gifted money to invest

Terry Says

Wow, that’s the nicest blog post I have seen today! So first let me ask you some questions about the basics of your life:
How old are you? (that gives me an idea of your time horizon — young vs nearing retirement — and thus your risk tolerance)
What kind of debt do you have outstanding? (paying off credit card debt that is costing 20+ percent if the first step!)
Do you have any other investments — a retirement plan at work? In fact, are you currently earning income (because if you are, the investment should be made inside a Roth IRA)
Finally — how much of this money are you willing to lose?! (That’s not a trick question! — I can give you arguments for investing in the stock market if your time horizon for needing the money is at least 20years!)

SO — Let me make a few assumptions: You are working, under 40, have little credit card debt (which you will pay down immediately!) and haven’t saved much for retirement.
In that case, go to Fidelity.com and open a Roth IRA and put $3,000 into the Roth account invested in the S&P 500 stock index fund. Set up an automatic contribution of $300 a month to be take out of your own bank account and added to the Roth IRA. (The limit is $6,000 per year –under age 50 — assuming you earn at least that much.)

Leave one-third of the money in a money market account at your bank. You won’t earn any interest — but you will have a safety net for emergencies.
AGAIN, this advice is based on the assumptions I made above. But if your situation is materially different, please post again with more details!