Expert: Paul Henneman - 4/24/2009

Question
My grandma just died and I got 25,000 for anything and I have a trust fund from her for about 125,000 that I can only use for college? What dose the only mean, aka when if I don't spend that much on school I just get the rest for anything? My dad also died a long time ago and I have a large amount of money from him. My mom is using some of it for our private schooling now and other costs relating to my siblings and I, but it will end up being somewhere around 100,000. We have a guy at the bank who manages the trust. It is in stocks I guess and I asked him how it is doing since the "recession" and he said that it is not as affected in everything else cause it is a (insert investing jargon here). For the time being our guy has the trust and the dad fund, and I just put the 25,000 in a CD for the time being, but the interest is only 2.25 percent for 13 months which I don't think is a good deal. What should I do with all of this money in terms of investing? Should I just let our guy have it all?

Answer
Eric,
   Thank you for your question!
It sounds like you certainly have enough funds to find yourself a good financial advisor.  But I would look for an independent fiancial advisor. Typically the ones that work at banks are the least experienced ones, and are trained to move your finances into investments that benefit the bank the most, not you.
   For example, investment grade life insurance offers a good return, a death benefit, tax free withdrawls, and is an excellent long term investment. Bonds are also safer than stocks, but earn more than CD's. I would interview several independent financial advisors that are not associated with a bank, and see if you can get a referral from anyone that you can follow up on as well.
  The CD is fine for now while you figure out what you want to do. But in the long term, the interest you earn on a CD will not even keep up with inflation, so you need to put together a financial portfolio of investments that is better than that. You should spread your investments out among riskier but higher return, and lower return but very safe investments. This means some sort of combination of stocks, mutual funds, bonds, and investment grade life insurance.
   Find a good independent financial advisor, and work with him as much as possible to figure out your exact goals. The advisor can help you make decisions on how to best achieve your goals.

Best Regards,
Paul Henneman
President
ValuEngine, Inc
www.ValuEngine.com