In what Milevsky calls a “very different book than what I usually write,” The 7 Most Important Equations for Your Retirement: The Fascinating People and Ideas Behind Planning Your Retirement Income () not only looks at financial equations, but those responsible for coming up with them.

The seven people profiled in this book are responsible for shaping modern retirement calculations. Although they are now all dead, having been born as early as 1170 and as late as 1915, they made it possible to calculate things like how long your retirement income will last and how much you can spend every year.

And, although it is a little different from the usual financial how-to guides Milevsky writes, this recently published book has already created some buzz.

calls Milevsky “a rock star on the adviser lecture circuit,” for his approach, making him, “one of the most important educators on retirement finance today.” AdvisorOne published several excerpts from the book.

The 7 Most Important Equations for Your Retirement straddles different genres – financial mathematics, actuarial science, retirement planning and biography, says Milevsky. But as “it’s not really enjoyable to think about finances or to talk about them,” he’s hoping this book will change that by spurring interest in the people who first developed the equations and calculations. “Hopefully, reading about the great scholars in this field will get people thinking about their own financial life.” The financial part, they will “absorb almost by osmosis.”

Who would know they’re learning about financial planning when they’re reading about a “comet-chasing astronomer following his father’s suspicious death and a plot to kill the King of England?”

That was Edmond Halley, the King of England’s personal astronomer, as well as a geophysicist, military engineer, physical geographer and surveyor. He catalogued stars and mapped the Earth’s magnetic fields. Halley's Comet was named after him. He was also publisher and editor of Sir Isaac Newton’s principles. Halley came up with an equation to figure out pension annuities in 17th century England, at a time when many London residents had been promised lifetime pensions. No one knew how much money would be needed to fulfil the promise, and Halley's work provided the first formal model.

Moshe Milevsky. Photo by Finn O'Hara Photography

The goal is to get people talking, says Milevsky. “At a basic level, this book is really about seven different conversations.”  Conversations people should be having when doing retirement income planning. They are important because most of those heading into retirement “are not saving enough money to maintain their current standard of living,” but also “many are financially illiterate,” he writes.

For instance, “You can’t have an intelligent financial plan about retirement income without a conversation about your legacy,” he says. Life insurance becomes part of that discussion. That’s where Solomon S. Huebner comes in with his concept of human life value or human capital value – the present value of all the wages, salary and income a person will earn over their working life. He believed that human life value should be insured like property.

What will draw people in are the interesting people Milevsky brings to life as he shows that the retirement field as a science has solid foundations and an illustrious history. And although there are equations in the book, they are presented as art pieces at the beginning of each chapter.

Another of those people was Leonardo Fibonacci, who created present value analysis to calculate how long capital will last at a certain interest rate and given certain withdrawals. He devised this calculation in 13th century Pisa, Italy, well before calculators were invented. His technique is still taught to first-year business school students with only slight modifications 800 years later, says Milevsky. So if you have $300,000 in savings for retirement – how long will it last?

Benjamin Gompertz achieved scientific immortality. An Englishman who wasn't allowed to attend university because he was Jewish, Gompertz developed the most famous mathematical model of human mortality, answering the question, "How long does the money have to last or how long will a person live?" He studied the odds of living until any given age and came up with the Gompertz law of mortality.

Beyond the financial aspects, Milevsky is interested in fostering the adoption of these seven as heroes of the retirement field. “There’s enormous literature on these people already, but they’re not widely known outside their own narrow areas.

“These are seven key figures in the history of ideas. Anyone who believes themselves an intellectual, or at the very least would like to retire someday, should know about these people,” says Milevsky. “One thing is for certain. Every one of them is fascinating.”

Milevsky has won two National Magazine Awards for his popular writing. He is also the author of Your Money Milestones (FT Press, 2010), Are You a Stock or a Bond? (FT Press, 2009) and The Calculus of Retirement Income (2006). He is a fellow of the Fields Institute for Research in Mathematical Sciences and executive director of its . He received a lifetime achievement award in 2009 from the Retirement Income Industry Association in the United States.

By Sandra McLean, YFile deputy editor

Republished courtesy of YFile– 91��ɫ’s daily e-bulletin.

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The Toronto CFA Society has chosen four group finalists, including a team of Schulich School of Business students, in the annual CFA Institute Research Challenge, an equity research competition for student teams from the world’s top university business and finance programs.

“The CFA Institute Research Challenge is a unique, global competition and the Schulich team dedicated a lot of hours and a lot of hard work to make it into the local final,” said Pauline Shum, director of the Master of Finance program at Schulich.

“The CFA Institute Research Challenge asks student teams to work with a CFA [chartered financial analyst] mentor to research, analyze and present a detailed equity research report on a subject company. The Schulich team worked with CFA Dale Powell from Morningstar Canada to research Onex Corporation, a Canadian private equity company.”

