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No. of Recommendations: 4
Hi Andrew,

I'm 22 and had a fairly similar experience as you and I will share with you what I did. It turned out well for me, and I hope you find it helpful.

1) Moved the money entirely into Vanguard funds with the exception of about $100,000. I really like the Vanguard fund family because it has very low expense ratios and the shareholders are the owners of the company. I use the following funds, although you may not find them applicable:

S&P 500 Growth Indew (VRIGX)

Primecap (VPMCX) -- this fund is now closed, but there are some other good actively-managed growth funds out there in Vanguard's offerings.

International Growth (VWIGX)

I put the rest of the money into two piles, the money that I would invest and the money that I would keep for an emergency (such as if my parents could no longer pay my college costs, which run over $30,000 per year). With the emergency money, I placed it into three staggered CDs of $30,000 each set to expire after one year, two years, and three years. If necessary, each of these CDs could have paid my college costs. I found the highest rates at telebank, which is now part of E*Group, but you may find higher rates elsewhere.

I placed the remaining $10,000 in Fidelity to invest in stocks that I choose. I thought of this money as the money I would learn to invest with over the course of the year. Although I haven't beaten the Rule Breaker portfolio (yet), I have done fairly well, but I have also (and most importantly) learned a great deal about investing, the stock market, and what causes fluctuations in the market.

At the end of one-year, your first CD will come due and with any luck, you'll be ready to invest this money using insights and ideas that you've generated over the past year. This should repeat itself over the next two-years, and if you're feeling bold, you might want to move some money from mutual funds to your actively managed portfolio.

Good Luck!
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