It’s that magical time of year again: bonus season. And for all the lawyers raking in market bonuses or better, it is definitely going to be a green Christmas.
You probably don’t really need help blowing money. If you feel compelled, go ahead and buy yourself that $15,000 ostrich-skin jacket — it’s not like that ever came back to bite anyone. But if you want to get a few more miles out of your bonus this year by investing it in something slightly more practical, I’ve got you covered. So light up the Yule log and grab a hot toddy, because I have a couple bonus season suggestions that are a little bit naughty, and a little bit nice.
Nice: Wisely Invest In Vanguard Equity Income Fund Admiral Shares
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The stock market sucks right now. As of early this week, in December alone the Dow Jones Industrial Average was down 7.8 percent, and the S&P 500 has likewise tanked by 7.6 percent, putting these major U.S. stock indexes on track for their worst December since 1931. Yes, that 1931, the Great Depression. Merry Christmas. But as unpleasurable as it might have been to watch your retirement savings melt away in the run-up to the holidays, the stock market will recover eventually, and its new forwarding address deep inside a toilet bowl might just present a good opportunity for the bold to buy some shares on the cheap.
Enter Vanguard Equity Income Fund Admiral Shares! There are lots of plays to make in the stock market right now, and any number of them might be as good as or better than this one, but the thing I like about this mutual fund is that it gives you little quarterly mini-bonuses — it’s like having bonus season all year ’round! The fund’s SEC yield, which calculates its hypothetical annualized income as a percentage of its assets based on projected dividend yield, stands at 2.91 percent. That means you could gain almost three percent a year just in income from your shares, in addition to being exposed to the potential for an increase in the value of the underlying securities. You could get both periodic dividend payouts and a nice capital gain should you decide to cash out in a few years. With an expense ratio of 0.17 percent, maintaining shares in this fund is reasonably inexpensive compared to similar competing funds, and the minimum investment of $50,000 is priced just right for a mid-range associate bonus on the Cravath scale.
Naughty: Splurge On A New Tesla
Treat yourself. Why not? This isn’t an investment in the traditional sense of the term, because you’re not going to make money by buying a Tesla. And as always, when it comes to Tesla and my thoughts on it, remember that I own a little bit of its stock. That being said, if you buy a Tesla, you’re sure going to have a hell of a good time, and there are certainly worse things to do with your bonus. Teslas: People. Freaking. Love. Them. One of our paralegals just got a new Tesla, and the thing is sweet. And beyond just spoiling yourself a little for the holidays with a spectacular new ride, this is certainly not a terrible time to be buying an electric car. In addition to, you know, helping to save the whole planet from being slowly baked alive like a dog in a hot car — which is another problem your Tesla might be able to help you with — you only have until the end of the year to take advantage of the U.S. government’s full $7,500 electric vehicle tax credit for Teslas (it will be substantially reduced as part of an eventual phase out in the New Year). You might not be getting monetary returns, but you’d be investing in the future of the planet and in the future of actually enjoying your commute. With the MSRP of the Tesla Model 3 starting at $46,000, it’s a luxury vehicle well-within reach for the recipient of a mid-level Biglaw bonus.
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Really Nice: Invest In Humanity
I won’t harp on you too much about this. We’ve all got our own families to support and our own student loan blood debts wrapped around us like the chain encumbering Jacob Marley’s ghost. No one begrudges you taking care of your own expenses first. No one begrudges you rewarding yourself for all your hard work with either a little added security from a wise investment, or a swell of happiness from purchasing something useful and cool. But do try to remember the less fortunate at a time of year when many of us are getting bonuses worth more than what most people make in a whole year. You can save a human being’s life by donating money for an anti-malaria net that goes for as little as two dollars. It’s pretty hard to get a much better return on your investment than that.
Jonathan Wolf is a litigation associate at a midsize, full-service Minnesota firm. He also teaches as an adjunct writing professor at Mitchell Hamline School of Law, has written for a wide variety of publications, and makes it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at [email protected].