Hey First name / Friend,

 

‘Spend less than you earn’ is one of the Golden Rules of finance. 

 

In my newsletter last week, I mentioned one of our joint intentions for 2026 was to ‘spend less than we earn’ across personal and business finances.

 

That’s because ‘cashflow’ has been a challenge for us the past few years.

 

In 2025, across personal and business finances we earned $80,826 and our expenses were $122,393. 

 

So, we spent $41,567 more than we earned. 

 

Which doesn’t look great at face value… 

 

But what does ‘earn’ refer to in this golden rule? 

 

We’re taught the cashflow definition which is ‘spend less than your earned income’. 

 

Earned income meaning the salary you take from your employer or business. 

 

And living by this definition is critical in the early years of building your wealth. 

 

Because you need to create a ‘gap’ between your income and expenses, so you can save and invest. And every dollar you save and invest secures a piece of your independence. 

 

If you’re spending more than your earned income early on – you will fall into consumer debt and struggle to get ahead. 

 

We’ve reached a different level on our financial journey. 

 

And the nature of our circumstances is quite unique. 

 

Although the cashflow definition of ‘spend less than your earned income’ is still important, for us – it also makes sense to look at it through another lens. 

 

 

Your ‘total economic gain’ is a combination of your: 

 

 

Because we lived by the principle of ‘spending less than our earned income’ early on and invested aggressively into assets over the last 10 years – our money is now working hard for us. 

 

So I was curious to investigate our ‘total economic gain’ for 2025 to give us another perspective.  

 

Our equity (assets minus liabilities, *excluding Superannuation*) increased by $126,140 over the 12 months (largely due to our share portfolio). 

 

And our investments produced net income (after expenses) of $16,052 (largely due to our investment property).  

 

So our ‘total returns from capital + income’ minus our expenses for the 12 months turned out to be positive $100,626. 

 

This tells a different story.

 

 

Ideally, 

 

We want to get back to spending less than our earned income as a basic rule – and that’s why we set the intention.

 

Because we don’t want to rob our future selves.

 

And that’s what happens when you liquidate investments too early to fund your current lifestyle. 

 

But I also want to highlight that we weren’t ‘blowing’ our money on luxurious purchases. 

 

We live a simple life, and enjoy it. 

 

It’s just our ‘earning power’ in recent times has been lacking (the challenges of parenthood and business). 

 

But because of the smart decisions we’ve made over the last 10 years, we’ve been able to navigate these tricker economic times. 

 

That’s what assets give you. 

 

Options. Choice. Flexibility. Time. 

 

Yes, I could go get a regular job and easily earn $100k+, so could Kaci. 

 

This would help our cashflow and get us ‘spending less than our earned income’ once again (which would make my Dad very happy – he’s an avid reader of this newsletter). 

 

But at what cost? 

 

Putting Cliffy & Florence in day care to be raised by others in their most formative years?

 

Giving up my mission and time to slave away at a job I don’t really like for a few extra dollars?

 

No thanks. 

 

That cost is far too high.