Tables of Contents

Preface

Acknowledgements

Part 1

1. The Wealth Engine

Part 2

2. Pension

Defined Benefit Pension Plans

Defined Contribution

Choice of Portfolio and Pension Fund Manager

Annuity

Commutation

Family Benefit

Pension of Government Employees

Pension under Employees' Provident Funds and Miscellaneous
Provisions Act, 1952

New Pension Scheme (NPS)

3. Equity — Passive Exposure Approach

Absolute Returns from Equity

Equity and Inflation

Rolling Returns from Equity

4. Equity — Active Exposure Approach

Standard Terms in Equity Analysis

Types of Shares

Risk in Equity Investing

Value Drivers in Equity Market

Management of Equity Portfolio

Pearls of Wisdom and Best Practices

Investment Fables

Five Issues of Particular Concern

Three Cognitive Biases

Ten Lessons for Investors

5. Equity — Business Value Approach

6. Debt

Interest

Instruments

Absolute Returns from Debt Securities

TRI Returns and Inflation

Rolling Returns from Debt

Risks in the Debt Market

Yield to Maturity and Price

Debt Valuation

Investment Style

Management of Debt Portfolio

7. Insurance

Types of Life Insurance Products

How Much Life Insurance is Adequate

General Insurance

Part 3

8. Mutual Funds

What is a Mutual Fund?

Scheme and Units

Types of Schemes

Schemes versus Options or Plans

Scheme Selection

Investors in a Mutual Fund Scheme

Systematic Investment Plan (SIP), Systematic Withdrawal Plan
(SWP), Systematic Transfer Plan (STP)

Benefits of Investing in Mutual Funds

Exit from Mutual Fund Schemes

Comparison with Other Investment Products

Appendix 8.1: SIP — NAV up 1%

Appendix 8.2: SIP — NAV down 1%

Appendix 8.3: SIP — Random

9. Alternate Assets

Gold

Real Estate

Art

Temptations

10. New Investment Structures

Portfolio Management Schemes (PMS)

Hedge Funds

Venture Capital (VC) / Private Equity (PE) Funds

Angel Networks

Structured Notes

Derivatives

Structured Obligations

Securitisation

Evaluating a New Investment Structure

Part 4

11. EconoView — Economy and Markets

Appendix 11.1: Will the Tremors of Japan Hit the World Economy?

Part 5

12. Cash Flow Planning

Future Value of Bullet

Future Value of SIP

Pitfalls of Future Value Calculations

Cash Flow Planning for the Wealthy

13. Asset Allocation

Asset Classes

Portfolio Performance Analyses

Asset Allocation Types

14. Succession Management

Dear Business and Enduring Business

Stakeholders in Enduring Businesses

Best Practices in Succession Management for Family Businesses

15. Tax Planning

Income Tax Concepts

Setting Off Capital Gains and Losses; and Speculation Profits
and Losses

Taxation of Mutual Funds and Other Investments

Wealth Tax

Direct Tax Code (DTC)

16. Liability and Leverage Management

Business Debt

Personal Debt

Leverage

17. Estate Planning

Assets and Associated Records

Liabilities and Associated Records

Scheme of Transfer of Estate

Formats for Estate Transfer

Living Will

Part 6

18. Misrepresentation

19. Insolvency and Bankruptcy

20. Scam

Stock Exchange Scams

Illiquid Asset Scams

"Exercise of Authority" Scams

Phishing and Vishing Scams

21. Circular Trading

22. Hawala

23. Illegal Transactions

24. Easy Money Schemes

Ponzi Schemes

Nigerian Scheme

Easy Loans

25. Fraud

26. MISCHIEF — Cases from India and Abroad

"Big Bull" Harshad Mehta

Nick Leeson (Barings Bank)

Ketan Parekh

Worldcom

Bernard Madoff ( Ascot Partners)

Ramalinga Raju (Satyam)

Shivraj Puri (Citi)

Part 7

27. Financial Planning Tradition

Steps to Financial Planning

Comprehensive Financial Plan and Goal-Oriented Investing

Tips and Tricks

28. 3-D Framework for Optimal Portfolio (3-D FOP)

Risk Profile and Model Portfolio

3-D Framework

Towards an Optimal Portfolio

Speculative Component in Portfolio

3-D FOP Profile

29. SSELECTIVVELLY-Invest Classification Scheme for Investment Products

Why a Standard Classification Scheme is Essential

SSELECTIVVELLY-Invest

The SSELECTIVY Sub-set

30. Risk Management and Recovery Framework

Risk Management Framework

Selection of Market Intermediaries

Recovery Framework

31. Financial Blood-Test Report (FBR)

The Financial Planning Ritual

The Financial Blood-Test Report (FBR)

Conclusion

32. Building a Sustainable Financial Advising Organisation

Financial Adviser — Generalist or Specialist?

The Role of Fees

Know Your Customer (KYC)

Client Management

Likely Shape of the Industry

33. Ethics in Financial Advising

Key Ethical Standards

Association of Mutual Funds in India (AMFI) and Code of
Ethics [ACE]

AMFI Guidelines and Norms for Intermediaries [AGNI]

34. Dawn of a New Era of Riches

Wealth Engine — the Indian Context: Points to Ponder

Wealth Engine — the Story So Far

What is Rich?

How Much is Enough?

A Balance in Life

Negative Balance — No Aspiration, No Drive

Institutionalising a Positive Balance — The Heart of Giving

Virtuous Wheels of Earning and Giving

Annexure 1: Future Value of Bullet

Annexure 2: Future Value of SIP

Annexure 3: Present Value of Bullet

Annexure 4: Equated Monthly Instalment

Epilogue

Further Learning

References

Index