Q. I am 23 years old and getting ready to graduate from college. I recently received a settlement that provides me with about $110,000 to invest. What would you suggest a person my age do with the money? I am very interested in the stock market but just afraid of the risk.

A.You're in a very enviable position. We always tell readers the first $100,000 is the toughest to save -- and you're already there. If you handle that money wisely, you'll never have to worry about a safe and secure future.

The first step to take is to open an Individual Retirement Account and commit to making the maximum allowable deposit each year -- $5,000 for 2008. The tax benefits are huge and our 6 simple rules for a successful IRA will answer all of your questions.

But this still leaves you with lots of money to invest outside an IRA. Although the stock market isn't doing so hot right now, historically it's been the best way to create wealth.

One of the best ways to take advantage of that (and this is true for the money in your IRA, as well) is to buy shares in a mutual fund with an investment strategy "targeted" to your retirement date.

The professional managers running targeted funds take greater risks with your money when you're young, buying a mix of stocks and bonds with the most potential to increase in price and boost the value of your account. Of course those kinds of investments are the most likely to tumble if the market falls. But there's plenty of time for the market and your retirement savings to rebound.

As you get older, targeted funds adjust their mix of stocks and bonds to take fewer risks and ensure your money is there when you retire. Your account may not grow as fast, but it won't be as susceptible to downturns in the stock market, either.

Vanguard and Fidelity are good places to look because they have targeted funds for all ages and often charge the lowest fees.

Then all you need to do is move as much money as you can from your mutual fund to your tax-sheltered IRA each year, sit back and wait.

If you leave that money alone, you'll be a millionaire by the time your kids are ready for college.

Don't believe us? Run the numbers through our calculator called You can be a millionaire.

If you start with $110,000, and earn an average annual return of 8%, you'll have $1 million by the time you're 52. And that assumes you add nothing more to your savings.