Wall Street greed has gone out of its way to ruin the reputation of the humble bonus. Like really just above and beyond.
But most people actually work damn hard to help their companies grow, so the end of the financial year means you can be forgiven for quietly hanging out for some extra cash from incentive payments or performance bonuses.
To help you with some ways to blow that freshly minted cash I’ve put together a few ideas for when it hits your account.
1. Pay off your debt
Yep, there it is; you knew it was coming! In fact you could have bet your bonus that “pay off your debt” was going to be number one. That’s because paying off debt has an instant impact on your net worth by reducing your cash sucking liabilities, putting you on a stronger financial footing.
Kill off any “bad debt” first; money you’ve borrowed on high interest credit cards or personal loans to pay for things which don’t increase in value over time, like your car.
2. Invest in great business
There are some great businesses listed on the ASX and if your goal is financial freedom, owning shares of strong, cash generating businesses can help to move you in the right direction.
Dividend paying companies like hotel and resort marketer/operator Mantra Group Ltd (ASX: MTR) or SKYCITY Entertainment Group Limited-Ord (ASX: SKC) can help supplement your income with their current dividend yields of around 3.3% and 4.3% respectively. Alternatively you could consider high return generating business like CSL Limited (ASX:CSL) or Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) which have incredible compounding potential.
3. Buy some ETFs!
If buying and monitoring individual companies isn’t your idea of fun, ETFs, or exchange traded funds, are a great alternative. Many funds own a wide basket of stocks which offer easy diversification at very low fees.
For a great primer on how ETFs work, check out this piece by fellow writer Owen Raszkiewicz. When you’re ready for some ideas, Motley Fool Advisor Andrew Page has you covered with a selection of his favourite globally diversified ETFs to consider.
4. Tick something off your bucket list
Try the best restaurant in town. Plan a diving trip to Cuba, or a Ski trip to Whistler, or take the Trans-Siberian train to Russia. Watch the 2018 FIFA World Cup while you’re there.
Take the kids to Disneyland.
Buy some art; originals baby, not even prints.
Life is too short not to live.
5. Do nothing
If you don’t need to put the money to action straight away, then don’t feel obliged. Just sit on it.
You’ve worked hard (probably…). Enjoy holding on to that feeling for a while and cherish it. Leave it in the bank for a rainy day or build a contingency fund. If you’re not good with money lock it in a term deposit for six months with your bank while you ponder your options.
People who’ve made a million want reliable returns as much as you do. And when you buy a dividend-paying stock, you’re setting yourself up for more reliable gains.
So if you want a blue-chip retirement you better look to some dividend shares rather than the paltry returns offered on term deposits.
Simply click here to learn more about how how to invest in the right dividend-paying stocks.
Motley Fool contributor Regan Pearson owns shares of Sky City Entertainment Group Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.