To put it bluntly, I truly believe the world would be a better place if there
were more rich women. And I thought a good way to get to know each other in this
first column would be to share some of my thoughts on rich women.
What Is a Rich Woman?
I hear women say, "I'm rich in spirit," "I'm rich in family and friends," and
"My life experiences make me rich." And I agree with each of these
interpretations. You can have a very rich life, but that alone doesn't make you
a rich woman.
When I talk about being rich in this column, I'm talking about one thing:
money. I'm talking about investing, cash flow and taking charge of your
financial life.
A rich woman is a woman dedicated to taking control of her financial life.
She isn't depending on someone else--a husband, a boss, a family member or the
government--to take care of her.
A rich woman isn't someone who marries just for money, and she doesn't stay
in an unhealthy marriage because she's afraid she can't take care of herself
financially. A rich woman doesn't goes to work day in and day out to a job she
can't stand. A rich woman doesn't agonizes over not spending enough time with
her children. And a rich woman doesn't allow her self-esteem to shrivel because
she constantly subordinates herself to her husband or boss because they control
the money.
Why Be a Rich Woman?
I write and speak this message because I believe that today, more than ever,
women must take charge of their own financial lives. In my opinion, a woman
can't be free until she's financially free.
I'm often asked, "Is there really a difference between men and women when it
comes to money and investing?" The answer is: No. And yes. The how-tos of
investing--how to find a good rental property, how to know when to buy and sell
a stock, how to spot great business opportunities--are the same for men and
women. What's different are the issues women face in the world of money and
investing. The following statistics clearly illustrate some of these issues:
- Nearly half of women over the age of 50 are single. This means that many
of these women are responsible for their own financial well-being.
- One out of every two marriages ends in divorce. What is the number-one
thing couples fight about? Money. And who usually ends up with the children?
The woman. Now she must provide for herself--and her kids.
- In the first year following divorce, a women's standard of living drops an average of 73 percent.
- In 2003, more women declared bankruptcy than graduated college.
- Fifty-eight percent of baby boomer women have less than $10,000 set
aside for retirement.
- Of the elderly living in poverty, three out of four are women. Yet 80
percent of these women weren't poor when their husbands were alive.
These statistics tell me that many of us women haven't been educated about
money, much less investing. We haven't been expected to know anything on the
subject. Unfortunately, too many of us, especially as we get older, are finding
ourselves in dire financial consequences. This needs to change.
What the Heck Do I Know?
Not long ago, I was absolutely clueless about money or investing. To me,
investing was something smarter and wealthier people did, not something I could
do. In 1989, three years after Robert and I were married, Robert said to me,
"Kim, it's time you start investing." All I could say was, "Huh?" He then began
to teach me what his rich dad taught him. Then he said, "OK, now you're on your
own."
To make a long story short, my first investment property was a small, two
bedroom, one bath house in Portland, Oregon. It cost $45,000 and required a
$5,000 down payment, which I didn't have. Robert and I were broke at the
time--and about $400,000 in debt.
I looked at this rental property and was scared to death. What if the tenant
moves out? What if the roof leaks? What if I lose money? What if, what if, what
if. Somehow, I finally got past my fear and purchased the property. This first
property gave me a whopping positive cash flow of $25 each month. It wasn't a
lot, but it was a start. And it was with this first, small property I learned
the fundamentals of real estate investing.
From there I went on to purchase more single-family homes, small apartment
buildings, then larger apartment buildings, commercial buildings and eventually
other types of investments. Instead of $25 per month per property, my cash flow
per property today ranges from $5,000 to $30,000 per month.
It's Your Choice
Which do you want, financial independence or financial dependence? Investing,
whether it be in real estate, paper assets or businesses, isn't rocket science.
It simply takes some time and education. And I'll talk about that in future
articles.
Financial independence is about much more than money. It's about self-esteem,
dignity, better relationships and more meaning in your life. Ultimately, it's
about having the freedom to get out there and do what it is you truly want to do
in life.