New to investing — I have $20,000 cash saved, what should I do with it?
You're not clueless at all. You don't mention that you have any debt, but if you have consumer debt, you might want to consider accelerating your payments on those debts unless you're already doing so. You and your wife have a baby on the way.  They're an absolute joy (we have a 7-year-old), but they're also a financial strain.  If I were in your shoes knowing what I know about your situation, I'd think carefully and go slowly with any investing until after you adjust to a larger family.  That way you run less risk of having a sizable investment tank when you really need the money for your new baby. Continue to learn about investing.  There's no reason to rush into something you're not comfortable with. If your goal is for a down payment on a house, then continue towards that.  Cash is just fine for that.  Shop around for a good house from someone who really needs to sell. @mbhunter and @JoeTaxpayer have given good advice. Were I in your situation, the only thing I might do differently is put whatever amount of cash not needed for emergencies in a money market fund with check-writing privileges and/or a debit card.  The rate on the account has at least some chance of preserving the value of your principal, and it will be easier to put your money into investments as soon as you're ready.  This sort of account is offered by any number of brokerages and financial companies, so pick one you trust and start there. I have questions for you - As the others have stated, now really isn't the time to do anything to turn short term liquidity into long term investments. I'll contradict that only for matched 401(k) deposits. The answers to these questions will prompt more/better responses. As @mbhunter says, make sure you pay off any debt you have first.  Then, it's a good idea to keep some or all of your savings as an emergency fund.  If you use every last dime to pay for a house, you'll have no cushion available when something breaks down.  The most common recommendation I've seen is to have 3-6 months worth of expenses as an emergency fund.  Once you have that, then you can start saving for your down payment.   As @Victor says, try to find the best interest rate you can for that money, but I wouldn't invest it in any kind of stock or bond product, because your need for it is too short term.  Safety is more important than growth given your time frame. When you're ready to invest, make sure you learn all you can.  You don't want to invest in something you don't understand, because that's how you get ripped off.  You can be reading and talking to people while you're saving for your house so that, when the time comes, you'll have a pretty good idea of what you want to do for investments. "Just my 2 cents, I read on the book, The WSJ Financial Guidebook for New Parents, that ""the average family spends between $11k and $16k raising their child during his first year"".  So it might be better for you to make a budget including that cost, then decide how much money you feel safe to invest." This advice will be too specific, but... With the non-retirement funds, start by paying off the car loan if it's more than ~3% interest rate. The remainder: looks like a good emergency fund. If you don't have one of those yet, you do now. Store it in the best interest-bearing savings account you can find (probably accessible by online banking). If you wish to grow your emergency fund beyond $14-20,000 you might also consider some bonds, to boost your returns and add a little risk (but not nearly as much risk as stocks). With the Roth IRA - first of all, toss the precious metals. Precious metals are a crisis hedge and an advanced speculative instrument, not a beginner's investment strategy for 40% of the portfolio. You're either going to use this money for retirement, or your down payment fund. If it's retirement: you're 28; even with a kid on the way, you can afford to take risks in the retirement portfolio. Put it in either a targe-date fund or a series of index funds with an asset allocation suggested by an asset-allocation-suggestion calculator. You should probably have north of 80% stocks if it's money for retirement. If you're starting a down-payment fund, or want to save for something similar, or if you want to treat the IRA money like it's a down-payment fund, either use one of these Vanguard LifeStrategy funds or something that's structured to do the same sort of thing. I'm throwing Vanguard links at you because they have the funds with the low expense ratios. You can use Vanguard at your discretion if it's all an IRA (and not a 401(k)). Feel free to use an alternative, but watch the expense ratios lest they consume up to half your returns. My advice to you is not to take any advice from anyone when it comes to investing, especially when you don't know much about what you are investing in. mbhunter is correct, take your time to learn about what you want to invest in. If your goal at the moment is short term don't invest in stocks unless you really know what you are doing.   Put your money where you can get the highest interest rate, continue saving and do a lot of research on the house you wish to buy. Even if you are not ready to buy a house yet, start looking so that by the time you are ready to buy, you know how much the house is really worth. Before buying our house we spent about 7 months looking and researching and looked at more than 100 houses. Another thought: Higher education in the US is frightfully expensive with the sticker price for a 4-year undergraduate degree at a decent private college us sitting at around $250,000 and rising fast. Consider starting a 529 savings plan especially if you planning on more kids. I don't agree with others regarding paying off debt ASAP. You only have auto loan and auto loans are actually good for your credit score. With a mere $6k balance, it is not like you are going to have a problem paying off the loan. Not only that you will build your credit score and this will come in handy when you are purchasing a home.  With the Federal Reserve setting the interest rate at 0% until 2015, I can't understand why people would pay off anything ASAP. As long as you don't have revolving credit card balances, you are in the clear. I don't know your salary nor how big your porfolio is but I would save 5 months expense in cash and dump the rest in precious metals. Holding cash is the worst thing you could be doing (unless you predict a deflation).  You said you already have 40% in precious metals. You are already way ahead of other 95% of  Americans by protecting your purchasing power. Follow your gut. The stormg is coming and it's not going to get any better.
