What would you do if you suddenly got a $50k/year raise?

crypto (or sh!tcoins as some of our dear letsrunners so fondly call them)

serious advice: spoil yourself

it depends, of course. what is your age, are you single, married, kids? saving for anything in particular?

what is your overall increase in take home with this $50K/yr raise?

whatever you do, don't send it to Israel, Taiwan or Ukraine.

I'd ask for $60k/yr.

Negotiate.

Save it and retire early.

The way you are framing it, the raise doesn’t sound like a life changing amount of money for you. Going out and buying new things probably won’t make you happy. Maybe use $5k of it to buy time back (hire a someone to clean your house every other week as an example) or get massages or extra PT.

One way to think about this is to model income as a stepwise function. One step on the ladder is you don’t have to worry about the costs of groceries. The next is meals, then vacations, then homes.

will 50K — 35K post-tax or whatever — move you up a step in the ladder? If yes, great! If not, investing it seems like the best bet. By the time you’re old, it’ll be enough money to matter.

ofdollarsanddata.com

Climbing the Wealth Ladder

Nick Maggiulli

On the 6 levels of wealth and why affluence increases in steps.

Link:ofdollarsanddata.com/climbing-the-weal...

You'll only get about 30K thanks to taxes, not really enough to warrant a lifestyle change at all

If you’re already comfortable with your rate of retirement savings, you could invest the new money into something that adds to your quality of life, like a vacation home or a side business that’s connected to one of your interests. I’ve done both of these things, and have no regrets.

Get the debt eliminated, especially the house. Either that, or invest in some land.

Congrats on the raise. It's a meaningful amount and is recurring.

It gets a bit philosophical what to do next, but ideally put the money where you get the largest return. Opportunity cost. Always weigh and compare your opportunities and make the best decision.

You may or may not want a house. You may have high interest debt to pay off. You may have low interest debt, which may change your decision on whether to invest or pay debts. You may have no debts. You may want to bootstrap a startup and so on. Always think about the opportunity cost.

When this happened to me I invested most in s&p index and started doing more of my grocery shopping and a store with better quality stuff (eating good food is important to me) I think the ~70% save 30 percent treat yourself is a good model

I'd do nothing different.

What I did last time....save a little more but watch the rest nickel and dime its way out into the ethers. You spend a little more on a car, more on the kids, more on vacation...it just kind of disappears.

Assuming all of your other basic needs are meet, I would do the following in order:

1) if you aren’t already, max out your 401k
2) if you aren’t above the income limits for IRA contributions, max that out
3) treat yourself as someone else suggested with a bit more self care if you still run, get the new shoes more often, go get semi regular massages, etc
4) Read the Bitcoin Standard by Saifedean Ammous, put the remainder in each month into Bitcoin. Some months this may be more, some it will be less, but whatever you have left over each month from your 3-6mo emergency fund, just blow it into bitcoin. Every time I’ve bought bitcoin it’s felt expensive. It will never feel cheap, and no you haven’t missed the boat. Do this over several years and truly understand what it is and the function it serves, you won’t be disappointed.

That's it? If you had an extra 50k dollars, you'd do two dudes at the same time?

Damn straight. Always wanted to do that man.

For me, as someone single in a not great area, the first thing I'd do is look for better housing in a nicer area. Probably the best quality of life improvement I could make right off the bat. If it's not life changing money for you, investing in savings/retirement is probably the way to go

I had a similar situation (although closer to 30k than 50k). My suggestion is to invest all of it and use the cash returns from investments to increase your lifestyle. E.g. if you put it all in a high cash flow investment e.g. ccflx you'll get an extra 3k to spend on yourself each year but will still aggressively save so you can potentially retire early.

A couple of thoughts:

•If it isn't going into a bank account specific to investments, you'll end up spending it.
•If you spend all of it, you've put yourself in a worse place due to lifestyle creep and now need to make that extra money.
•If you spend none of it, you'll wonder why you are working so hard and not seeing the benefits and start spending it.

I would look at:
•debt fund (e.g. ccflx), business development corporation, REIT, or high dividend stock which give you a 9-10% cash on cash return. And use those returns to splurge on extra things. (I would actually not invest in REITs currently commercial real estate is in a tough spot, but mentioned them anyways)
•dividend aristocrats should give 2-4% cash returns but better overall returns than the high yield investments (which probably see limited to no capital growth)
•tech monopolies (in 401k/IRA if possible)
•broad index funds (in 401k/IRA if possible)
•some other alternative investment (real estate, crypto, buying/building your own company/website)

What I ended up doing was increasing my budget by about 400-500/mo, maxing out my 401k and IRA contributions and buying a pair of single-family homes to rent out.

This recently happened to me by switching jobs. It was actually a $60k pay increase. Nothing changed about my lifestyle. I stuck to my budget I created for my prior job and had more to put in investments after each payday. I did provide myself with a one-time reward by buying a new guitar but I also sold another guitar at the same time so it all evened out.

Funny enough, the new job was pretty terrible so I ended up leaving for a lower paying job (still higher paying than the initial job). I am glad I did not allow myself to have lifestyle creep.