HomeblogYou might be wealthy, but are you free?

You might be wealthy, but are you free?

You ever read a blog post that went something like this…

You might want to think twice before you buy that scooter. It would set you back $3,000, and will likely only provide you entertainment for a handful of years.

What if you invested that money instead? 

If you put $2,000 in to a Roth IRA and let it grow for 30 years, at 8%, you would end up with $30,000. 


Is that scooter really worth $30,000 to you? I didn’t think so. Now go give yourself a spanking and put yourself in time out for even thinking that buying a scooter was reasonable! 

I can’t tell you how many times I’ve read some iteration of the post above. Maybe instead of a scooter, it’s a vacation. Or a boat. Or a house. Or probably the most popular topic for an argument like this to appear, a wedding post.

Consider this my permission to flip those other PF bloggers the internet version of the bird and tell ’em to buzz off. Unless of course, your goal is to be miserable for the rest of your life.

Then by all means, drink the kool-aid.

Personal finance bloggers commonly confuse the terms financial freedom and wealth.


Say I had $1,000,000 in my 401k right now. I am literally a millionaire. You’d probably even say I was wealthy.

But am I free?


My 401k isn’t going to pay my cable bill, put groceries on our table, or a car in my driveway for another 30+ years. Yeah, I’m a millionaire, but I’m no more free than the dude that bags groceries down the street at the local Safeway.

We both still have to go to work tomorrow.

Do you get it? 

You need to be working towards financial freedom, not wealth building.

Even though I still have to work, I consider myself relatively free. My job provides the best work/life balance of anyone I know. We have a roof over our head. We contribute 15%-20% towards retirement. And we’re content living within our means, no pinching pennies, but we still have to be mindful of our spending. As far as I’m concerned; we’re retired.

It’s a beautiful place to be, and a place I hope you are in, or working towards finding. 

Don’t get discouraged by the PF bloggers who talk about how great early retirement is even though they are still slaves to their blog (or their portfolios), who make you feel terrible for buying a new car, or who tell you there is no such thing as saving too much.

Those bloggers suck.

You be the best YOU you can be. Make a plan. Stick to it. And enjoy the ride along the way…even if that means you end up having a $30,000 wedding.

You don’t have to be a millionaire to be happy. Promise. 



  1. Great point. You must have balance.

    I refuse to live like a pauper just to save 50% of my income. I’m content saving 25% and living it up (relatively speaking) today.

    The thing is, the compounding example can be used for everything. Hey, that gas you are putting in your car could be $50,000 in 30 years. You should bike to work. Hey, that bike you just bought could be $100,000 in 30 years. You should walk to work. Hey, those running shoes you just bought could be $10,000 in 30 years. You should go barefoot…

    Also, no one mentions that the guy who retired at 40, with $1,000,000 in the bank, is barely making it. He’s going to continue to barely make it until he dies at 90, almost 50 years later. He’ll end up working part time bagging groceries at Safeway to make ends me. But hey, he retired at 40!

  2. It’s all about finding the right balance between spending and saving. There are times I envy those who are in hundreds of thousands of dollars in debt. The big house, the big cars, the big vacations, all because they have no fear of debt and bankruptcy. Sometimes I feel we are the fools saving all our money only to die the next day with a ton of money in the bank.

    • Balance is great. I agree. But if you die tomorrow, you die. I’d like to think that you’ll have more in heaven, than you ever had on earth. Plus, if you leave your money to your grandkids(or charity), that money will help many more people vs just you.

      • Unfortunately it is just a thought. What I see and feel is real right now. Living in Las Vegas and seeing all the bling around does not help with my envy of the rich. Don’t get me wrong, I live a comfortable lifestyle and fully appreciate my life compared to third world countries but still…envious…

  3. I think it’s all about figuring out what works for you. There’s no “one right way,” in my opinion. Everyone has different financial goals and as long as you’re making progress towards what you want, and using your money consciously, then you are set!

  4. This is exactly why I have to incorporate fun into my life. If I’m miserable while I’m trying to repay debt, I will lose motivation and quit. It’s all about balance and deciding what is right for YOU.

  5. THIS is why I love reading your blog – you take the general PF consensus and question it, flip it on it’s ear, and remind us to LIVE!

