100 Words On: Why Financial Freedom Requires Very Little Money

Don’t fall into the trap of thinking that one has to be “rich” to attain financial freedom. There are lots of people earning millions per year who aren’t financially free, just as it’s also true that there are folks earning less than $40,000 annually who are financially free. The latter case is more common than you might think because financial freedom doesn’t depend on money so much as it relies on personal responsibility and a commitment to fiscal discipline.

The bottom line: Financial freedom comes easiest to those who understand it’s a state of mind as much as a state of being.

Photo Credit: recursion_see_recursion


  1. 1


    I’ve even known people below the U.S. poverty line ($10,890) living a life of financial freedom. Those are my real heroes.

    • 2

      Len Penzo says

      Isn’t that amazing? It can definitely be done. Someone wrote to me awhile back regarding my article on how $40,000 is enough money to live on, saying that they have a family with six kids (or maybe it was seven) and live happily on $25k per year. Like I said, it’s all a state of mind!

  2. 3


    If you are in control of your finances and debt free, you can live on very little. It goes back to needs and wants. Many of my happiest moments were free!

  3. 5


    Very interesting thoughts! And completely true–there are definitely rich people who are not financially free. And how sad! It’s easy for the rest of us to think “if I had their income I would be financially free for the rest of my life”, even without working more than one more year.

    • 6

      Les Conyers says

      Dare mrPenzo, I really loveyour website as to it is very educational and the blogs are sometimes very funny! Keep up the superb work. “Neither borrow nor lender be”

  4. 10


    Definitely true – as long as the $40K comfortably covers expenses, doesn’t accrue any debt, and there’s enough left over for savings, it works.

  5. 11

    AniVee says

    I can’t agree more! It doesn’t require that you have a lot of assets, but it DOES require that you have a very small amount of *LIABILITIES* – (or none!) … those are the little devils that bring you down…

  6. 12


    I agreee with AniVee. Financial freedom is more a lack of debt and liabilities than a hefty income. Most Americans have created their own financial restraints by choosing the lifestyle of a consumer.

  7. 13


    It is disappointing to think that some financial advisors out there are more concerned with increasing income for families rather than assisting them with adjusting to the amount of financial security they do have. While this could be the case for some, we need to take initiative over what we really value in our lives and weigh them heavily with the lifestyle and budget we create for ourselves in order to really have the chance to feel financially free.

    • 15

      Len Penzo says

      Hi, son. Hopefully you’re on lunch break and not in class. You are on lunch break, yes? Love, Dad.

  8. 18

    Charles Hummelke says

    To DOABLE: Johnny’s Side kick was ED McMahon And you are right he went “belly up” after Johnny retired.He had to sell most of his possesions to survive. It was a shame./ My brother and I had an understanding that if he borrowed from me, he should exspect that I had the same right to borrow from him. We never kept records just an understanding that we help each other out. This has worked well through out our long life times. (75 & 66) Hands

  9. 19


    ‘Bout time someone pointed this out! 😉 My freedom is tied to my time. When I have time to do what I love, I consider myself free. Not only does the amount of money you make not matter, I think having to WORK for money is a drag. The older I get, the more I just want my basic needs taken care of, then the ability to spend time with my loved ones. And that doesn’t take a lot of money.

  10. 20

    Kevin says

    I have raised two kids on 25 grand a year.
    I own a mobile home (totally misnamed since it has never moved)My bills are less than 1/2 my take home.
    I do splurge on vacations I have an annual pass to a major theme park in driving distance.I stay at 35 dollar a night rooms while there (you can get 25 dollar a night rooms if bring bug spray and your own sheets it is just cheaper to pay an extra 10 a night)I once bought a 500 dollar car(air cond worked) that I drove for 4 years and junked it and received 285 back.
    P.S, renewing an annual pass is 1/2 the cost of a new one.

  11. 21

    David C. says


    Last weekend I was paid a surprise visit by an ex-neighbor who, with his wife, managed their money and were able to retire in their early 60’s back in 2012. I think they were financially independent for a bit before that, but just wanted a bit more cushion before they pulled the trigger on retirement. They downsized from a 1,700 square foot house here in OK and moved to a smaller pueblo style house in AZ. That is a culture shift!

    Anyway, they are as happy as newlyweds again, since they became FI and left the rat race behind. Seeing them again made me very happy that they had made it and that there might yet be hope for me. It was a pleasant visit and a nice little push to try harder to get to the point that I can give my employer my “two cheeks notice”, lol.

    • 22

      Len Penzo says

      That’s terrific, David. I think most people look forward to the day where they can give our employer two weeks (or cheeks!) notice!

  12. 23

    KiwiBloke says

    Bingo – you explain it in an instant. I’ve always earned well below the median wage in NZ yet in 20 years of working part time I got to the point where work has been an optional extra for the last few years. I live comfortably off $20000 (NZD) investment income is well over that, which means there’s enough to put extra away for my daughter’s uni fees, old aged medical care and the proverbial rainy day. I feel I want for nothing.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>