By Richard W. Stout III
I’ve been in the financial services industry for over 25 years. During that time, I’ve heard my fair share of sound financial advice: maximize employee benefits, pay off credit card debt, manage risks. Although these are wise words to live by, I believe the best financial advice can be summed up in two key lessons: live within your means and save and invest wisely.
1. Live Within Your Means
Spend less than you earn and save the rest. We’ve all heard this adage before, yet we can all agree that it’s easier said than done. Credit cards, loans, and even your savings can make it easy to spend money you don’t have without even realizing it.
But here’s the cold, hard truth: You can’t know if you’re living within your means if you don’t track your cash flow. How much money do you take home every month? How much are you spending? If these two questions have you scratching your head, it’s time to put a budget in place.
Yes, even millionaires need a budget. It’s a foolproof way to make sure you reach your financial goals and stay in control of your money. So, go ahead. Fire up that spreadsheet or download that budgeting app and get to tracking those expenses. Be ruthless and cut out any extra expenses that aren’t important to you. There’s no need to keep up with the Joneses if you don’t even like how the Joneses live in the first place.
If your budget feels too restrictive, look for ways to increase your income. Go after that raise. Start a side hustle. Look for a new job if you have to. Studies show that an employee can see a 10% to 20% bump in salary when they leave a company versus a 3% raise when they stay in their current position. (1)
2. Save and Invest Wisely
When you save and invest wisely, you eventually build enough wealth to achieve financial independence.
Saving wisely means building a three- to six-month emergency fund and keeping the money in a high-yield savings account where it won’t lose value. If you lose your job, need to pay for an unexpected expense, or simply don’t want to withdraw from investments during a down market, you pull from this account. It’s your safety net for when life takes an unexpected turn.
Investing wisely is a bit different. It’s where you harness the power of compound interest and hopefully build real wealth. At Benchmark Wealth Management, LLC, we believe investing shouldn’t be overly complicated. You don’t need to read the latest financial news or follow the hottest stock trends. We believe you just need to:
- Create a broadly diversified portfolio of low-cost mutual funds or ETFs.
- Choose a proper asset allocation that aligns with your goals, risk tolerance, and timeline.
- Automate your investments so you’re not tempted to make decisions on emotion.
For high-net-worth individuals, investing wisely may also mean working with a financial planner. A recent Vanguard study shows that investors who work with a professional see 3% higher net returns than those who don’t. (2) This is because a financial planner can help you lower investing fees, save on taxes, and avoid making emotionally charged decisions.
How We Help
Living within your means and saving and investing wisely may seem like simple advice, but these nuggets of wisdom have the power to revolutionize your financial life if you follow them closely. At Benchmark Wealth Management, LLC, we’re committed to helping you achieve the freedom and peace of mind that comes with true financial security. Whether you need a full-fledged financial plan or just a go-to person to bounce ideas off of, we’re here to guide you every step of the way. Please call 860.434.6890 or email me at richard.stout@bwmllc.net to schedule a consultation.
About Rick
Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary (AIF®) designation. He has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning and holds the Master Planner Advanced StudiesSM (MPAS®). He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. He also completed the Accredited Wealth Management Advisor (AWM®) program through the Estate and Wealth Strategies Institute at Michigan State University. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.
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