I'm in my early twenties, have never had this sort of money in the bank before, and I am totally lost.
How do I best use my tiny jackpot?
EDIT: To clarify, I _also_ have a job where I make ~$150k/y, regardless of this jackpot.
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...
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!
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.
https://ritholtz.com/2014/02/the-best-investment-advice-youl...
those are retirement and extreme emergency funds.
dont feel bad about buying something fun. just make sure it isnt stupid and fun.
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.
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.
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.
Or a high interest savings account.
Or just put it into SPY.
- 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.