Yeah, that doesn't work.
I do agree that living frugally is a VERY good tool for happiness and financial freedom.
But (as MAHDOOD says below) you also need an income, or investment that will "beat inflation".
Discussion
If you're spending less money, that means that you probably have a source of income. Otherwise, you wouldn't have anything to spend.
I didn't say "an income"--I said the income needs to "beat inflation".
You need extra money so that you can save for a rainy day. Depending that the income you currently have will be around forever, or that you will have the ability to do it forever, is just silly.
Yes, many can get to that "extra" by living frugally.