at 5k to Bill Gates its like him worrying about a Penny. You take a look at someone who makes only minimum wage and thats almost 1/6th of there salary. What that 5k is worth is to the individual and there future. If you have debt then invest in something that will help bring a return and help you pay it off sooner. If you invest it right your money will double every 7 years with the right financial planner. If you have no debt and the money is of no relation take a look at wealthy individuals who buy furniture in the millions at a Southerby’s auction. They are buying something that is an asset and an investment. Something that will grow and hold and gain in value. If you buy a TV your going to loose almost all of your value in two years beacuse of technology advancement. If you buy a watch then it better be swiss and used as more likely then not you will likely get 50% of its value if you need to sell it. Buy something that is going to make you happy but realize what your spending your money on and appreciate it but furthermore take a look at your priorities.
With an extra $5k, I would take the first $2K and add it to our rainy day savings at CapitalOne Money Market account. I think it’s one of the best out there. Spend about $1200 on a solid fee-only certified financial planner for long range planning. Add $1k to my 1-yr old daughter’s 529 plan. And use the remaining $800 on a good elliptical trainer machine. Maybe boring, but would definitely give me some warm fuzzy feeling.
I look for zero financing deals or cards for major purchases, so my normal credit card debt is paid off monthly. An extra $5000 would result in a $500 allowance bonus each for the wife and me to spend on whatever. The remainder would go into our cash reserves we keep in a high interest checking account for vacations, car insurance, unassigned surplus, and other big ticket or annual payments. Since we both have pensions and substantial 401k/IRA savings, it would not benefit us to any great extent to run with a check to the nearest stock broker. Bottom line: we’d probably blow it on a vacation cruise.
I would do precisely what I did with my ‘06 bonus: throw it at my mortgage. I’m able to save a respectable percentage of my salary for retirement, and have blown too many bonuses in the past, so any windfall would go toward paying off debt and increasing monthly cashflow.
I looked this lits over for some new ideas on this question because I just put $5k in a 6 month T-bill @ 5.03% last week after asking myself the same question. Still sitting on $10k making up my mind which best to invest next, but the T-bill through Treasury direct still one of the safest things around. Might just build the old bond ladder by spacing out the next two investments so a T-bill comes due every 2 months.
Best watchdog:
A Scottish terrier
No, seriously.
You should be able to snatch a pup for between $1,000 and $2,500. What’s left of your $5,000 should cover food and medicine for a couple of years.
Guess what… Instead of BUYING a dog, find one that needs a good home by going through a Scottie rescue group and adopt for a couple hundred dollars and have even MORE of your $5K left over (and save the life of an unwanted animal in the process!)
I would take about $2K to replace the part of my emergency fund that I used while looking for a job (I have one now, yay!), divide half of the rest into 12 parts to contribute to my Roth over the next year, and the other half would go to the Red Cross.
I would use 95% of it to make a down payment on a new Mastercraft X-10 boat, then I’d use the last 5% for gas, which should last me about 4 days on the lake. After that, I’d sell the boat and use the remainder of the money to throw the biggest party for all the people I previously met on the lake.
First 10% to church, save 25% for the taxes I’m gonna get hit with because of it, spend $1000 on things we don’t really need, and save the last $2,250. However, we have no debt, aside from mortgage, and have significant savings already in place. Hmmmm, what to do with $1000………
There is only one thing I would want to do with $5000….that is go and see the mountain gorillas in Africa. I was just in southern Africa on a safari and decided I want more. I have vowed that before I die, I will see the mountain gorillas!
If I have $5,000 cash in my hand. I would rather pay a big lum sum on my mortgage loan (espcially on principal only)
I’d send my wife on a wild shopping spree that she deserves and put the other 4950 in our savings in case she wants to go nuts again….
I would buy either Euro (appx 2 USD=1 EURO) or Indian Rupee (appx 40 INR = 1 USD) and wait for 5 years.
