Rich People Spend $350K+ to Park Their Cars — Here's How We'd Spend it Instead

By Tim Lemke on 13 October 2016 0 comments

I came across a news report recently about the construction of a luxury condominium for cars. It will allow people with fancy cars to park their vehicles in a secure environment, at the reasonable cost of just $350,000.

Yes, $350,000 for a place to park.

Suffice it to say, we can think of smarter things to do with $350,000. If you are lucky enough to have this kind of cash available to you, consider these alternative and sensible ways to spend your money.

1. Bolster That Emergency Fund

Before you shell out thousands of dollars for that custom-made personal watercraft, ask yourself if you'd have enough cash left to pay for a major medical bill if you got hurt. Or a hot water heater if it leaked all over your basement. Ask yourself how long you could get by if you lost your job. It's bad to blow money on unnecessary things. It's even worse to blow that money when you have nothing saved for a rainy day. Make sure you have at least three months of living expenses in liquid savings before you make any crazy purchases.

2. Pay Off High-Interest Debt

If you have money, there's no real excuse for carrying high-interest debt, such as that from credit cards. Interest from debt can erode your net worth, so pay off as much as you can. Focus on paying down the debts with the highest interest rates and go from there.

3. Contribute Maximum Toward Retirement

If you have a high income, there's no reason to hold back on putting as much into your retirement funds as possible. Those with 401K accounts can contribute up to $18,000 per year, and anyone with earned income can contribute $5,500 annually into an individual retirement account. Both of these accounts allow you to invest and see your money grow in a tax advantaged way. Focus on investments that mirror the overall performance of the stock market, and you'll see your money grow without much stress. Maxing out retirement funds may very well be the least frivolous thing to do with your money.

4. Invest Even More

Okay, so you've maxed out the amount you can place in retirement accounts. That doesn't mean you can't continue to invest! If you have the funds, consider buying stocks, mutual funds, and exchange-traded funds in a traditional brokerage account. You will have to pay taxes on any gains, but if you're investing for the long haul, you'll still come out well ahead in most cases.

5. Go to College

The best kind of investment is an investment in yourself. If you have enough money to pay for college, go for it! A typical person with a bachelor's degree earns 66% more over the course of their lifetime than someone who does not got to college, according to the College Board. And the earnings get even higher for those with advanced degrees. If you've already been to college, consider opening a college savings account for your children or another relative who's college-bound. Most states offer 529 plans that allow you to invest money without paying tax on the gains, provided that the money is later used for education expenses.

6. Buy a Home (Or a Second One)

If you're sitting on a sizable sum of money, it might make sense to put some toward a down payment on a house or other piece of real estate. It's better than renting, because you're building equity and may be able to even sell the real estate later at a profit. If you already own a home, consider buying a second and renting it out. This way, you not only get the benefits of real estate ownership, but an additional income stream as well. This sure beats cars or other material items that don't accrue in value.

7. Do Some Home Maintenance and Upgrades

Maybe it's time for a new roof, or your furnace has been on the fritz. Maybe you've always wanted to turn the basement into a nice family room. If you invest a little money into your home, you can stave off expensive repairs later, and any upgrades you make could increase your home value.

8. Give Some Away

$350,000 is a fair chunk of change, so why not give some away to a cause that you support? Remember that all charitable donations are tax deductible, so there's a financial benefit to giving away cash rather than spending it on something silly.

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