"This is only a partial answer to your question #1. If you have a conservative approach to savings (and, actually, even if you don't), you should not invest all of your money in any single industry or product.  If you want to invest some money in oil, okay, but don't overdo it. If your larger goal is to invest the money in a manner that is less risky but still more lucrative than a savings account, you should read up on personal finance and investing to get a sense of what options are available.  A commonly-recommended option is to invest in low-cost index funds that mirror the performance of the stock market as a whole.  The question of ""how should I invest"" is very broad, but you can find lots of starting points in other questions on this site, by googling, or by visiting your local library." I encourage using it as a buffer.  After h.s. I had a thousand or so dollars saved up in my savings account.  After college it was maybe 5 thousand and it's remained roughly like that ever since. I figure any modest emergency or spending splurge may cost, at most, a couple thousand bucks.  I'm talking about a new couch, a car accident, hospital bill, vacation to wherever, etc.  It's nice to have an idea of a buffer.  Financial advisors say to have a buffer of about 3 months of salary.  This is in case of unemployment and such.  It was smart for me. I wouldn't try to spend money to make money at this point.  It's not enough money to try to see a significant gain unless you're lucky.  I tried Sharebuilder a while ago with $200 to see what stocks were like.  They gave you several free trades to see how you liked it.  At first I was shuffling stuff a little too much and once the fees start kicking in it's 7 bucks here, 7 bucks there- eventually I realized you have to invest enough to offset the transfer fees and the fact that you have your money tied up in something going up and down all the time.  But yeah.  Start with a buffer and scale it up as your lifestyle changes.  Anything beyond your buffer is spending money, investing money, fun money. "You cant! There is the risk that between the time you get the check and the time you get to the bank that you will be murdered, have a heart attack, stroke, or aneurysm too.  And they are probably more likely than the bank going out of business between the time you deposit the money and get access to it. Prior to accepting the check I would do the following: Get a lawyer that specializes in finance and tax law.  There are some steps you can take to minimize your tax exposure.  There is little you can do about the immediate tax on the winnings but there are things you can do to maximize the return of your money.    You will want to do what you can to protect that money for yourself and your family.  Also create or revise your will.  This is a lot of money and if something happens to you people from your family and ""friends"" will come out of the woodwork trying to claim your money.  Make sure your money goes where you want it to in the event something happens to you. Get a financial planner.  This money can either make you or break you.  If you plan for success you will succeed.  If you trust yourself to make good decisions with out a plan, in a few years you will be broke and wondering what happened to your money. Even at 1% at 20million dollars that is 200k a year in interest... a pretty good income by itself.  You do not have to save every penny but you can plan for a nice lifestyle that will last, if you plan and stick to your plan. Do research and know what bank you are going to deposit the money in.  Talk to the bank let them know of your plans so they can be ready for it.  It is not every day that they get a 20 million dollar deposit.  They will need to make plans to handle it.  If you are going to spread the money out among several banks they can prepare for that too. When choosing that bank I would look for one where their holdings are significantly more than you are depositing.  I would not really go with one of the banks that was rescued.  They have already shown that they can not handle large sums of money and assuming they will not screw it up with my money is not something I would be comfortable with.  There were some nice sized banks that did not need a bail out.  I would choose one of them." Market rate of return averages about 8% annually (sometimes more, sometimes less or negative). To get 30k monthly -- even taking that as pretax -- you're talking about 360k yearly. Divide that by 0.08 and you need to have savings of 4.5 million--- and really you should double that for safety..  Tl;dr: forget it. Added thought: If you really have $20k/month coming in, you really have no business asking the Internet for advice. Hire a professional financial advisor (not a broker, someone who is paid a flat fee for their expertise and has no incentives to give you less-than-optimal advice). . The money they will save/make for you will more than pay for their hire. "I take it you have nearly zero expenses, since you don't mention any savings and with your income you wouldn't have much left over for investing. At your level of income, any actual investing is either going to unwisely reduce your cash available should you need it (such as investment in mutual funds, which often have minimum investment periods of 2-6 months or more to avoid fees), or cost you a high percentage of your income in commissions (stock trading). So, I wouldn't recommend investing at all — yet. I find Dave Ramsey's baby steps to be very good general money management advice.  Here is how I would adapt the first three steps to your income and stage in life. Beyond this, Dave recommends saving for retirement, college (for kids) and paying off your house early.  