Assuming I netted $150K after taxes:
Pay off mortgage. $20K.
But a new house outright. $100K (Yes, it’s possible where I live).
Pay off student loans. $27K.
Go to Disneyworld. Remaining $3K, plus some of the proceeds from the sale of my current home.
Buy 150,000 Powerball tickets!
Actually, I’d pay off my debts , give $9.9K to each of my family members, and buy a new computer. Sock most of it away for retirement.
Not to hijack the thread, but do people think they would behave differently if they received $150,000 in a big windfall vs if they just sort of accumulated it over a few years?
Yes. Very few people are actually able to accumulate $150,000 in liquid assets “over a few years.” It would take me about 5 years just to earn that much, and most of it goes to living expenses. An extra $150K on top of what I have managed to tuck away would be major.
Pay off a few bills.
Put a bigger chunk into the kids’ trust funds (no, we’re not rich, but the trusts are set up to handle anything relatives might leave for them) to pay for college.
Max out our retirement savings for a couple of years.
Do something fun like a big family vacation.
I’d pay off my mortgage, which would leave me with about $30k left, plus an extra $1200/month in mortgage non-payments. With that I’d probably replace both of our cars, which are long in the tooth.
Depending on if the $150K is before or after taxes, I’d either pay down or pay off my mortgage. If it was after taxes, I’d use the remainder to clear some smaller debts and probably for a down payment on a new car.
I won $150,000 on a game show. Unfortunately, the show was called “Your Wife Is Terminal.” While it was tax free, after the medical, funeral and mortgage payoff I had exactly $100,000 left.
I spent $10,000 and bought a huge television and an antique English car. The $90,000 sat in the bank for a year or so while I pondered it.
I bought the house next door for $180,000 and rented it out. I now owe about $60,000. I rent it for $1000/month (low) and put another $1000 with it every month (It is the only debt I have). Once it is paid I will stick that $2000 a month in the bank until I have enough to buy another house outright.
Then I will save the $3000/month and buy one more. That will give me $3000/month income. At that point I will be 62 years old. That’s the plan. But you know what they say about plans.
Even if it doesn’t work out, it would be difficult for it to go too far wrong. It is a fairly safe investment.
$90,000 to spend?
$10k on various entertainment products (video game consoles, television, computer, etc).
$10k on a vehicle.
$5k on furnishing a new apartment.
$5k on personal shopping (clothing, funding my hobbies, etc).
$60k to live cheaply in my apartment for as long as the money lasts while working on my books (so likely two solid years).
Try to figure out how to turn it into $200,000.
I don’t get the popularity of paying down a mortgage. I’ve successfully avoided almost all other debts in life - never made a car payment (drove beaters when I had to), never carry a credit card balance. But a mortgage is the one debt I happily carry. The interest is tax deductible, and rates are historically low. It’s a great way to get the use of the bank’s money for a few decades.
If you’re paying off the mortgage to make your monthly living expenses lower, then I suggest you just give yourself a monthly allowance from the winnings, and keep the cash around for emergencies and other investment opportunities.
Even after the low rates and the tax deduction, your are still paying interest. Unless you can nearly guarantee a greater rate of earnings on the money, it still is beneficial to pay off the interest.