What should a 19 year old with a moderate inheritance look for in a financial advisor?
"I think your question is pretty wise, and the comments indicate that you understand the magnitude of the situation.   First off, there could be nothing that your friend could do.  Step parent relationships can be strained and this could make it worse, add the age of the girl and grief and he could make this a lot worse then it potentially is.  She may spend it all to spite step-dad. Secondly, there is a need to understand by all involved that personal finance is about 75-90% behavior.  Very high income people can wind up bankrupt, and lower income people can end up wealthy.  The difference between two people's success or failure often boils down to behavior.   Thirdly, I think you understand that there needs to be a ""why"", not only a ""what"" to do.  I think that is the real tricky part.  There has to be a teaching component along with an okay this is what you should do.   Finding a person will be difficult.  First off there is not a lot of money involved.  Good financial advisers handle much larger cash positions and this young lady will probably need to spend some of it down.  Secondly most FAs are willing to provide a cookie cutter solution to the problem at hand.  This will likely leave a bad taste in the daughter's mouth.   If it was me, I would encourage two things: Both of those things buy time.  If she comes out of this with an education in a career field with a 50-60K starting salary, a nice used car, and no student loans that would be okay.  I would venture to say mom would be happy.   If she is very savvy, she might be able to come out of this with a down payment on a place of her own; or, if she has education all locked up perhaps purchasing a home for mostly cash.   In the interim period a search for a good teaching FA could occur.  Finding such a person could also help you and your friend in addition to the daughter.  Now my own step-daughter and I have a good financial relationship.  There are other areas where our relationship can be strained but as far as finances we relate well.  We took Financial Peace University  ($100 offered through many local churches) together when she was at the tender age of 16.  The story of ""Ben and Arthur"" really spoke to her and we have had many subsequent conversations on the matter.  That may work in this case. A youTube video on part of the lesson."
I am not interested in watching stock exchange rates all day long. I just want to place it somewhere and let it grow Your intuition is spot on! To buy & hold is the sensible thing to do.  There is no need to constantly monitor the stock market. To invest successfully you only need some basic pointers. People make it look like it's more complicated than it actually is for individual investors. You might find useful some wisdom pearls I wish I had learned even earlier.  Stocks & Bonds are the best passive investment available. Stocks offer the best return, while bonds are reduce risk. The stock/bond allocation depends of your risk tolerance. Since you're as young as it gets, I would forget about bonds until later and go with a full stock portfolio. Banks are glorified money mausoleums; the interest you can get from them is rarely noticeable. Index investing is the best alternative. How so? Because 'you can't beat the market'. Nobody can; but people like to try and fail.  So instead of trying, some fund managers simply track a market index (always successfully) while others try to beat it (consistently failing). Actively managed mutual funds have higher costs for the extra work involved. Avoid them like the plague.  Look for a diversified index fund with low TER (Total Expense Ratio). These are the most important factors. Diversification will increase safety, while low costs guarantee that you get the most out of your money. Vanguard has truly good index funds, as well as Blackrock (iShares).  Since you can't simply buy equity by yourself, you need a broker to buy and sell. Luckily, there are many good online brokers in Europe. What we're looking for in a broker is safety (run background checks, ask other  wise individual investors that have taken time out of their schedules to read the small print) and that charges us with low fees. You probably can do this through the bank, but... well, it defeats its own purpose.  US citizens have their 401(k) accounts. Very neat stuff. Check your country's law to see if you can make use of something similar to reduce the tax cost of investing. Your government will want a slice of those juicy dividends. An alternative is to buy an index fund on which dividends are not distributed, but are automatically reinvested instead.  Some links for further reference:  Investment 101, and why index investment rocks: However the author is based in the US, so you might find the next link useful.  Investment for Europeans: Very useful to check specific information regarding European investing. Portfolio Ideas: You'll realise you don't actually need many equities, since the diversification is built-in the index funds.  I hope this helps! There's not much more, but it's all condensed in a handful of blogs. It sounds like the job will largely be an administrative assistant (scheduling, note taking, organizing, etc.).    If you want a primer on finance to try and show you want to understand more about what he does, then there's 4 fundamental ideas that underlie the majority of topics in finance:  time value of money, liquidity preference, risk, and leverage.  