  6. But you CAN withdraw your 401k and your Roth early if you desire. So its not as straightforward an example.

    Even ignoring the Roth pipeline/72t shenanigans….

    Let’s say I contribute to my 401k to save on taxes at 25% + 5% state while we are dual income and in a high tax bracket. Then later I quit my job and attempt to live off a huge 401k balance maybe plus some part time work. The 10% penalty + 10% fed + 5% state in taxes I would be somewhat break even no? I could even move to a place where there are no state taxes. Remainder of the balance would stay in the account to follow the market and withdraw when necessary.

    Just because money is harder to access doesn’t mean you can’t take credit for the freedom it could provide.

    I do agree you have to find a path you are happy with. Also, it doesn’t mean you should sacrifice in the present to get there. As you stated you need to find balance in the middle ground and do/buy things that make you happy on the inside like family, personal growth, hobbies, etc. Not fake materialistic happiness.

    • I agree. If I had a million dollars in my 401k right now, I wouldn’t mind paying the early withdraw penalty every year.

      4% annual withdraw of 1mil = 40k.
      40k-4k(10% fee)-10k(40,000X.25 tax[25%worst case])= 26k.

      I can then make myself live off 26k. No problem.

      • Actually, the math would be more like
        40k-4k(10%fee)-6k(Estimated Fed incremental tax on 40k)= 30k

        I can live on 30k…especially somewhere like Mexico or South America(if not a state with no income tax).

        • Hey if you can make $26,000 a year work for you, more power to ya. Although something tells me very few people would pack their bags, leave their family and friends behind, and go sit on a beach for the next 40 years.

          • Tons of people already doing it. check it out. Plus if you’re married(and you have a million each) that would be 52k/year. Hubby and I would be able to live off that.

          • Actually your monthly spending is WAY less than mine. Its still doable on 50k a year. (And a 26k figure if you paid off your house is really not all that low) Just takes a little longer working. Maybe to 45 or 50 with the last 10 years being a job I’m passionate about. That’s a huge amount of freedom to not be forced into working a job that’s outside of your interests.

            Don’t worry, I know your posts are dramatized and filled with sarcasm. But for others reading it is possible. Its not act poor and retire at 30 only to live in poverty for the rest of your life. OR work until your 65 and buy whatever you want. There’s a huge array of possibilities in between. The key idea is that money is not the answer. Money is a tool.

            That being said I appreciate there’s multiple ways to do it.

            Most people would say you’re lucky that you are in a nice stable job that provides the $, balance, SAHM, and fulfillment you need. But its not luck. You worked hard and strategized to get where you want to be! Its determination really. You might have fell into it initially but you morphed it to fit what you want. So more power to you!

  7. 1000% agreed. I don’t worry about wealth, I just want us to have a decent life and a future. We do indulge in some ‘areas’, since life needs to be lived today and not when I’m 90, which probably won’t happen anyway 🙂

    We can still enjoy life and be frugal, depending on which matters most to us.

  8. I agree also that one can get crazy in saving and miss out on a lot of opportunities that life has to offer. In fact, Wade Pfau, a well-known retirement researcher, has calculated what he calls a “save savings rate” that should be adequate to meet most peoples’ retirement needs; google his blog to check out his recommendations.

    Meanwhile, there are two main reasons I think a certain amount of spending is good for one’s sense of well-being as well as financial health. First, your net worth is going to fluctuate to the point that you can gain or lose 1 or more percent within even a short period of time. Despite losses in the market these past weeks, I gained 1% just from last Thursday and the market looks strong today. Therefore to spend perhaps 1/4-1/2% of my net worth is not going to affect me much one way or the other (despite the tongue-waggings of the Suze Orman types who are all too ready to “deny” people the vacations and other purchases they long to make).

    Second, spending is essential to the overall economy especially during recessions. Your spending at a restaurant is that restaurant’s income; the restaurant server’s spending at the local grocery store is that store’s income, etc., etc. When everybody gets too frightened to spend, the economy contracts and people lose jobs. I’m obviously not suggesting reckless spending and excessive debt, just that people should calm down a bit and not worry about making a few enjoyable purchases.

  9. Absolutely loved the last sentence of this post. “You don’t have to be a millionaire to be happy. Promise.” Indeed, it is the truth. Money does not bring happiness. Happiness relies on how you are using your hard earned money. 🙂

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