A risk plan

Eleven chapters, in the order you would actually do them.

1. Insure what would be catastrophic

Term cover sized on your own arithmetic: outstanding loans, plus annual expenses times years until dependants are independent, less existing assets. Chapter 3.

Health cover that does not end when a job does.

Disclose everything on the proposal. IRDAI is explicit that wrong disclosures can lead to a denied claim, and the claim is made by people who cannot fix it then.

Use the 15-day free look period to read what you actually bought.

Name a nominee and keep it current.

2. Hold cash for what is merely disruptive

Three to four months of essential outgoings for stable dual income, six for a single earner with dependants, nine to twelve for variable income. Chapter 4.

Available and stable rather than productive. The forgone return is the premium, and it buys the ability to leave everything else alone.

3. Match every pot to its date

Chapter 12 of the fixed income subject, and the most load-bearing habit in this course.

Needed	Where
Any day	Cash
Under 3 years	Deposits or short-duration debt, maturity matched
3–10 years	Mixed, duration matched to the date
Over 10 years	Mostly equity

Money with a date in one row held in an instrument from another is where most avoidable damage happens.

4. Remove the risk you are not paid for

Chapter 5. Diversify across holdings and asset classes, and count exposures rather than holdings — four assets with one driver is one bet.

Then chapter 7: find your largest single exposure. For most employed people it is their employer, counting salary, bonus, options, shares and often the local property market. Sell vested shares down rather than holding them.

5. Size so that being wrong is survivable

Chapter 7's arithmetic: an 80% loss needs a 400% gain to recover. Size by what you can afford to lose, treat correlated positions as one, and trim a winner back towards the size you originally chose.

6. Set the allocation to the lower of capacity and tolerance

Chapter 11. Capacity is what your circumstances absorb; tolerance is what you will actually hold. The optimal portfolio you abandon in year three returns less than the modest one you keep.

Estimate tolerance in rupees, and from what you did in the last fall rather than from a questionnaire.

7. Protect the years around retirement

Chapter 8. Sequence risk is small while adding money and largest when starting to withdraw. Hold several years of spending outside equities, reduce exposure gradually into the transition, and keep the withdrawal flexible — taking slightly less in bad years is the most effective single lever.

8. Build the structures that fix behaviour

Chapter 9, and these work where resolve does not: the emergency fund, horizon matching, automation, a written plan, and checking less often.

Then measure your own gap. Your XIRR against the fund's published return over the same period, once. It is usually larger than any fee you have worried about.

9. Apply the fraud filter to everything

Chapter 10, before any money moves:

1. Registered, and verified on the regulator's own site?
2. Any return assured or implied as certain?
3. Does the money go to my account or theirs?
4. Why the urgency?

One failure ends it.

The page

Write it, date it, keep it:

• What is insured, for how much, and where the documents are.
• How many months of cash, and in what.
• Each pot of money: what it is for, when it is needed, where it sits.
• The largest single exposure, and whether it is deliberate.
• The allocation, and the reasoning.
• What would make me sell — specific, checkable reasons.
• What would not — a bad year, a bad quarter, somebody else doing better.

The last two are the point. During a severe fall you read the page rather than deciding afresh, and you find out whether the reasons you wrote while calm still apply.

What the plan is not

It does not predict anything, and it does not need to. Every item is a structure that works whatever happens, which is why none of it requires a view on markets.

It does not remove risk. It removes the uncompensated risk of chapter 1, and arranges the rest so that volatility stays volatility instead of becoming permanent loss.

And it is dull. The things that work in risk management are all dull, which is most of why they are skipped.

The point

Insure the catastrophic, hold cash for the disruptive, match every pot to its date, remove what you are not paid for, size so being wrong survives, allocate to the lower of capacity and tolerance, protect the retirement transition, build structures rather than relying on resolve, and run the fraud filter on everything. Then write it on one page, dated, so a bad market meets a decision you already made.