How I Live on Less Than $40,000 Annually: Ralph from West Virginia

Ralph’s living room; the stone wall and fireplace took two years to build. His family lived in the home, built in 1977, while the interior was being finished.

My name is Ralph and I’m a retired US Patent Examiner. I have five kids, all of them in their fifties. Since retiring, I’ve developed a prize Angus cattle herd. I’ve also bought and sold real estate that I’ve held title to, sold timber from time to time, and leased my land for shale gas prospecting.

I’m not sure if my strategy for living on less than $40,000 per year will be of much interest to some of you, since it depends on a defined-benefit retirement payment that is no longer available to most young people these days. Even so, the heart of my story remains true to the spirit of this series: “A debt-free 82-year-old living in a low-cost, rural location with an assigned benefit pension of $40,000 and Medicare, is living comfortably with no financial problems.”

I’ve always been financially responsible, but I’ve never pursued wealth for its own sake, and I’ve never focused on increasing my net worth. Today my net worth is probably $2 million; most of it is in real estate.

I built my net worth by only investing in that which can be enjoyed during acquisition and throughout life, as opposed to papers in a drawer like stocks and bonds. In our case, that meant buying, on time, a large block of cheap, mountainous, forested real estate, where we built our home and enjoyed life there while the underlying asset (the real estate) appreciated.

A big benefit of real estate is that management strategies remain entirely in the landholder’s control, unlike paper investments in enterprises managed by others — and I’ve experienced many surprising episodes along the way.

One example: After I learned a neighbor was selling his timber “on the stump,” I walked out to my boundary line with him to see where his crew was cutting and, in the course of conversation, the crew chief told me he could see valuable timber over the line on my place. So I had a local sawmill assess it and the estimate was for $125,000 dollars! Ultimately, it brought $140,000 and that allowed us to pay off our mortgage and all other debt. I also bought a 1995 4X4 Dodge diesel pickup and 1999 4X4 GMC Suburban for cash, which I still own and which will last me the rest of my life.

I’ve been debt-free ever since.

My Household Expenses

To be honest, I don’t track my expenses. I manage my finances on the computer, mostly. I use tax preparation software and I bank and pay all of my bills online.

I have no rent or house payment. I’ve lived here in my private Eden for 36 years and the mortgage is long since paid off. Here in rural West Virginia property taxes are quite low — I pay about $800 per year for the house and 700 acres of land. My homeowners insurance, which includes a million dollar all-risks rider, is $120 per month.

We are independent of public water and sewer services, so our only utility is electric power, which averages about $350 per month. I pay $310 per month for satellite television, 4G Internet, and cell phone service.

I don’t keep track of the grocery bill. I just watch the checking account balance and if it gets below a few thousand dollars, I cut back a bit, or draw down from one of our three deep freezers.

As I previously mentioned, my two vehicles were bought with cash, so I have no car payments. I drive each vehicle less than 10,000 miles per year, and they’re very low-maintenance, so the car expenses are treated in same way as my grocery expenses. I pay $224 per month for auto insurance.

Of course, I have no life insurance now — although I did carry it while my kids were growing up. I have Medicare and Government-wide Blue Cross and Blue Shield supplementary health insurance.

For entertainment, my wife and I play bridge twice per month with a bridge group in a neighboring town. I visit with my children and grandchildren, walk on my property, watch TV, and listen to music (I enjoy most kinds, but I’m partial to Baroque music). I also enjoy commenting online about current events, going out to dinner, and taking occasional trips in a 1986 Scamp trailer that I tow behind the pickup.

Closing Tips and Thoughts

Like everyone, I’ve made my share of mistakes in life. If I had to share just one with you, I’d say that in pursuing my goals, I was often inconsiderate of other people’s feelings. There was no need for rudeness and I regret it.

If I had to list my five most important pieces of advice that I’ve learned over my 82 years, I’d offer these for your consideration:

  • Pay attention to your government and do what you can to make it represent you.
  • Marry and stay married to a steadfast, reliable partner.
  • Have children, if God gives you and your spouse the gift of them. They will be a joy and a trial early — but pure joy late in life.
  • Buy “investments” you personally control, and use and enjoy them as you go through life. It could be a small business; but in my case, it was rural real estate. Avoid “certificates in a drawer” that represent enterprises controlled by others.
  • Stop leveraging to acquire these investments as early in life as you can. Don’t be greedy — it’s important to know when enough is enough.


