Dear Dave: I’m 24, single and make $60,000 a year. I’m also debt-free and live in an apartment, plus I have about $550,000 in a brokerage account that’s made up of 75% mutual funds and 25% single stocks. The money in the brokerage account was originally an inheritance of $280,000 that has grown since I received it in 2007. Am I putting my money toward the best investment possibilities right now? – Drew

Dear Drew: You’re in a nice place! I’m glad you’re taking your finances and future so seriously.

First of all, I don’t play around with single stocks. There’s just too much risk there for me. Since I don’t invest in single stocks, I don’t recommend others do it, either. I look at two things when it comes to investing – real estate and mutual funds.

I always pay cash for income-producing real estate. And when it comes to mutual funds, I invest in good, growth stock mutual funds with a solid track record of at least 10 years. Now, I don’t get mad at people if they want to dabble in single stocks a little, but I wouldn’t recommend having more than 10% of your investment portfolio wrapped up in them. The numbers on playing single stocks are just not that good for the individual, and besides that, I don’t like losing money!

If I woke up in your shoes, I’d move the 25% you have in single stocks into good mutual funds. And I wouldn’t use a brokerage account. I’d stick with a quality financial adviser, one who has the heart of a teacher. I think you’ll end up doing better with your money in the long haul this way. It might be a little boring, but boring is good when it comes to stuff like this. Exciting means you stand a good chance of losing a lot of money.

You’ve got a good income, especially for a single guy who’s 24, so I’d make those adjustments and live like the inheritance money wasn’t there. Stay away from debt, live on a reasonable budget and make sure you’re putting 15% of your income away for retirement. Then, when it’s time a few years down the road, use some of that inheritance money to pay cash for a nice home.

If you can manage to do all that, the money you inherited – even with buying a home – will likely grow to millions of dollars by the time you’re ready to retire. Pretty cool situation, Drew! – Dave