How To Become Your Home CFO
You are who you choose to become.
For my career journey, the thing I chose to become one day was a Chief Financial Officer (CFO).
For years, I went through all kinds of training, everything from becoming a Chartered Accountant to even doing an Executive MBA.
I even had to work for at least a decade before I had what it took to become a CFO.
Today though, although I still work as a CFO (for an Investing Business), I’ve had certain mindset shifts about work and life.
I’ve come to realise that we’re in the age of Portfolio Careers, where the skill of a CFO is only one super power that I have.
When not outsourcing my skills as a CFO, I also own and run my own business and joint ventures.😎
Other superpowers (to humbly name a few I’ve acquired over time) include the fact that I’m:
- An investor,
- A strong communicator,
- Emotionally intelligent,
- Can create and build digital assets,
- Use the internet as a net producer,
- I’m Financially Independent, etc.
Stacking these super powers on each other gives me a unique advantage that no one else can match or replicate exactly.
This talent stacking also creates opportunities like never before.
What’s interesting though is that it was through acquiring the skills of a CFO that I was able to broaden my abilities to other areas.
My journey towards becoming a CFO, for example, gave me an understanding of numbers (assets, liabilities, cashflow, etc) that most don’t have.
It also gave me Executive experience and an understanding of strategy and responsibility like nothing else that I have ever done.
Today, I’m sharing lessons learned from my role as a CFO and how it can help you transform your financial life as a CFO of your home.
My Real Job as a CFO
Before we talk about how becoming your home CFO can serve you, I’d like to share what my job as a CFO actually entails.
At a high level, the role is about leadership, strategy and financial responsibility.
Below are some details about my role and we’ll connect this to your Personal Finances shortly.
Showing leadership in these areas:
- People – Managing a small team and taking responsibility for their growth and development.
- Responsibility – I hold the number one role and responsible for making sure our business does not go broke!
The important role involves oversight over:
- Financial position – Basically, managing the balance sheet of the business. For Personal Finances, this is your Net Worth.
- Financial Performance – Managing the Profit & Loss of the business to ensure that we’re profitable enough.
- Cash Flow – Ensuring that we have enough cash (liquidity) to meet our daily obligations.
- Budgeting – Annual budgeting process for the business and month review against actual performance.
- Financial Modelling – Modelling business cases and scenarios for all kinds of possibilities so that we can prepare adequately for them.
This is a particularly important area of my work as a business adviser to the Board:
- Goal Setting – Working with the senior team to set SMART business goals.
- Strategy – Advising the Board on strategy and taking steps to deliver that strategy
- Tactics – Coming up with weekly tactics to deliver on our strategy.
These areas of responsibility are there to stop bad things happening:
- Process – steps to ensure things are done efficiently and easily.
- Reporting – Various types and to various people aka stakeholders
- Governance – Basically, keeping those who need to know in the know.
That fun list continues and includes things such as Compliance, etc.😅
The one word I want you to note in all this responsibility.
This word comes from the same family as my other favourite word, commitment as I explain in The Case for Commitment.
I’ve outlined the above summary job spec to give you an idea of what this super important role involves.
Now let’s look at why it’s important to have a home CFO and who should take on that role.
Why Become Your Home CFO
Here are some of my top reasons for why you and/or your partner should become your home CFO:
1. Family Vision
Setting a financial goal is an easy enough thing to do, but delivering on that goal is quite something else.
If you’re in a relationship or part of a family, to improve your chances of success, someone has to own that goal.
What I’m referring to here is your main North Star goal.
The CFO is responsible for moving you on from being ‘Fearless Dreamers’ to becoming ‘Dream Makers’.
Dream Makers take massive action.
The CFO makes a case for how the vision will be delivered and encourages dialogue over the family vision.
One such vision could be the journey to become Financially Independent driven by a strong why.
The CFO is the person who reminds everyone about the vision when it’s time to book that expensive holiday.
He or she is responsible for owning the plan for freedom, protecting it against even their own moments of weakness.
I almost see them playing the role of the light bearer.
On our journey to Financial Independence, I was that light bearer but with my wife’s input on all things.
I was responsible for fighting the resistance in order to protect our family resources.
2. Stop Being Broke
A lot of homes are broke because no one has a solid grasp on what is going on.
There is no division of labour and no one has made it their thing to fight for the family’s finances.
A home CFO is the gatekeeper and will make it part of their day-to-day responsibility to understand the details of home finances.
If a family is currently living pay cheque to pay cheque, it is the CFOs role to diagnose the issue as a cash flow problem and take the necessary steps.
They are responsible for ensuring that you spend less than you earn and that margin necessary for the beginnings of a journey to freedom.
3. Generational Wealth
I get invited a lot to speak about General Wealth by the ethnic minority groups.
Part of the reason for this is because unusually, we (me and my siblings, parents, wife, etc) have been able to build wealth together.
What has been interesting about this is that in each of our households, there has always been a CFO in charge of delivering individual family visions.
And together, all the CFOs in all our households assemble to create joint venture opportunities to build further wealth.
This covers everything from property investments to new business start-ups or even product launches.
The fact that we had a process (a CFO role) in place in each family unit meant that we had it in the extended family unit.
Together, all CFOs bring their super powers (talents and skills) together to create new opportunities and ensure tax efficient wealth transfer.
Examples of this include me and my skills in Finance, Money management, Tax, Online Businesses, etc.
But my wife, sisters, brother and parents bring skills in digital marketing, IT, Sales, Entrepreneurship, Property Management, etc.
