How Becoming Your Own CFO Can Make You Millions of Dollars

A Tale of Two Investors: John and Gian

Let’s dive into a quick story to illustrate why becoming your own CFO is important. 

Meet John and Gian, two real people earning $250,000 annually and living in homes worth $2 million. 

They both have similar dreams—to support their kids in buying their first homes and to leave behind a financial legacy. 

Sounds pretty great, right? Well, here’s the catch.

The Story of John: The Consequences of Financial Inaction

John, 54, never had a solid cash management plan. His money was paid into a joint account and spent freely. 

He still has a mortgage of $650,000, his retirement account holds just $450,000, and his net worth today is approximately $2 million. 

He’s realised that his own financial safety net isn’t strong enough to support others. His only choice now is to keep working until his official retirement age.

The Story of Gian: A Study in Financial Discipline

Gian, also 54, has been meticulous with his cash management. He’s mortgage-free and has been an active investor since he was 22. 

His current net worth? A stunning $11 million. He’s set for a comfortable retirement in just a few years, thanks to the income generated by his diverse asset portfolio.

So, what sets John and Gian apart? 

Why Become Your Own CFO

The crux of the matter is that to reach a state of financial abundance like Gian, you must become your own CFO. But what is a CFO?

For those who aren’t in the know, CFO stands for Chief Financial Officer. In a business setting, a CFO is a senior executive responsible for overseeing all financial actions of a company. 

They don’t do the nitty-gritty bookkeeping but make important financial decisions based on analyses and reports. 

The glaring question here is: if businesses that are serious about success employ CFOs, why aren’t we doing the same with our personal finances?

Key Responsibilities of Your Inner CFO 

So, what does it mean to be your own personal CFO? Here’s a breakdown:

1. Managing Cash Flow: Allocate funds for future investments and today’s lifestyle.
2. Practising Investment Decisions: While you won’t always make the right choices, aim for consistent, informed decisions.
3. Critically Assessing External Advice: Evaluate advice based on its relevance and reasonability.
4. Aligning Investments with Goals: Focus on sustainability and the long-term game.
5. Being Tax Aware: Recognise tax implications and make informed decisions for long-term benefits.
6. Projecting Forward: Forecast potential outcomes of investment decisions for more accurate planning.

The Cost of Financial Indecision 

One point to consider here is the cost of inaction. Spending a dollar today instead of investing it is robbing your future self. 

You must ask yourself, “How much do I care about my future lifestyle?” 

Are you okay with working longer to enjoy your present, or can you find a happy medium between living for today and securing tomorrow?

Final Words

Taking control of your finances by stepping into the CFO role in your life can make you millions over a relatively short period of time. 

It’s not just about hoarding wealth but also about achieving a quality of life that allows you to significantly impact the people and causes that matter to you. 

So, if you’re keen to transform your financial future, it’s time to roll up your sleeves and become your own CFO. 

It’s a decision you’ll never regret.