Financial Freedom Is Not a Number, It’s a State of Mind

Have you ever felt like you’ve done everything right financially, yet still don’t feel free? I recently came across a caller on Dave Ramsey’s show who perfectly illustrated this problem. This man had accumulated $1.7 million in savings over 35 years of disciplined saving with his wife. By traditional standards, he should feel wealthy and secure. Yet when Dave asked him if he felt like a millionaire, his answer was a resounding “Oh no.” This response reveals a profound truth that most financial advisors won’t tell you: financial freedom is not a number in your bank account—it’s a state of mind. This caller had reached what many consider the promised land of personal finance, but he couldn’t enjoy it because he’d spent 66 years developing only one muscle—his saving muscle.

The Saver’s Paradox

When Dave challenged this millionaire to spend $8,000 on a cruise (double what he considered comfortable), the man could barely breathe at the suggestion. Think about that—spending less than 0.5% of his net worth felt overwhelming to him. I see this pattern repeatedly with disciplined savers. They’ve been taught their entire lives to live in scarcity, to pack money away for “someday,” and then they’re suddenly supposed to flip a switch and enjoy their wealth. It rarely works that way. The traditional financial model tells you to save aggressively, then withdraw only 3-4% annually in retirement to avoid running out of money. For our caller with $1.7 million, that’s about $50,000 per year—hardly the millionaire lifestyle he might have envisioned after decades of sacrifice.

From Saver to Steward

The real transformation that needs to happen isn’t from saver to spender—it’s from saver to steward. Here’s what this means:

• A saver focuses primarily on accumulation and scarcity
• A spender focuses on consumption without planning
• A steward focuses on making the best use of resources for themselves and others

Stewardship represents the middle path. You’re born with nothing and die with nothing—everything in between is stewardship. The question becomes: How can you make your money work harder for you so you don’t have to work so hard for it?

Breaking Free from Scarcity

The saver mentality is inherently self-centered (not in a malicious way, but in its focus). It constantly asks: “How can I not run out of money?” This creates a perpetual cycle where no amount ever feels like “enough.” To break free, start asking different questions:

• How can I make better use of this money?
• What could I do to create a positive ripple effect through more people’s lives?
• How can I use these resources to live the life of my dreams?
• What passion projects or causes could I support?

When money is no longer the primary reason you do or don’t do something—that’s financial freedom. It’s about having the peace of mind knowing you’re okay, regardless of what your bank statement says.

A Different Approach to Financial Freedom

What if our millionaire caller could generate 10% annually on his $1.7 million? That would be $170,000 per year—a dramatic difference from the $50,000 the traditional model suggests. Even after taxes, this approach could transform his retirement experience. If he continued working a few more years while reinvesting that return, he could quickly surpass $2 million and potentially generate over $200,000 annually. That’s a lifestyle that might actually match his vision of what a millionaire should experience. I’m not suggesting reckless spending. I’m advocating for enlightened self-interest—using your money as a tool to create value for yourself and others rather than hoarding it out of fear. Money is meant to be used, not just accumulated. It can be an amazing tool to bless more lives—yours and others. The question is: how will you use it? Remember, if you don’t develop an abundance mentality with your money, you will never be financially free—no matter how many millions you accumulate. That caller with $1.7 million isn’t financially free because his relationship with money is still based on scarcity. Financial freedom comes when you shift from being a saver to being a steward, and when your money works harder for you than you work for it.

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Frequently Asked Questions

Q: How do I know if I have a scarcity mindset about money?

You likely have a scarcity mindset if you feel anxious about spending money even when you have plenty saved, constantly worry about running out of money regardless of your net worth, or find it difficult to enjoy your wealth. Another sign is if you’re always postponing enjoyment for some future date that never seems to arrive.

Q: What’s wrong with the traditional 3-4% withdrawal rule in retirement?

The 3-4% rule is extremely conservative and often leads to unnecessarily restricted lifestyles. It’s designed primarily to prevent you from running out of money, not to help you live your best life. With proper investment strategies, many people can safely generate 8-10% returns, allowing for much higher withdrawal rates while still preserving or growing principal.

Q: How can I transition from a saver to a steward mentality?

Start by identifying what truly matters to you beyond just accumulating wealth. Practice intentional spending on things that align with your values. Consider working with a financial professional who focuses on cash flow rather than just net worth. Begin asking how your money can create value for yourself and others, rather than just how to preserve it.

Q: Is it possible to be financially free with less than a million dollars?

Absolutely! Financial freedom isn’t about a specific number—it’s about having enough passive income to cover your expenses while maintaining a healthy relationship with money. Someone with $500,000 generating strong cash flow and an abundance mindset can feel more financially free than a multi-millionaire trapped in scarcity thinking. The key is creating reliable passive income streams that exceed your needs.