Calling the Shots: How to Be the CEO of Your Own Life

During the 1990s, my financial life was like a Caribbean cruise ship during hurricane season: I was in a cabin at the center of the ship, unaware of the storms approaching from the horizon. By 2001, I'd wandered onto the deck in the midst of Hurricane Debt and Failure; I found myself in financial and personal trouble. It took a few years, but eventually I discovered that I had more control over that cruise ship than I thought.

In 2006, I shared with Get Rich Slowly readers the circumstances that allowed me to start moving in the right direction. In short, I realized that I could no longer sit by and let external forces — the hurricanes: my bosses, a difficult situation at work, my increasing debt, a deteriorating personal relationship — control my life. I learned how to manage my own money, using the basic approaches of earning more and spending smarter. I removed the negative forces in my life — anything that worked against my long-term goals to improve my finances, my life, and my identity — and replaced them with positives.

In my old life, I put the blame for failure or the credit for success on outside forces, such as luck or the economy. But this just made me feel helpless about my situation. In my new life, I shifted my philosophy from an external locus of control to an internal one: the belief that the circumstances in my life were due to choices I made. (Or worse, the choices I didn't make.) This made all the difference.

Taking the Red Pill
While working for a company in the finance industry, I learned how large public corporations operate. I began to apply some of these lessons at home; I started looking at myself as the Chief Financial Officer (CFO) of my own life.

Like a public company, I published regular reports of my financial progress online. I didn't do this to brag; in fact, at first there was more embarrassment than anything else. Holding myself accountable to Consumerism Commentary readers was a good move for me, and almost eight years later after my first post in 2003, I still publish these monthly reports and field questions and suggestions from readers. (Here's the first monthly report of 2011.)

In December, after building a business on the side that could more than sustain me, I quit my corporate job and shifted exclusively to writing and developing my own online projects. I've been tracking my discoveries working for no boss other than myself in a series called “Life After Salary”.

The path I chose may not be for you. But the concept of being the CFO of your own life applies to everyone. You have to make choices if you want to live your life a certain way rather than let life happen to you. The best way to describe this feeling of awakening is to compare it with the moment in the film The Matrix where Neo, the “One,” can at last see the Matrix for what it is, and realizes he can control his environment.

You are in control of your life, even if you work for someone else. You choose whether to get out of bed in the morning, understanding the consequences if you don't. You decide whether to take on the assignment your boss gives you. You either choose to be happy or not — every second of every day.

With my recent shift to self-employment, I discovered yet another level of control necessary to better reach my long-term goals, both financial and non-financial.

How to Be the CEO of Your Own Life
In business, the Chief Executive Officer (CEO) is responsible for guiding a company towards its mission, vision, and goals. The Chief Financial Officer (CFO) ensures the company manages its finances properly in order to reach those goals. In the business world, the CFO answers to the CEO. But in your own life, you need to play both roles.

Here's how to operate as the CEO of your own life:

  • Take ownership. Sometimes people need to hit bottom before realizing they need to take control of their situation. But rock bottom isn't a pretty place. Don't wait for it. Start attributing your success and failures to the decisions you make (or don't make), and you'll see that there's no need to let others control your life. When you've decided to stop taking orders from the world, to stop waiting for someone else to make your decisions, you'll be promoting yourself from administrative assistant to boss.
  • Set goals. I like to set lofty non-financial goals to give my life direction. Dry financial goals are vacuous. What's the point of having a goal of retiring at age 45 with $2 million in the bank? What will you do when you no longer have any work to keep you busy all day? Focus on the person you want to be, and what you would like your New York Times obituary to say — then you can figure out what your finances need to be in order to get there.
  • Track your finances. You know your destination, but you can't set your course yet because you don't know where you are. Know where you stand (your net worth) and your velocity (your income and expenses over time) so you can determine the right path for you. This requires some tools, whether software like Quicken or a pencil and pad.
  • Recruit a positive environment. Build a support team. I did this by creating a blog, but if you're more normal, you may wish to share your goals with friends and family while keeping the gory details private. Escape the negative attitudes around you. “Negative energy” sounds a little new-agey, but there's truth to the idea that people who bring you down emotionally will eventually become an obstacle to reaching your goals.
  • Make your own choices. Don't wait for other people to tell you what to do. The worst thing that can happen is you refuse to make a choice because you don't know if it's perfectly correct — as J.D. has said, the perfect is the enemy of the good. Arm yourself with the best information you can find from sites like Get Rich Slowly, Consumerism Commentary, and other sources that work for you, as well as what you've learned from tracking your finances. Gather the essential tools like a great savings account and a low-cost broker like Vanguard, and learn how to use them.
  • Don't let other things get in the way. CEOs and CFOs of large companies are focused on their responsibilities, and delegate all but the highest level of decisions. You don't have the luxury to delegate, so don't get distracted by anything that pulls you away from your mission. (But that doesn't mean you can't have fun; life is short, and you need to live it now.)

