Episode 26: The Wealth On Any Income Book – Section 3: The Cash Flow Form – Transcript

Wealth On Any Income Podcast Episode 26

Hi Folks, Welcome to the Wealth On Any Income podcast. This is where we talk about money tips, techniques, attitudes, information and provide inspiration. I’m your host, Rennie Gabriel.

In the previous episodes I spoke about your five year financial goal; the difference between good debt and bad debt; how good debt can support you to create wealth and how to complete a Balance Sheet and determine your net worth. This tells you how close you are to Complete Financial Choice™.

Today, I will continue reading the third section of the Wealth On Any Income book. This section is where I cover the tools, tips and techniques that will lead to you having Complete Financial Choice™ in your life. Today I’ll talk about the Cash Flow form. It will tell you where your money is coming from and where you are spending it. You will see there are many areas to create income. You will see if more money is coming in than going out. Or If more is going out than coming in and how to fix it.

It’s the tool that tells you how you got to what you have on your Balance Sheet.

It will be around 15 minutes today.

As I read, I could stumble over some words. I am not a professional voice over actor so please forgive me if that happens.


You need to answer the following question. And the operative word here, the key word, the important word is like. Do you like to budget? Probably not.

Let’s try another question. Do you like to spend money? Probably. That’s why I’ve created a spending plan instead of a budget. What I mean is you begin to spend your money in alignment with your goals and the areas that provide you the most pleasure. Well, you won’t know where that is unless you find out where you’ve been spending your money and begin evaluating the level of pleasure you’ve been getting from it.

Tool #3 - The Cash Flow Form (Spending Plan)

In the book you’ll see a chart which is a sample of the Cash Flow Form. You can request any of the forms I talk about by sending an email to Rennie@WealthOnAnyIncome.com. You’ll use this tool to find out where all the money you earn or receive comes from and where you’re spending it. It’s also referred to as an Income and Expense form and creates the basis of your “spending plan.” After you fill out this form you need to ask yourself, “Is this is how I want to spend my money?”

You may receive a regular paycheck as your only source of income, so the income side will be easy to complete. My suggestion is to write down the amount of your net check. This is the amount after taxes have been removed and other deductions have been taken. This is the amount to look at. This is the amount you have to live on. This is the amount you have available to pay your bills. Looking at the gross amount will not serve you unless it stimulates you to take actions to reduce your taxes and other deductions and transfer that money into the areas that will create wealth.

You may be a commission sales person. If that’s the case you have a different source of income. You may be an entrepreneur, a businessperson, or self-employed. You may find you have several sources of income. You may have income from rental property, dividends, interest or royalties. You may be retired and have income from social security, a military pension or a corporate retirement plan. You may be someone who doesn’t have to work because you get distributions from a trust account or you can’t work and receive disability income. Just fill out the Cash Flow Form based on where the money comes for now. If this income will stop, be sure to make a note of it.

Where you see and asterisk (*) by a category item on the Cash Flow Form, like clothing, gifts, and vacations, are items which may not show up each month, but you need to set money aside monthly for those items.

You’ll notice at the top of the column over the expenses it says person #____. If you’re part of a couple, or even a group of people who live together and contribute income to the same household, you’ll need to copy this form for each person. Or, you can add a column next to the one on the form if there are just two people. Any couple can use this tool to determine how to share expenses, whether they live together or not.

If you get paid once or twice a month, this is pretty easy. However, if you get paid every two weeks, then this form works a little differently for you. There will be two months each year when you will receive an extra, or third paycheck. I do not want this extra paycheck to be considered or added into your monthly income. It would slightly increase what your monthly income would look like, and this would be misleading, because it would not be a true reflection of what actually comes in ten months of the year. You can certainly look at this as additional income, but it would be more valuable for you to save it, rather than needing it to bail you out of the short-falls you’ve had 10 months of the year.

If you’re self-employed or have your own business with an erratic income this exercise is more important for you. For this part, take the total you earned for a 12-month period, and average it out on this form under gross income. It may not be accurate, but it’s an important starting point. You may be short one month, and play catch up in another. The goal setting part of this book is designed to assist you to establish an action and support structure; you get to focus on what needs to be done to create a consistent and/or higher income and deal with the peaks and valleys. I’ve done it, and I know you can do it, too.

Referring back again to Robert Kiyosaki’s book, Rich Dad, Poor Dad, how your cash flows from one area to another on your balance sheet will determine if you will be poor, middle-class, or wealthy. The poor use their income to directly pay for expenses such as food, rent, clothes, fun, transportation, and so on. People in the middle-class use their income for those same expenses plus liabilities such as a mortgage, consumer loans, or credit cards. The wealthy use their income to purchase assets that generate an income, such as rental property, stocks, bonds, intellectual property, trust deeds or notes. And, the wealthy have their income come from things like rent, royalties, interest, and dividends. Completing this form will allow you to see where you are now. Then you can choose where you want to go.


From a Dear Abby column many years ago I read the following:

“I am a twenty-three-year-old liberated woman who has been on the pill for two years. It’s getting expensive and I think my boyfriend should share half the cost, but I don’t know him well enough to discuss money with him.”

The above comments say it better than I can. People are more willing to discuss sex rather than money. In the privacy of your own home you’ve written down where your money comes from. Now, let’s see where it’s going.

Again, the Cash Flow Form is where you list both your income and expenses. I have one in the Appendix section of the book. When you fill it out for the first time it’s okay to guess. It’s even desirable if you don’t have the information available. You’ll need to photocopy it before you begin to fill it out so you will have extra copies for future use. Tool #4 in the Appendix is the Spending Plan Cash Flow Memory Jogger. You may want to look over the items in each category to remind you of the places where you could have spent money but forgot about it. A sample, and more of an explanation of the Cash Flow Memory Jogger, follows shortly. Again, all these forms are in the Appendix, and you get copies of them all by sending an email to me.

