How should I invest my money?

1. Leave a reasonable amount of money in an accessible cash account. A couple of months expenses.

2. Start funding your retirement with a mix of a 401K and an IRA. Look into retirement date funds most 401Ks have them available. Find the one which balances your risk tolerance with your return requirements. Most people make the mistake of planning their retirement based on current cost. A burger meal cost 40 cents in 1969. It now cost $4.00. In 40 years assume it will cost $40.00 when planning your retirement.

3. Create an emergency fund equal to 6-12 months of expenses. Most people don't prepare for life's major setbacks. When they occur, their plan breaks and they have to start over. Charles Schwab has brokerage accounts which are linked to a checking account. They allow you to achieve higher rates of return on your emergency cash while still maintaining access to your funds.

4. Put the balance of your savings in your Schwab account.

5. Since you are leary of investments in consideration of the current economy, look into Treasury Inflation Protected Securities - TIPS. I like the one at Vanguard - low fees.

The world is in a debt crisis and governments will choose to inflate their way out of the mess. Fixed income investments like CDs and savings accounts will be BIG losers. My favorite burger joint raised prices 11% this year. Last year $20,000 would have bought 2353 burger meals there. Now it will only buy 2105 burger meals. If the trend continues in 5 years $20,000 will buy only 1387 burger meals.

Banks are in the business of arbitrage. They pay less than inflation making you a constant loser. They use your money to make high interest loans and collect fees. Asking a bank for investment or financial management advise is like asking a piranha to trim your toenails.

If your employer offers a match in a 401k then you should contribute up to the match. After that contribute to a Brokerage IRA and then return to your 401k once you've hit your IRA limit. This is because you have full control of what to invest in with your brokerage IRA whereas you're limited as to which funds you can choose with a 401k, of course it's up to you to make a good choice with the IRA so for many people there may be no difference.

As to the difference between Roth and regular IRA. If the tax rates are the same then there are no differences but the tax that you would pay on a Roth is your maximum tax rate while on the Traditional will be the average that you pay when you retire so unless you are making very little money at all (on the order of $10g or less per year) then a traditional will give better returns. Most people like the Roth cause it's simple but few people bother to do the math to see that they're making slightly less with a Roth.

The advantages of a tax shelter can be quite remarkable because you are compounding on your pre-tax earnings. You can invest up to $5k per year in an IRA and $16.5k in a 401k so you can invest up to $21.5k per year in tax shelters. They won't take retirement accounts away from you in a bankruptcy and you can't be sued for them. 401k's can be rolled into your IRA when you change jobs.

I would start an IRA account, make it a Roth IRA. Studies show that the best way to accumulate wealth for later years is to start early. I think the limit at your age is $3,000 per year.

With the remainder of your savings, I would open an account with Vanguard or American Century Investments. Dump all of the money into a short-term bond fund. Then once a month for the next year, move $1,000 into a stock fund. Choose a conservative one, like Dividend Appreciation. That is called "dollar cost averaging" and it will help protect you from fluctuations in the market.

An option would be to open a Scottrade account and buy company stocks. You can get good stocks like Nike, McDonalds, Johnson and Johnson, that pay 2% or more in dividends per year. That is more than you can make anywhere and you can sell the stock whenever you want.

Put it in a CD, I would not invest it in stocks, bonds, commodities, gold or silver right now. There is a world debt crisis luming the will effect all the above in a very bad way but with a CD you should be safe and make a few %. Go with a credit union, avoid banks like the plague ( unless they are state run)

1. Google this: oldinvestor's Channel - YouTube

2. view the videos

3. email

4. invest

5. earn

I would open up a ROTH account

Put in 5K for this year, and put in 5K for next year in January

You can take out money penalty free for purchase of your first home (up to 10K)

Use a discount broker for this - never trust banks - they will fee you for anything

Schwab, Fidelity, TD ameritrade

Take the rest and pay off that student loan - save the interest.

The markets are going to be extremely messy next year

And if the middle east starts fighting again - expect chaos

I would put that ROTH money into long term 5 year cd's

Gold, silver, USO (United States Oil Fund).