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How I became financially free

If I can do this, you can, too -- even if you have a modest income and/or currently find yourself buried under a mountain of debt.

By MSN Money Partner Aug 31, 2012 3:19PM

This post comes from Len Penzo at partner blog Len Penzo dot Com.


Len Penzo dot Com on MSN MoneyLet's face it, the more choices we have in life, the richer and more rewarding it becomes.


Image: Roll of bills (© John Wilkes Studio/Corbis)Fortunately, I'm currently in that coveted sweet spot where I can do pretty much whatever the heck I please, whenever I want.


Don't get me wrong. I'm not in a position to buy whatever I want, but I am able to take advantage of a lot of opportunities in life that are typically out of reach for the financially undisciplined crowd. So, financially speaking, I'm in a pretty good place right now.


Flexibility is a powerful perk

If I want to drop everything right now and take a spur-of-the-moment vacation, or visit some friends on the other side of the country, I can do it. True, I won't be flying first class or staying in five-star hotels, but I can do it in a financially reasonable manner, knowing that the bills will be paid in full shortly after they arrive in the mailbox.


Many of you know that not too long ago I made the biggest impulse purchase of my life, shelling out almost $2,500 -- from a "mad money" savings account I have -- on a couple of tickets to see my hockey team play a Stanley Cup Final game.


I'm also fortunate right now to be in a position to handle unanticipated financial surprises -- like when I got blindsided with a dentist bill earlier this year for $3,332 to cover the cost of, among other things, having my son's impacted wisdom teeth removed. And while that really smarted at the time, I was thankful to be able to pay the entire bill without having to take out a loan because I had a rainy-day fund to handle unexpected expenses. (Post continues below.)

The quest for financial freedom

Although a lot of folks would disagree with me, I'm not rich -- but I am financially free. It's important to understand that the two are not synonymous.


Believe it or not, financial freedom can be achieved no matter how much money you earn. All it takes is a lot of discipline, a little patience, and a strong commitment to spend less than you earn, which is why I constantly preach that financial freedom is a state of mind as much as it's a state of being.


So how did I get to this point? Well, there are two big reasons:

  • I've always lived well below my means. Always.
  • I've kept my debt to a minimum.

That's not to say all debt is bad; it's not. Even so, the only outstanding debt I've had on the books for the past eight years or so is a very manageable monthly mortgage payment. For as long as I can remember, other than our cars and the house, I've never bought anything unless I've had the money already set aside to pay for it in full.


By following that simple strategy, I've been able to avoid tens of thousands of dollars in interest payments over the years. That's money I've been able to, for example, spend on a last-minute vacation to Hawaii in 2011 and, even more importantly, feed into my retirement, mad money and rainy-day funds.


The moral of the story

It's never too late to start your quest for financial freedom.


Remember, if I can do this, you can too -- even if you have a modest income and/or currently find yourself buried under a mountain of debt. Trust me: The only catch is you've really got to want it.

The bottom line is this: Debt limits your choices and future opportunities in life because you end up spending tomorrow's wages today.


The good news is that by forcing -- and then keeping -- the red ink on your balance sheet to a minimum, you'll not only keep more control of your life as you get older, but you'll also gain the financial flexibility to make it richer and more rewarding.


More on Len Penzo dot Com and MSN Money:



Sep 1, 2012 7:26AM

We made a choice to live below our means and keep debt to the very minimum. When we were younger rather than buying boats and Mc mansions we chose to stay in our home and pay it off and fish from the shore. We are free humans. Our home is paid for, we have NO debt. I work just to maintain health coverage for us. Debt is slavery. I really think consumer companies want you enslaved to force you to work. Get control of your money and make it work for you instead of against you.

 It's a very secure feeling to be able to sit back in these screwed up times and know we can wait for better times without panicing.


Sep 1, 2012 11:45PM
I like this story.  Same method of operation for me in my life.  Lived below my means my whole life.  Last 15 yrs have not borrowed to buy my cars.  Paid the credit card off in full each month.   Only debt I have is 6 yrs left on a home mortgage.  I'm not uber-wealthy, but I can leave on vacation whenever I want and pretty much as often as I want. In the past 20 yrs I've even been able to to give 10% of my income to charity each year.  Don't be like the vast majority of Americans who wallow in debt.  Get out of it and free yourself.  Less stress, less worry, more time to do what you want.  More options in life. 
Sep 1, 2012 11:36AM
Just because someone may be in a tough financial situation, that does NOT equate to being irresponsible or living beyond their means, nor does it mean that they've always been in a tough spot.

Congrats to those of you who haven't had to deal with unexpected changes in your life, like the company you work for going out of business leaving you unemployed, or the company downsizing, or moving your job overseas.
Sep 2, 2012 4:30PM
my extra frugal husband was right. be cheap and then enjoy down the road.
Sep 2, 2012 2:23PM
You can either spend today and work in the future or work today and spend the future.
Sep 3, 2012 12:15AM
I fail to understand how Mr. Penzo can say that it is never too late to start having always lived within your means. This article fails to make logical sense, and I'm mildly surprised that MSN Money ran this fluff piece. That is not to say that it doesn't contain good advise to install in a growing and learning child even before their first paycheck.
Sep 4, 2012 10:28AM
I agree, while this article does contain some bits of sound advice, it is terribly lacking in meaningful and practical content.
Sep 3, 2012 10:16PM
Can we get some strategies on puts and calls for options?
Sep 2, 2012 2:16PM
Wow.  I'll have to remember this in my next life.  It's too late for the current one.  I don't see the path to get free from being buried under a mountain of debt.
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