Another way to fill out the Cash Flow Form is to wait a month or two after you’ve tracked your money to find out where it’s going. I do not suggest this. Instead, I suggest you guess first, and then you can track your expenses and compare that to your guesswork. Again, this is why you need to copy the form before you fill it out the first time. You’ll be coming back to this form several times.

In addition, this form needs to be used by each person in the household who is responsible for some expenses. When I refer to financially responsible, it usually excludes children. If you and another person decide to share expenses, like you pay the rent and the other person pays the utilities, each of you needs to fill out a form. If you give a child an allowance, that just goes down under dependent expense for you. Likewise, if your significant other has no responsibility for expenses, but you give them money, it could be treated like giving an allowance to a child. If it’s a roommate arrangement, they don’t have to complete a form. You just omit from your form the expenses they pay for.

I’ve had clients whose husbands made none of the financial decisions or paid any of the bills. They may or may not have worked and earned an income. They might have just turned their paycheck over to their wife and received an allowance in return. In this situation, there would be no need for the husband to fill out a form. The wife would just put the allowance down under dependent expense. The same would hold true if the roles are reversed.

After you fill out the Cash Flow Form for the first time by guessing wherever the money went, or looking back through your checkbook register and compiling it from your credit card statements, subtract the expense figure from the income figure to see if you have a deficit (spending more than you earn) or if you have a surplus. If the amount on this line is positive, great! You now know how much money you have to use to either reduce debt or increase your savings and investments. Setting aside this surplus is one way to create financial freedom, but this is paying yourself last. The ability to have work as a choice and not as a requirement comes from having money that generates the income for you to live on. Otherwise, you have to continue to generate the income. This is called money at work instead of you at work. In Step 10 I’ll tell you the most powerful way of building this pool of money. It’s called pay yourself first and we will go into detail.

If the amount on your cash flow form is negative, guess what? You’re spending more than you earn. I apologize if this is too basic. I used to think all I had to do when this was my situation was to earn more money. After my expenses outran my six-figure income, I realized it wouldn’t matter how much I earned, I had to start dealing with the expenses first. While some people may joke that this is the “American way,” it will lead you to personal financial ruin. I know that is not the course you want to take or you would not be listening to me read this book to you.

And, when you focus on expenses first, you can look at increasing your income second, and you will see you will earn more of it. The universe will reward you when it sees you know how to handle money powerfully, and that means a focus on expenses first.

There are two solutions to a deficit. After you complete the Cash Flow Form, you’ll be ready to deal with the first solution to overspending: The Financial Coach Spending Plan Register. We will get to that shortly. The other solution will be shown in Step 9: “What to do when expenses exceed income.”

If two people work together I suggest they determine what expenses they will be responsible for ahead of time in writing, as they complete the Cash Flow Form. Use Tool #3a in the Appendix to assist with this process. It can be changed whenever you like, but start by writing it down. Then each person has their own checking account to cover their own expenses. I didn’t say checkbook, I said checking account. This could also be Venmo, Pay Pal or even Apple pay.  The point is that the income is split along the lines of who will pay for what expenses. It doesn’t matter who earned more or how much, the money gets split by the expenses each person agreed to be responsible for paying. This includes vacations, hobbies or whatever. An excellent book to assist with the mechanics of this budget/spending plan process is Rich on Any Income by Combs and Christensen. It was first published in 1985, but should still be available.         

An excellent book for couples who have difficulty communicating in this area is Couples and Money by Victoria F. Collins. It was originally published by Bantam Books but is now available through Gabriel Publications and online at Amazon. This is the best book in the field and bringing it back to the public was the reason I established my publishing company.

Tool #4 - The Spending Plan, Cash Flow Memory Jogger

The fourth tool in the Appendix is the Cash Flow Memory Jogger. You can tear out the page in the Appendix or copy it to carry with you. It will remind you of the different expenses and categories. The first place you’ll use it is when you sit down to fill in the Cash Flow Form and can’t remember all the places where you spent your money. It will remind you, and it matches the numbers on the expense list. As an example, someone might say, “I don’t buy clothes or spend money on entertainment. I don’t have any expenses there.” But they do if they go to the dry cleaners or laundry. Those are clothing expenses. They do if they buy books, magazines, CDs, rent videos or pay for Cable TV. Those are entertainment expenses. There should be no “miscellaneous” items. If it’s not on the list, and it’s legal, call me and let me know what it is, and I’ll add it to the next edition. You’ll see there are 20 different categories to find out where your money is going and I believe this would cover almost any place you could be spending it. You can also use these categories in a computer spreadsheet program or with existing programs like Quick Books or Microsoft  Money.

There’s an unusual category on the Spending Plan Cash Flow Memory Jogger. It’s item #19, called Lessons Learned. This covers situations when you’ve spent money and you don’t really have anything to show for it, other than the fact you’ve learned a lesson. This could be anything from being ripped off in an investment scam to buying a vacation timeshare you never use, and find out you overpaid. This isn’t an investment, or a capital loss, it’s a lesson learned.

These forms were developed over many years of trial and error with thousands of people. If you feel these forms would be of value to another person make a copy for them. Or suggest they buy a copy of my book, or get a copy of my book at the library. Or suggest they listen to this podcast.


Here’s your opportunity to grow: Send an email to me and request all the forms I talk about in this, and the next several episodes. Send your request to Rennie@WealthOnAnyIncome.com.

In the next episode we’ll continue in the third section of the book where I cover the Financial Coach Spending Plan Register. You’ll see where your money goes in 5-10 seconds and you can measure the level of pleasure based on the money you’re spending.

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Until next week, be prosperous. Bye, bye for now.

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