These things are a little beyond your stage in life, but it would be good to start thinking about them. For you, I recommend following DJClayworth's advice to ""invest in yourself"".  Specifically, plan to get through college debt-free.  Put away money so that you have a head start once you do have living expenses — save for a car, save money for rent, etc. so that you don't have to live month to month as most people do starting out. So, what this boils down to: Put away every cent you have, in a savings account." "Nobody has mentioned your ""risk tolerance"" and  ""investment horizon"" for this money. Any answer should take into account whether you can afford to lose it all, and how soon you'll need your investment to be both liquid and above water. You can't make any investment decision at all and might as well leave it in a deposit-insured, zero-return account until you inderstand those two terms and have answers for your own situation." Alright so you have $12,000 and you want to know what to do with it. The main thing here is, you're new to investments. I suggest you don't do anything quick and start learning about the different kinds of investment options that can be available to you with returns you might appreciate.  The most important questions to ask yourself is what are your life goals? What kind of financial freedom do you want, and how important is this $12,000 dollars to you in achieving your life goals.  My best advice to you and to anyone else who is looking for a place to put their money in big or small amounts when they have earned this money not from an investment but hard work is to find a talented and professional financial advisor. You need to be educated on the options you have, and keep them in lines of what risks you are willing to take and how important that principal investment is to you. Investing your money is not easy at all, and novices tend to lose their money a lot. The same way you would ask a lawyer for law advice, its best to consult a financial planner for advice, or so they can invest that money for you. "Put it in a Vanguard fund with 80% VTI and 20% VXUS. That's what you'll let set for 10-15 years. For somebody that is totally new to investing, use ""play money"" in the stock market. It's easy for young people to get dreams of glory and blow it all on some stock tip they've seen on Twitter." "First off, I would label this as speculation, not investing.  There are many variables that you don't seem to be considering, and putting down such a small amount opens you to a wide variety of risks.  Not having an ""emergency fund"" for the rental increases that risk greatly.  (I assume that you would not have an emergency fund based upon ""The basic idea is to save up a 20% down payment on a property and take out a mortgage"".) This type of speculation lent a hand in the housing bubble. Is your home paid off?  If not you can reduce your personal risk (by owning your home), and have a pretty safe investment in real estate.  Mission accomplished. My hope for you would be that you are also putting money in the market.  Historically it has performed quite well while always having its share of ""chicken littles""." "I'm not a fan of using cash for ""emergency"" savings. Put it in a stable investment that you can liquidate fairly quickly if you have to. I'd rather use credit cards for a while and then pay them off with investment funds if I must. Meanwhile those investments earn a lot more than the 0.1 percent savings or money market accounts will. Investment grade bond funds, for example, should get you a yield of between 4-6% right now. If you want to take a longer term view put that money into a stock index fund like QQQ or DIA. There is the risk it will go down significantly in a recession but over time the return is 10%. (Currently a lot more than that!) In any event you can liquidate securities and get the money into your bank is less than a week. If you leave it in cash it basically earns nothing while you wait for that rainy day which many never come." The 20x number is drawn directly from the assumption that it should be easy to get more than 4% average return on investment. After lots of historical studies,  Monte Carlo simulations, and the like there was a consensus that saving more didn't significantly increase the odds of achieving at least the desired yearly income sustainably. (That's the same calculations the insurance firms use as the starting point for writing annuities.) There are also some assumptions about inflation and its interaction with the market built into this rule-of-thumb. Note that this is 20x what you want as post-retirement income, not necessarily 20x your current income. I have a moderately frugal lifestyle, And my budget confirms that my actual spending -- even in years when I allow myself a splurge -- is well below my current income, with the excess going into the investments. To sustain my lifestyle, I need that lower number plus any taxes that'll be due on it plus whatever I want to allocate as average emergency reserve... and theoretically I should be able to base the 20x on that lower number. When I run estimates (Quicken has a tool for this, so does my credit union, I  presume others are widely available), they tend to confirm this. I'm still using the higher number for planning, though. I don't feel any need to retire early (though I have issues with my current manager), and I have no objection at all to being able to afford better toys on occasion. Or to leaving a legacy to friends, relatives, and/or charity. But it's nice to know exactly when I could punt the day job if I wanted to. "I'm not a financial expert... In my opinion it might be best to have as much in savings (aka being liquid and the funds are insured by the FDIC) as possible for a couple of reasons. If you lose your job, your equity line could then get frozen if the bank finds out. What you want to avoid is only owing 20 grand on your home (because you paid a chunk off with your savings) but because you lost your job you can't take any money out of your home and suddenly you are equity rich, cash poor, and jobless, that is a potential for big trouble. I'm curious why you borrowed on the Heloc since you seem to have a significant amount in savings anyways. What you really might want to look into is lowering your mortgage interest rate to around 3.5%   I would use the credit card debt as a reality check. Make sure every month you are making at least a 10% to 15% of the total due payment. This dilutes the interest rate charge and lets you see the true ""drag"" credit card debt payments really have on your life.   