No. of Recommendations: 5
This post wasn't created for me to get approval from strangers if I should manage some of my mothers savings.

I think the harshness of some of the responses is because they see you making a potentially huge mistake. They might be wrong, but you should consider that they might be right.

If you mother is not in the market and has total savings of $25,000, then it is likely that she is not used to the gyrations that can ensue, and that's the quickest way to get chased out of the market with a loss. That would be particularly bad news for someone with so little to start with.

That might not come true, but what happens if something happens (she loses her job, say) and needs some of that money to pay bills - and it just happens that people losing their jobs and the market going down often happen at the same time. Now she has a serious need for savings, and there's only $12,000 in the pot.

You may have other contingencies in mind (like you helping her out or whatever) and none of us know that, but it is an issue that should be considered. General advice is to have a minimum of three months, and preferably six months savings in cash for such times.

If you want to get her into stocks, you can get stable dividend payers with a decent return, maybe 4% or more. On $25,000, that's another $1,000 a year instead of $85, and yes, that's something to think about. (Heck, you can get over 6% with a few like AT&T or Altria (Philip Morris) but both have risks. Actually, they all have risks, just look at what happened to that great 'widows & orphans' stock: GE.)

You can mitigate the chances of a GE by buying a dividend oriented mutual fund, or better, a dividend ETF (type 'dividend etf' into Google for an education.)

Finally, I'll just say that "three years experience" is a trifle, it's close to nothing, and you should not overestimate your ability in this regard, particularly with someone else's money, particularly if that someone else doesn't have a lot and you are taking charge of all of it. That's not being snarky to you, it's just the plain truth.

Which brings me full circle. Don't be offended that people have reacted as they have. Perhaps some of their choice of words could be better, but they have had these reactions for the same reason you would if your 10-year-old decided to barber the dog. It might come out great, but the chances are not wonderful and the risk is quite great.

You might also consider some good quality corporate bonds, usually sold in increments of $1,000 or more (sometimes much more.) Like stocks they can go up and down in value if you need to cash out early, but if you can hold them to term (assuming the company/municipality/government doesn't go bankrupt) then your capital is returned and you get a predictable interest payment.
 
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