Category: books

Thu 02 Sep 2004

Family CFO

First and foremost I would like to recommend this book to anyone who is looking to organize their finances shared with an individual. The first set of chapters is designed to give you and your loved one a set of common tools to discuss your goals in financial terms. It is written by two women who have different perspectives. Their goal is to take the emotion out of making financial decisions. They would rather have you focus of the goals you are trying to achieve. Then with their tools they should you what is possible. What I love about this book is it is straight forward and focuses on the 90% of finances that is common sense. And they use a lot of examples.

The rest of the book focuses of major life decisions and how their tools can be used to make those decisions. For example can we afford a house, change jobs, or have a child. They don't believe in budgets and work more from a cash flow model.

They have two positions in the office of CFO, the Cash Flow Manager and the Investment Manager. The Cash Flow manager handles all the day to day bill paying and account management, plus taxes. The Investment Manager handles all the insurance and investments. The Cash Flow Manager is responsible for generating month cash flow statements while the Investment Manager generates net worth. The cash flow statements helps you track your short term goals, while the net worth helps you track long term or life goals.

The best part about this is they focus on having your sit down and dream your dreams. You turns those dreams in to goals. Then you align your spending and saving to those goals. So you make investments aligned to your goals. In short it is written in common and easy to understand langauge and gives you to tools for designing a financial plan for two people.

Posted by Christian Pearce at 7:28PM EDT [ /books | # ]