What would you do with a $20,000 inheritance?

You should invest in a diversified mix of stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfoilio of stocks on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund.

If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

Sources:

http://www.vanguard.com/VGApp/hnw/planningeducation
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetallocation.htm
http://www.diehards.org/readsites.htm
http://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics

Asset Allocation Calculators
(Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.)
https://flagship.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education
https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval
http://www.ifa.com/SurveyNET/index.aspx

Web forum: http://www.diehards.org/
(Many investment web forums are overrun by scam artists. This one seems the most legitimate site.)

529 plans: http://www.savingforcollege.com

Wonderful, fantistic question! But impossible to answer. We know nothing about you. If you wish to invest some of it you would definitely need to talk to a reliable investment advisor. He/she would ask you many important questions about yourself and then be able to make a sensible and reasonable recommendation.

Best of Luck!

Pay off all your debts first. Then start investing. Keep it simple buy things or companies that you know will go up in value. Like google and oil. But make sure to stay diversified just to be safe.

set it aside for 2-3 years then decide

oh the possibilities! real estate, shares...! the stock market is a great place to make some serious cash from a small amount. Do your homework and you cant go wrong. I am using http://www.goldenbullstocks.com check them out you will be impressed! And remember to do your own research.

Come over and let's spend it LOL

There are several options when it comes to Investing. However I have invested in CDâ€™s, stocks and Real Estate and I have loved investing in Real Estate. The returns are great and their 30 times what you are going to get from the stock market. I use T & D Investment Group and I think you should check them out they are great and they can get you started ASAP. Also, they have a loss prevention program so you donâ€™t have to worry about losing your money and most of their properties are sold before they even start working since there is such a high demand in the markets they are in. Their website it www.ncinvesting.org and Jill Daniels is the Investment Specialist that you will work with and her email address is jilldaniels@realtyagent.com.

I Hope This Helps You

It depends on your financial needs, if your young and won't need the money for a while try investing some. Your best bet would be a bank account for safety. Good Luck

$200,000.00 (I am a Portfolio Manager)

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