Most Americans aren't saving enough to ensure a comfortable retirement. But even though statistics are sobering, it is still possible to have a secure and rewarding retirement.

My client Jory Olson, a 53-year-old hardware engineer for Compound Photonics in the Portland, Oregon, area is an example of how someone who isn't particularly rich -- or frugal -- can still win the retirement game.

Jory Olson Credit: Scott Niesen

He did it by first realizing that he needed to save money and then by educating himself about the benefits of investing with discipline. Finally, he learned to control expenses and emotions. I've known Olson for several years now and can tell you he is not cheap, but he is very value-oriented.

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Olson traces his relationship with money back to his sixth birthday, living in an affluent area of Colorado Springs, Colorado. He bought his first bicycle at age six with his birthday money, and vividly remembers his father taking him to the store, picking out the bike, and then handing that birthday money to the clerk.

At age 12, Olson made enough mowing lawns to buy his first bike with money he earned. He said his parents taught him early on that work led to money and money led to being able to buy stuff.

While many people say they learn to live below their means from their parents, studies demonstrate that there is a relatively small correlation between how parents handled their finances and how their children do. In fact, children of self-made millionaires often go out and blow their inheritance on a lifestyle that is far above their means.

Harnessing the power of inertia

Olson told me he wasn't always on track to retire. Roughly 20 years ago, when he was in his early 30's, he worked with an older engineer. During a conversation, his engineer friend asked him how much of his paycheck he was saving for retirement. Olson replied "about five percent," to which his friend replied "that's crazy."

Fast forward to the present, I can tell you that Olson has plenty of money saved for retirement. I define financial wealth in time, not money. The formula is roughly net worth divided by annual expenditures to support one's lifestyle equals the number of years of financial independence one has. By living frugally, he was able to build up his net worth (numerator) and decrease his denominator. His money gives him more choices to pursue happiness.

Lessons from Olson's success

How did he save so much? First, he lived below his means and saved money regularly. He didn't build his wealth by receiving huge bonuses or cashing in on a stock option windfall -- at least not yet.

Second. Olson is a great investor. He got educated about the impact of expenses and emotions on wealth building. He sticks to his game plan of broad, low cost index funds and some CD's with easy early withdrawal penalties.

He rebalances his portfolio to make sure it matches his asset allocation regularly, which means buying stocks after plunges and selling after surges. Research shows he is may be earning more than three percent annually over the average investor who gives up two percent annually in expenses and another 1.5 percent from emotions. Olson says he's relatively new to proper investing, as it was only about six years ago that he started reading books like Burton Malkiel's Random Walk Down Wall Street.

You might think that living below your means will decrease happiness. Actually, research reveals that this is a fallacy. Buying stuff only brings short-term happiness and possibly decreased happiness in the long-term.

Having a foundation in place for a secure retirement will provide great peace of mind. Jory Olson did it and you can too.