Milestone 4: Debt management

The drag on every wealth plan

Debt is the biggest drag on wealth building. Every dollar of interest can't compound for your future. The 4 most common adult debts: student loans, credit cards, car loans, mortgages.

You don't have to wait until debt is gone to start investing. But know your numbers. What you owe, the rate on each, and pay more than the minimum on at least one debt every month.

Full playbook (snowball vs avalanche, negotiating, consolidation) lives in the How to Get Out of Debt course. This lesson sets the foundation.

Key points

• List every debt. Balance, interest rate, minimum payment. Can't beat what you can't see. Avoidance is what keeps debt dangerous.
• Rule of 72 runs in reverse on debt. At 22% APR (average card), a balance doubles every 3.3 years. The math that crushes people. Kill high-interest first.
• Use the 28/36 rule as a ceiling. No more than 28% of gross income on housing, 36% on housing plus all other debt. Over that, cash flow suffocates.
• Go deeper in the Debt course. The full strategy lives in How to Get Out of Debt. This lesson sets the foundation.

Debt is math, not morality

Every interest charge is a tax on your future self. Every extra dollar today is one less of interest tomorrow. Keep it simple. Keep going.