Lesson Content

A lot of the heavy lifting has been completed in Course One. We’ve psychological prepared a plan and know the foundation we are working with. Now, what income versus debt are we working with? Let’s detail it and then optimize it.

To effectively determine and list current income and debt, here’s a checklist guide, along with tools and techniques:

For Income

Job/Salary:    Pay stubs, W-2, employment contract. Include bonuses, overtime.

Business Income:   P&L statements, bank deposits, invoices. Monthly average. If variable.

Rental Property:    Lease agreements, rent rolls, bank statements. Account for vacancies.

Dividends/Interest:    Brokerage statements. Use monthly or annualized.

Other (SSI, alimony, etc.):    Award letters, court docs, bank statements. Only include regular sources.

Undocumented Cash Income:   Push for bank deposit verification or business statements.

Hidden Debts:    Use a credit report to identify missed accounts.

Inconsistent Income:    Use a 3–6-month average for self-employed individuals.

For Debt

Debt Type:    Documents to Collect. Notes.

Credit Cards:    Statements showing balance + minimum payment. Collect all accounts.

Mortgage:    Loan statement or amortization schedule. Include escrow/taxes.

Auto Loans:    Monthly bill or loan agreement. Note balloon payments.

Student Loans:    Servicer statement or loan summary. Include deferment/interest information.

Personal Loans:    Bank or fintech loan documents. Confirm if fixed/variable.

Lines of Credit:    Statements with outstanding balance. Include HELOCs.

Now that we have all the numbers from Course #1 and #2, we can move on to Course #3 where we start to optimize for savings, protection and investing.

In essence, Course 2 takes the plan you created and puts it on autopilot. This reduces daily decision fatigue and ensures consistency – key for reaching those 5-year wealth goals. It’s the difference between manually drawing water from a well for each use versus installing plumbing that delivers water to you automatically. We want to “plumb” your finances.