If you decide to go the investing in stocks/bonds route…
Obligatory link for these questions > http://www.diehards.org/forum/viewtopic.php?t=6211
I’m a Diehard and Boglehead, so by default, I’m a fanboy of Vanguard, but recognize the benefits of other good companies like Fidelity and T. Rowe and would only recommend those.
First things first, pay off your high-interest, short term debts. Sink the rest into a money market or FDIC savings account earning at least 4.75% (it’s getting smaller these days). Next, sit on it and educate yourself before doing anything for at least six months*. You know how parents don’t want to teach their kids about sex as seen in porn? The financial industry is just like that and you need to filter the facts from fiction. Hence your need to get educated before doing anything too quickly and wondering if you made a mistake later on.
You must know that to make a million dollars in 10 years off of 100k today, would require an extreme amount of risk to get there and is unlikely to happen unless you get real lucky. You must recognize the need to be realistic. Investing today, if you earned 10% per year, your money will double approximately every 10 years, and that’s with a well set up asset allocation in various funds blended with stocks/bonds and staying the course.
I would avoid individual stock investing like the plauge. The fees, taxes, and your time to maintain them is a colossal waste of time and money. You will here great tales of anecdotal stories of success investing this way, but very few succeed this way. Don’t buy into the hype.
If you decided to go with a financial advisor, go with one that comes recommended and is hourly fee based, and one that doesn’t sell expensive pyramid scheme mutual funds (front-load, back-load, high expense ratio, etc…). Beware of the ones that want to line their own pockets before yours.
You should post your quesiton on the Diehard forums I linked to above into the personal finance forum. You will get great responses from very knowledgable people for your specific situation. I also recommend the book The Bogleheads’ Guide to Investing as a starter for mutual fund investing. Easy to follow and is common sense.
As John Bogle says:
Select low-cost funds
Consider carefully the added costs of advice
Do not overrate past fund performance
Use past performance to determine consistency and risk
Beware of stars (as in, star mutual fund managers)
Beware of asset size
Don’t own too many funds
Buy your fund portfolio – and hold it
*Check your eligibility to see if you’re eligible to invest in a Roth IRA in 2007/2008 if you don’t already have one ($5000 limit for 2008). This is something I would recommend right away in January (or up to next April 15 for 2007, limit is $4000). You could start with a “Target Retirement” fund. They’re named for the time frame of your expected retirement year (i.e TR 2035, TR 2040, TR 2045, etc…). The asset allocation of these types of funds automatically adjust for your risk in age. More stocks vs. bonds when you’re younger for aggressiveness and growth, and more bonds vs. stocks for conserving your cash when you inch closer to retirement. You do nothing but contribute!