“I wanna be a billionaire..” Perhaps this song by Travie McCoy became a massive hit not just because of its pop rhythm and lyrics, but also because at one time or another many of us dreamt of becoming a billionaire. Millions of people aspire to this, but do you know that there are billionaires who spend much less on necessities and luxuries than above average income earners?
In fact, there are numerous frugal billionaires.
They have the money but live way below their capacity. They choose a low-key, simple kind of life. Sure, you might say that it’s unlikely that they became rich because of their frugal ways, but they definitely held on to their riches longer because of it. By looking at the way they live, there are definitely some things that we can learn.
Not all billionaires were born with a silver spoon in their mouth. They had to go through hardships to get to where they are now. Their riches are the result of hard work and determination. From their past, they developed the appreciation for the simple things despite what they achieved and despite their current abundance.
Sergey Brin is the co-founder of one of the most successful search engines, Google. He is a Russian internet whiz whose parents had to struggle through temporary jobs and unstable income flow before they could leave Russia and go to America.
In an interview he said, “From my parents, I certainly learned to be frugal and to be happy without many things. It’s interesting—I still find myself not wanting to leave anything on the plate uneaten. I still look at prices. I try to force myself to do this less, not to be so frugal. But I was raised being happy with not so much.”
These are definitely some thoughts we can all live by.
Being frugal is just like being practical. As defined in Wikipedia, frugality is the economical use of consumable resources and avoiding waste, lavishness or extravagance.
Azim Premji, whose wealth amounts to US$13 billion, can easily buy any kind of luxury car. You might envision him riding around in a stretch a limousine. But in reality, he walks to work because his home is nearby. And even if he needs to take a car, it is not a Porsche or Rolls Royce that he chooses, but his Toyota Corolla.
Ingvar Kamprad, IKEA founder is another billionaire who avoids wastage. He personally practices frugality. He recycles tea bags and even takes home packs of salt from restaurants. He extends his frugal ways to his workplace. In the workplace, he urges workers to use both sides of the paper. He is quoted as saying: “Ikea people do not drive flashy cars or stay at luxury hotels.”
Though frugality can be likened to practicality, it should not be synonymous to deprivation. It is finding the useful worth of simple things.
Warren Buffet, the third wealthiest person in 2011, owns a house in Laguna Beach, California worth $4 million, still opted to live in the house he bought 50 years ago for only $31,000.
John Caudwell, whose net worth is $2.2 billion, is known for being frugal, and he buys his clothes at Marks and Spencer rather than a high-end designer clothes’ shop. He believes that he doesn’t need to spend money to bolster his self-esteem.
Even though frugal billionaires are known for being thrifty, many of them do splurge from time to time, spending money on worthy causes.
David Cheriton, the 19th wealthiest Canadian, opted to donate $25 million to fund the University of Waterloo’s School of Computer Science graduate studies and research instead of driving flashy cars.
Terry Gou is the Chinese business tycoon who is sometimes called a tightwad or a cheapskate, but he made a bold but generous gesture that raised some eyebrows in surprise. Before marrying his second wife, he vowed to donate 90% of his wealth to charity.
They say “If you’ve got it, flaunt it.”, but not for these frugal billionaires. They worked hard, invested wisely and now they are spending their money in an even more clever way. The most admirable trait they have is not just that they know how to become rich but, most of all, they know how to stay rich.
What would you spend money on if you were a billionaire?
YFS is owner and author of Your Finances Simplified. He was born and raised in West Philadelphia and is now a financial adviser, IT contractor, landlord, and treasurer of a non-profit. He created his blog partly due to his desire to help people with their finances.