Max's Story

So, to get started, let's first review the case of Max.

Now, Max was one that was in Section 2, on page 2-37. If you'd like to take a moment and look back at that statement, Max, as you might recall, was a 27-year-old man.

He'd graduated from college with a degree in biology, but he ran out of money and loans before he could finish his graduate degree. So, he was stuck in a position where he couldn't advance without an advanced degree, and then he found out he hated his job.

Now, many of you today may be able to empathize with Max. You might be in a job that really doesn't give you any passion, but you need it. You need it to pay the bills. Well, Max certainly did need it to pay the bills.

Take a look at Max's financial statement. Now remember, Max set aside a day to pull this together.

First, on his income, he listed his earned income. Now, that is the gross amount that he made in his job.

What that means is how much he got paid before taxes. Many people confuse that with the amount they take home, which is net income. For our purposes, we're looking at the gross amount. That's earned income.