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How to be the Family CFO by Kim Snider

How to be the Family CFO by Kim Snider [3] is a book that teaches you how to manage your household like a business from the financial side, hence the term Family CFO. It’s written in simple terms and for people who want to learn the whole personal finance picture from the very beginning. If you’re a veteran of personal finance, this book might be useful to borrow to see if you need any blanks filled in. If you’re a beginner, this is a very quick and easy way to get that whole picture without wading through complicated terms and ridiculously complex explanations that try to prove how smart the author is.

Who is Kim Snider?

Kim was (and of course, still is) a high educated, very bright professional (and also a blogger! [4]) who had the great luck of working hard at a company and finally getting a windfall payday when the firm went public in 1995. Unfortunately, she had both bad timing and the same poor personal finance education all of us have when we leave the academic school system and blindly entrusted her small fortune to a well respected and highly recommended broker (she says this was her crucial mistake, one borne out of youth and ignorance). She doesn’t say it explicitly but I bet she lost a bundle when the dot com boom burst and she found herself broke, her fortune unable to keep up with the expenses she had assumed.

On the face of it, it sounds like a unique situation. Not many people rise to management, is granted stock options, and then finds themselves broke because they trusted the wrong person. However, there isn’t much difference with a rise and fall and simply a gradual slide. In the end, you’re in the same place. In the end, you’re still fighting the battle of managing your money so that it doesn’t dictate to you what you’re able to do in life. How to be the Family CFO is a book about establishing a framework for managing your money and being in charge of your personal finances, Kim simply had the misfortune of having to learn it through a trial of fire (and humility) but I think it adds color to the picture she’s painting.

Four Simple Steps

Underneath the title on the cover, it says “4 Simple Steps to Put Your Financial House in Order.” What are these simple steps?

From the looks of it, being a family CFO is fairly simple! It actually is just that simple. One of the sections in Invest Wisely is Control What You Can; Ignore The Rest (Chapter 15). It talks about how in investing you must be careful to analyze your options, diversify your portfolio, and make careful decisions but there are factors that are simply out of your control. Control what you can and let the rest sort itself out. The market has plummeted tremendously in the last year due to factors completely outside of your control yet it wasn’t a bad choice for you to participate, and continue participating, in your retirement saving.

This is true for everything else in your life too. As long as you’re planning for the future and making smart decisions with respect to what you know, adjust to the things that happen along the way.

I’m a fan of this book. It explains personal finance in simple terms and is great for someone who is completely new to personal finance and needs to start from the beginning. Like many other books, the onus is really on the reader to execute in addition to being informed and I think Kim does a good job of simplifying concepts so they don’t sound so difficult to do.

I didn’t find this out until later but Kim Snider now runs Snider Advisors [5], a SEC-registered Investment Advisor, and through her website you can get a free copy of Chapter 14: Create Passive Income [6] by signing up to her mailing list.