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Both of my parents were killed in an auto accident about 4 months ago. I am an only child and will be inheriting a lot of money (to me anyway) after both my parents and my own personal debt is cleared. The estate should be closed in another couple months. I have been gaining financial education by and have read a couple of books such as richdad poordads guide to investing. I am 26 and am still going to school and work fulltime. I would like to quit work and go to school fulltime. I will need to do this for about 3 years in order to get my degree in mechanical engineering. I could graduate sooner but want to spend more time wiht family. However my wife is a fulltime mom and I will need to have $3000 of liquid cash every month to meet my living needs/wants. My goal is that $4500 of interest accumulates a month leaving 1/3 for taxes. If I can do this there will be no rush to get a job and I could practically retire. Right now I have a little over half sitting in two MMA accounts at different banks, one gaining 4.5% and the other gaining 4.9%. I recently found out that there is another bank that I am also with that will go as high as 5.6%. That number is likely to go up as well, possibly up to 6%. This bank is supposedly guaranteed to have the highest rate on MMA's. However, the account is FDIC insured for only $100,000. I am looking for other low risk methods of investing. Is investing in an S&P500 index fund considered conservative. Does this seem practical? Should I pay off the house? Approximately how much money would I need to meet these goals?

Anybodys response/suggestions would be greatly appreciated.

Phoenix, Az
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