Question: My mother just inherited $600k from her father who just past away. Currently she has the sharks swarming around trying to get a bite (DC at it’s finest!). I listen to your show religiously (have about $30k+ invested @ 26 years old – you guys rock!), but I need your help with my mother. I know you all say fee only advice. I called my own investment firm (Fidelity) but they don’t offer that (I only use it for trading stocks). She really needs help with investing this money. I don’t know who else to ask!!! Please help! Andrew, Washington, DC

Answer: I’m sorry for your mother’s loss. When it comes to you’re her inheritance the first principle is preservation of capital. That’s why I recommend putting the money into FDIC-insured bank accounts–from savings accounts to short-term certificates of deposit–and U.S. Treasury bills. (You could also park the money into accounts at a federally insured credit union.) She can buy Treasury bills directly from the government at Treasurydirect.gov.

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I don’t know how old is your mother, but her issue about what to do with the inheritance is a much bigger question than where to invest it. Coming up with a good answer involves thinking through lifestyle, expenses, goals, whether it’s important to your mother to pass money on to children, and are there any debts to be paid off? It entails looking at other assets, including retirement accounts, the home, and additional savings. You get the picture.

It might take you and your mother several months to a couple of years to decide how to best manage this money. What you don’t want to do–and you’re right to be concerned–is to turn it over to someone who will take inappropriate risks with it and charge high fees to boot. It’s far better to earn a low rate of interest in risk-free Treasury bills and short-term insured accounts and keeping the principal safe until she has a plan.

By the way, she might want to think about creating a fixed income “ladder” with at least some of the money for now. Your mother would invest money in U.S. Treasuries or federally insured certificates of deposit with different maturities. For example, she could invest equal sums in three month, one year, three-year, and five year Treasuries. (She might want to stop at 3 years since she will be making some big money during that time frame.) The longer the maturity the higher is the yield on the fixed income security (which isn’t saying much these days). Still, let’s say interest rates go up somewhat over the next year. Your mother will have some short-term debts that will mature relatively quickly and she can reinvest that money at a higher rate. But if rates surprise the consensus and stay low she’s still earning a better return on her higher yielding investments.

The Associated Press ran a basic bond ladder story here. Jane Bryant Quinn describes the mechanics of a bond ladder in her comprehensive and updated personal finance book, Making the Most of Your Money Now. Quinn is always good.

Okay, the money is now safe. You and she can then research on your timetable for professional help. You may end up realizing that you can come up with the answers on your own, too. It isn’t easy finding a good financial planner. Many planners are really stock brokers or life insurance agents. There’s nothing wrong with that but your mother needs a different kind of expertise.

She’ll want to find a financial planner that works with clients her age and with similar wealth. And you’re right, I do favor fee-only financial planners too.

She could check out the fee-only planners at the Garrett Planning Network. The planners break down money questions into pieces as opposed to coming up with a comprehensive financial plan. That limits the overall cost of their fees and advice. (They can do the broader plan but their business model allows for the cheaper option.)

The website of the National Association of Personal Financial Advisors is a portal into the fee-only advisor universe. The problem here is that most of the planners concentrate on high net worth clients, but it’s worth a look. The Alliance of Cambridge Advisors is another fee-only network