Put the money in a money market fund that pays at least 5%. Then let it sit for a month and at the end of the month an idea or two will appear, to spend wisely.
Get ten families out of poverty with microloans. http://www.kiva.org
First, I’d buy decent long term care insurance policies for my husband and me. Second, I’d up our umbrella liability coverage to $2 million. Last (or instead of the above), I’d buy a muni bond that’s non-AMT in my state. That doggone AMT eats up whatever other investment gains we might make!
For Mike Hughs and Jason: Mike, what doe sit matter if its after April 15th? Add it to your Roth or regular IRA for next year and start increasing your wealth NOW! Or you can increase your deductions to your company 401K plan and pay yourself back with the 5K. Jason, Mike: I already bought my 50″ plasma, made my $5K additona to Roth IRA’s for my wife and myself, now what? An international vacation to the islands?
I would take $3000 to max out my Roth, $1,000 to build up my cash reserve at Immigrant Direct earning 5.05% and $1,000 towards my VUL
I would cash the check and hold onto the cash, adding to my “strong Box.”
Then I’d make petty cash loans to friends at 10% interest. Or loan them at zero interest and improve my position for favors down the road.
This is assuming zero debt, and retirement fully funded.
I would spend 10% and then either pad our money market or add it to our ETF funds. We already save 15% of our income (not including employee profit sharing contributions), have funded our IRA’s for 2007 and don’t have any debt other than our mortgage.
I agree with previous posters. The best way to become financially well off is to live below your means and save, save, save, save. We’re living below our means and are absolutely lovin’ it!
I would use all the money to purchase a piece of property at a local city or county auction for Tax-Defaulted Properties. I would hold the property for a couple of years and then sell it a market value. You can usually pick up something for under $5000.
By reading all the comments I see that everyone is well established financially. The true is that I have so many credit cards that will be even hard to decide which credit card to pay the the 5,000 dollar ammount to. I guess I need to payoff all current credit cards before I can actually think about making a 5,000 investment.
If I had a $5000 windfall I would put it in my GE Interest Plus emergency account, currently paying 5.43% apr. and it is liquid.
After paying tithing (10%), I’d put the rest in our cash/CD savings that covers our three-month emergency fund and savings for predicted large expenses.
First of all, I would NOT tell my financial planner I have $5K, as they would want me to invest it in my portfolio. I am at 116% of target, so I am doing just fine at this rate. Though it is tempting to reduce my projected retirement date by a month. So, then what would I do?
I would take $100 to $600 and blow it on a toy of some sort (yeah, I am a guy)… a weather wireless device or new gas grill or some new garage tools.
The rest I would put in my emigrantdirect.com savings account where I am getting >5% interest. On $20k, I get $80/month in interest. So on $5k, so I would get about $20 in interest. Big deal you say. Next time you go out to eat, think of the $20 you just got.
Have some fun. But pay off debt first before anything. Put money into your life insurance. The kids life insurance. Get that UGMA. The 529. Your 401k.
There’s no “one size fits it all” answer here. Bill Gates would answer one way while most would answer completly with a different need in mind. As a general answer, I’d give back 10% first to the really needy, spend 10% as a “feel good” factor, save 10%, then, pay down the highest interest debt that I have outstanding. If I have no credit card, or high interest debt, I’d make sure that I have an emergency fund equivalent to about two to three months of take home living expenses, then find the best investment at the time. At times, the best investment may be the lowest risk depending upon your age & net worth, including your positive/negative cashflow position. This is a question that needs to be answered totally based upon your financial position at the time.
Head to the casino
Sock away 2000 for graduate school, put 2000 down to pay off credit cards, and use the last 1000 on something fun - a short vacation, perhaps.
If I get 5K, first I try to lower my expensive financial debt, then (anything left) I will invest in amutual fund.
