Top Highlights

• Though few people think about it this way, everybody owns not just one but two distinct businesses: a temporary labor business and an asset management business, which together comprise Family Inc.
• The financial objective of your temporary labor business is to convert your labor into financial assets as efficiently as possible.
• Your objective in your asset management business is twofold: (1) manage and enlarge your portfolio of assets; and (2) produce adequate cash flow to support both your consumption needs—everything from groceries, clothes, and car expenses to recreation—and investments to further your labor business, such as my return to graduate school for further ed...
• Your objectives as CFO in managing these two businesses can be simplified into three basic goals: Provide adequate cash flow to support your spending, now and in the future, while allowing necessary investments to enhance those two businesses of yours: labor and asset management. Maximize your “Family Inc. Net Worth”—the sum of your labor and finan...
• In the early years, his consumption is funded by his largest asset—labor. As he gets older and his labor is depleted, he has to fund consumption from his financial assets.