Your Start to Financial Freedom (From Scarcity to Abundance)

Battling financial illiteracy is your first step—then, build a money mindset from paycheck-to-paycheck scarcity to one that plans for the future with abundance.

There’s a moment when you shift from treading water in your financial life’s pool—with debt and a history of bad decisions threatening to pull you under if you stop paddling—to floating listlessly at the surface. You could still find yourself paddling for dear life again, but at this moment, you can rest.

You can think about where you are.

Your history isn’t weighing on you any more than your internal buoyancy lifts you up. It’s this moment when your thoughts can shift to build a better, less exhausting financial future for yourself.

That moment is what I want to talk about today with you.

Financial Illiteracy

Initially, for most of us, we do battle with our financial demons that try to drag us into debt, overspending, and lethargy.

That’s often through personal financial illiteracy.

Unless your parents or a caring guardian taught you about the world of personal finance, you’ll probably struggle with a system that relies on taking advantage of the ignorant.

You’ll probably become an adult without basic finance classes under your belt.

  • Do you know what debt, interest, or a budget are?
  • What’s the difference between savings and checking accounts?
  • How do paychecks break down—can you read a paystub?
  • Do you know the basics of how the stock market works?
  • Are you familiar with taxes—progressive tax brackets, deductions, and credits?

For many of us, we gather this knowledge through trial and error. We make some key mistakes along the way.

We buy brand new cars we don’t need because we want to keep up appearances and look successful.

The bank tells us we can afford to spend $250K of debt on a house, and so we max that amount out. Surely they wouldn’t approve us for a loan that might keep us house poor, in debt, and stuck working a job we can’t afford to lose.

Instagram depicts the lives of luxury around us—our peers stay at high-end resorts. They drink Kombucha, their streetwear is on point, and their phones have cameras with more lenses than that kid in 4th grade everyone made fun of.

We fall to the Connoisseur Effect, relishing in our ability to no longer enjoy simple tap water instead of seltzer, or boxed wine instead of Winter Rosé. Our tastes are more developed.

We’ve become better than that.

If you can see yourself in some of this, keep taking a hard look in that mirror. The first step to freeing yourself from financial purgatory is to find a balance between the life you want and the life you can afford.

Starting from scarcity

Take a moment to read through my post on living below your means. The truth is, you don’t get rich overnight. At least, the vast majority of us won’t. It’s years of work, planning, and intention. And even then, some luck and fortune.

Our story of reaching financial independence and becoming millionaires within about 10 years involved all that and more, but it’s not unattainable.

Along your own path, you’ll reach a turning point. That time where you’re getting ahead—your bills are paid and you know where the next chunk of money is coming from to pay next month’s balance.

It’s in this moment where some folks stay, trapped in a mindset of scarcity, unsure of their financial future.

Paycheck-to-paycheck, neither drowning nor finding their way to the shore.

Paddling. Endlessly paddling.

But it’s also the moment where you can decide to break out of the cycle.

This is how I did it. And how I hope it’s a blueprint for you.

Find a way to have extra money.

When you’re just breaking even, the key is figuring out how you can do more than break even. You’ve got to make more money than you’re spending. And even a little extra goes a long way.

You can do this by spending less or earning more. Here’s what I did: I earned more.

While I was still in college, I started a little side business. And don’t let me overstate what I mean by “side business”. The emphasis is on little. I was already working part-time fundraising for the school and attending classes.

I didn’t have much in the way of marketable skills—it’d been amazing to know how to do something like construction—but I did know how computers work. As a nerdy kid, I loved taking computers apart and rebuilding them with better, faster components.

I liked overclocking (running the CPUs, graphics systems, or other components faster than they were rated for). It was like I could get a computer as fast as one that cost twice as much for nothing. I learned a lot about how computers worked and their various components, down to the chips on different motherboards.

So, I tried to make use of this interest and knowledge in a couple ways.

1) I bought computer components known to overclock well, tested and rated them, then resold them advertised at the higher speeds (and for a higher price).

2) To support my overclocking reselling, I needed multiple computers to test components—so I bought motherboards in bulk, kept the good ones as test beds, sold the ones I didn’t need, and recycled the dead ones.

If you’re interested in the details of this adventure, which gets a little technical, check out the “appendix” section at the end of this post.