If someone has read and understands the investopedia intro paragraph on those topics; it's pretty easy to explain the gist of most aspects of finance to them. "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." There is no rule of thumb (although some may suggest there is). Everybody will have different goals, investment preferences and risk tolerances. You need to figure this out by yourself by either education yourself in the type of investments you are interested in or by engaging (and paying for) a financial advisor. You should not be taking advice from others unless it is specifically geared for your goals, investment DNA and risk tolerance. The only advice I would give you is to have a plan (whether you develop it yourself or pay a financial advisor to develop one). Also, don't have all your savings sitting in cash, as long-term you will fall behind the eight ball in real returns (allowing for inflation). "That depends, really. Generally speaking, though - Roth IRAs are THE PLACE for Stock-Market/Mutual-Fund investing. All the off the wall (or, not so off the wall) things like Real Estate investments, or buying up gold, or whatever other ideas you hear from people - they may be good or bad or whatnot. But your Roth IRA is maybe not the best place for that sort of thing.  The whole philosophy behind IRAs is to deliberately set aside money for the future. Anything reasonable will work for this. Explore interesting investment ideas with today's money, not tomorrow's money. That being said - at your age I would go for the riskier options within what's available.  If I were in your situation (and I have been, recently), I would lean toward low-fee mutual funds classified as ""Growth"" funds.  My own personal opinion (THIS IS NOT ADVICE) is that Small Cap International funds are the place to be for young folks. That's a generalized opinion based on my feel for the world, but I don't think I'm personally competent to start making specific stock picks. So, mutual funds makes sense to me in that I can select the fund that generally aligns with my sense of things, and assume that their managers will make reasonably sound decisions within that framework. Of course that assumption has to be backed up with reputation of the specific MF company and the comparative performance of the fund relative to other funds in the same sector. As to the generalized question (how else can you work toward financial stability and independence), outside of your Roth IRA: find ways to boost your earning potential over time, and buy a house before the next bubble (within the next 18 months, I'm GUESSING)." Is my financial status OK?  You have money for emergencies in the bank, you spend less than you earn. Yes, your status is okay. You will have a good standard of living if nothing changes from your status quo. How can I improve it? You are probably paying more in taxes than you would if you made a few changes. If you max out tax advantaged retirement accounts that would reduce the up-front taxes you are paying on your savings. Is now a right time for me to see a financial advisor?  The best time to see a financial advisor is any time that your situation changes. New job? Getting married? Having a child? Got a big promotion or raise? Suddenly thinking about buying a house? Is it worth the money? How would she/he help me? If you pick an advisor who has incentive to help you rather than just pad his/her own pockets with commissions, then the advice is usually worth the money. If there is someone whose time is already paid for, that may be better.  For example, if you get an accountant to help you with your taxes and ask him/her how to best reduce your taxes the next year, the advice is already paid-for in the fee you for the tax help. An advisor should help you minimize the high taxes you are almost certainly paying as a single earner, and minimize the stealth taxes you are paying in inflation (on that $100k sitting in the bank). "Aggressiveness in a retirement portfolio is usually a function of your age and your risk tolerance. Your portfolio is usually a mix of the following asset classes: You can break down these asset classes further, but each one is a topic unto itself. If you are young, you want to invest in things that have a higher return, but are more volatile, because market fluctuations (like the current financial meltdown) will be long gone before you reach retirement age.  This means that at a younger age, you should be investing more in stocks and foreign/developing countries. If you are older, you need to be into more conservative investments (bonds, money market, etc).  If you were in your 50s-60s and still heavily invested in stock, something like the current financial crisis could have ruined your retirement plans.  (A lot of baby boomers learned this the hard way.) For most of your life, you will probably be somewhere in between these two.  Start aggressive, and gradually get more conservative as you get older.  You will probably need to re-check your asset allocation once every 5 years or so. As for how much of each investment class, there are no hard and fast rules.  The idea is to maximize return while accepting a certain amount of risk.  There are two big unknowns in there: (1) how much return do you expect from the various investments, and (2) how much risk are you willing to accept.  #1 is a big guess, and #2 is personal opinion. A general portfolio guideline is ""100 minus your age"".  This means if you are 20, you should have 80% of your retirement portfolio in stocks.  If you are 60, your retirement portfolio should be 40% stock.  Over the years, the ""100"" number has varied.  Some financial advisor types have suggested ""150"" or ""200"".  Unfortunately, that's why a lot of baby boomers can't retire now. Above all, re-balance your portfolio regularly.  At least once a year, perhaps quarterly if the market is going wild.  Make sure you are still in-line with your desired asset allocation.  If the stock market tanks and you are under-invested in stocks, buy more stock, selling off other funds if necessary.  (I've read interviews with fund managers who say failure to rebalance in a down stock market is one of the big mistakes people make when managing a retirement portfolio.) As for specific mutual fund suggestions, I'm not going to do that, because it depends on what your 401k or IRA has available as investment options.  I do suggest that your focus on selecting a ""passive"" index fund, not an actively managed fund with a high expense ratio. Personally, I like ""total market"" funds to give you the broadest allocation of small and big companies.  (This makes your question about large/small cap stocks moot.)  The next best choice would be an S&P 500 index fund. You should also be able to find a low-cost Bond Index Fund that will give you a healthy mix of different bond types. However, you need to look at expense ratios to make an informed decision.  A better-performing fund is pointless if you lose it all to fees! Also, watch out for overlap between your fund choices.  Investing in both a Total Market fund, and an S&P 500 fund undermines the idea of a diversified portfolio. An aggressive portfolio usually includes some Foreign/Developing Nation investments.  There aren't many index fund options here, so you may have to go with an actively-managed fund (with a much higher expense ratio).  However, this kind of investment can be worth it to take advantage of the economic growth in places like China. http://www.getrichslowly.org/blog/2009/04/27/how-to-create-your-own-target-date-mutual-fund/" Be very careful to hold on tight to your money! I agree with paying for an investment advisor, but I would say use at least two to get different viewpoints, and get credentials and references! Don't let relatives convince you to invest in their business, or help them out, or any other such nonsense. Real estate still is one of the best investments out there in my opinion. You could buy a fixer upper and rent it out? "I would be more than happy to find a good use for your money. ;-) Well, you have a bunch of money far in excess of your regular expenses. The standard things are usually: If you are very confused, it's probably worth spending some of your windfall to hire professional help. It beats you groping in the dark and possibly doing something stupid. But as you've seen, not all ""professionals"" are equal, and finding a good one is another can of worms. If you can find a good one, it's probably worth it. Even better would be for you to take the time and thoroughly educate yourself about investment (by reading books), and then make a knowledgeable decision. Being a casual investor (ie. not full time trader) you will likely arrive, like many do, at a portfolio that is mostly a mix of S&P ETFs and high grade (eg. govt and AAA corporate) bonds, with a small part (5% or so) in individual stock and other more complicated securities. A good financial advisor will likely recommend something similar (I've had good luck with the one at my credit union), and can guide you through the details and technicalities of it all. A word of caution: Since you remark about your car and house, be careful about upgrading your lifestyle. Business is good now and you can afford nicer things, but maybe next year it's not so good. What if you are by then too used to the high life to give it up, and end up under mountains of debt? Humans are naturally optimistic, but be wary of this tendency when making assumptions about what you will be able to afford in the future. That said, if you really have no idea, hey, take a nice vacation, get an art tutor for the kids, spend it (well, ideally not all of it) on something you won't regret. Investments are fickle, any asset can crash tomorrow and ruin your day. But often experiences are easier to judge, and less likely to lose value over time." "Excellent questions!  Asking such questions indicates something special about yourself.  The desire to learn and adjust your beliefs will increase your chance of success in your life.  I would use a wide variety of authors to increase your education.  Myself I prefer Dave Ramsey to Clark Howard, but I think Clark is very good. The first thing you should focus on is learning how to do and live by a budget.  Often times, adults will assume that you are on a budget because you are broke.  It happens with my friends and my youngest child is older than you.  Nothing could be further from the truth.  A budget is simply a plan on how you will spend your income so you don't run out of money before you run out of month. Along with budgeting I would also focus on goal setting.  This is the type of ""investing"" you should be doing at your age.  For example if your primary goal was to become an engineer, my recommendation is to hold off buying stocks/mutual funds and using your current income to get through school with little or no student loans.   Another example might be to open your own HVAC business.  Your best bet might be to learn the trade, working for someone else, and take night classes for business management. Most 18 year olds have very little earning power.  Your focus at this point should be increasing your income and learning how to manage the income you have.   Please keep in mind that most debt is bad.  It robs you of your income which is your greatest wealth building tool.  Car loans and credit card debt is just plain stupid.  Often times a business case can be made for reasonable student loans.  However, why not challenge yourself to take none.  How much further ahead could you be if you graduate, with a degree, when your peers are strapped with a 40K loan? Keep up the good work and keep asking questions." Before you even enroll in a good financial school, register for an account with a bank that allows you to manage a stock portfolio.  I prefer TD Ameritrade.  You do have to be 18 (Just register it under your parents, it doesn't matter.  Just make sure they fill out the information portion.  Get the SSN and tax info right.  Basically it's their account, you're just managing it. ) That way you'll have some good, practical experience going into it.  Understand that working with money can be a very cut-throat industry, be ready to be competing with people constantly.    Also, surround yourself with books from successful stock brokers, investment bankers, things like that.  When you're working you'll want information like that.  Good luck, and  I hope this helps. Look through the related questions.  Make sure you fund the max your tax advantaged retirement funds will take this year.  