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Congrats: You've just gotten your first job, a raise, or a windfall, or you've significantly cut down on spending. No matter the reason, you've now got 10 crisp Ben Franklins in your hands, and you're wondering what to do with them.

Of course, you have the option of heading to the shops and spending the money right away. But all that will really do -- probably one week from now -- is leave you the willing victim of "hedonic adaptation." You'll get a rush similar to going on a roller-coaster ride, it will wear off quickly, and all you'll really be is $1,000 poorer.

Don't be that person.

Here are the three smartest things you can do with that money right now.

Pay off high-interest debt: Save $15,000 over two decades

Albert Einstein quipped that there's no force more powerful in the universe than compound interest. Usually, we hear that quote used as a catalyst to get people to invest in the stock market. But compound interest can work against you, too -- and nowhere is that more obvious than if you have credit card debt.

According to, the average interest rate on credit cards in America is 15.07%. Unpaid debts with such interest rates create the type of poverty that can follow you your entire life. If you have any such debts, use your $1,000 to pay them off -- immediately.

To get an idea of how much money this will save you over the long run, look at how $1,000 in high-interest debt can compound over twenty years:













Do your future self a favor and avoid having to deal with debt-collection agencies. Pay off that high-interest debt.

Stash the money:  Sleep easy knowing you have an emergency fund

The next option actually has very little assured financial value: putting your $1,000 into a savings or money market account as an emergency cash stash. Currently, even the best money market accounts are yielding just over 1%. Over time, it's likely that this cash stash will lose value relative to inflation.

So why bother to do it anyway?

Because this is real life, and unexpected things pop up all the time. Your car could break down, you could lose your job, you might have to deal with serious illness, or your family might start growing unexpectedly. In reality, $1,000 is nowhere near what you should have in your emergency savings -- I personally put away enough to cover basic expenses for six months.

Having an emergency stash helps you to rest easy at night. And what is money, if not a tool that we can use to make our experience of life better?

Invest the money: Quadruple your money over 20 years

If you've already covered options one and two, then it's time for you to look at investing that $1,000. Unlike going out and blowing the cash on the newest gadget, this decision will actually leave you wealthier years down the line.

Because you're a beginner, start the process slowly: Buy a broad-market index that gives you lots of diversification. I would suggest the Vanguard Dividend Growth Fund (NASDAQMUTFUND:VDIGX), but it was so popular that Vanguard recently decided to close it to new investors.

In its stead, I think the Vanguard Dividend Appreciation ETF (NYSEMKT:VIG) is a great option. It has an ultralow expense ratio of 0.09%, and you get exposure to 185 dividend payers with a focus on "[l]arge-cap equity, emphasizing stocks with a record of growing dividends year over year." 

Since its inception in 2006, the fund has averaged a return of 7.4% per year. If we extrapolate that, your $1,000 could grow to almost $4,200 in two decades. As with paying down high-interest debt, your future self will thank you for making such a simple purchase.

Hopefully, you're young, and you have lots of time in front of you. If that's the case, all three of these moves -- in order -- could provide a lifetime of financial comfort and flexibility.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.