Above: From left, Rebecca Schoenhardt, Zac Wang, Shane Dixon, Malcolm MacQuarrie and Sean Moore

In the report, the Schulich team had to analyze every aspect of the company to come up with a 12-month valuation target. “It was quite the challenge because Onex is a very complex company, but the team demonstrated solid, thorough research and valuation skills, used strong technical writing, presented their data and analysis in a creative fashion and managed team dynamics effectively,” said Shum

On March 1, Schulich students Shane Dixon (MF ’12), Sean Moore (MF ’12), Malcolm MacQuarrie (MF ’12), Rebecca Schoenhardt (MBA ’12) and Zac Wang (MF ’12) will present their research to a panel of judges at the BMO Customer Care Centre in Toronto. They will compete against teams from University of Waterloo, Wilfrid Laurier University and the University of Toronto, Scarborough.

The winning team will be determined based on the quality of its written analysis and presentation, and will qualify for the regional North American competition in New 91��ɫ City on April 10. The regional winner will advance to the global final in New 91��ɫ City on April 11.

“Being selected to represent Schulich in the regional finals of the CFA Institute Challenge is both an honour and a pleasant confirmation of all the hard work our team committed to,” said Schulich team leader Dixon. “Participating in the challenge has been a great learning experience. Not only have we developed a greater understanding of the mechanics of a formal research report, general investment research and valuation techniques, but also an appreciation for the virtues of teamwork.”

Everyone on the team came to the table with a different background. “This gave us a wide range of skills and perspectives to tap into to build the report, encouraging us to think outside the box and it ultimately concluded in a more well-rounded report. In fact, I’d say some of the strongest areas of our report resulted from our team brainstorming sessions,” said Dixon.

The CFA Institute Research Challenge is an annual educational initiative designed to promote best practices in equity research among the next generation of analysts through hands-on mentoring and intensive training in company analysis and presentation skills.

Local CFA societies, including the Toronto CFA Society, together with the CFA Institute, hold local competitions involving teams of three to five business and finance students from participating universities who work directly with a local company and a mentor.

More than 2,500 students from 546 universities around the world participated in the 2010-2011 competition, according to CFA Institute.

For more information on the challenge, visit the website.

Republished courtesy of YFile– 91��ɫ’s daily e-bulletin.

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Since 2000, the amount of start-up financing provided by traditional sources in Canada, including private equity and labour-sponsored funds, has significantly dropped. Predictably, the total pales in comparison to the United States, a much more welcoming environment for small business. Canada's Venture Capital and Private-Equity Association reported the industry raised less than $1 billion in venture funds in 2009 compared to $3.9 billion in 2001. And the credit crunch has left Canadian banks even more risk-averse when it comes to small-business loans.

That has left private investors, or so-called "angels," to pick up the slack. Even then, jaded entrepreneurs quip, the best chance of striking a deal is an appearance on "," CBC's hit television show that brings them face-to-face with potential investors.

But Matthew McGrath, president of Toronto-based P2P Financial Inc., has a plan to help venture capital in Canada get back on its feet. Last September, the former Royal Bank vice-president launched P2Pfinancial.ca,a virtual marketplace that brings together accredited well-heeled individuals with would-be entrepreneurs seeking capital usually in the range of $25,000 to $1 million.

. . .

, a professor of finance and entrepreneurship [and Ontario Research Chair in Economics and Cross Cultural Studies] at 91��ɫ University's Schulich School of Business, says businesses such as P2P will play an increasingly important role in venture-capital markets, particularly as they develop and become better established. As they do, capital flows should free up and new mentoring relationships will be fostered between experienced business leaders and budding entrepreneurs.

"The importance of the angel investment market is huge and cannot be overstated," Cumming says. "Without it, the number of new successful innovations and patents generated in the country will remain well below potential."

Posted by Elizabeth Monier-Williams, research communications officer, with files courtesy of YFile– 91��ɫ’s daily e-bulletin

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The sharp spike contrasts with little change in the short selling of companies that borrow money from banks, according to the research.

“Hedge fund lenders, like banks, are ‘quasi-insiders’ and thus privy to private information about the performance of borrowing firms,” the authors of the paper write. “However, hedge funds are not subject to the same degree of oversight and regulation as banks.”

“It’s impossible to know if it’s hedge funds that are doing the shorting, but our study raises important questions about regulating hedge funds when they make loans,” says Debarshi Nandy, Assistant Professor of Finance at , one of the co-authors of the paper. The other researchers are [Associate Professor] and [PhD candidate] Keke Song, both also from 91��ɫ, and Anthony Saunders, at New 91��ɫ’s Stern School of Business.

The paper has been accepted for coming publication in the Journal of Financial Economics and tracks the trading of 105 U.S. companies that borrowed money from hedge funds between January 2005 and July 2007—a period when regulators began demanding more information about short selling.

The academics found that the average company receiving a new loan from hedge funds saw a 74.8% spike in the volume of short sales during the five days preceding announcement of the new loan, as compared with the volume of short selling 60 days before the deal.

The study was funded by a Social Sciences and Humanities Research Council of Canada () standard research grant.

Read the full article in .

Republished courtesy of The Schulich School of Business' .

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