I don't know this for sure but the higher amount credit card payments you make probably reflects well on your credit score, and of course, never be late with the credit card payments either." "Since I, personally, agree with the investment thesis of Peter Schiff, I would take that sum and put it with him in a managed account, and leave it there. I'm not sure how to find a firm that you like the investment strategy of.  I think that it's too complicated to do as a side thing.  Someone needs to be spending a lot of time researching various instruments and figuring out what is undervalued or what is exposed to changing market trends or whatever. I basically just want to give my money to someone and say ""I agree with your investment philosophy, let me pay you to manage my money, too."" No one knows who is right, of course.  I think Schiff is right, so that's where I would put the amount of money you're talking about.  If you disagree with his investment philosophy, this doesn't really make any sense to do. For that amount of money, though, I think firms would be willing to sit down with you and sell you their services.  You could ask them how they would diversify this money given the goals that you have for it, and pick one that you agree with the most." Fifteen thousand dollars is not a whole lot of cash.  It should probably be kept liquid.  To that end, savings accounts and certificates of deposit (CDs) are typically used.  (There are also money market funds, but I am not sure that makes sense once trading costs are figured into the equation.) I would set some of that money aside, for an emergency fund.  (Start with at least 6 months of realistic living expenses  and also consider a fund for unforeseen emergencies.)  I would consider using 2-3 thousand to setup a retirement account.  The rest, I would place into CD ladders, so that it is somewhat accessible. "Many of my friends said I should invest my money on stocks or something else, instead of put them in the bank forever. I do not know anything about finance, so my questions are: First let me say that your friends may have the best intentions, but don't trust them. It has been my experience that friends tell you what they would do if they had your money, and not what they would actually do with their money. Now, I don't mean that they would be malicious, or that they are out to get you.  What I do mean, is why would you take advise from someone about what they would do with 100k when they don't have 100k. I am in your financial situation (more or less), and I have friends that make more then I do, and have no savings. Or that will tell you to get an IRA -so-and-so but don't have the means (discipline) to do so. Do not listen to your friends on matters of money. That's just good all around advise. Is my financial status OK? If not, how can I improve it? Any financial situation with no or really low debt is OK. I would say 5% of annual income in unsecured debt, or 2-3 years in annual income in secured debt is a good place to be. That is a really hard mark to hit (it seems). You have hit it. So your good, right now. You may want to ""plan for the future"". Immediate goals that I always tell people, are 6 months of income stuck in a liquid savings account, then start building a solid investment situation, and a decent retirement plan. This protects you from short term situations like loss of job, while doing something for the future.   Is now a right time for me to see a financial advisor? Is it worthy? How would she/he help me? Rather it's worth it or not to use a financial adviser is going to be totally opinion based. Personally I think they are worth it. Others do not. I see it like this. Unless you want to spend all your time looking up money stuff, the adviser is going to have a better grasp of ""money stuff"" then you, because they do spend all their time doing it. That being said there is one really important thing to consider. That is going to be how you pay the adviser. The following are my observations. You will need to make up your own mind.  Free Avoid like the plague. These advisers are usually provided by the bank and make their money off commission or kickbacks. That means they will advise you of the product that makes them the most money. Not you.  Flat Rate These are not a bad option, but they don't have any real incentive to make you money. Usually, they do a decent job of making you money, but again, it's usually better for them to advise you on products that make them money. Per Hour These are my favorite. They charge per hour. Usually they are a small shop, and will walk you through all the advise. They advise what's best for you, because they have to sit there and explain their choices. They can be hard to find, but are generally the best option in my opinion.   % of Money These are like the flat rate advisers to me. They get a percentage of the money you give them to ""manage"". Because they already have your money they are more likely to recommend products that are in their interest. That said, there not all bad. % or Profit These are the best (see notes later). They get a percentage of the money they make for you. They have the most interest in making you money. They only get part of what you get, so there going to make sure you get the biggest pie, so they can get a bigger slice. Notes In the real world, all advisers are likely to get kickbacks on products they recommend. Make sure to keep an eye for that. Also most advisers will use 2-3 of the methods listed above for billing. Something like z% of profit +$x per hour is what I like to see. You will have to look around and see what is available.  Just remember that you are paying someone to make you money (or to advise you on how to make money) so long as what they take leaves you with some profit your in a better situation then your are now. And that's the real goal."