No Limits Ladies.com

We often hear about married folks not having enough money, however, what about the flip side: divorced women who have children and extra money? Having experienced this personally, I'd like to share my thoughts on the subject.

There are many things we are told by financial gurus to do with our money. I truly believe that extra money just sitting will find its way to someone else who will put it to work for them, so it may as well be working for me, right? I, for one, have become a fan of investing in things that cash flow, and am looking for more ways to do so.

I am a fan of cash flow for two reasons:

1) My money keeps moving (earning and growing, instead of sitting or perhaps wandering off to the mall...)
2) More money in my pocket (my asset pays for my life, liabilities, and other assets)

These give me more security as a divorced mother with children, and also more income with which to do other things with, or income coming in if godforbid something happens to me.

There are different investments to choose from, always try to love what you invest in and understand it (the two really go hand in hand).

The two things to be aware of with investments from this extra money, in my personal opinion would be:

1) Look for the best ROI (biggest bang for the buck, making more of and for less...)
2) Look for the most control over your investments.

These two have become important to me because holding out for an investment with the best ROI (return on/of investment) I can is the best use of that money- more bang for my bucks. The control is something I really have come to value. If the proverbial shit hits the fan, the more control you have over your investment, again the greater security when you have children who rely on you.

Are you a divorced woman with children and extra money? What are you doing with that money?

How We Got Out Of Debt
by Kim Kiyosaki

More and more people are getting swallowed up in debt. I’m sure you’ve read and heard many of the statistics and stories in the news.

One of the keys to financial independence is to get rid of your bad debt and acquire good debt. Bad debt is debt that makes you poor, such as credit card debt, car loans, school loans – this is consumer debt. Good debt is debt you acquire that actually works for you. The best example of good debt is a mortgage loan on a rental property that throws off positive cash flow every month. Good debt is money that you borrow to purchase assets that puts money in your pocket.

In 1985 Robert & I had a good deal of bad debt. And even though we kept making payments every month we never seemed to make a dent in the amount of debt we owed. Each month we paid a little over the minimum on each one of our credit cards as well as on our car loan. Obviously there had to be a better way to get ourselves out from under our creditors. And sure enough there was. This is the formula that Robert and I followed to pay off our debt. You’ll find that if you follow this formula you will be out of debt much quicker than you imagined. Most people find themselves “bad” debt-free within 5-7 years. The key is to stick with the formula. You will not get ahead if you say I’ll just skip this one month, and then two, and then three. If you stick with the formula it then becomes a habit you follow for a lifetime.

Here is the formula we used:

Step 1 – Stop accumulating bad debt. Whatever you purchase via credit cards must be paid off in full at the end of each month. No exceptions.

Step 2 – Make a list of all your consumer (bad) debts. This includes each credit card, car loans, school loans, home improvement loans on your personal residence, and any other bad debts you have acquired. (One item on my & Robert’s list was an outstanding debt to a partner from one of Robert’s past businesses.) You can even include your home mortgage in this list.

Step 3 – Next to each items listed make 3 columns:
-Amount Owed
-Minimum Monthly Payment
-Number of Months

Enter the appropriate numbers into each column. To arrive at the number of months, simply divide the amount owed by the minimum payment.

Step 4 – Based solely on the Number of Months begin ranking each debt. Put a “1” next to the lowest number of months, a “2” next to the 2nd lowest number and continue up to the highest number of months. This is the order that you will be paying off your various debts.

The reason you will start with the debt with the lowest number of months is that you want to have your first “win” or success in this process as soon as possible. Once you get that first credit card (or debt) paid off you’ll begin to see the light at the end of the tunnel.

Step 5 – Come up with an additional $150-$200 per month. If you are serious about getting out of debt, and more importantly becoming financially free, then generating this extra money will not be difficult. To be candid, if you cannot generate an additional $150 per month then your chances of becoming financially independent are slim.

Step 5 – Pay the minimum amount on every debt you have listed EXCEPT for the one you’ve marked with a “1”. On this first debt to be paid off, pay the minimum amount due plus the additional $150 - $200. Keep doing this each month until your first debt is paid off. Scratch that first debt off your list.

Step 6 – Congratulate yourself!

Step 7 – Pay the minimum amount due on every debt you have EXCEPT for the one you’ve marked with a “2”. To this debt pay the minimum amount due, PLUS the entire amount you’ve been paying on debt #1. For example if on debt #1 your minimum amount due was $40 and you added the additional $150 then you were paying a total of $190 each month. On debt #2, if the minimum amount due is $50, you will now pay $50 plus $190 or a total of $240 per month.

After a debt is paid off then take the total amount you were paying on that debt and add it to the minimum amount due on your next debt to get your new monthly payment. You will be amazed at how quickly this amount adds up and how quickly your credit cards, car loans, etc. are paid off.

Continue this process until all the bad debts on your list are paid off.

Step 8 – Congratulate yourself!

Step 9 – By this time the monthly amount you were paying on your last debt is likely to be quite substantial. Keep paying that amount every month. Except now, instead of paying it to creditors, you pay it to yourself for only one type of purchase – assets that give you positive cash flow each month. You will be out of the rat race faster than you ever dreamed.

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