Successes
Budgeting Stinks
People who want to take control of their finances are often encouraged to undertake a budgeting exercise. Budgeting can be helpful tool for some people. However, most people find it to be a painful and burdensome activity. So they quit. Family CFO has helped people focus on taking control of their expenses through iterative goal setting and behavioral feedback through intuitive reporting. This creates awareness of past behaviors and promotes continuous iterative improvement with a focus on goals… not enslavement to an inflexible budgeting mechanism.
Just Married
Conflict over money is the single biggest threat to the sustainability of a marriage. Young couples experience difficulties merging personal finances into a family structure. Family CFO helps structure a “his, hers and ours” approach to balance autonomy with collaboration. In addition to team goal setting and reporting exercises, Family CFO also coaches both members of a couple to overcome personal finance acumen challenges.
Family CFO helps couples figure out how to apportion the collective family funds and individual discretionary funds or ‘fun money’. Family CFO mitigates the risk of destructive conflict through professional mediation and education of financial discussions and topics.
Newly-Single
One spouse often takes a more substantial role in managing the family’s finances. After divorce or death, the spouse with less experience in financial management has compounded difficulties. Family CFO has helped divorced or widowed individuals get their financial footing and accelerate their learning curves toward having healthy and productive relationships with money.
‘Kiss My Backside’ Fund
You don’t choose a job, a job chooses you… based on your income needs. Many people dislike their jobs but are handcuffed to the income. Further, needing the job rather than choosing the job creates an additional animosity for the beholden employee. One use of money that helps people have better relationships with their current employment, and create opportunities for other employment is a “kiss my backside fund”. Family CFO has helped people build sufficient savings to empower themselves to know “I can enjoy working this job because I know that I don’t need it… and if the burden is consistently greater than the reward, I can leave at any time.”
House Hunters
Buying a house is usually the biggest investment that an individual or family ever makes. Most people make residential choices based on conventional wisdom and emotion. Family CFO helps buyers make highly-informed, objective decisions about housing based on debt capacity, family plans, mid-term professional and geographic aspirations, market cycle phase, and detailed cash flow pro forma analysis. Family CFO clients make better informed decisions about real estate and consequently have less anxiety and report greater satisfaction with their housing decisions.
401 not (ok)
Selecting 401(k) allocations can be a daunting task. A client nearing retirement engaged Family CFO to review her portfolio. Her portfolio was in an “actively managed” fund administered through the plan. After a deep review, it was clear that the fund manager had very closely mimicked an otherwise low fee life cycle fund for an additional charge of about 1% extra per year.
Assuming a 7% return over 30 years, that additional fee imposed by the manager equates the retiree having 18% less at retirement. Clearly, this wealth erosion is very destructive. Thankfully, it can be minimized with the right counsel.
Family CFO seeks to help individuals and families gather as much data and education as possible in order to make the best decisions about their finances and to make sure they are retaining the wealth they are building.
Surviving Retirement
Having to ask “am I going to run out of money or life first?” is a painful experience that can trigger many stressful thoughts and emotions. Answering this question is not an exact science. Family CFO helps retirees reduce anxiety during this phase of life. Let us worry about behind-the-scenes technical concepts like sensitivity analysis and multiple variable and assumptions modeling. At the same time, we will keep you in the driver’s seat with frequent, intuitive reporting of objective data. Family CFO helps with the complexities of portfolio management in retirement as well as cash flow management modifications.
Benefits? What Benefits?
Employer-provided benefits are a nice perk, but navigating the landscape of options is daunting. One client engaged Family CFO to help understand a 200+ page healthcare election brochure. Family CFO has extensive experience in reviewing and assessing the group insurance benefits, healthcare options, retirement contribution and portfolio allocation options from employers of all sizes.
Family CFO simplifies presentation of options, helps make the best elections for each life scenario, and enables our clients to feel confident in their decisions as employees.
Baby On Board
Navigating the healthcare landscape can be so complicated that some people simply bury their heads in the sand. A young, expecting mother realized that her relationship with healthcare was about to change and engaged Family CFO to help understand the implication of the ‘individual mandate’ penalty and identify coverage options. Family CFO can also help promote a sense of mastery for new (and new again) parents when it comes to shifting spending, savings, and life insurance priorities.
Wanted Dead
(or Alive)
Life insurance sounds inherently responsible, and there are indeed benefits to different policies. However, certain policies – particularly the ones that salespeople are incentivized to sell – may be less beneficial to the policyholder than others. A client engaged Family CFO to review his insurance portfolio. The multiple, complex life insurance policies he owned were ‘overkill’ and a disproportionate burden on the family’s cash flow and future cash flow needs. Family CFO advised adjustments to risk management, savings rates, investments and cash flow.
Rat Race & Hamster Wheel
Americans have almost a trillion dollars in credit card debt. It isn’t hard to get a little (or quite) behind. Then, keeping up with the payments becomes a perpetual struggle and major limitation on personal freedom. Family CFO has helped individuals get their heads above the flood of consumer debt. Strategies include balance sheet optimization, cash flow management and accountability partnering.
I Learned It From Watching You
The wellbeing of children is a top priority for parents. However, for all the time and money invested in private schools, math tutors, college savings and allowances, we can easily forget that children develop their relationship with money by observing parents. We have all inherited good and bad behaviors from our parents. Family CFO uniquely specializes in helping adults manage their relationships with money and each other. There is no substitute for setting the example of mature, objective and disciplined parental communication about family finances. Family CFO provides a structure, scheduled and professionally-mediated platform.