For every CEO or CFO that's involved with a financial scandal, there are dozens who do great things for their organizations, build a company up from nothing, and make a difference in the world.

There was a time in my life when I wasn't making any difference for myself, for my future. My finances suffered, my attitude suffered, and I was headed for imminent disaster. Now, I call the shots — all of them. I still have a lot of work to do and more to learn, but now I'm motivated by the idea that whether I succeed or fail, it's only the choices that I make that lead me to that point.

When you're the captain of your cruise ship and have the information and tools you need, you have the power to safely navigate through even the worst storms.

Cloud photo by joiseyshowaa.

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Yakezie
Yakezie
9 years ago

I wish you the best of luck Flexo! It’s great when people start deciding for themselves what to do, and blame and reward nobody but themselves.

Cheers,

Sam
The Yakezie Network

LifeAndMyFinances
LifeAndMyFinances
9 years ago

I love being the CFO of my life! My wife and I had nearly $20,000 of debt last year, but we will soon make our final payment at the end of this month and be debt free! Wow, it’s a great feeling, and I can’t wait to invest in the future.

Pamela
Pamela
9 years ago

The best suggestion here is to make “non-financial goals to give my life direction.” We don’t get much meaning in our lives from hitting a certain bank balance or stock portfolio. Good reminder. I’d also add having gratitude for the things that go well that we have absolutely no control over. While I agree that we need to actively steer our lives in the directions we want them to go, insisting that we are solely in charge of our destiny lacks humility. If we were characters in a Shakespeare play, this is where lightning would strike and burn our house… Read more »

Lauren @ Pineapple Pizza
Lauren @ Pineapple Pizza
9 years ago

Love this post, especially the part about not “just letting life happen to you!”

I’m going to direct my readers over here, because this is a really well-written piece.

EMC
EMC
9 years ago

Thanks for posting this Flexo. Not too along I did the same exact thing you mention at the beginning of your post – blaming other people for how my life had turned out. I blamed my parents poor financial decisions, I blamed my ex-girlfriend and I even blamed my employer at the time. Blame was everywhere until one day I decided to realize that I AM RESPONSIBLE FOR THE CHOICES I HAVE MADE. I now have action plans (thus becoming the CFO of my life) to eliminate debt and finally live a financially fit life. If you would have told… Read more »

Vanessa
Vanessa
9 years ago

I understand how this should work in theory, but I have a hard time looking at my finances objectively. Emotion influences my judgement. I am afraid of risk. Tracking my spending isn’t the problem, I’ve done that for years. But I don’t know how to analyze that data to tell if I’m making the best decisions with my money.

Bert
Bert
9 years ago

Thank you for this wonderful post. I also am on the journey and my goal is retirement in 10 years at the age of 52, if all goes well. Thank you, J.D., for your blog and all the great advice that you and your writers are giving. It’s always so encouraging and validating!! We do have choices, and thus power, over our financial destinies!

HedgeHoncho
HedgeHoncho
9 years ago

Great and detailed article into your thoughts. I hope to one day be CEO of my own business.

In the meantime, I am working on being CFO of my finances.

