Sorry I have to disagree. A rental property is a BAD idea. If your friend is young he probably hasn't got a clue about maintenance, collections or any of the other things that go with magaing a rental property. And a few bad tenants could destroy the value of any rental unit.

On one things that investment councilors have always emphasized is to start young on any retirement plan. Here's the perfect opportunity. Take 120,000 of that cash and invest in in a well managed mutual fund. Try to make it as hard as possible to get it out for a least a few years. When, if ever your friend decides what he wants to do and starts earning money he can start moving some of his investments into tax sheltered versions.

He needs to convince himself that that 120,000 is 'gone' so he doesn't decide to use bits and pieces of it over the next few years. If he does that assuming 10% return over the longterm he ends up with over 2million after 30 years. And 10% in a balanced mutual fund is not out off line. Especially since this is a long term investment and if he leaves it alone and doesn't 'panic' if things go negative for a while.

just my 2 cents worth.

I ditto the education thing, tell him to invest in himself. He'll make many, many times more $ over his working lifetime with a good college degree, versus only a High School degree. Unfortunately, at 19 most people don't look that far forward on their own. I went in the Marine Corps at 17 and was out at 19, so I kind of had a bit of focus when I went to college. I'm 50 now and don't know where the time went.

I know a half a dozen people who inherited large amounts of money when they were young, or get some kind of trust with $100,000 or so per year, and NONE of them are worth a $h!t.

It's easy to be armchair quarterbacks, but the reality is the ideal strategy is only known to that young 19 year old kid. Until this guy defines his goals, needs, and wants, nobody has the perfect solution. The only thing anyone can likely agree upon is the money must not be wasted now. There are dozens of good investments out there. Let's hope he finds the right one.
jurgen

Buy a home/condo! You're a Rich Man when there is not mortgage or rent to pay. Even small paychecks will go far when there are only a few bills to pay.

I knew a waiter that saved for years. What a smart guy I thought - most service industry (bars) type folks tend to live for the day, if you know what I mean. Anyway, the waiter reaches a point in his life where he needs a change, he's got $45K in a savings account, no investments. What to do? Buy a house/condo (90's SD so very doable)? Naw, he spends EVERY PENNY on Kreiss furniture for his apartment, clothes, and a trip to Cancun. :confused: Everyone knows that furniture is a fantastic investment. http://www.pelicanparts.com/support/.../gaapslaap.gif

This, I agree with. And since fewer than 5% of all mutual fund managers deliver a better return in any given year than the overall market, I'd suggest a no load, next to nothing management fee (less than 1/4 of 1%) fund...such as the Vanguard total market fund. At age 19? Sheesh! Let's just say I wish I'd had the foresight and funds to make such a move at age 19. www.vanguard.com offers an excellent basic investment tutorial, plus info on this and other Vanguard funds. I like Vanguard. They were/are NOT mentioned in the fund management scandals, are no load low fee funds, and offer a host of other services as well, including a low transaction fee brokerage for those who wish to deal in individual equities...
The sad truth tho? At age 19 would have I listened to any of this advice? Probably not. Would I have had the smarts to do the research required to pull it off? Probably not. I also agree with managing real estate well being very difficult for a 19 year old. One of my happiest days was when I relieved my shoulders of the burden of being a landlord...some people have the "stuff" for it...I didn't.

Just don't buy a new car, it will be an old car and worth half as much in 3 years.

Ok, I read through this and I'm not sure anyone asked. Where are his parents?

Rick? Damned good question!