Earn more, Spend Less and Invest!

By Mr. FrugalEnginerds

The Math

The equation of financial independence is simple and straightforward.

Money Earned – Spending = Money Saved/Invested over time = FI

On this blog, we mainly focus on living frugally by reducing unnecessary spending. However, there is a threshold where it’s unhealthy to dip below a certain level as it starts to negatively affect our standard of living, and thus reduce our overall level of happiness.  In Money Can Buy Happiness we discussed the relationship between income and happiness. We learned that the average American family making more than $75,000 a year won’t increase their day-to-day happiness.

I know…I know, you are probably saying,Holy crap, we can live like royalties for $75,000!” You are RIGHT!!!

Forget the Bacon, bring home the PIG!

Showing up and producing good work for our employers have paid off. Our hard work translates to raises and bonuses throughout the years, and I don’t see this trend stopping anytime in the future. We also have a few side hustles that produce additional income. One in particular is buying residential real estate. We buy properties below market value, fix them up, and rent them out. We made a few mistakes along the way but our hard work is paying off.  Approximately 50% of our asset is in real estate.


Kick Spending in the Rear

Our approach is simple, reduce spending to a level that our family is comfortable, without feeling deprived. Every family is different. Some family cannot forgo traveling every year to visit relatives on holidays, some family enjoying going to the movies, some family like to go to restaurants. When Mrs. FEN and I sat down several months ago, we compiled a list of items that we consider highly valued, average valued, low valued. Any items identified as low valued are reduced or eliminated immediately without feeling saver’s remorse.

The List:

Highly Valued

  • Family trips to visit family and friendsFootstepsinthesand
  • Our home
  • Creating memories with our daughter

Average Valued

  • Cars
  • Phones
  • Internet

Low Valued

  • Clothes/shoes/purses
  • Restaurants/dining out
  • Movie theaters


A lot of improvements can be made to the list above but as of right now the list represents us. Everyone’s financial independence journey will be different. We are perfectly content with taking baby steps to FI.

Mr. Market, Friend and Foe

Ben Graham, the Father of Value Investing and the author of “The Intelligent Investor”, described the stock market aka “Mr. Market” as an irrational bi-polar grumbly man whereby one day he offers to sell paper clips for $0.25. The next day he sells those same paper clips for $10.

Alright you…Ben Graham Police, I know those aren’t Ben Graham exact words. I am paraphrasing.


Ben Graham conveyed the wisdom that every day Mr. Market offer shares of publicly traded companies that are undervalued, fair valued, and overvalued compare to their true value or “Intrinsic Value”. The investor has the option of buying or selling based on this intrinsic value.

Investors are rewarded when undervalued stocks are bought and held long term. The difficult part is to determining undervalued stocks. If you are aspired to be like Ben Graham then should you read “The Intelligent Investor” and many books on value investing. While it’s easy emulating this Titan’s method of investing, it’s another to find the same success. For us mere mortals, there is another form of investment and it is much easier, although, not as lucrative. This is known as low-cost index funds. These funds are collection of the largest U.S. companies. As the economy goes up, the index funds will do well. On average the historical rate of returns is 7%. Which means $10,000 invested would double every 10 years. The magic of compound interest!

Initial Investment = $10,000

Year 10 = $20,000
Year 20 = $40,000
Year 30 = $80,000
And so on…

Cheer up buttercup

The path to financial freedom can be achieved by anyone.

Yes, even you! The gamer with Cheetos stains.

Other bloggers have done it, such as Jeremy and Winnie from Go Curry Cracker, Mr. Money Mustache, Jim Collins and amongst countless. It’s very liberating to know that with slight adjustments to our daily lives we can one day accomplish what they have. To all of you dreamers out there, the DREAM is just a glimpse of the future. Cheers!


Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.

-Albert Einsteinalbert einstein cartoon


2 thoughts on “Earn more, Spend Less and Invest!

  1. Hi Mr. and Mrs. FEN! Nice blog.
    I like your approach to FI through rental income. My wife and I started investing through some private equity funds in multi family housing, but would be interested in doing the direct route once we settle down in a permanent retirement location. Would be nice if you posted something on the experience of “landloring”, i.e., what’s the rental yield, what’s the worst experience you ever had, etc.
    Stay in touch and good luck! Stay frugal, my friends!

    Liked by 1 person

    1. Welcome and thank you for stopping by. We just started this blog so it has been a real learning experience. We have several posts about real investing that need to be finalized. We aren’t professional real estate investor but we hope our posts will offer some insights into real estate investing. Best of luck on your near retirement!

      Mr. and Mrs. FEN


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s