The following is an excerpt from Your Life & Your Money.
Your actions speak so loud, I can’t hear what you are saying.—SCOTT FEHER
1. Always take responsibility and accountability for your financial affairs. Take responsibility for your role in all your affairs, not just financial. Do not blame others. Understand that you can’t change people. You can only make the necessary adjustments and changes to better prepare yourself for your next fi nancial investment or transaction. It’s easy to blame others, but your role is the only one you can take responsibility for!
2. Master your expenses. If you don’t, you’re destined for financial failure. Manage your expenses and you’ll pay off your debt faster and have more to invest for your future. That future is in your hands. Invest wisely and you’ll be able to retire comfortably. Remember, if you can’t afford something, don’t buy it!
3. Develop a mission statement and improve it annually. It’s vital to put your individual or family mission statement on paper. It’s a commitment to you! Be true to your mission statement, and all the rest falls into place. This will force you to dig deep and fi nd out what’s really important to you and your family. Know thyself—what a present to give yourself. As you track your improvements annually, make bigger goals to achieve every year!
4. Track your expenses, taxes, and investments with quarterly reviews. Staying on top of these important items will ensure that you become and remain a duly diligent CFO. If not you, then who? Meet with your spouse quarterly to track these and any other items that are part of your mission statement. Make sure you’re making marked improvements. This is also a good time to communicate how everything is going, and to hold each other accountable to the mission statement. It’s also an opportunity to make any necessary adjustments for the next quarter. Keeping up with these items will become easier over time!
5. Read books and business journals to become financially savvy. I recommend reading one fi nance-related book every three months. There are so many great books and journals to read. I suggest that you subscribe to the Wall Street Journal or Investors Business Daily for a couple of months to get a feel for what’s going on out there in the fi nance world. You might think it’s boring, but as the CFO you need to be well-read. Read a variety of business journals to find the one that best fits your personality. Then make it a perennial daily read. I like the Wall Street Journal because it covers more than just financial topics. I know a lot of people who like Investors Business Daily better. Everyone has a favorite for various reasons. Wake up fifteen minutes earlier or spend fifteen minutes at night before bed to read, read, read!
6. Meet with all your consultants (fi nancial advisor, CPA, insurance agent, and estate attorney) semiannually or annually. Please take this seriously. Keeping in touch with your financial, legal, and tax professionals is vital to proper planning for the following year. I recommend a meeting with your CPA and fi nancial advisor every November to see how you can benefit from any tax advantages, such as exercising capital losses to offset any capital gains, or possibly harvesting any gains for the following year. Your CPA needs to be very proactive prior to the New Year. There’s usually very little a CPA can do for you on April 15 to implement tax strategies from the previous year. I repeat: make sure you visit your financial advisor or CPA every November to plan for the upcoming New Year! Also, visit your insurance agent every year to check that your car, home, and life insurance policies are in order, and to confi rm that all necessary insurance policies are in place. See your estate attorney every two years to make sure that your family trust is current with any new estate tax laws. If you do all of the aforementioned tasks without the help of a professional, make sure to track and check them all just as a financial or tax professional would.
7. Don’t invest in any product or service that isn’t aligned with your mission statement or that you don’t understand. As a financial advisor, I am solicited regularly by wholesalers who want me to sell different products and services. Many of these products would incur too much risk for my clients, and therefore I would not present them. If I’m interested, and the product or service is aligned with my clients’ mission statements, then I begin to research vigorously. I read through the prospectus, research online, and discuss the product with other advisors who sell it. Then I watch it for three to twelve months. There’s no rush, since I represent products and services on a large scale, and people are depending on my recommendations. Who relies on your research and investment strategy? You do. Your family does. Do your homework, and make sure that you or your advisor thoroughly research any hot stock or mutual fund tip or offer. Make sure that this hot stock or fund is aligned with your mission statement and risk tolerance no matter how good it sounds. Remember, this book is about you knowing you, and being a smart investor, not a careless gambler!
8. Don’t allow fi nancial mistakes to hinder your progress. When you do make mistakes, forgive yourself and move on. I know many wealthy people who’ve had their share of financial hardship. Meeting thousands of people in my career has allowed me to survey many different levels of wealth. The very wealthy usually learn from their mistakes, and use them as motivational steps to reach a higher level of wealth. Even in their darkest moments, they stay true to themselves and believe that they’ll improve their lot in life. On the other hand, I’ve met people who live paycheck to paycheck, and have let their past financial mistakes become their permanent life story, thereby keeping themselves from achieving financial greatness. It’s such a fine line that it’s scary. Allow yourself to make fi nancial mistakes, and never, ever give up on you or your family.
9. Your word is your bond! Hold yourself accountable. Integrity is essential in all your affairs. When you say you’ll do something, you need to follow through. If you don’t, how will you achieve your goals? When you design your mission statement, and you and your spouse agree to hold each other accountable for taking care of each other’s assignments or chores, then it’s important to be there for one another. If you’re single, be there for yourself. In either case, it’s vital to follow through on your word and on your promises to
yourself. Is there anything more important than keeping your word? Rare is the story of financial success or goodwill in which people do not keep their word.
10. Having it all depends on YOU! If you don’t take care of your financial affairs, who will? It doesn’t matter if you’re a paycheck-to-paycheck family or a very high-net-worth individual. You have to follow the laws and principles of sound financial money management or you’ll eventually end up in a place you never intended.
Lastly, I wish you all the best in your endeavors to become a quality CFO, and I pray that you fulfill all of your dreams. Always stay focused on preparation, and the rest will fall into place. Your future is up to you.
If not you, then who?
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