Well if you ever just get 35K, obviously you should just invest it now, then you wouldn't have to worry about retirement. But if it had to be cars, then yeah, I'd put that towards an STi. However, in the true spirit of hondaswap, assuming I stayed with the 96 Hatchback...
B18C1, sleeved
9:1 Arias pistons
Crower rods
Complete head work (valves, springs, retainers, cams, port and polish)
coolers for every fluid
Turbonetics ceramic ball bearing turbo (I'm not even gonna say a size for fear of starting the next gsr/t)
Quaife LSD
JUN flywheel
ACT Stage 3 clutch
AEM Standalone with boost control
700ccinjectors
Hours of professional tuning
New paint (metallic gunmetal)
Volk GT-Ns in gunmetal
Tein Flex
Tein EFDC (compatible?)
Completely new interior (new black carpet, black roof upolstry, Intergra typeR front and rear seats)
Brembo 4pots in front, 2pots in the back
Type R lip front and rear
Thermal RD Turbo exhaust
Many sets of tires
Spend a couple grand on sound mods, no booming bass, just the best possible sound.
I don't even know if that would total 35K or not, or if I'm missing anything, but I couldn't see myself wanting much more than that for a Honda.