Ralph Bender - Live Within Your means

Live Within Your Means

The simple formula for personal wealth management is to spend less than you earn and invest prudently, aligning your investments with your long-term goals.

Always keep your investments focused and match your time horizon with your investment. We like to say, focus on the long run.

- Ralph Bender

Live Within Your Means

When asked for his “go-to” tip for financial wellness, Ralph Bender, MBA, CFP®, of Enduring Wealth Advisors®, states it simply: live within your means.

While it makes sense to spend less than what you bring in each month, it’s also tempting to spend more since various forms of secured and unsecured credit are easily accessible. However, using credit cards and loans to maintain a lifestyle beyond what your monthly income can accommodate can put you into a vicious cycle of debt.

For example, carrying a constant $5,000 credit card balance at 18% interest could reduce your personal net worth by more than $100,000 over 30 years. A $50,000 balance for the same period could cost over $1 million.

That’s based on the assumption that interest-only payments of $75 per month, or 18% annually, get diverted from a retirement investment earing 8% over 30 years. In addition to the $24,000 interest payments going to the credit card company, the hypothetical investment stream grows to $111,777. A balance 10 times larger increases the burden ten-fold.


Speaker 1:           A go-to financial tip.

Speaker 2:           Yes.

Speaker 1:           Live within your means. That's one of the problems that a lot of people have is that they think they have to have what their neighbor has. They get overextended on credit. In these times when household debt is at an at an all-time low, we still run into people that can't get off the junk of carrying $5,000 credit card debt, or $50,000 credit card. That's probably the main thing for somebody who needs to get started. The other thing is to keep focused on the long run. Always keep your investments focused and match your time horizon with your investment. We like to say, "Focus on the long run." It even says it right on my business cards.

Speaker 2:           Awesome. [inaudible 00:00:51].




This is a hypothetical example and is not representative of any specific situation. Your results will vary. They hypothetical rates of return used do not reflect the deduction fees and charges inherent to investing. This example was created using a compound interest calculator compounding monthly.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk, including the loss of principle.

The views and opinions expressed by the LPL financial professional(s) are as of the date of the recording. These views may not be representative of other financial professionals and are not indicative of future performance or success. Neither LPL Financial nor the LPL financial professional can be held responsible for any direct or incidental loss incurred by applying any of the information offered.