How to Be Your Own CFO

Video Transcript

"Ever thought of what it would be like to run your own company. Well, you're in luck because today we're going to talk about how to become your own CFO or chief financial officer. Today I'm going to talk to you about budgeting and developing a financial plan for your family. Now, I know that preparing a budget is not the sexiest topic but it will allow you to figure out where you are now and how you want to grow your wealth in the future. So, to get started I want you to think about "A" and "B". "A" is where you are now and "B" is where you want to be in the future. So, let's think about "B". I want you all to close your eyes for a minute and imagine what your life will be like 20, 30, or 40 years from now. What will you do on a daily basis, where will you take vacations, will you join a golf club? When you think about all of things, think about where you want to live, what type of house you want to own. OK, come back to reality. Now, what we need to do is figure out, with all those things that you want, to write them down and think about how much it will cost. Once you figure out this number, this will be your "B". Now, lets figure out where we are today. Let's talk about "A". In order to determine "A" we really need to prepare a couple of financial documents to get an accurate picture. One is called a budget and a budget, in CFO terms, is called a cash flow statement. It basically is how you are spending every year and you can break it down on a monthly basis. I have a chart here that you can reference, and just. This is a chart you can easily pull of the Yahoo finance website and it will really help you think about and get a good handle on how you're spending your money. Now, the idea here is to have more money coming in than you have going out, that's the first step."