The outcome of these little side adventures is that, combined with parents who footed the bill for my college tuition, I graduated without any debt (there’s that fortunate part).

In fact, if memory serves, I had about $5,000 to my name. At 22 years old, it seemed like a fortune.

At the least, it let me think a bit about what I wanted to do without feeling like I needed to immediately find a job and a paycheck to make ends meet.


  • You’ve got to either earn more or spend less to get ahead (and maybe a bit of both!)
  • Leverage the advantages you have—turn skills or experience into a side income
  • Credit cards can be powerful tools for short-term loans, but only spend what you can pay off in full each month!

Be opportunistic—stay flexible.

While exploring my options, a friend told me he was going on to law school and might have extra space in the place he was renting. And so, I moved across the state with my 300ZX packed to the brim and into his dining room—my makeshift bedroom.

This is what move-out day looked like for me in 2006. Loads of clues in this photo about the future of my life, especially that Peace Corps book!
This is what move-out day looked like for me in 2006. Loads of clues in this photo about the future of my life, especially that Peace Corps book!

My plan: expand my little computer hardware empire.

I had some ongoing revenue from the previous experiments, and I thought I might be able to create custom high-end systems for demanding applications. I figured, at higher price points, there’d be more room for profit. And customization meant more price flexibility.

It seemed smart to compete at the high end rather than at the consumer level where $500 computers were already becoming commonplace.

I figured I had enough money to give it a try for about 6 months and really start a business. If I failed, well, I’d have to find a paycheck!

Sometimes in life, there’s opportunity and you’ve got to take a risk.


  • When you’re first getting your financial footing, stay flexible to catch opportunities before they pass by
  • Set yourself up to be able to take smart risks by having a little nest egg or something akin to an emergency fund

Keep learning new skills.

Cutting a long story short, it worked until it didn’t. I sold some high end systems to labs and other organizations. But, it wasn’t really enough to do more than tread water despite the relatively low cost lifestyle I’d developed.

Living out of a dining room helped with minimizing lifestyle inflation, that’s for sure!

Within 6 months, I was faced with finding a new place to live. The landlord wasn’t a fan of someone not living in a bedroom.

And so, somewhat defeated, I started looking at job opportunities in nearby cities. Jenni and I rekindled our relationship and I moved in with her, along with my fledgling business and questionable future.

Yep, she’s a saint (there’s more of that fortune!).

Through necessity, I’d faced a little DIY fear and built the website for my business over several months. After all, I needed a digital way for customers to order and customize their systems without being dependent on eBay or other platforms.

I leveraged a free e-commerce platform called osCommerce to build the site and learned a lot about website building, design, and code in the process.

I had a lot of sleepless nights, but to my surprise, this would be the greatest asset I’d step away with after this experience.


  • Relationships—whether romantic or professional—are the bedrock of a stable life and financial future
  • Keep learning new skills, they might become the basis for a career change or side business

Increase income faster than your spending.

The e-commerce site became my portfolio as I started applying for jobs in web design. One company took a chance on me and I landed my first professional job and professional salary—$42,000/year with benefits in 2007.

By the second paycheck, I was swimming for shore. Rest. I had the ability to think about a financial future for myself.

I could let lifestyle inflation takeover. We were living with a roommate in a fairly crummy place and I had a 17 year old car with 220,000+ miles on it.

It was the life of a college student.

And while we let a few luxuries creep in—including our first international trip together to The Bahamas with a friend—we didn’t go crazy.

Jenni had years of pharmacy school left and an increasing pile of debt.

Our big expenditure was a Carnival cruise to the The Bahamas with a friend!
Our big expenditure was a Carnival cruise to the The Bahamas with a friend!
And while these days, we don't really see Nassau as a very exciting adventure—for a 22-year-old, it was exotic, exciting, and luxurious!
And while these days, we don’t really see Nassau as a very exciting adventure—for a 22-year-old, it was exotic, exciting, and luxurious!


Transition to Abundance

It’s this moment—when you start thinking about planning for your future self—that your mindset shifts from “today” to “tomorrow”. It’s not paycheck-to-paycheck. You stop thinking strictly in terms of trading your time for money.

You start thinking about achieving financial freedom. And you begin to plan ahead to make it happen.

