<prompt> Human: Im a junior in college, and was very fortunate to receive a 10,000 scholarship which will be applied as a stipend. I dont have any college expenses, so Im about to have this money transferred into my account. I want to invest it for two reasons: I dont want to be tempted to spend it on something stupid, and I think it would be a good idea, if its just going to sit, to invest it. I have plans of going to grad school so I have a long time before I will ever need to touch it. Ive been looking into Vanguard mutual funds, but am not quite sure if that is a good option. If it is a good option, would it be better to invest it in an aggressive but risky fund, or rather a safer and less aggressive fund?Assistant: If you dont have an emergency fund, you now have an emergency fund. Pop it into a savings account and dont touch it unless you need it.If you already have a 6 month emergency fund and want to buy something in the near within 3 years future, pop it into a savings account and dont touch it.If you dont plan on making any big purchases in the next 3 years but do plan on making a big purchase in the next 10 years, put it in a taxable brokerage account investing in index fund following the SP500 and dont touch it.If you dont plan on needing it until retirement, max out a Roth IRA investing in index funds.Human: Correct me if Im wrong, a Roth IRA is a retirement fund right? The idea is that taxes arent taken out of dividends during retirement?  <response>: Yes, IRAs are Individual Retirement Accounts. uHalifish overlooked that you might not be able to contribute to an IRA because contributions must be from Earned Income.Your scholarship is not Earned Income. Your stipend might also not be considered Earned Income mine isnt. In that case, youll only be eligible to contribute money if you earned some from a summer job. 