Strategic financial planning over the lifecycle : a conceptual approach to personal risk management / Narat Charupat, Huaxiong Huang, Moshe A. Milevsky.

Includes bibliographical references and index.

"This book on personal financial planning and wealth management employs the lifecycle model of financial economics. The central idea of 'consumption smoothing' is used to connect chapters and topics such as saving and investment, debt management, risk management and retirement planning. The first part of the book is nontechnical and aimed at a wide audience with no special technical background. The second part of the book provides a rigorous presentation of the lifecycle model from first principles using the calculus of variations. The accompanying website is found at http://www.yorku.ca/milevsky/?page_id=185"-- Provided by publisher

"This book project grew out of the deep frustration two of the three authors have experienced for many years, trying to teach a practical yet rigorous course on personal - in contrast to corporate or investment - nance, to undergraduate and graduate students at Canadian business schools. Although there are many college level textbooks that discuss the tactical aspects of personal .nance - nuggets such as: credit card debt is bad, reduce fees on mutual funds, regular saving is important, have a budget, etc. - we have not come across a textbook that integrated all these disparate concepts into a conceptual or strategic framework for financial decision-making, based on sound economic principles"-- Provided by publisher

Print version record.

Cover; STRATEGIC FINANCIAL PLANNING OVER THE LIFECYCLE; Title; Copyright; Dedication; Contents; Acknowledgments; 1 Introduction and Motivation; 2 Mathematical Preliminaries -- Working with Interest Rates; Learning Objectives; 2.1 Interest Rates; Learning Objectives; Learning Objectives; Learning Objectives; Learning Objectives; Learning Objectives; Learning Objectives; Learning Objectives; Learning Objectives; Learning Objectives; Learning Objectives; Learning Objectives; Learning Objectives; 2.1.1 Effective Annual Rate (EAR) and Annual Percentage Rate (APR)

2.2 Time Value of Money -- Definitions2.3 Present Value and Future Value of a Single Cash Flow; 2.4 Present Value of an Annuity with Constant Payments; 2.4.1 Ordinary Annuity; 2.4.2 Annuity Due; 2.5 Future Value of an Annuity with Constant Payments; 2.5.1 Ordinary Annuity; 2.5.2 Annuity Due; 2.6 Present Value of an Annuity; 2.6.1 Constant-Growth Ordinary Annuity; 2.6.2 Constant-Growth Annuity Due; 2.7 Future Value of an Annuity; 2.7.1 Constant-Growth Ordinary Annuity; 2.7.2 Constant-Growth Annuity Due; 2.8 A Preliminary Discussion of the Effects of Inflation

2.9 Appendix: Geometric Progressions and Annuity Relations2.10 Questions and Assignments; 3 Personal Balance Sheet and Human Capital; 3.1 Personal Balance Sheets; 3.1.1 Financial Assets; 3.1.2 Gross Human Capital; 3.1.3 Explicit Liabilities; 3.1.4 Implicit Liabilities; 3.1.5 Economic Net Worth; 3.2 Estimation of Gross Human Capital; 3.2.1 What Is Proper Discount Rate for Gross Human Capital?; 3.3 Estimation of Implicit Liabilities; 3.4 An Example of Human Capital Decisions: Investing in Education; 3.4.1 Some Caveats; 3.5 Questions and Assignments; 4 Consumption Smoothing and Optimal Savings

4.1 Consumption Smoothing4.2 Assumptions for Consumption Smoothing; 4.3 Solving for Smoothness; 4.3.1 Effects of Changes in Other Parameter Values; 4.4 Consumption Smoothing vs. Other Approaches; 4.4.1 The Fixed-Percentage Savings Rules; 4.4.2 The 70'045 Income Replacement Rule; 4.5 Practical Considerations; 4.6 Questions and Assignments; 5 Debts, Loans, and Mortgages [Canadian Content]; 5.1 Mortgage Financing; 5.1.1 Mortgage Amortization; 5.1.2 Mortgage Insurance; 5.1.3 Mortgage Refinancing; Case 1: Do Not Refinance the Loan; Case 2: Refinance the Loan

5.1.4 Fixed-Rate vs. Floating-Rate Loans5.2 Borrowing to Invest; 5.3 Debt Consolidation; 5.4 Is Debt Good or Bad?; 5.5 Questions and Assignments; 6 Personal Income Taxes [Canadian Content]; 6.1 The Logic of Income Tax Calculations; 6.1.1 Federal Income Taxes; 6.1.2 Provincial Income Taxes; 6.1.3 Combining Federal and Provincial Income Taxes; 6.2 Investment Income; 6.2.1 Interest Income; 6.2.2 Dividend Income; 6.2.3 Capital Gains/Losses; 6.3 Income Tax Planning; 6.3.1 Income Splitting; 6.3.2 Tax-Deferred Investment Vehicles; 6.3.3 Tax-Free Savings Accounts (TFSAs); 6.3.4 RRSPs vs. TFSAs

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