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Around here, we applaud almost any cost-cutting measure. Clipping coupons, taking home a doggie bag from a restaurant meal, splurging only at discount stores, and even being conservative about the home you buy are all pretty common when you’re gazelle intense about getting out of debt and saving money.
But would you ever guess that these are also actual habits of some “super” rich folks?
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- Hillary Swank, an award-winning actress with an estimated worth of about $40 million, is a coupon clipper.
- Even though he has an estimated net worth of $1.3 billion thanks to his early investments in Google, David Cheriton saves half the meals he orders at restaurants for the next day.
- Legendary investor and founder of Berkshire Hathaway Warren Buffet lives in the same home he bought more than 50 years ago. It’s now worth about $390,000. He is worth $44 billion!
- Former presidential candidate and co-founder of Bain Capital Mitt Romney shops for blue-light specials on golf clubs at Kmart, even though his net worth is as much as $250 million.
Why Would They Do That?
We shouldn’t be surprised to see wealthy people participating in activities we’d normally associate with penny-pinchers. Dr. Thomas Stanley, author of Stop Acting Rich and The Millionaire Next Door, has been studying the lifestyles of rich people for decades. His research shows that truly wealthy people don’t focus on acting and looking wealthy but tend to find satisfaction in a simpler lifestyle.
Case in point: Buffet said of his modest home, “For the $31,500 I paid for our house, my family and I gained 52 years of terrific memories, with more to come.”
Buffet could have bought any number of multi-million-dollar mansions for his family over the years, but he instead chose to focus on the memories his family made rather than how large a home those memories were made in.
Despite his massive wealth, Cheriton continues to live out the frugal habits he learned from his parents. “My rule is never to spend in a way that I can’t explain to my parents without apology or embarrassment,” he said. He’s decided to live a life he can be proud of rather than one that demonstrates his monetary wealth.
A Positive Attitude Adjustment
Clearly, the people in this article didn’t earn their wealth because of these specific habits. Hillary Swank is a millionaire because of her acting skills—not because she clips coupons. But many an actor has blown through their earnings and ended up broke. This particular habit says Swank doesn’t think of herself as wealthy—and that’s a prevalent attitude among the truly wealthy.
Dr. Stanley included a letter from “Bob” on his blog that explains the millionaire mindset. Bob and his wife run their own business and have never made more than $200,000 in a year. They have no credit card debt and drive paid-for used cars. Bob didn’t even buy Dr. Stanley’s book from a bookstore—he borrowed it from the library.
He estimates his family’s net worth at about $4 million and explains their lifestyle simply: “We don’t think of ourselves as wealthy. Never have."
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So what’s the lesson here? Hopefully, for those of you who already live a simpler lifestyle despite your growing net worth, this is an encouragement to keep up the good work. Keeping up with the Joneses is a losing battle—don’t fight it!
And for those of you just beginning to form your “rich people” habits, this is one more reason to avoid spending your money to appear rich and focus instead on living a truly rich life.
Of course, one result of living a simple, frugal lifestyle is that cash will pile up. But that’s not the end goal. Invest your money wisely so you can leave a legacy for your family and give generously to causes you’re passionate about.
If you need advice about your investing options, we can put you in touch with an experienced, trustworthy advisor who will answer your questions and put you on track to reach your goals.