Wade
Wade
9 years ago

I’m with “Pamela” in thinking that “non-financial goals to give my life direction” is a great point. It is imperative that a person looks at what they want to get out of life and not just financial savings or gains. It is important to combine the concepts of where one wants to be in their lives in 1,5 and 10 years both personally and financially.

Matt (with The Online Budget)
Matt (with The Online Budget)
9 years ago

This post reminds me of the discussions (around the web, not necessarily at GRS) surrounding the morality of “walking away” from an underwater mortgage during the ongoing real estate debacle. One of the jobs of the company CEO is deciding which investments or assets are worth keeping and which should be done away with or sold off because they’re losing money. For those who question the morality of the practitioners, it occurs to me that walking away from a mortgage is a sound business decision, akin to a CEO deciding that Division X simply isn’t generating enough profit to justify… Read more »

Jo@simplybeingmum
9 years ago

Fantastic Guest Post and I never say that lightly. I am a huge proponent of the ‘Choose your own reality’ camp. I know this stuff works. It does. I have spent the majority of my adult life debt free, because that’s the life we chose. Some may disagree with that statement, but only I could make that decision to open the wallet or not, go for promotion or not, get a better education or not. We did everything we could to earn more and spend less (well spend less on what didn’t matter – some things did and we spent… Read more »

Tyler Karaszewski
Tyler Karaszewski
9 years ago

“Set goals. I like to set lofty non-financial goals to give my life direction. Dry financial goals are vacuous. What’s the point of having a goal of retiring at age 45 with $2 million in the bank? What will you do when you no longer have any work to keep you busy all day? Focus on the person you want to be, and what you would like your New York Times obituary to say – then you can figure out what your finances need to be in order to get there.” That’s my favorite paragraph in the article. Whenever I… Read more »

Squirrelers
Squirrelers
9 years ago

I smiled when I saw this title. The reason? I totally agree with this concept of being CEO of your life, and recall a conversation with someone who broke out laughing when I made that statement.

At the time, I stood my ground and reiterated that this is how I see it. Nice to see this same approach being suggested here!

Brian
Brian
9 years ago

It’s funny how the simple act of taking control of your own situation will catapult your life in the direction you want it to go. But sitting back and waiting on others to help you get through life fails to consider one thing: those people you are waiting on to help you might just be as complacent in their own lives.

Personally, I took control early last year and my life has become so much better. I hope I never go back to being complacent.

Flexo
Flexo
9 years ago

Pamela: It’s certainly true that there are things in this world that are beyond our control. I wouldn’t let the fear of unplanned natural events or Acts of God prevent me from doing what I want or need to do, however.

There’s also the idea that one needs to be in the right place at the right time, signalling that luck is at play… but there is much more to it than that. There is much you can control in your life to ensure you’re in the right place at the right time.

Diane Nissen Friedman
Diane Nissen Friedman
9 years ago

@Vanessa. Tracking your expenses is definitely a big step to understanding them.

Look for a trusted friend, family member or other professional who can help you analyze your spending. My business specializes in analyzing spending and guiding my clients to make the best choice for them. Other professionals include some investment advisors or your accountant who prepares your tax return.

Smoovie
Smoovie
9 years ago

“You can choose to be happy!” eughhh, try telling that to someone with chronic depression.

I would be hesitant to say that everyone’s financial situation is a result of their own choices. There are absolutely people who exist who cannot find well-paying work, regardless of their efforts, or whose medical conditions inhibit their ability to work. This post is certainly appropriate for a majority of people, who may not be aware of their choices, but a blanket statement of “You have all-powerful free will!” throws those who do not under the bus.

Jaime
Jaime
9 years ago

Good for you. I liked this post a lot. However I didn’t like the matrix analogies, I think they’re overused. Anyway, posts like yours give people hope that they can change for the better, including myself. So thank you. Best to you. 😉

Mary
Mary
9 years ago

I know this is a small thing to point out, and certainly not the point of the post, but it seems unlikely that a 2004 Honda Civic would ever count as a $12,000 asset. I own a 2004 Civic, and I could probably only get a few thousand for it, far less than I’ve put into it; it’s more of a necessary liability than an asset, don’t you think?

