Money smart skill # 2– Increase your cash flow monthly
I started my journey to becoming money smart in 1993. Before that time I was not money smart. I was self employed, working 70 to 80 hours a week and burned out doing a profession I loved. My horse clients and patients meant everything to me but I wanted more time to spend with my own horses and I wanted to be able to afford to have my own farm and my own home.
As fate would have it, a trusted friend introduced me to network marketing. Lacking money smart skills, I did not immediately see the business model as anything different than selling products. I was game, however, and jumped into the company and built me a nice base of customers.
To this day I still use the products from my first company and maintain many of my original customers but in the beginning finding customers was very time intense and even though my income did go up my time freedom was even less. I was pretty miserable.
When I read two books by Robert Kiyosaki, Rich Dad Poor Dad and the Cashflow Quadrant, I realized I had to do something to increase my cash flow monthly that did not require me to work more hours. I set my sights on a figure that looked reasonable and would make a big enough difference to keep me motivated.
After 10 years of working with my first company I realized their business plan was not a fit for the time freedom I was seeking. I was wanting a company with a model that would not require me to personally sell lots of products. I wanted to find a team of people and build me a network of customers who would also find customers. I found what I was looking for in another company introduced to me by again by a trusted friend.
Even though I had surpassed my cash flow monthly goal with my first company I did not have the time freedom. I wanted time with the horses, my own farm and home. I joined another company in 2005 and proceeded to focus on building a network of partners into my busy schedule.
Now the majority of my partner/customers are also seeking financial and time freedom. Face it, network marketing is not for everyone and the business partner approach is only for the super committed but if it sounds like a fit for you give me a call. Madalyn
PS I now have my own farm and ride almost every day.
Money smart skill #1: get out of bad debt!
Boy has there been a cascade of talk lately about bad debt. Our country is out of control with bad debt and our government is out there encouraging people to spend more. It is insane!
On the other hand, there are some wonderful people, such as Suze Orman, out there teaching individuals how to get out of bad debt by controlling spending and doing a better job of managing money. These money smart skills taught by these experts are sound and should be part of everyone’s money smart training.
I suggest you learn all these money smart skills to stop wasteful spending but it sure is easier to get out of debt if you are bringing in more cash flow monthly at the same time. Network marketing is one way to start a home business without a huge initial investment. Five hundred additional cash flow monthly is very doable and I want to share how I got there. You will need to purchase products for your own consumption to generate a check but guess what, his is good debt invested in something that can bring you passive, residual cash flow monthly.
Here is an exercise to get you out of bad credit card debt.
Whether you increase your cash flow monthly by $500 or work with your current income here is the process. Making a full extra payment every now and then might be out of the reach of some people but here’s what anyone CAN do. The secret is to stop using credit for bad debt. Money smart people know that if spending the money is not going to make or save you money it is bad debt!
List all debt in one column with highest interest rate debt at top (that will probably be a credit card).
Decide how much extra you can pay each month even if it is only $10 – $25 a month. There is no debt out there that you can’t get out of by starting today and having a simple plan!
Apply that extra amount to each month’s bill on the first debt on your list to get it paid off as soon as possible. If it has a minimum amount that gets smaller each month as you pay down balance (like a credit card) do NOT reduce what you are sending – the payment plus the extra $ you have decided to pay each month. You instantly can feel better just having a plan and sending any amount of extra money.
If you can also do a little more some months on top of that commitment to get money smart by paying off bad debt, then great.
Put it all on paying off the first debt at the top of the list.
Once that first debt is paid off then take the amount you have been paying -the monthly payment plus the extra you have decided on – and put that ENTIRE amount each month toward paying off the next debt in line. Now this is a good chunk of money toward paying off that debt! Check out how that feels!
Now you’ve got one debt paid off and you’re bringing that whole monthly payment down to add to your second bill and pay it off. Action! Yippee
Soon, two debts are paid off. You’re seeing results and rolling! ALL the money of payments for debt one and debt two now rolls down to pay off debt three.
Each time you pay off a debt you roll ALL the money of the previous debt payments plus your additional amount down to the next debt to pay it off. This plan works so much faster and is much less painful if you are increasing your cash flow monthly at the same time.
Did you know that when you use credit counseling companies that negotiate lower interest rates for you, it may be on your credit report and not look good for you when you try to go buy a car or get a mortgage? YOU can call your debtors and tell them you are committed to being in integrity with them (they love to hear that!) and ask them to lower your interest rate.
Those companies that are going to be open to lowering interest rates – and that is a common business practice – will do it when you ask, and then nothing negative goes on your credit report – what does go on your credit report is lowering balances and paid off debts that makes you LOOK GOOD!
Another option is when you make that debt list – to get momentum going check and see if you have a small balance bill – regardless of the size of the payment or interest rate – that would obviously be quickest to pay off – and maybe you want to add your extra payoff money to it, get it paid first because it will be quickest to do so, and then have that monthly + payment to apply to paying off the second account. It may feel better to get one bill paid first that is the easiest bill to pay so you can see results and get the ball rolling
Mortgages are EASY to pay off but not as critical as credit card debt. Money smart people realize that most mortgages have fixed reasonable interest rates and are a tax deductible. Setting up an emergency fund is generally the next most important step after paying off credit card debt. But, hey, if you are on a roll, go for it.
The fastest way to pay off a mortgage may well be the above debt reduction system because if you have several debts you are handling now and then pay them off and apply those payments+ to your mortgage payment each month, then you’ll smoke your mortgage! Because a mortgage is such a large balance debt, regardless of the interest rate, that usually is the last debt you pay off.
Don’t forget to pray for help and strength. Debt reduction is a process and it involves changing your habits. It is step number one in becoming money smart!
