Strategic Financial Planning over the Lifecycle
A Conceptual Approach to Personal Risk Management

This is a final-year college level textbook on personal finance, jointly written by business school and mathematics professors.

Narat Charupat (Author), Huaxiong Huang (Author), Moshe A. Milevsky (Author)

9780521764568, Cambridge University Press

Hardback, published 28 May 2012

382 pages, 20 b/w illus. 59 tables
22.9 x 15.2 x 2.2 cm, 0.64 kg

'This book is unique in deriving the formulas for annuity pricing from basic economic theory, making it useful for finance practitioners and, importantly, intellectually satisfying.' Eytan Sheshinski, The Hebrew University, Israel

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.

1. Introduction and motivation
2. Mathematical preliminaries - working with interest rates
3. Personal balance sheet and human capital
4. Consumption smoothing and optimal savings
5. Debts, loans, and mortgages [Canadian content]
6. Personal income taxes [Canadian content]
7. Risk, utility, and insurance
8. Mortality risk and life insurance
9. Investment and diversification
10. The mathematics of portfolio diversification
11. Housing decisions
12. Pensions and retirement [Canadian content]
13. Advanced material*: Part I. Continuous time and the calculus of variations
14. Advanced material*: Part II. Stochastic optimal control and the HJB equation
15. Concluding thoughts and next steps.

Subject Areas: Personal finance [VSB], Business strategy [KJC], Finance [KFF]