What to do with DAT BONUSPE
I understand that a lot of the readers on this board have never received a sizeable bonus and the minority who do were already paid months ago back in June/July, but I hope this post is still helpful to some about how to manage the bonus that you receive from your finance job.
1. Pay off your student loans immediately. I don't care if your uncle approached you with an amazing idea that will return 5000% in a year which is more than your 6% Stafford Loans, pay off the debt! I know you're young now, but very soon you'll be looking to buy a house/apt or get married and the loans you need on a mortgage will be a lot harder to get ( or more expensive) if you have a bunch of student debt left over. There's always pressing capital needs, but 99% of the time, you should be clearing up those student loans immediately.
2. Luckily, some of us had scholarships or parents that took care of #1, so if you don't have any loans you need to be investing your money intelligently.
This means ignoring all the scam financial advisors that somehow got a hold of everyone's names at yourand are cold calling 24/7 telling you they can help invest your money when really they're going to just buy the S&P and layer fees on top.
NO THANKS! Now everyone and their mother has an idea on what investing wisely means, so feel free to do a search and pick the best strategy for your risk appetite. For me, a mix of commodities, cash savings, and mid cap equities in a balanced portfolio fits my risk tolerance.
3. Don't blow it all at once. Obvious, but still many analysts every summer realize that they wish they'd saved more of their bonus. One large spend is usually a sweet vacation to a far away land. However, something my friends and I did back when we were first years was to find an interesting inexpensive hobby.
For us, that was poker. It helped that we were good at it, but we took a few thousand each to Vegas and had a great time. Worst case scenario, you lose 1k and get a comp'd room/food and create some great memories. Best case scenario you make 2-3x what you started with and get a free paid vacation PLUS some.
Luckily, there were a lot of fish back in the day so we all won a few thousand and basically had a free trip. Not to mention that Vegas packages are dirt cheap since they're all subsidized by the local casinos to bring people to gamble.
4. Don't be a miser either. Sometimes, blowing a little steam is what gets you through the next year of 100 hour weeks. All work and no play makes Jack a suicidal analyst. Just make sure you use that money intelligently so you're not regretting it when, god forbid, you get laid off or find a better job that requires you to leave before your next bonus.
Don't be afraid to take aside a thousand and spend it with the people you love most, best friends, significant other, and family. This doesn't mean necessarily buying people gifts but rather spending time with them and taking them out to nice places / restaurants. It's a great way to show appreciation and will provide you with relationship capital in return (which is always a good investment).
5. Be happy. I know bonuses are down across the street from the glory days of 2007 but keep your chin up. Most kids out there your age never get checks this large and won't until they're in their 40s. A lot more are unemployed or underemployed. Be happy and keep on trucking.