What To Do With a BIG Bonus!

Summary

A 26-year-old and their 23-year-old fiancée, both General Motors employees, received a $21,000 profit-sharing payment and already save at a 25% rate. The speakers first clarify whether the payment is cash or deposited into a retirement account, then discuss it as a cash bonus.

Their main point is to check whether the reported 25% savings rate includes the bonus. If it is based only on base salary, the speakers say at least 21% of the $21,000 should be saved to maintain a 25% rate against total gross income. The exact calculation depends on how the bonus and savings rate are measured.

Suggested framework

• Confirm the savings-rate calculation: Include the bonus when assessing savings as a share of total compensation.
• Clarify the money’s purpose: Discuss long-term goals as a couple, such as early retirement or other future plans.
• Consider building investment “critical mass”: The speakers suggest putting a substantial share toward long-term wealth building; they offer half to 60% as an illustrative possibility.
• Balance future goals with present enjoyment: If their financial plan is on track, use some of the money for a meaningful experience, such as a vacation. The speakers caution against spending it all at once, noting that the pleasure of spending can fade as expectations rise.

The speakers place the couple around Step 7, “hyperaccumulation,” in their Financial Order of Operations, and describe Step 8 as potentially expanding lifestyle or pursuing other goals. They suggest using their “wealth multiplier” resource as a tool for discussing the decision.

Financial details

• Amount: $21,000
• Ages: 26 and 23
• Employer: General Motors
• Savings benchmark: 25% of gross income
• Illustrative allocation: Save at least 21% of the bonus, per the speakers; potentially invest 50–60%, with some available for enjoyment
• Investments, tickers, or instruments: No specific securities, ETFs, or other investment products are mentioned
• Disclosure: No “not financial advice” disclaimer is stated

Presenters/source: The captions refer to “Brian” and address “Hunter,” though the auto-captions may be inaccurate. Source: The Money Guy Show.