I am going to be selling my business in the near future and I will have some money left over I'd like to do something responsible with, like start a retirement account. However, I don't have any experience with this sort of thing and I'd really appreciate any tips or suggestions people had to get me going in the right direction.

Take advantage of the tax benefits of the Roth IRA if you are eligible and put it in good mutual funds.

Make sure that you have a good 6 months emergency fund in place in a Money market or savings account before you go off on the investing path.

What Jason said. Set some aside for an emergency fund if you don't have one. Pay the rest on your mortgage. That is a guaranteed return. If you must invest some a Roth IRA is a good idea. Paying down the mortgage is the best bet though. Let's say you pay all 20k to your mortgage and it is at five percent. You will save $1000 every year you have left on your mortgage.

I agree with the Roth IRA. One issue with an IRA though is that you can only contribute $5k per year though. I would recommend opening a Roth IRA, and a regular brokerage account. Put $5k in the IRA and the rest in the brokerage account. Then, each year, move $5k from the brokerage account to the IRA to max it out for each year. After you move all of your money into the IRA, you can begin regular contributions to max it out with your salary. The standard brokerage account will tax all gains as income or capital gains, so make sure you move money into the IRA as fast as you can.

While you're doing this, you can use your new salary to build an emergency fund, or fund a 401k or other investment. Start now so you get used to the idea of saving a decent portion of your salary. Automate it if possible and it will be easy to keep funding the IRA when you're ready without impacting your spending and saving habits.

As for what to invest in, I would put 100% in stocks right now. You're young and you have a long time for your money to grow. You can handle the ups and downs of the stock market for a while. Stocks are going to provide the best long term return. The bond market is inflated right now after many investors got scared into them after the crash of 2008, and it's going to fall eventually. If you don't need the stability of bonds (IE. You're not retiring soon), I would avoid them.

Look for a good indexed mutual fund that tracks the S&P 500 and accumulate as much as you can. You can pick some individual stocks if you want, but it's more risk and more work, and it will be difficult to beat the S&P 500 over a long period of time. You're better off in an indexed mutual fund.



Real estate values are so much more dynamic than "they're not making any more of it". Look at the housing crash in 2008. The same logic was used to justify paying astronomical prices for housing and land all over the country and the bubble popped. Land can go through bubbles and crashes just like any other investment. And over the long term, land will not appreciate faster than a diversified investment portfolio. Unless you're buying an income generating property (apartments, rental house, etc), it's unlikely that land will beat stocks and bonds as a long term investment. OP needs to get a retirement account started and get used to funding it regularly before he starts looking to alternate investments like real estate.



I would disagree. OP needs to make sure his mortgage is financed at a competitive fixed rate for the current market (about 3% right now) and then pay the payment as normal. With an interest rate that barely beats inflation (if at all), it doesn't make sense to pay down a mortgage right now. It's not too difficult to get a return greater than 3% and offset the interest paid with an investment portfolio. Why pay down a mortgage to save $600 a year, when you can be earning $1500+ or more from the same money in an investment portfolio?

I would make a minor adjustment. Instead of moving money from your regular brokerage I would contribute new cash into your Roth. As you are still young you will get the same time benefit in your Roth as a transfer without taking away the wealth you have already gained. At some point when you get older you may want to start making that shift. Also when you open the Roth make sure you ask for self directed or else you will get limited to a bunch of crappy funds.

I agree with both of you but I'll throw one more thing out there. You also have to consider the size and balance of your net worth. All other things equal, if you are thin on investments and retirement but have a ton of equity in your house then it might make sense to put your extra money into investments. If you have a ton put away but have little equity then maybe paying down the mortgage makes more sense. Having a good balanced allocation has a value too.