Seriously, a moderator should be the person whom you completely trust. Because if there will be such a situation when you and moderator think different on some topic and there is kind of quarrel between you, s/he can completely delete your forums content and disappear.
Moderator should be also experienced enough in forum content questions. I know many people become ambitious after receiving "moderator" status and moderate the board under their own rules, which is unacceptable.
I think hiring a person could be a good solution, because when we talk about the money, it comes to a more advanced level else if you just would give her moderator status for fun. She also will take kind of responsibility for her work.
But as I know, usually moderators are not paid for their job and doing it just for fun visiting the board more often than admin himself.
Finally, only you decide what is better for your purpose :-)