I am going to make a few more assumptions in regards to your current situation before I offer advice. I assume you have a stable job, and that you are not planning on moving your family to another city/state in the next 5 years. If those are true, I would invest half of that money into the equity of a newer/larger home. Get the nicest home that you can comfortably afford without paying any PMI. Real estate in this country is very, very low right now, and probably at extreme bottom. Your investment in your home will most probably pay handsomely over the next 5-10 years.

I would invest the other $20k in relatively conservative, divident paying stocks or mutual funds, and try to grow that investment over the next 10 years.