If you’re a household CEO who is successfully making ends meet on roughly $40,000 per year or less, I’d love to hear from you. Contact me at and be sure to put “$40,000″ in the subject line. If I publish your story, you’ll get a $25 gift card!

Photo Credit: Ralph


  1. 1

    Spedie says

    It is a treat to learn the life experience of the older generation. I have been thinking about stopping my $1900 per month investing, as I just don’t like the stock market and its risks. Thanks Ralph, you gave me lots to think about.

    I could buy a lot of rural land (for example) with that money as time goes on. I’m 50 and have time left.

  2. 2


    I love this story, Ralph!! I particularly like the 5 lessons you listed at the end, which I think are fantastic pieces of insight. Owning assets that you personally control, like real estate, is a great way to grow your net worth.

    • 3

      Shari says

      I totally agree with you! I loved this story, as well as the 5 lessons at the end. I always read this column and this was one of my favorites!

  3. 5

    Starr says

    Ralph, like the others, I just want to say I loved your story! The fact that your story is based upon a lifetime of experience makes it that much more powerful.

    Len, this is a great great series! Please keep these stories coming!!!

    • 6

      Len Penzo says

      Thank you, and I’ll do my best, Starr; but it’s all up to the readers — they’re the ones I depend on to share their stories!

  4. 7


    You share some key insights that I hadn’t considered before, especially being in control of your assets. That advice will definitely take some time to digest before we revaluate our current plan.

  5. 8

    Ralph says

    My first reliable, steadfast wife of 53 years (After her death I married again, to another good woman) deserves to serve as an inspiration, not only for her forbearance with my enterprises, but in her own right.

    At age 40, She graduated from Mary Washington College with honors while we were raising our five children. Later she taught piano, first in a studio we fashioned for her in an obsolete little country schoolhouse we bought, later in our living room (pictured in the story, above), on her Steinway B grand piano, which she purchase from her own earnings. Owning a Steinway had been a lifelong dream. West Virginia country folk are mightily attached to their small local churches. My wife taught quite a few adults to play 4-part hymns for their church, as well as many children.

    She was a highly competent, quiet, poised lady, traits she used to good advantage from her earliest years. She was an honor student at Detroit’s High School of Commerce. She used her co-op earnings from file clerking at Blue Cross to buy a sewing machine, which she used to make beautiful clothes for herself and others, from Vogue patterns. She graduated at age 17 and, based on her secretarial skills (remember Gregg shorthand, you old folks out there?), went to work as secretary to the Director of the Detroit Institute of Art. After I was discharged from the Army during the Korean War years, we were married and we went directly to Michigan State College (now “University”), where she worked as secretary to the Director of Salaried Personnel, Oldsmobile Division of General Motors, until I graduated. We were raised in God-fearing, working class families of that time and it didn’t occur to us to get her a college education, until years later.

    Best wishes to you youngsters – I sincerely hope you build enjoyable lives for yourselves, as we did.


    • 9

      Len Penzo says

      Ralph, thank you again for sharing your wisdom and part of your life with all of my readers.

      (And even I remember shorthand. When I got my first engineering internship in 1985, the secretaries were still taking dictation and I was fascinated with their shorthand (and 100 word per minute typing) skills. By the time I took a full time position a few years later, shorthand — and most of the secretaries — were on their way out. By the early 1990s shorthand had all but disappeared — I think a victim of personal computers, which all the engineers had on their desks by then.)

  6. 10

    John says

    Great success story, I enjoy reading articles like this. My belief is no one cares about your money like you do or should care.

  7. 11

    Money_Illusion says

    Love this success story. I’ve been doing almost exactly the same as Ralph has done. It’s encouraging to see others who have been successful apply the same principles. I too have ranch/farm land that I acquired years ago and have my own well, septic system, I burn my own trash, have no mortgage, rent, and pay for my car, truck & tractor with cash. I’ve planted fruit trees, and have a small garden that I plan to expand.The only thing I lack is solar/wind power which I plan to add in the future. That will free me from just about all utility bills. We don’t have cable but I do have cell phone and broadband Internet service for my pc. My property taxes are $900 a year. My goal is to be as self sufficient as possible. I’m doing this before I retire as I’m 54 and want my retirement funds to last and last.

  8. 12

    RD Blakeslee says

    It is encouraging to hear that others have found my experience to be of interest.

    While it is quite atypical of most folk’s way of going and thus not much in line with most of Mr. Penzo’s areas of advice, I thank him for including my story in his broad-based compendium.

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