Continuing with the theme from last week’s post, I hope you can see how my money mindset formed in the early years of my career.

It’s these early years where you need to focus on treading the path to financial independence in the way that so many others have:

  1. Knock out any high-interest debt like credit cards if you’re not paying the balance off in full each month
  2. Get “free money” from your employer if they offer a 401(k) match by earning the maximum match amount (read those policies!)
  3. Pay down debt with moderate interest (car loans, personal lines of credit, etc.) that might have rates similar to long-term stock market returns (around 7%)
  4. Max out your tax-advantaged accounts (IRA, 401(k), 529, HSA, etc.) and carry broad index mutual funds or ETFs with low fees and high diversification
  5. Consider paying off your mortgage early if it’ll let you earn less money (which might mean a lower tax bracket or qualifying for certain subsidies)
  6. Develop a strong cash cushion with a few months of savings and dump the rest into a brokerage account that carries similarly diversified investments as your tax-advantaged accounts
  7. Protect your assets once you’ve earned enough money through insurance, a healthy lifestyle, and meaningful creative work

Many personal finance books turn an action item list like this in full-blown 400-pagers, but these are the headlines to remember.

When it comes down to it, the real actionable steps to achieving financial independence and escaping the rat race are that simple. There’s not much more to it, so mark this list and come back to it for a reminder.

But, easier said than done.

I’m going to follow up this post with a rundown on what driving scarcity out of your financial life lets you do. Replacing a paycheck-to-paycheck mentality with one of abundance opens up doors to making more money as opportunities present themselves.

As they say, it takes money to make money. Bookmark our site, subscribe to our RSS, or punch in your email for a free newsletter subscription to catch the follow-up within a few weeks.

Readers—how did you get your start on the road to financial independence? What was your “break” that let you go from treading water to finally saving for your future? And, if you’re not yet there, what do you think is the most significant thing holding you back?
Let me know in the comments!

Appendix: Overclocking for Fun and Profit

The AMD Opteron: my overclocking king and profit center!
The AMD Opteron: my overclocking king and profit center!

At the start of a semester, I’d have a few thousand dollars in my checking account to live off of that I’d build up working full-time during the break between semesters. I worked in a mailroom and an auto shop between semesters to earn the money, then try to stem the flow by working part-time at the school’s fundraising program during the semester.

I signed up for my first credit card as a Junior (third year) in college. Combined with the funds I’d have at the start of the semester, I could use the credit card to fund my inventory purchases and hopefully sell them and earn back the money with some profit before the bill was due. I’d have my checking account to fall back on if it took longer to sell than I expected.

I leveraged the online trading profiles I’d created through various computer forums years before when I was buying and selling my own computer components for personal upgrades. That let me have an established presence to advertise in “For Sale/Trade/Wanted to Buy” forums that matched my target buyer.

While almost anyone could overclock computer components themselves, most people, even enthusiasts, didn’t put in the effort to learn which specific models—or even more specifically factories where certain models were produced and on certain dates—would perform the best. And even if you could figure out where to source the high performers, it’s blind luck in getting a good, high performing overclock. Testing usually took at least 24 hours and necessitated making tiny tweaks to various settings to confirm stability and maximize the outcome.

So what does the dollar math really look like for all of this?

Well, I had many successes, but there’s one component—a CPU—that really stands out in my head. In 2005, AMD sold a processor called the “Opteron 144”. Its single-core ran at 1.8 GHz and sold for $150. At the time, AMD’s flagship CPU, the FX-57, ran at 2.8 GHz for about $1,000.

After finding a good source for the Opteron 144, I routinely had inventory that was tested stable to run at 3.0 GHz or more. Plenty of folks happily paid a premium to buy a thoroughly tested CPU from a vetted, known seller that would perform at the level of a $1,000 CPU.

When the cost was only $150, I could absorb the occasional poor performing unit or customer return without it breaking the bank.

I had plenty of time to leave a CPU running tests while I was attending classes, but I had a significant bottleneck. I only had one computer!

That lead me to buying motherboards and RAM in bulk so that I could have multiple test beds operating at once. And while eventually I found enough working sets of components to test multiple CPUs at once for overclocking, I also wound up with lots of extra components that worked well and were no longer needed.

