Your path to expanding your means and attaining financial freedom
“Two roads diverged in a wood, and I—I took the one less traveled by, And that has made all the difference.”—The Road Not Taken, by Robert Frost
Throughout your life, you’ll undoubtedly be faced with a fork in the road—it could be your next career move, a decision about your children’s’ future, or moving to a new city. When it comes to the topic of personal finance, you’ve also been faced with a fork in the road—and the decision you made once upon a time got you to where you are right now. Do you like where you are?
Let’s pretend you had it to do all over again (because, spoiler alert, you do!). On Path A, you can choose to take the reins and take control of your finances—the possibilities are endless and financial freedom could be yours. On Path B, you can choose to sit on the sidelines and stay in the rat race—or worse, become dependent on someone else who does all your thinking for you (like your husband, parents or even your grown children).
So, since I’m offering up a do-over, which path would you choose this time around? No matter where you’re at in life at this very moment, please know that it’s never too late to switch paths.
In fact, I wrote the book Rich Woman because I wanted to show women exactly which steps I took to go from broke and homeless to financially free! That’s right: I changed my path and turned my life in a completely different direction—I became a Rich Woman. I made the decision to get off Path B and switch to Path A—I took the one less traveled by and it really has made all the difference.
What is a Rich Woman?
I believe there’s a Rich Woman in every woman—a woman who, by becoming financially savvy, reaps the benefits that a rich life holds. One of the biggest advantages I see for a woman who’s in charge of her financial life is a huge spike in her self esteem. Once she feels she can take care of herself financially, her self confidence soars. I know it did for me! And when a woman feels better about herself, often her relationships with her husband or partner, her children, her family and her friends and associates grow stronger. That is priceless.
Let me make one thing very clear: Rich Woman is not about living below your means. A Rich Woman does not cut up her Neiman Marcus credit card. She loves her credit cards. A Rich Woman does not forget her mocha lattes or manicures. Living below your means crushes your spirit. A Rich Woman expands her means and creates the income that enables her to have the lifestyle she wants and deserves. A Rich Woman does not live frugally, she lives abundantly and enjoys all the wonderful things this world has to offer.
My wish is for every woman to find the Rich Woman inside of her—a woman rich in spirit, rich in life experience, and rich in all ways financial. To that Rich Woman inside you, I say, “Let her soar!”
Your path to becoming a Rich Woman
Why is Path A— financial independence—the one less traveled by, by women? The reason many women choose Path B (whether purposefully or accidentally) is because there are dozens of excuses available to them. No matter how many opportunities arise, fear, negative people, and hopelessness can sabotage their efforts to take control of their finances.
It can be intimidating thinking about changing your current trajectory. But that shouldn’t stop you from taking your first step forward on Path A. You can begin your transformation to becoming a Rich Woman by following the five steps below. I think you will be amazed at how quickly your financial knowledge increases and how rapidly your financial life begins to transform. And once you’re in motion, your successes will lead to more success.
- Seize your independence If you are dependent on your husband, a family member or the government, then you are not in control of your financial future and well-being. The first thing you need to decide is if you want to be dependent… or independent. If you choose to be dependent, then I suggest you keep your fingers crossed and hope and pray that there will be something there for you down the road—because if you’ve chosen to put your entire financial life, and your future, into the hands of someone else, then I would say you are the ultimate gambler. Good luck! If, however, you decide you want to be financially independent, then we are of like minds, and I encourage you to read on.
- Become a lifelong learner One trait independent women have in common is education, and I’m not talking about an Ivy League school. It doesn’t even matter if you finished high school, as I have yet to find a traditional school that teaches you any real-world money skills. So where are all the independent women finding their financial education? There are millions of books, seminars, and online resources that offer a wealth of information on money and investing. Start reading, attending workshops, and paying attention to business stories in the news—your financial education will be a mix of those plus real-world experience (once you get in the game, of course). And while we’re on the topic of financial education, be careful who you learn from. Just because someone is successful in one aspect of business, doesn’t necessarily mean that success will translate to other areas. Personally, I only want to learn from people who are actively doing what I want to do. In real estate, business, oil, and gold and silver— my primary investments—I only work with people who are in the trenches in that business every single day. Too many women blindly turn their money over to an advisor or financial planner with the expectation that that person can do a better job at managing and growing their money than they can. A word of warning: A great many financial planners and advisors are not focused on educating you. They are salespeople with products and services to sell. When talking with a so-called “financial expert,” ask yourself this question, “Am I listening to a true educator or a salesperson?” More often than not, you’ll find it’s the latter. That’s why my husband, Robert, and I founded The Rich Dad Company—because we are passionate about people being free—not just financially free, but free to do what they truly want to do with their lives. At the Rich Dad Company, we offer many resources, such as free investing classes and personal finance coaching.
- Make a plan Ask yourself: What is it that you want to achieve financially? First and foremost, my financial strategy is based on the concept of cash flow. As an investor, there are two things you can invest for: cash flow and capital gains. What’s the difference? Capital gains. You buy a share of stock for $20. You later sell that share for $30. The profit you make is called capital gains. Or you buy a property for $50,000. In two years you sell that property for $75,000. Your profit, or $25,000, is capital gains. Cash flow. You buy a share of stock that pays a dividend. You hold onto that stock and every year you are paid a dividend. That dividend is called cash flow. Or you buy a $50,000 property and decide to rent it. Every month you collect the rent, pay the mortgage and other expenses and—If you’ve managed the property well—you’ll make a profit each month. That profit is cash flow. My initial plan was clear and concise: I was going to purchase two rental units per year for 10 years. At the end of 10 years I would have 20 units and a healthy cash flow. That’s it! The beauty of setting goals and moving forward on the path you’ve set is that once you’re in motion the journey becomes a bit easier. I bought my first unit … and then my second and third. Soon I realized that investing wasn’t as difficult as I thought it was. And instead of needing 10 years to reach my goal, I acquired my 20 units in 18 months. Create a plan and keep it very simple.
- Start small Remember how I mentioned real-world experiences in the education section? With almost everything in life, there is a learning curve. Know that you will make mistakes along the way, so start with small steps. My first real estate investment was a small, two-bedroom/one-bath house. I learned the fundamentals of owning and managing a rental property on that first house. I also made quite a few mistakes. Had I started with a 50-unit apartment building, my mistakes would have cost me so much more. Which brings me to step 5 …
- Put a little money down At some point you must take action. You can read all the books you want, attend seminars all day long, research opportunities up one side and down another, but if you don’t put up a little money and get into the game you will never see a change in your financial life. One simple action you can take is to research various stocks in companies you have an interest in and buy just two or three shares of one company. Your intelligence regarding the stock market will immediately increase if you pay attention to what’s happening with your stock on a daily basis. Another easy first step toward financial independence is to go to a coin shop and buy a 1-ounce silver coin. Today, it will cost you about US $17.89. You now own a commodity. The beauty of this small investment is that now you can go online every day and check if the price of silver is up or down. You’ll begin to spot articles and news clips on silver. Because you now own silver, both your interest and your education increase dramatically.
Take charge of your life as a Rich Woman
Sure, there are a lot of factors to overcome in order to take control of your financial well-being and to change your life for the better. But know that you are not alone on your journey to becoming a Rich Woman. Many women (including me) have gone from being homeless to being financially free—and you can too. If you’re still struggling to move forward, perhaps you need to start with discovering your “why” and learning how to live your truth. Once you do that, I know you’ll join us on Path A — and it will make all the difference!