Use the 30k to backstop any shortfalls.  Invest the rest in a brokerage account. In and out of your tax advantaged accounts, try to invest in index funds.  Your feeling that paying someone to manage your investments might not be the best use is shared by many.  jlcollinsnh is a financial independence blogger.  He, and many others, recommend the Vanguard Total Stock Market Index Admiral Shares.  I have not heard of a lower expense ratio (0.05%). Search for financial independence and FIRE (Financial Independence Retire Early).  Use your windfall to set yourself on that road, and you will be less likely to sit where I am 25 years from now wishing you had done things differently. Edit:  Your attitude should be that the earliest money in your portfolio is in there the longest, and earns the most.  Starting with a big windfall puts you years ahead of where you'd normally be.  If you set your goal to retire at 40, that money will be worth significantly more in 20 years. (4x what you start with, assuming 7% average yearly return). 2 + 20 isn't really a investment style, more of a management style.  As CTA I don't have specific experience in the Hedge Fund industry but they are similar.   For tech stuff, you may want to check out Interactive Brokers.   As for legal stuff, with a CTA you need to have power of attorney form, disclosure documents, risk documents, fees, performance, etc. You basically want to cover your butt and make sure clients understand everything.   For regulatory compliance and rules, you would have to consult your apporiate regulatory body. For a CTA its the NFA/CFTC. You should look at getting licensed to provide crediabilty. For a CTA it would be the series 3 license at the very least and I can provide you with a resource for study guides and practice test taking for ALL licenses.   I can provide a brief step by step guide later on. First of all, I am sorry for your loss. At this time, worrying about money is probably the least of your concerns. It might be tempting to try to pay off all your debts at once, and while that would be satisfying, it would be a poor investment of your inheritance. When you have debt, you have to think about how much that debt is costing you to keep open. Since you have 0%APR on your student loan, it does not make sense to pay any more than the minimum payments. You may want to look into getting a personal loan to pay off your other personal debts. The interest rates for a loan will probably be much less than what you are paying currently. This will allow you to put a payment plan together that is affordable. You can also use your inheritance as collateral for the loan. Getting a loan will most likely give you a better credit rating as well. You may also be tempted to get a brand new sports car, but that would also not be a good idea at all. You should shop for a vehicle based on your current income, and not your savings. I believe you can get the same rates for an auto loan for a car up to 3 years old as a brand new car. It would be worth your while to shop for a quality used car from a reputable dealer. If it is a certified used car, you can usually carry the rest of the new car warranty. The biggest return on investment you have now is your employer sponsored 401(k) account. Find out how long it takes for you to become fully vested. Being vested means that you can leave your job and keep all of your employer contributions. If possible, max out, or at least contribute as much as you can afford to that fund to get employee matching. You should also stick with your job until you become fully vested. The money you have in retirement accounts does you no good when you are young. There is a significant penalty for early withdrawal, and that age is currently 59 1/2. Doing the math, it would be around 2052 when you would be able to have access to that money. You should hold onto a certain amount of your money and keep it in a higher interest rate savings account, or a money market account. You say that your living situation will change in the next year as well. Take full advantage of living as cheaply as you can. Don't make any unnecessary purchases, try to brown bag it to lunch instead of eating out, etc. Save as much as you can and put it into a savings account. You can use that money to put a down payment on a house, or for the security and first month's rent. Try not to spend any money from your savings, and try to support yourself as best as you can from your income. Make a budget for yourself and figure out how much you can spend every month. Don't factor in your savings into it. Your savings should be treated as an emergency fund. Since you have just completed school, and this is your first big job out of college, your income will most likely improve with time. It might make sense to job hop a few times to find the right position. You are much more likely to get a higher salary by changing jobs and employers than you are staying in the same one for your entire career. This generally is true, even if you are promoted at the by the same employer. If you do leave your current job, you would lose what your employer contributed if you are not vested. Even if that happened, you would still keep the portion that you contributed. okay, I was thinking of an investment advisor. I believe in not doing it alone too. But i don't believe in just one more person. Investing advisors, tax advisors, business and law. I don't go to an advisor bc I can't balance my monthly budget and also want to save, you know. Questions more like, highest growth sectors, diversified strategies, etc.  And right, they wouldn't get fired bc their client is still happy, (even though their losing money during a record bull market). Guy must be a good sales man. I'd just want to know that my advisors performance is decent relative to the market. But again, I'm not handing over checks to people, only speaking with them.  edit: Yes, the average person should worry about making their kids soccer games and shit, not necessarily the markets and what their investment is worth in 30yrs