Im 18 and just inherited 200k, what type of account should I place funds into to maximize growth potential?

thanks for all your help!

With that large a sum of money you should open a brokerage account with a reputable broker like Schwab or Fidelity. Both provide excellent services and account reporting. Be sure to check out what the going rates are for inactive money in the money market, because this is where you;ll park some of your money between investments.

I'd start with a diversivied portfolio, e.g.,
- 25% in iShares MSCI EAFE (EFA)
- 15% in iShares DJ U.S. Total Market (IYY)
- 15% in Mid Cap SPDR Trust (MDY)
- 10% in Diamonds Trust (DIA)
- 35% in your 5% money market

Don't put it in all at once!!! Especially at this time. No one can predict the market direction, but it's a safe guess that there will be some volatility for a while. Just get your toe in to test the waters, if you are new to the investment game.

While your starting out, read up on investment theory. There's plenty of good books out there to read.

Good luck.
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Think about what it is that you want. What are your goals for this money?

Do you know anything about investing, mutual funds or the stock market?

Diversify. Do not put all your eggs in one basket.

Investing tends to only get exciting when you make money quickly or you see the end result of a good investment over a fairly long period of time 15 - 20 years or longer.

The more risk we are prepared to take, the more we can expect to make. That is why the stock market will generally return more than a savings account.

To be successful you will need patience, discipline, and wisdom. But most importantly you need a plan and you need to define your goals.

It may prove expensive to acquire that much needed wisdom on your own. Learn by other peoples mistakes. Learn from other peoples successes. Read some books. Visit your local book store and find a book that you like and feel comfortable with.

Some of the titles I have on my bookshelf include:
One Up on Wall Street by Peter Lynch
How to make money in Stocks by William J. Oâ€™Neil (Founder of Investorâ€™s Business Daily)
The Millionaire Next Door by Thomas J Stanley and William D Danco

Check out web sites like fool.com and yahoo finance.
Investigate trading strategies with a proven track record over 3, 5, 10, and 15 years.

Pick something that you understand, find easy to use and will help you realise your goals. Pick a strategy where you can take responsibility for your investments and be in full control of your capital.

Systems like the Stocks Monthly system are definitely worth investigating once you are up to speed with the nuts and bolts of investing.

Remember, diviersify, do not put all your eggs in one basket.

no one account will "maximize" growth potential...if you want to do your best but still lower your risk, go to a large national bank like Citibank, Bank of America, 5/3 Bank, Harris Bank, Wells-Fargo...and ask to speak to a relationship banker...he can build you a portfolio and invest money over time to increase your net wealth...just don't do anything stupid like taking some of the money out...keep working and go to school...

please, please, be carefull with Ponzi Scheme
http://en.wikipedia.org/wiki/Ponzi_scheme

With $200,000 you have a LOT of options. Growth is only one consideration, however. The other side of the equation is risk. How much risk are you willing to endure? If you're mainly concerned with maintaining your principal (the $200,000) then a pretty safe investment is a High-grade bond fund or a high-yield money market fund. You could also look into buying a small business (a sandwich shop, ice cream shop, nail salon, or something like that, something that interests you.) Incidentally, I'm looking to do something like that right now too. If you're interested in partnering up, just email me and we can discuss opportunities.

If you are a little more of a risk-taker, however, you could invest the money in the stock market. With that much money, you really should get in touch with an investment professional (I would strongly suggest you contact one who has received his/her CFP designation (that stands for Certified Financial Planner.) They really know their stuff.

Hope this helps. Good luck!

1) Mutual Funds for Dummies, by Eric Tyson
2) http://www.invest-for-retirement.com has a free downloadable book, by me

Those are two sources to help you get a basic understanding of investing in stocks, bonds, and mutual funds.

Now, since you inherited the money all at once, this is quite a tricky question to answer. Most people who have acquired the money over time have developed their own methods and have an idea where to put the money. However, with a big chunk of money like this, you may wind up putting it in something that you later regret.

My advise is to find a good money market account, like one from www.vanguard.com or www.fidelity.com to temporarily park this money. You can even sign up for check-writing abilities from this account. This way the money earns interest while you decide, and you can easily get the money back or just write checks from it. A money market account is a very safe and liquid investment. You do not want to put all this money in a bank as banks are only insured for up to $100,000 per account.

Then, go see a fee-based financial advisor, one who is not associated with any particular investment firm. You will need an independent, unbiased person to help you. You may end up paying $200 - $300 total to this person, but this is a very small percentage of your overall money. The fact is that if you invest this 200k properly, you can be a millionaire by your 40s. This is too much money and the potential is too great to simply do this yourself (if you have no experience or education on investing). IMO, it is well worth the expense of an independent financial advisor. It may be the best $300 you will ever spend.

The advisor can help explain things and can help you set realistic goals. He/she can tell you the benefits of things like Roth IRAs. They can help you set up a portfolio with the correct amount of risk. They can help you determine whether or not ETFs would be a good choice, or regular mutual funds. In most cases, they will probably advise that you spread your money into several different accounts and funds.

** One point about the IRA. You cannot contribute any of this money to an IRA. IRAs only allow contributions from earned income from a job. This does not count as earned income and is therefore ineligible. However, if you saw a financial advisor, they would already know this and would have warned you. See, already the advisor is paying for himself.

Whatever choice you make, I suggest that you understand the costs involved. Chaper 19 of my book (listed at the top) discusses this. I highly recommend you download my book and spend 20 minutes reading chapter 19. It will save you a lot of money in the long run.

Be very careful of the following items, which are fraught with unecessary high costs. Most of these make advisors and salespeople a lot of money through commissions, leaving you poorer. If your advisor tries to push you into any of these, fire that person and get a new advisor:

- Variable Annuities (the only variable annuities I recommend are from Vanguard or Fidelity. All others are dog crap on a stick because of their high costs.)
- Mutual funds with loads and/or 12b-1 fees
- Limited Partnerships
- Cash-value life insurance policies (like variable or whole life insurance)

If you are looking for good, low-cost firms, look first to www.vanguard.com and www.fidelity.com

my account! at least 1/2 for my real answer! ha ha congrats! Don't friggin blow it!

I suggest you a brokerage account at Fidelity.

I am a Portfolio Manager with over a decade of experience in the Stock Market and I suggest you to hire someone like me to manage your account.

If you really want to maximize your profit you need to get into guaranteed real estate investments! Real Estate bonds are good they have a 15% return! Just real estate investments alone could triple that in no time! Here is a great free site that could help you!
www. kjonesrealestateinvestment .com
if you fill out their form they will call you back and offer to make you a projection analysis which is a blueprint on how you would make your money back off of your investment! with an inheritance like that you need to talk to real professionals, hey it's free after all ! If you flipped that 200k 4 or 5 times you could be a millionaire! You may not never have to work in life!
Good Luck!

You can go check out my website I can guarantee you up to 33% a year one of the accounts I recommend is 2.5% compounded monthly it a fixed return no risk account.

http://www.indiplan.com

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