The Frugal Billionaires

The title sounds like an oxymoron, but there are frugal billionaires out there.  I always knew that there were a number of billionaires that lived well below their means, but never to the extent that an article in the Financial Post points out.

It goes to show that these billionaires did not gain their billions for the purpose of gaining material things.  They are wealthy because they are successful from loving what they do.

Below are some frugal billionaires and some examples of their relative frugality:

Warren Buffett

As one of the richest men in the world (he bounces around the top 3), you would expect that he lives a relatively extravagant lifestyle.  Quite the opposite, Mr. Buffett still lives in his 1958 $31,500 home, eats burgers and drinks Cherry Coke.  That’s not to say that Mr. Buffett doesn’t have a few luxuries such as a private jet.

Ingvar Kamprad

Mr. Kamprad is the founder of the well known furniture store “Ikea”.  Even though he is worth approximately $31 billion he still wears very casual low cost clothing along with decorating his home with low cost furniture from his store.  In addition, he still drives a 1993 Volvo!

Azim Premji

This technology mogul, who is worth over $12 billion, is yet another example of being frugal in spite of his extreme wealth.  In addition to living in a modest bungalow, Mr. Premji drove a Ford Escort for 8 years before trading it in for a upgrade.  What was the upgrade?  A Toyota Corolla! When he travels for work, he flies coach along with staying at budget hotels.

If we look at networth to expense ratio, these guys take frugality to a whole new level.  Question for you, do you think that you would be this frugal if you had billions of dollars at your disposal?

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FT

FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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panchang810
10 years ago

The super rich people like these billionaires need to help the economy going by BUYING or spending. To keep their used cars for decades doesn’t help the car industry. The same holds true with the housing industry, like Warren Buffet couldh help boost the housing industry if he bought himself a modest house at this point and time when the housing industry is so down.

Life is short, I don’t mean we need to be spending every cent we worked hard for, but by gosh, these billionaires cannot take with them their wealth when they die. Besides, what’s a $40,000 worth of new car or a brand new $500,000 house in a nice suburban subdivision that they could cough out compared to the billions they have in the bank.

PaperChaser
11 years ago

I agree with DBennett. If I had Billions of dollars alot would change in everyones life!

Stan
12 years ago

Scott has it bang on. These billionaires are unique minds, sucessful because they worked incredibly hard to earn their fortunes. They don’t think like Joe Six-Pack who would buy vacation homes, a Ferrari and fly around the world with supermodels on his arm. Anyone notice how these guys are still working actively when they could have retired years ago with huge fortunes? They are driven by their work and their businesses in which they are personally invested both financially and emotionally. Buffett doesn’t spend six months a year in Antigua sipping daiquiris… even though he could.

Mrburgerking
12 years ago

LIke to note what most people dont understand about Frugal Billionaires
“Money control You” or You control Money”
its not about getting rich then blowing it, it DISTORT the truth of life.

money has this thing about distorting truth and perpective, we prostitue ourselves for money when normally we shouldn’t
Im guilty of this getting excited for getting overtime( this is not a normal reaction but i do it all the time)

Understand your lifestyle needs, then apply the level of money needed at the appropriate time.

Biggest money lesson i learn was balance it all, and make sure you control money and make sure money never control you.

For anyone who was talking about a huge shopping spree.. it would have seem money controls u, not judging to condem.

Scott
12 years ago

An example of how “rich” people think:

I know of a very senior citizen (near 90) who owns a hotel and many apartment buildings and land…let’s just say he’s worth a LOT. So he stops in Reno on his way down to Arizona for the winter (more real estate holdings there). He plays a slot machine and wins $30,000. Very nice. He takes one step over and plays the slot machine next to it. He wins $45,000! I’m not making this up. Of course, he only gets to walk away with half of that — Nevada tax-man keeps the other half. This ‘loss’ of (basically) free money makes this old rich guy angry. He comes home to Canada and hires lawyer to get ‘his’ money back (it’s a US/CAN tax thing).

Instead of being happy with (economically unneeded) winnings of $38K to add to his already multi-millions, he goes after the whole $75K (still economically unneeded for him). I would go after it too, but that’s a nice chunk of change for me!

I’m sure he’s a bulldog of a businessman. He also eats at cheap diners instead of fancy $18 burger restaurants.

Rebecca
12 years ago

Interesting post. I’ve read before that many rich people tend to be frugal. I think I would allow myself a few luxuries though!

Brandon
12 years ago

If money changes who I am, then I better figure out who I am first. Money comes and goes, and sure it can be used for a lot of good, but saying that- we are the richest culture in the world and yet what are we doing but continuing to get more. We say we would do charitable work- why not do it now- say we would help the poor, why not now- why wait for the billions?

ken
12 years ago

It depends…
If I worked for years to earn the billions, I may not have even noticed that my net worth and disposable income have increased.

If I was awarded the billions, having never had even a million, I would spend the money on things haphazardly. Inexperience and unfamiliarity would guide my spending.

Being older now, I have become comfortable with my lifestyle. I have found a contentment for what I now have. If extra comes in for a given month it goes into savings, even if $10 or $100 (and I suppose even if $1B).

One other point… The billionaires listed here have become billionaires by focusing their time on the income side of the equation, just as much as the frugal outflow side.

Jordan Clark
12 years ago

Exactly, I am doing that already with my life. Thats why I don’t seek to gain millions and why I think the money would be more of a burden.

blaze
12 years ago

“I’d be pretty happy never discussing it, just living a very comfortable life, still doing a job I enjoy, having freedom to try new things and never worry.”

Really, you don’t need a billion dollars to do that.