Together, when we talent stack, we end up with unbelievable results. 👌
Who Should Become Your Home CFO?
Historically, I’ve been the home CFO at our home and reported to our Board of directors (namely me and Mary).
However, from 2020, we’ve started changing things up and I’m encouraging Mary to be co-CFO with me.
The reason for this is so that she can play a more active role in our financial lives rather than play her current oversight role.
Practically, this means that a lot of the tasks I have as a home CFO is gradually being shared between us.
If you have a partner, it is important to have a discussion about who should take on this responsibility based on your identified strengths.
You could both take this role on too.
It is important that you and your partner understand your exact roles in your financial lives and take the responsibility seriously.
This is a big step forward towards a life of Financial Independence that many will one day look at in awe.
How To Become Your Home CFO
Below are some immediate steps that you can take to become your home CFO:
The very first thing to do is to identify the need for a home CFO and create a “job” spec.
This comes by having a conversation with a partner (if you have one).
Discuss why you need someone to own this role and make it personal. Then discuss who is best suited.
2. Ongoing Learning
For a home CFO to be effective and successful over time, he or she needs to skill up and learn continually!
Reading blogs or books is not enough.
What you need is a combination of practically understanding your numbers and skilling up for who you need to become to achieve your goals.
It might be that you need coaching or skills on investing, creating an online business, working on your money mindset, etc.
Or it might be that in addition to these areas, you need accountability, encouragement, support, inspiration or motivation from like minded individuals.
If any of the above, then consider joining our newly launched Membership Programme
We’ve created the best possible resource for motivated Dream Makers seeking to be coached, to learn and take action to achieve Financial Independence.
This membership is our chosen tool to empower 10,000 families in 10 years to create a true life of Financial Joy.
Financial Joy in our lives = Financial Independence + Generous Living
3. Monthly Money Days
Diarise a money day in your calendar.
I use a system of Calendar Blocking and make our money day one of our key blocks each month.
Think of this as the day that you need to have a “Board” meeting.
In real life, I prepare to report the current state of our Financial Position, Financial Performance and Cash Flows to the Board.
The “Board” for your Personal Finances could be made up of you and your partner or kids.
4. Weekly Catch-ups
These are weekly check-ins with your other half (or family) on how things are going.
E.g. We overpaid our mortgage by x-amount this month. Or we saved x-amount this week, etc.
All with the goal of simply encouraging ongoing dialogue.
You could even do this over dinner once a week. This acts as a form of accountability.
5. Financial Position
Work out your financial net worth and begin tracking it.
This is simply the sum of all your assets less all your liabilities.
In the business world, it is known as the Balance Sheet.
Your goal as Home CFO is to grow that Net Worth through collective effort.
In particular, you want to ensure your liquid resources (cash and investments) are growing.
This is also an indicator that you’re spending less than you earn.
6. Financial Performance
Work out your budget as a family using a budgeting tool that gets you involved and encourages conversation.
You can create one yourself or use one that is recommended to you.
We personally use and highly recommend The Budget For Life.
Your goal with the budgeting process is first to. i) Understand your numbers and ii) Track Actual vs Budgeted figures monthly.
7. Celebrate Progress
As home CFO, you will be in charge of diarising times to celebrate progress in your financial goals.
Recently, I diarised fun to celebrate crossing 10K Subscribers on YouTube and being YouTube’s chosen Creator on The Rise.
Here’s Our YouTube Channel to check out and our recent fun celebration:
View this post on Instagram
★ CELEBRATING PROGRESS ★ Today is a day of celebrations!💃🏽🕺🏾 January has been a month of many surprises and successes and we're finally taking #timeout for a bit of fun 😀. Itenary for today is: 1) 2 hour lunch in East London 2) Cinema to see Queen & Slim. Seen it? Very excited! 3) Games nights with some friends. 4) Party somewhere. Who knows?!? So grateful for available parents who are looking after our boys. They even get to sleep over! Party time, peeps!! 💃🏽🕺🏾 𝗪𝐡𝐚𝐭 𝐚𝐫𝐞 𝐲𝐨𝐮 𝐝𝐨𝐢𝐧𝐠 𝐟𝐨𝐫 𝐟𝐮𝐧 𝐭𝐨𝐝𝐚𝐲?😎 #celebrate #fun #lifestyle #livelife #celebratesuccess #couples #romance #marriedlife #winning #youtuber #newyoutuber #UKYouTubers #UKYouTuber #Christianyoutuber #youtubechannel #financialindependence #financialfreedom #youtubesuccess #milestones #10Ksubscribers #growth #progress #motivation #success #onlinebusiness #sidehustle #business #faithandfinances #thehumblepenny
Celebrating helps you create anchors in your memories for good times from all your hard work and creativity.
They are necessary activities to diarise and make regular.
Becoming your home CFO is a priviledge and an important responsibility for financial success.
It is a role that has not only transformed my personal life and skillset, but it has made us financially richer and sped up our journey to Financial Independence.
I hope it’s a role that you find exciting enough to take up and own in order to begin achieving your goals.
Happy money conversations! 😀
What To Read Next>>
- Join Our MEMBERSHIP Programme
- Our 10 Year Commitment To 10,000 Families
- 10 Things I Did Differently To Become Financially Independent
- Free Overpay Mortgage Calculator To Pay Off Mortgage Early
Do you have a Home CFO in your household? How did you come to that decision? And What led to it?
Do please share this post if you found it useful, and remember, in all things be thankful and Seek Joy.