I’d buy a 65 inch Plasma HDTV. Only because I have all ready set up my retirement IRA’s, owe only 200K on my mortgage and have 50K in a money market. If I had not taken care of my financial business, I would put it in a mutual fund or money market. These steps should be taken by young people in their 20’s. Then you save money and watch 20 year old TV’s ,like me, and buy used cars and scrimp and save and if your lucky your wife is into the same things and shops at Goodwill whenever she can or the Dollar store. Anybody gan get rich with enough time and frugality.
Of course it’s obvious that the best thing to do with $5000 is to pay down your debt. The bad news is in America it takes a FINANCIAL EXPERT to tell you that.
Use it to fund my personal business venture. For example, if I was going to create something and sell it, I would buy the tools and components and maybe an ad or two. If I needed more than 5k, having that 5k to invest could help to secure a small business loan for 5-20k more. I am into computing and recently saved up about 6k. I have bought some computer books, some domain names, some computing equipment, and soon will buy some hosting once I build my websites. I expect to be supporting myself on this self-created business within 12 months. And then, over the next few years, to study hard, increase my ventures, and get rich. =)
I’d pay off a little credit card that I have at 2.99% to get that pmt out of the way. Then I’d take them remaining 4,200 and put it towards clearing the lot for the house my fiance’ and I are planning to build. My truck should be paid for by the time the house is complete and her car is paid for now. So that would allow us to cut down on the money we would have to borrow on our house and it would eliminate a $50/month payment.
I am never in debt, so if I had $5,000 I would put it in a money markets account or partial down payment on rental property.
If I came upon an extra $5,000 I would tithe 10% of it to my church and then take my wife out to our favorite Italian restaraunt to celebrate. We don’t have any credit card debt and we already put away for retirement so I would take the remaining cash and dump it into our medium risk mutual fund with Vanguard. We are using this to save for a newer home one day.
If i had $5,000 to spend, I would analyze my debt and options to make my money grow. If all of my debt at the moment was let’s say going from 7% and higher I would put my $5,000 towards my highest interest rate debt to try to lower it down as much as possible or even eliminate it.
On the contrary if i had all of my debt (car loan, mortgage, student loans) under 7% i would throw my money into a money market account or somewhere in the likes of emigrantdirect.com.
Pay extra on my home loan; I’m too old to have one so, the sooner I pay it off the better…btw..I’m 43
We’ve got so much money tied up already in real estate and retirement investments for the future, that I’d use $5,000 to invest in my family now. That would mean doing more fun things with my kids, traveling, giving my son some college money, just enjoying life for the moment. We’re always thinking about the future but we’re not promised tomorrow. Better to use the money to build some family memories today. Money has always been tight for us and I’d like to enjoy it for once.
How ironic. I just put $5,000 into a 7 month CD. I have no debt to speak of, expect for the house payment and decided that this would be a better way to make some money. I also had $5,000 before April 15th and put that into a ROTH IRA.
The first thing I would do is drag out my calculator. $5,000 would REALLY mess up my tax situation, so I’d have to figure out how much to pay in taxes. With what was left, I would divide it into three parts: One part would go towards increasing my emergency savings fund. One part would go toward paying down my credit card debt. And the last part would go to investment in stocks or mutual funds.
Boring, I know, but that’s what I’d do. Oh, wait–I’d spend $20 on whatever I wanted.
Buy Gold or Silver bullion. The long term gains could be huge. Hedge against inflation, global tension and is really the only true money. Get out of US dollars.
If I had $5k fall from the sky and into my lap I’d do the following. I’d take 10% and blow it on something I wanted, not needed. Maybe a camera, a vacation, etc… The remaining money I would put into the highest interest debt… unless…
If I had a credit card or personal loan that was a reasonable rate, but very close to being paid off I’d pay that instead.(assuming the remaining $4.5k would clear that loan completely.
My thought is that with the 10% splurge I can enjoy the windfall of cash a little bit. Paying off the credit card that is almost cleaned up will give me a warm fuzzy, and if all those aren’t an option paying into the highest interest rate loan would be the smart and safe, albeit boring thing to do.
I would pay my rent that is behind which totals $5000.00 before I get kicked out!