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Thanks to the private company owned by my grandfather, my wife and I received a fairly large lump-sum distribution. We now have a financial advisor and most of our money is in mutual funds, but are there better ways to invest the money, especially considering our young age (23) ?

I am currently working as a software developer/independent contractor, the income from which is paying our bills. At this point we are essentially living as if the money isn't even there. I just wonder, are we being foolish or wise?

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"I have money to invest. Where should I put it?"

Anyone who answers with "Give it to me, I'll invest it for you, don't worry." needs to be avoided. If your financial advisor gives you this line or equivalent, fire him/her and find another.

Before you think about where you should put your money, learn about investing. Take courses, read books, consume blogs and videos on investing in stocks, businesses, real estate, and precious metals. Learn what the risks and rewards are for each, and make an informed decision based on what you learned. Find differing opinions on each type of investment and come to your own conclusions for each.

I for example, do not understand stocks, and so do not seriously work the stock market.

Mutual funds make money for the folks selling them whether or not the price goes up or down. You assume all the risk while the mutual fund advisor gets the reward. If you find a mutual fund advisor who cannot recommend the purchase of a product he doesn't sell, he's not an advisor, he's a salesman.

Investing in business requires you either to intimately understand businesses and how to fund them, or to hire someone who can make an objective evaluation for you. Again this requires training. I have no such training, and avoid investing in businesses.

Investing in real estate also requires you to know what to look for in a property that produces cash flow or capital gains. I took a course, read some books, gained experience and have a knowledgeable team at my disposal so my wins are greater than my losses.

Do not be fooled by people telling you that higher risk means higher reward. Risks that you understand and have a detailed plan to mitigate are not risks. It is possible to have higher reward without increasing risk.

Again, do your own research. The richest people in the world do not own mutual funds or IRAs or RRSPs or TFSAs, they do their own research and invest in the things I mentioned above.

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I highly recommend passive investing through something like betterment (www.betterment.com) or vanguard's ETFs. FutureAdvisor.com can provide some good advice as to what funds to invest in.

I'd recommend using that money to max out your Roth IRAs each year, too.

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    I would concur on the Vanguard idea. I would also start listening to the clark howard podcast for more advice. – Mark Monforti Sep 9 '14 at 19:00

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