I bundled working components together and sold them off as “barebones” computer kits that just needed a case, power supply, and accessories.

At first, I just thought of it as a way to recover the costs of bulk sets. But eventually, I was making significant money off simply testing the bulk components, recycling the bad ones, and selling working combos of the good ones.

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By Chris

Chris began his financial independence pursuit in 2007 as he learned basic personal finance from Get Rich Slowly as an aspiring web designer and novice investor. After several missteps, he learned the secrets of financial independence and began his pursuit of freedom.

He reached financial independence in 2018 with $1.2M and two businesses. He began the process of transitioning to early retirement in 2020.

Learn more: Meet Chris.

10 replies on “Your Start to Financial Freedom (From Scarcity to Abundance)”

Thanks for another thoughtful article. Increasing lifestyle more slowly than you grow your income is indeed a key to accumulating assets and finding your way to shore.
I’d love to hear some more on your mental journey of living well below your means. There’s so much encouragement/pressure to spend more to demonstrate financial success (or projected status). How do you tune that out? What about around family, friends, and community?

Thanks, David, good questions!

There’s so much encouragement/pressure to spend more to demonstrate financial success (or projected status). How do you tune that out?

I’m going to ask Jenni to answer this question, too, since I think an additional perspective is helpful. She should shortly (if you’re reading this and she’s not yet replied below). For me, personally, it’s not really ever been a problem but I think that’s a personality trait I’ve had since young. It’s an unfair advantage (in this case). I just don’t really care what other people think very much, but rather focus on whether I’m being true to myself and if I’m happy with myself.

It’s a highly individualistic way to think that doesn’t match up in many other cultures, or for many other people. I have a draft post that’s coming along that addresses this very topic (“tight” and “loose” cultures around the globe and how that might impact the road to FIRE). I think part of that is just basic personality—I’ve never really been with the “in crew”, I have a handful of very close relationships instead of lots of middling ones, and none of what I’ve done for work has required me to be “popular” in any fashion.

Combine that with being interested in Stoicism (which I’d recommend to anyone struggling with feeling the pressure from society to please them), enjoying books like “Zorba the Greek” or Tim Ferriss’s 4HWW section on “Comfort Challenges”, and starting multiple businesses flying by the seat of my pants—you’ve got a recipe for just not really having time to care what others think.

What about around family, friends, and community?

Ah, the more difficult crew to escape. I find it’s helpful to ensure that the neighborhood you choose, friends you keep, match up with the lifestyle you want to live. If you’ve got $50K/year of spending, ensure you’re not living in a neighborhood surrounded by folks spending triple that. You’ll feel more pressure.

With friends and family, whom you should be closer to, I find it’s helpful to convey your goals. A lot of folks will do some mental math based on what work you do, car you drive, house you have to “figure” what sort of money you make and therefore what you can afford to spend. So, they might pressure you to more bar nights with higher-end drinks if they think you can afford it.

While FIRE folks probably don’t have flashy cars or gigantic houses, they might have quite high-earning jobs. It can help to convey your goals “yeah, work is great, but I’m trying to switch to part-time soon” or “I’d like to take a long sabbatical next year, we’ve been working on our savings goals so that we can!”. Friends and family will be more reluctant to push you to expensive nights out if they can relate/understand better.

Lastly, in general, I think the core of this question is about who you want to impress more—your friends/family/community, or yourself? I think that’s a difficult question to answer honestly. We all want to be liked, to varying degrees. We’re social creatures. But perhaps trying to impress your group in a way that doesn’t involve big spending would be the most wholesome, helpful, and productive approach of all. Be the guy/gal that gardens those amazing cucumbers and brings the harvest to family gatherings. Oh, David Flint? He’s our friend that is always ready to help with carpentry work around the house, provide expertise for DIY projects, etc. Impress through skills, guidance, and—being there, to help.

I hope that’s helpful, thanks for the great question!

This is a good question and I do have a different answer than Chris. While he may not care about what other people think, I still struggle with this. Growing up, I preferred to avoid confrontation and I liked to fit in with groups to some degree. However, I never let this cover up my frugal self. I never got into high fashion and tended to shop at second-hand stores without feeling embarrassed. I was proud to drive around my beat-up 1993 teal Honda Civic while my high school friends got new cars. And was well known that I was drawn to saving a buck with a coupon. So those that we’re okay with that and liked me for me became my friends. Just like you make a statement with how you wear your hair, what music you listen to, your choice to be financially smart is part of who you are.