Taking control of your life is an important step; good luck to all those starting on this path!

jennypenny
jennypenny
9 years ago

It is so hard to feel in control of your life and finances when the unexpected happens–car repair, job loss, medical bill, etc. I think that’s why budgets and emergency funds are a critical step in the process. Planning for the unexpected is necessary to feel in control. Having an “auto repair” line in your budget–even if you roll it over for 12-24 months–will give you a sense of control when you find yourself calling AAA.

Matt
Matt
9 years ago

Flexo, I’ve been reading your blog just like JD’s for a long while now and its inspiring to know that there is a light at the end of the tunnel. The advice you give here today is very true and something similar was recently told to me by (funny enough) a CEO – ‘treat your work like you are running the company’ and it rang very true for me at that time because of what I do but the reality is as you suggest this is true in our lives as well.

Great post!

Nicole
Nicole
9 years ago

This post is probably a lot less off-putting than our future post entitled, “It is hard being perfect” that covers a lot of the same ground. Kudos for taking charge of your life and your reflections on your life!

Heidi (at PocketChangeBook)
Heidi (at PocketChangeBook)
9 years ago

Flexo,
You are living proof that all of that scientific research on locus of control, self-efficacy, and empowerment are correct! Congratulations on taking charge of your own destiny. Even if external obstacles arise in your path, you are going to create a situation that works for you.

Adrian
Adrian
9 years ago

Based On the Amount Of Comments Posted, I Could Easily Surmise That This Article Simply “Missed The Ball” Today With Readers And Dismiss It — Except That It Didn’t. Before GRS And Other Life Changing Experiences Took Place, I Too — Like The Author — Eagerly Dismissed The Concept Of “Self-Responsibility” Probably For Most Of My Life, And I Can Tell You From Personal Experience That You Will NEVER Succeed Financially Or Otherwise If You Take That Approach Towards Existence. Many Of Us Easily Fall Into “Victimization Traps” Wherein The “Government, World And/ Or Forces Beyond Our Reckoning” Appear To… Read more »

Pat S.
Pat S.
9 years ago

Awesome post Flexo. And thanks for all you do with your blog and the Carnival of Personal Finance. I’ve lived by the same type of philosophy for years, without really realizing it, considering my life kind of like a business, and treating every dollar as an investment. This has helped change my outlook on money, and helped me to define the important things in my life that are worth my time and money.
Pat
http://compoundingreturns.blogspot.com

Donny Gamble
Donny Gamble
9 years ago

I also want to control my own destiny in every situation that I am in because if I don’t, someone else will

Patrick
Patrick
9 years ago

really, really great post, I identify thoroughly with eliminating the negative, and loved the emphasis of right or wrong it’s my choice.

Flexo
Flexo
9 years ago

Mary: That $12,000 valuation was from 2005. The graphic used in the post was pretty old.

If you look at my latest balance sheet, I’m valuing the car at about $4,600, which should be less than the Edmunds.com third party trade-in value. I’ve been steadily decreasing the amount since its purchase.

Sabah
Sabah
9 years ago

Great post! Assuming ownership, setting realistic goals and tracking your finances are essential for taking the reins of your own life. Taking steps to secure your financial future can also put you in the position to set goals that are the MOST meaningful to you.

Cory
Cory
9 years ago

Hey J.D.,

Great stuff. My friend Natsha mentioned your site, and I checked it out, and it was yours! Too funny. Great to see you doing so well.

I agree 100% with what you have to say about being a CEO of your life. Great concept.

Cory (from Canby)

Slinky
Slinky
9 years ago

“Invictus” by William Ernest Henley Out of the night that covers me, Black as the Pit from pole to pole, I thank whatever gods may be For my unconquerable soul. In the fell clutch of circumstance I have not winced nor cried aloud. Under the bludgeonings of chance My head is bloody, but unbowed. Beyond this place of wrath and tears Looms but the Horror of the shade, And yet the menace of the years Finds, and shall find me, unafraid. It matters not how strait the gate, How charged with punishments the scroll, I am the master of my… Read more »

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