Are You a Stock or a Bond?

Are You a Stock or a Bond?

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a€œMoshe Milevsky offers an original and clear re-thinking of the most fundamental concept in onea€™s financial lifetime: the management of risk, in all of its not-so-obvious dimensions.a€a€”Nick Murray, author, Simple Wealth, Inevitable Wealth a€œThis book is another example of Moshe Milevskya€™s ability to make the complex excellent primera€”for both advisors and their clients alikea€”on the a€˜How Tosa€™ of effective retirement income planning.a€a€”Jim Rogers, CFP, 2008 President, The Million Dollar Round Table (MDRT) a€œIn this new book, the author presents a holistic framework for investors and advisors to think about critical issues that impact investment decisions, such as human capital, mortality risk, and longevity risk. But even more importantly, Milevsky presents practical solutions that we can all follow to achieve financial security throughout our lives. This book is a must-read for everyone in the financial services industry.a€a€”Peng Chen, CFA, Ibbotson Associates a€œThis is an extremely timely and valuable book. Our financial lives have never been more complex, and the challenges for many are daunting. Milevsky provides a new perspective that can really help people make better financial decisions and attain a greater level of financial security.a€a€”Matt Greenwald, President, Mathew Greenwald a Associates a€œThe author has written an instant classic that will help people become better-educated retirement customers and also help financial advisors improve their professional skills.a€a€”Francois Gadenne, Chairman of the Board and Executive Director, Retirement Income Industry Association (RIIA) a€œMilevsky delivers one of the best books to date on personal financial planninga€”a refreshing blend of content, conceptual correctness, and clarity. Buy it. Read it. Do it.a€a€”Richard M. Ennis, Chairman, Ennis Knupp a Associates; Editor, Financial Analysts Journal In an era when traditional corporate pensions are disappearing, Social Securitya€™ s sustainability is in question, healthcare costs are skyrocketing, and society is dumping more and more financial risk squarely onto your shoulders, Moshe Milevsky helps you comprehensively integrate all the opportunities and risks in your life: your career risks, your portfolio risks, your housing risks, and even your personal inflation and longevity risks that could lead you to financial regret and a ruined retirement. Then, he introduces a powerful, new framework for thinking about and managing your financial future that you can use to systematically reduce your vulnerability to each of these risks and, thus, generate long-term financial security. To maximize your investment returns and protect yourself and your family, you must learn to think of yourself as a small company, with assets, liabilities, a balance sheet, an income statement, and real shareholder equity. The composition and choices you make with your financial capital should reflect the nature and security of your career or job, which is your unique a€œhuman capital.a€ So, for example, if You, Inc. is like a a€œstock, a€ make sure your retirement savings are tilted toward a€œbonds.a€ If your job is more secure and You, Inc. is essentially a a€œbond, a€ then make sure your retirement savings are tilted toward a€œstocks.a€ Get personal with your investments and make your financial capital serve and protect your human capital. Factoring in your unique a€œhuman capitala€ adds a new dimension to financial planning which is a critical next step for sound and effective investing.I found it quite surprising and perhaps even depressing that 23.5% of people above the age of 75 actually had credit card debt. ... I actually have no problem with retirees taking on debt to finance their lifestyle, but perhaps a reverse mortgage or other, cheaper forms of debt would ... Economists summon the so- called a€œlifecycle hypothesis, a€ to describe the change in financial net worth or wealth as we age.

Title:Are You a Stock or a Bond?
Author:Moshe A. Milevsky Ph.D.
Publisher:FT Press - 2008-08-27


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