On Wednesday I gave an impromptu lecture to our women’s soccer team about the basics of investing money in mutual funds. Towards the end I was asked by a student-athlete, “If you got a ton of money while you were in college how would you spend it?”
Like I told them: I am not a financial adviser, so you should consult one before making any decisions about your own money. I’d do my own homework about investing, including reading this book, this book, and Mr. Money Mustache’s blog.
That said, I can confidently say what I’d do with a bunch of money if I were still in college. Let’s say I inherited $100,000:
1) I’d pay off my credit card debt and car loans. I’ve never actually had these debts, but if I did I’d do this first. If I needed a car I’d buy a $5,000 used one because I’d still use a bike as my primary means of transportation.
2) I’d pay off my student loans and the my remainder of my schooling costs, assuming it wasn’t an exorbitant amount.
3) I’d open a retirement account through Vanguard, buying as many shares of VTSAX as I could.
4) If I wanted to buy a house soon after graduation I’d have that down payment saved.
5) I’d have 6-12 months of living expenses saved in an online savings account like Capital One 360.
6) I’d make a donation to a cause I care about.
I might buy something fancy, but probably not. I don’t particularly care for fancy things.