I must preface these comments with "IMO" in my opinion.

There are many good financial advisors and financial planning services out there BUT there are also too many of those types who are not even honest much less benevolent.  Here is the rub, most make their living providing the service so it is to their advantage to get you to do what makes them money.  I know that a wise business would do just what you need and optimise your profits so that they will be profitable in the long term.  Unfortunately it is very tempting to encourage you to do what you want hoping for instantaneous gratification which will surely gratify your advisor who most often makes a profit when you buy, sell and change your plan.  If you ask the right questions you will find out how they make their money.  They can't affort to provide all of the time and services for free and they deserve a fair price for their service.  All that I am saying is, just make sure you get a good service at a fair price.

How do you do that?  Educate yourself before you make a decision.  Consumer Reports has annual articles on the investment tools you mentioned.  There are also a number of books by consumer organizations who help you understand the financial instruments and even advise you on finding a good advisor if you still need one.  My personal opinion is that a financial advisor who makes money from your investment etc and says they offer the service free is a dangerous route.  I would rather pay for the consulting time and then make my decisions based on long term performance of any investment.

You won't get rich quick without taking high risk which means you will likely lose most of you investment unless you are lucky.  Many tried and true systems exist but they all yield somewhere between 3% and 4% of spendable income if you want to assure that you protect your nest egg against inflation and keep your inflation loaded capital over the rest of your life.

Of course I am assuming you don't have money you can afford to lose in an attempt to make a big one time profit.

I am sorry if this sounds too negative but in truth it sends chills down my back when I see the phrase "I'll only have to call our finance guy and he'll take it from there."   Chances are better than even that if you don't educate yourself in this area that he will indeed "Take it from there."  Don't through caution to the wind.  If it sounds too good to be true it is too good to be true.

I hand the pulpit back to the forum.
Larry

Please let me preface this with several statements:  First I am not a financial planner, and Second these are my opinions and things that have worked for us.

First let me say that I have a golden rule when taking financial advise, and that is to Never take financial advise from some one who is still working for a living.  If they so so good at it, why are they still working?

Second I never trust investment of OUR money to someone else.  These investments are our responsibility and we need to know all that we can about it.  Anything else is risky at best.  I consider it a recipe for losing your money.   Take the time to do your own research and educate yourself.  Certainly there are some hard decisions to make.  First have a goal.  What do you want your money to do and how fast do you need it to get there.  This is essential to knowing how much risk you must take to achieve the goal.  Many of us can not afford to lose our money because we are simply too old to grow another nest egg.  Therefore we want very low risk.  Vehicles such as CD's, Money Markets are about the safest investments you can make but you pay for your safety with lower gains.  Mutuals funds are probably the next lower risks but not as safe as the other two previously mentioned.  Investing in stocks on the market are probably the most risky thing you can do but they also come with the possibility of the largest gains.  Only you can make these decisions.  A planner should never be left to contol your money without your approval of anything they do.  

Like everyone else, I have to put in a disclaimer - not a professional, my opinion only, you have to decide for yourself. 

Everyone has given some pretty darn good advice so far.  So I will just add my two cents.

As Larry said, putting your money in the hands of someone else can be the biggest risk you will take.  However, if you find the right person like Here4Now and like we have, they can help your investments perform far better than we could have ever done on our own.

That can be the biggest problem - finding the right person.  In fact, that is one of the most frequently asked question we get with regard to finances.  "How do you find the right person?"  It takes lots of interviewing and lots of references from folks that have had long-term success.  That single decision might have more risk to it than the actual investment - the point that ahoweth and Larry are making. 

But your question is "What would you do?", so I'll cut to the chase based on the limited information here.

If it were me, at your age, I would skip the CDs and money markets and go for the higher historical returns of the stock market.  In ten year periods, the stock market has historically proven to be a winner without as much risk you might think if you diversify properly.  But I would never attempt to do that on my own - I would put it in the hands of a TRUSTED broker with an excellent track record to diversify the money for a reasonable long-term 8 - 12% annual return over time.

Doing that, you still should monitor the performance with the understanding that things can be really volatile in the short-term.  Even with our prior success and trust in our advisors, I still monitor everything monthly and look for trends.  As ahoweth said, it's still your responsibility no matter what happens.

Say I just didn't want to mess with a broker or advisor.  I would never invest in individual stocks on my own and I wouldn't want to be a day trader.  Still, I would want better returns than CDs or money market accounts.  So I would probably research mutual funds with at least a 10-year track record and split the money up among four consistently performing mutual fund types:  growth, growth & income, aggressive growth, and international.  Uh oh, my Dave Ramsey roots are showing again. 

Dave also says that CDs are great for an emergency fund or saving for a purchase, but bad for an investment.  The problem is that the low return on CDs, while less risky, will often not keep up with inflation.  In other words you will probably have your $75,000 plus interest earned in ten years, but the purchasing power of that money in ten years will likely be less than what the $75,000 would buy today.  He says over the long-term, you need to earn a minimum of 6% annually to pay for taxes and keep your money from losing ground to inflation.

So for us, CDs and money markets are only for emergency funds and checking accounts.

Now that investment in stocks/mutual funds assumes that we had NO debt.  If we had debt, we would use the $75,000 to pay off debt first. 

Well that's our answer to "What would you do?". 

P.S. I see bjoyce has posted a link to The Motely Fool which is another website I use to help confirm our strategies.  And he is correct that you have to consider the tax effects of investments whether you invest on your own or not. 

   

I agree with Howard but I got the impression you were a bit risk adverse so I didn't give specifics. If the $75K is all money you will not need soon, like for a major repair, then his strategy is great. If you need to hold some back, put that portion into the highest paying money market savings you can get so you can withdraw it without penalties ($25K??). Now we can talk about the rest.

Believe it or not, $75K is too small to diversify with individual stocks so mutual funds are the way to go. You want to buy stocks in increments of 100 shares, so it is difficult to have a good mix of stocks and stay under $75K. Watch those load and other fees when buying mutual funds, that is how many get the big bucks. The breakdown of four groups that Howard recommends is a good one.


-- Edited by bjoyce at 16:27, 2007-03-03

All great advice. I used a broker, I went to him told him what assets I have, when I wanted to retire and how much I wanted to have then. I said you tell me how to get there. He drew up an investment plan, I looked it over, agreed to it and over the last two years I have had gains of about 15% per year. However, there is an alternative to the brokers and insurance agents, who just happen to advertise as "financial advisors", what is available are people who do not sell you anything they charge hourly fees and advise on the best way to make your assets work for you and help clear some of the tax hurtles. I would ask around in your local area, maybe the bank, accountant friends etc. It is possible to get the help you need without feeling like you have to buy from the advisor.