‘Play money’ or ‘discretionary fund’ is a part of your personal savings and it can be of a size that you are comfortable with, if you have the financial strength and appetite to easily withstand the loss of that entire amount in the worst-case scenario. The amount in this discretionary fund can go towards investing in risky opportunities in which you personally believe and understand. Examples of such risky opportunities include a specific stock, a personal loan for a relatively-higher interest to a friend, or a business venture of your friend.
Firstly, you should (a) set your rainy-day fund; and (b) become on course with your long-term investing goals by investing in risk-optimised portfolios such as those offered by QuietGrowth. Only thereafter you should start considering the remaining part of your wealth as play money.
Also read the answers to the related questions:
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