Even though I have a small group of friends, they like me for me not what I buy or how I spend my money. In some ways, this has helped me make more meaningful relationships. Now when my close friends get together and catch up, we tend to focus on what’s going on in our personal lives and we don’t focus on our income, the types of cars we drive, or some fancy new expensive ‘thing’ we’ve obtained or not. Honestly, I can’t recall anyone questioning my choice to buy a used car with cash versus taking out a loan on a newer car. Every now and then, I will still hear a remark about my attempts to find the best deal. But you know what, I never hear any complaints that I saved everyone some money with those attempts.

On the other hand, since talking about money is such taboo, they also never seem to ask how I was able to pay off my $100K+ student loans so quickly or even now how I am able to work part-time. Most of our friends and family are not completely aware of our financial situation. They know we are walking a different path to have more freedoms with our time but hardly anyone asks how. They see that we are happy and seem to be ‘doing ok’, so I guess that is all they need to know.

We don’t push our financial lifestyle choices on others but we are happy to share our knowledge on savings, finding the best travel deals, or reducing expenses. It’s nice to be able to share this insight and help people down a better path. However, for the most part, people tend to shy away once they realize it takes a lot of consistent effort.

Lastly, it definitely helps to have a partner who is in the same mindset as you. You can keep each other accountable and have that person supporting your decision to buy used versus new, etc. I’ve had a lot of bad examples on handling money in my family. I’m glad to be learning better ways to handle money with Chris in our lives together.

I got my start on financial independence by being suddenly laid off from my first ‘real’ job shortly after being hired to a permanent position after working hard to stand out as a contractor. I was pretty disappointed and realized no one was going to care about my financial situation more than me. After getting another job, surviving more layoffs, and being reshuffled to an area I was bored in and overqualified for, my theory was only confirmed further. Then the pandemic happened, and I needed to go job searching again. Fortunately, I found a much better paying job with a reasonable workload, and so far it seems stable. In about 4 years I was able to get about 1/4 of the way to FI. I should be all the way there in 6 to 8 years.

Hi Chris
Very good read with very thoughtful tips which resonate with me a lot.
Flexibility and being willing to learn are key ingredients. There are so many opportunities there and we have the ability to design our lifestyle to a great extent.
My wife and I target FI by the end of 2024, we enjoy our path a lot.

Hey, that’s awesome! I’m glad you could glean something useful and meaningful from my own experience.

FI in ‘24 will be cause for celebration—but like you said—keep enjoying the time along the way!

I just started reading your content last week and since then I’ve really enjoyed reading stuff that really aligns with my goals. It’s cool to know there are other people out there who think so much along the same lines (detailed budgeting, investing in low-cost index funds, prioritizing things that really matter to you, sticking to a plan, etc.) and I look forward to reading more of your content and learning some things along the way. Thanks for putting this stuff out there.

Hey David! Real happy to have you around, and, keep commenting! I’m glad you’ve enjoyed our writing and/or found it insightful.

Cheers from Wisconsin! ?

It’s an interesting transition from living a frugal life by necessity to maintaining those habits by choice. Knowing I had extra money caused me to get a little loosey goosey with my spending.

I recently decided to try and pin myself down to more of a paycheck to paycheck lifestyle to remember that feeling of scarcity a little, basically keeping no emergency fund and investing everything extra. It’s helped me save a little more, but it’s also caused me some minor and unnecessary stress. Feeling that stress was, oddly enough, part of the goal of the exercise, forcing me to get creative and find money outside of the paycheck (basically just abandoning some bad crypto investments haha), but ultimately not worth it. I have a high savings rate as it is, but found I need to leave myself a little more wiggle room.

Now the thing to try for you is similar yet totally different:

Try living paycheck to paycheck again, for a time, but instead of keeping a high forced savings rate to make it happen—try spending.

See what life would be like to fully spend what you earn. The exercise might give you insight into things you’ve been missing in your life, or, it might reveal how little you’d gain by spending significantly more than you do currently.

Either way, win win.

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