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I am open to suggestions pertaining to placing a portion of the $35K into Vanguard funds that carry more inherent risk than the Index type funds.

There is a wide variety of index funds - with varying amounts of risk. If you're looking for more risk than an S&P500 fund, you could also put some in a small cap index, foreign index, emerging market index, reit index, etc. (I think Vanguard has all of these)

For any asset class & risk tolerance you're looking for, you can find an index fund to suit. This is what I have done with most of mine.

-Joe
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