4 Unexpected Habits of Frugal Millionaires and Billionaires
Written by
Heather Altamirano
Edited by
Susan Kim
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It’s a common misconception that millionaires and billionaires indulge in lavish lifestyles. In reality, many are prudent with their money. They live frugally to safeguard their wealth, like Warren Buffett, who continues to live in the modest family home that he purchased in 1958 for $31,500, even with his billionaire status.
Their financial wisdom is the key to their prosperity, and their frugal habits can guide others toward financial security. Here’s how the penny-pinching super-wealthy avoid unnecessary expenses.
They Don’t Buy New Cars
Cars are never a good investment because they depreciate in value the moment they’re driven off the lot. Millionaire Jonathan Sanchez — the co-founder of Parent Portfolio, a website that helps families learn to grow wealth — told CNBC, “Cars often shed about 60% of their original purchase price within the first five years, which is why I can’t justify spending so much money knowing that the value will only depreciate.
“Insurance premiums for new cars are typically more expensive than used ones, too. So I prefer buying a used car that is a couple of years old and has less than 100,000 miles,” he added.
They Make Shopping Lists
Another way millionaires save money is sticking to their shopping lists.
“When it comes to spending, millionaires used a common tool for saving money: a shopping list,” per The National Study of Millionaires by Ramsey Solutions. “According to responses, 85% of participants in The National Study of Millionaires rely on a grocery list to some degree.”
They Skipped Elite Schools
The National Study of Millionaires found that earning a college degree is important to many millionaires; however, attending an elite Ivy League school wasn’t a priority.
“Almost two-thirds of millionaires (62%) graduated from public state schools, while only 8% went to a prestigious private school. But the bulk of millionaires did get that piece of paper,” the report stated.
They’re Not Into High-End Fashion
Sanchez revealed he’s not into fast fashion because it’s costly. Instead, he focuses on the basics. “I don’t overthink my outfits. I keep a small closet of simple, timeless clothes,” he told CNBC. “If I’m going casual, I’ll pair blue jeans with a T-shirt or polo. If I’m attending a formal event, I’ll wear a suit and tie.
“I only buy new items when I need to replace clothes with unforgiving holes from normal wear and tear. One of the most important things I teach my kids is how to care for their belongings and make them last,” he explained.
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