In today’s article, I felt it time to write about something near and dear to me, understanding what a personal CFO is and why each family, who is serious about changing their financial future needs one.
First, what is a CFO and what do they do?
CFO is an acronym for Chief Financial Officer. They have the primary responsibility for the planning, implementation, managing and running of all the finance activities for a company, including business planning, budgeting, forecasting, and negotiations.
Moving forward I will refer to a Personal CFO as an Asset Coach and Tax Strategist. You see, every family should be viewing and running their personal family finances like a business. When it comes to finances, you need to understand who really runs the show. It’s the IRS. Sure, you may say the banks, investment companies (401ks), or even insurance companies. Some may even say the Federal Reserve; which would be partially right.
In reality, it all starts with the IRS. Now please understand I do not mean this to be a bad thing even though most of the time when we hear about the IRS in some sort of negative light or demeaning tone. The reality is that the IRS gives us the guidelines (IRS TAX Code) on how to control our taxes.
Here is where most say they still pay too much in taxes or that they don’t have the ability to reduce their taxes (tax planning). These may be accurate statements. but I would have to argue that isn’t the IRS’s fault, it is yours.
You are not working with an Asset Coach and Tax Strategist to show you how to minimize liabilities such as taxes and debt. You see an Asset Coach and Tax Strategist will be able to gather your situation into a budget, debt analysis, and asset inventory. Then understanding how the rules of the various assets work, be able to organize your situation to work more efficiently.
Then an Asset Coach and Tax Strategist will be able to formulate a plan to grow your assets which in turn grows your cash flow by implementing the plan.
Let’s quickly review…
A Personal CFO is an Asset Coach and Tax Strategist who performs the following tasks but not necessarily limited to these, these are the starting point:
running of all the finance activities for a company,
including business planning,
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