I Asked 4 Financial Advisors What They'd Do With a $50K Windfall
A $50,000 windfall can feel like a dream — until you have to decide what to do with it. Should you invest it, save it, pay down debt or enjoy some of it? The answer depends on your financial situation, goals and timeline.
To see how the pros think through a sudden cash boost, I asked four financial advisors what they would personally do with an unexpected $50,000 — here's what they said.
Making Money: I'm a Wealth Advisor—3 Habits My Richest Clients Share
You’re Innovative: 7 Low-Effort Ways To Make Passive Income (You Can Start This Week)
Split It Between Giving, Spending, Saving and Investing
Jordan Taylor, an independent financial advisor at Core Planning, said he would divvy up the $50,000 between four goals: giving, spending, saving and investing.
He believes that giving is the key to enjoying your wealth.
"Start by being generous," Taylor said. "For me, that means at least 10% is going to get spent taking care of people in my community."
Because he and his wife have been diligent about paying down debts and saving for retirement, he would spend $5,000 to $10,000 on a once-in-a-lifetime experience or vacation. He would then put $30,000 to $40,000 into various savings buckets, including emergency funds, savings for a down payment and a college fund for his daughter.
Finally, Taylor would invest the rest.
"Max out the Roth IRAs and stick the rest in a brokerage account," he said. "I have a fairly aggressive index fund-based portfolio. No special stock picks — just a regular contribution that automatically gets distributed."
Use It To Help Cover College Costs
Steven Rogé, certified financial planner and CEO of R.W. Rogé & Company, Inc., would put the funds toward his son's education costs.
"With a surprise $50,000 windfall, my wife and I would put it toward our nearest unfunded liability, which right now is our son's college tuition," he said. "He's entering his senior year of high school and we've saved steadily for the better part of 17 years, but depending on where he lands, it may not be enough."
Depending on the school, tuition for four years could be close to $400,000.
"If he ends up at our more affordable in-state option, our pocketbooks will be very happy," Rogé said. "That would free up discretionary cash for things like upgrading to an ocean view on vacation, the occasional first-class flight or a Swiss-made watch, like a Rolex Sky-Dweller."
Put It Into an Indexed Universal Life Policy
Ryan Richardson, CEO of LiteStrats and a certified financial fiduciary, would "do the boring thing and put the bulk of it into a properly structured IUL."
"At this stage, I care more about keeping money than chasing it," he said. "Inside a correctly built policy, cash grows indexed to the market with a floor of zero, so a bad year does not set me back; I can borrow against it tax-free when I want liquidity; and whatever I do not spend passes to my family tax-free."
Indexed universal life policies can offer tax-advantaged cash value growth and a death benefit, but they can also come with fees, caps and complexity, so they are not a fit for everyone.
Invest Most of It for Long-Term Growth
Jason Dall’Acqua, certified financial planner and founder of Crest Wealth Advisors, would divvy up the $50,000 strategically:
Keep $5,000-$10,000 for enjoyment — he does not have any high-interest debt and has a fully funded emergency fund
Invest $5,000 into a brokerage account earmarked for his children, separate from their college accounts
"The remainder would be put into my brokerage account, since my retirement accounts and the kids' college accounts are already being funded for the year with automatic monthly savings," Dall’Acqua said. "I would invest that money aggressively since I am in my 30s, have no near-term need for the money, a high risk tolerance and a long-term investment horizon."
As these responses show, there is no one-size-fits-all answer for a $50,000 windfall. The smartest move depends on what is already handled — emergency savings, debt, retirement contributions and family obligations — as well as what would bring lasting value.
For some, that might mean investing aggressively. For others, it could mean funding college, creating liquidity or using a portion of the money to enjoy life now.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion: