In the winter of 2015 when I worked as an analyst at a Swiss bank, one pressing concern was an acronym: DoL. A new fiduciary rule had been presented by the Obama administration’s Department of Labor and people wanted to know how it would impact the ability of the firm’s financial advisors to serve their clients. With a new President in office, the conversation today switches back the other way: does the industry need a rule to ensure its practitioners act in the best interests of their clients? The surge of opposition to an imminent repeal of the rule has resulted in a further piling-on from either side of the argument. The point here is not for me to argue in favor or against the DoL rule, but rather to highlight that it’s one of the countless aspects of a person’s financial life prone to uncertainty, tethered to the whims of the latest politician to sit on the iron throne.
Rajesh Jyotishi’s practical handbook on retirement and estate planning outlines the variables that one will encounter in the use and preservation of wealth in the United States. It’s a book geared towards the specific concerns of Indian Americans, whose finances often navigate complex family and business needs across multiple continents. Importantly, Jyotishi helps the reader understand the facets of their financial life beyond assets and liabilities. Whether working in California or retired in Karnataka, to give oneself the highest probability of adequately safeguarding wealth and securing the family’s future, there’s a lot more to consider than one might imagine. The journey begins with an inquiry and an open discussion, because it’s not just the breadwinner(s) who have something at stake when it comes to finances.
Here’s what this book isn’t: an academic tome on advanced estate planning strategies, an analysis of the global commodities markets, or even a how-to on picking stocks. Rest assured though, Jyotishi appears to have had the requisite textbooks on his mind as he penned this conversational book, which from the opening chapters details how he built his business and learned the nuances of the financial services industry.
Personal anecdotes and case studies provide the reader further comfort in his ability to survey the landscape and point out its hazards. Jyotishi also shines in his clarity, especially detailing the complexities involved with our trisul of modern society: money, life and death. Take this bit of advice on healthcare in the case of parents newly arrived from India: “a person receiving tax credits [to help pay for insurance] must also file a tax return in the United States and cannot be dependent on someone else’s tax returns.” His strategy calls for families to provide a monthly paycheck to their parents (as caregivers) through their business, and not claim the parent on their tax returns. Uncertainty around Obamacare notwithstanding, how many people were aware they could subsidize eldercare in this way?
Without resorting to any sort of fear-mongering, Jyotishi dispels the idea that these issues are self-explanatory—but he reminds us that through targeted attention, one can quickly gain a suitable level of understanding around healthcare, estate planning, retirement income strategies, and other important issues.
Books such as Malkiel’s A Random Walk Down Wall Street, Bogle’s Little Book of Common Sense Investing, Graham’s The Intelligent Investor, and even Buffett’s famous shareholder letters, may be in our bookcases, but they’re of little use when one’s income suddenly stops due to catastrophic injury, or one’s retirement plan of “moving in with the kids” is met with the blank stare of repudiation. Jyotishi’s book helps you to ask the practical questions first. He also gets you to consider the possibility of outliving your assets, of not adequately factoring inflation into your nest egg, of planning around stock market uncertainty, of getting the right legal documents in order for wealth transfer after one’s passing —especially important for business owners—and numerous other considerations that come well before “should I buy on margin?”
This is an important book for all the reasons mentioned above, but I did find it to be tone deaf in some parts: “The challenges of having too much money in retirement plans,” as a subheading would make 80% of Americans cringe—though that’s a style consideration versus one of content. The detailing of next steps wasn’t explicit enough for me, although these are numerous and differ by individual need —but I wouldn’t have hesitated to recommend that the reader hire an advisor on a one-time, flat-fee basis to draw up a financial plan that shows, with great specificity, what parts of one’s financial life are being adequately addressed, and where the blind spots are located.
I’m also a bit dismayed by some of the subtextual politics: for all the talk of tax avoidance, there’s no mention of what taxes actually do. Particularly in the case of estate taxes, which many economists argue as being one of the most progressive parts of the American tax code; its proceeds could, for example, single handedly fund the EPA’s annual budget more than twice over. While these are areas where a client should be free to make their own judgment, it’s certainly the professional’s duty to point these things out. I’d also delete the aggressively off-putting foreword— but that’s what second editions are for!
Monal Pathak has a background in economics and environmental science, and has spent time working in both consumer and investment banking. He writes from Seattle.