OK..Priority. Again..this is what i would advice my client (with the given info that you ahve provided) 1. Have your client get a will + Living Will Reason- If your client dies tomorrow, all his asset will go into probate. The court will decide who gets what. Worst yet, If both die tomorow, there will be a tug war between the family memebers from both side, regarding the guardain ship of their kids + their small empire. Who will take charge of financial and personal decision if he gets into bad shape. The first thing you need to advice your client is to make a will, guardainship of their children. A simple one, you can always update it. 2. Pay off all his Debt ( beside the mortgage, or he could pay that too) Reason, now all his regular income is fixed, and free, not tied up. 3. Emergency Fund. - 6 months of his "House hold expense" in his saving account. with 3 kids, i'd believe that would be anyweyr from 3-4K *6 = 18-24. ( just for emergency). 4. Update his Insurance. You need to talk to your client on how he feels about it. He's 48, I'd go with 20 yr Level term for 400k ( 10 yrs of his salary) Another 1M in Joint Survivorship Life Insurance. i'd not really bother for the wife right now, since she is not generating income. Long Term Care Insurance. Disability Insurance Again, this all depends on how yur client feels about them and how well you can explain and make them understand why this is sooooo important for estate conservation in bothy short and long term. 5. Income. Ok here i dont agree with you and your client. i dont see how anyone can afford to raise a family with 6 kids for 40 K. His income needs to goo up. Assuming he uses some money to pay off all the debt. I'd think he'd want to raise his house hold income by atleast 50% totalling 60 K.(BEFORE TAXEX--HE IS IN 28% TAX BRAKET---I DONT KNOW WHAT STATE IS HE IN, SO I DONT KNOW ABOUT STATE TAX) 6. Kids. Open up a 529 Plan. You can put all his kids as the beneficiary. Max per yr he can contribute is 5000.00. It grows Tax deffered, meaning you dont have to pay taxes on the gain. The only thing.....The money in 529 can only be used for education purposes. If not then there is 10% on taxex, and then your reguar tax . But again, with 6 kids, all wanting to go to private college. you do the math how much he'll have to invest. the avg rise for private college tution fund is 18%. iN NEXT 10 YR, TO ATTEND A PRIVATE COLLEGE IT WILL COST $175000 FOR 4 YRS. educate your client about that......and see how he changes from going to private college to public.. 7. MAT IS 48 ( 8 yrs to retire at 56, according to you) he is not eligible for SS , medicare, untill he's 59. I assume, if at retirement, he will have no income, if all his income is comming from his bussinss now....( he's gonna either close or sell his business at retirement isnt he.....what extra income source does he have ) So ok your other priority. Invest sum equal for 8 yrs that will return atleast 60 K ( to match his current income). If u ask me i'd go with variable annuity, rather than mutual fund, coz they grow tax deffered, if you invest in MF, he'll have to pay taxex on gain everyyears. Why... Most Variable annuity, has a death benefit, meaning the principle will never go less . Surrender charges are generally from 5-7 yrs. Tax Deeferd growth. Bypasses Probate if he dies before he enjoys his retirement. Creditors cant touch it. No law suit or anything. 8. Now substract all that from 1.6 M. and if he is a conservative. then diversify like this. Stock/Mutual Fund Total---------------------------35% Large Vlaue-Large Blend (15%) Mid/Small Cap (8) Foreigh (8%) Real Estate (2%) Precious Metals (2%) Bond Total.........................55% Short to intermediate Term(30%) Inflation Indexed (20%) Foreigh (5%) Cash and Equlivalent..............10% NOW, I'd not invest in stock...i'd just go with mutual funds, see the return for atlesat 5-10 yrs, with atleast 10 %. And i'd advice him not to just buy mutual funds. Do it inside the annuity and ROTH IRA. EXAMPLE- 1.5m with 8 % will be 3 M in 9 yrs ( 1 yr after he retires). if he dies then. his kids will have to pay upto 50% in estate tax for more than 2 mil. so in this case, for 1 mil, they will pay 500k in estate tax......this is where that survivorshipe life insurance come to play. assume he doesnt die. in next 9 rys. 3 mil grows into 6 Mil. i dont wanna get into estate planning and stuff like that, it'll be too confusing.