Full Book

Young investors face a daunting financial planning challenge. You can’t know yet how well your career or business ventures will turn out, or predict your spending needs over as many as six decades to come. But as a younger investor you also have the advantage of flexibility. This book explains Bernstein’s proprietary framework for planning over very long time horizons, which adapts our core/surplus capital framework to the needs of younger investors. Case studies address the particular planning concerns of The Young Professional, The Inheritor, The Entrepreneurs, and The Corporate Executive.

The book explains our approach to retirement saving and analyzing life-insurance needs, as well as tax-efficient wealth transfer techniques and charitable-giving strategies. It also includes basic reviews of investing, estate-planning, tax, and debt-management issues, and checklists on marriage, a first child, and suddenly acquired wealth.

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Uncertainty about future income and spending needs makes long-term planning difficult for younger investors, but greater flexibility and time gives them an advantage. In this chapter, we explain how to map the timing and hierarchy of your goals, understand your human and financial capital, set your target financial capital, and understand what surplus capital you may have. We look at case studies and key issues, such as whether to pay down debt and how much to save for retirement.



Planning for your family’s needs can be difficult. In this chapter, we review estate-planning basics, educational savings plans, and tax-efficient ways to transfer wealth to family and friends. We also explain how we quantify the life insurance you may need, even if you will leave substantial wealth behind. Finally, we discuss some solutions to problems that wealth can create in a divorce or if children do not share your work ethic.



Giving money or securities to organizations and causes can make the world better—and provides the donor with a way to avoid, not merely defer, a substantial portion of tax otherwise due. In this chapter, we review and quantify the advantages and disadvantages of tax-efficient charitable giving strategies, from the simple to the highly complex.



Investing can seem overwhelming. But if you want to preserve your independence and security, fund your children’s education, or meet other goals, you cannot afford to neglect investing your wealth. This chapter explains the basics of investing that you should learn, even if you choose to entrust management of your investments to someone else. It will also help more knowledgeable investors to understand the logic behind our approach to financial planning.


PERSONAL FINANCE: Making Sense of It

It’s hard enough for recent college graduates to land a decent job. Then, you have to figure out how much you can afford to pay for rent, especially if you’re burdened with student loans, and still save for other goals. Learning how to be a financially responsible adult isn’t easy. Here are some pointers.