Rolling the dice © 3523studio/

Dear Dr. Don,
I recently got lucky at a casino and won $8,000. I have a car loan and carry balances on my credit cards, but I never miss a payment. I don’t want to blow all the winnings by paying down unpaid debt for my car and credit cards. Instead, I’d like to try to double this income, even if it’s a risk. I’m thinking about the stock market or some other kind of investment. Can you give me some ideas about what I should do with the money?

— Jack Black

Dear Jack,
First, you need to eliminate the mindset that using a windfall to pay down your bills is “blowing it all.” That said, I can understand why you want to accomplish something with it other than just reducing your debt load.

Yes, you certainly can double your money over time by investing it. How long it takes depends on the yield on your investments. You can get a rough idea by dividing the expected yield on the investment, expressed as a percent, into 72. For example, if you thought you could earn a 10 percent yield (after taxes), then it would take about 7.2 years to double your money.

Let’s assume you can earn 10 percent after taxes and you carry a credit balance for the next seven years at the current Bankrate national average for fixed-rate credit cards of 13.02 percent. This could put you ahead of the game by paying down the card balance compared with paying the credit card minimums and carrying the balance(s). You could use the money saved from your monthly household budget to invest over time.

If you’re paying 13.02 percent on your credit cards, paying them down is a bet you are sure to win. Why? Because it pays you back 13.02 percent on your money. That’s better than most people will do at the casino.

You don’t say how high your credit card balances are, so giving you an exact answer is a challenge. While I understand why you want to use some of your windfall to invest for the future, a combination of investments and debt reduction seems like a good way to go.

Without knowing your personal tolerance for risk, your investment goals, your portfolio or your income, I can’t make a specific investment recommendation. In general, it’s best to concentrate your investments in a single diversified fund. A no-load mutual fund or exchange-traded fund that invests in a broadly diversified stock index, such as a total stock market index, is a good place to start. Another option is a target-date retirement fund. Good luck!

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