My 18 year old brother in law recently received $50,000 in a settlement from a car accident. He knows virtually nothing about finance and asked me what I would do with the money if I was in his situation. I'll outline his goals and such in the next few lines, but I was looking for what your input is.
He will be leaving in May for 2 years during which he will need $10,000 (he will be giving service). During those 2 years, he needs somewhere to park the other $40,000 so that when he gets back, he can pay for college. He will need $20,000 for four years worth of tuition (cheap school
). The rest of the money would also be used for school, just not directly (room and board, books, etc.)
My advice (I'm somewhat of a new investor, feel free to critique)
Out of the $40,000 left over ( took out the $10k for service)
Put $10,000 in a Roth IRA (hits 2012 and 2013 contribution limits)
Put tuition $20,000 in a 529 savings plan through his state
Put the other $10,000 in a low cost index/mutual fund (one of the Vanguard funds, mildly aggressive)
What are your ideas/what would you do if you were him??? Thanks for the insight.