January 16, 2013

"15 Frugal Billionaires Who Live Like Regular People."

Fascinating and really cool. Got us going talking about why someone would do this (other than being nutty). Highlights:

1. Warren Buffet, worth $46 billion, "still lives in the Omaha, Nebraska, home he bought for $31,500 more than 50 years ago." And Carlos Slim HelĂș, chairman and CEO of Telmex, worth $69 billion, has lived in the same modest house he's had for the last 30 years. Christy Walton, worth $27.9 billion raised her son in an 1896 Victorian house so he could have a normal life and, after her husband died in a plane crash, donated the house to charity.

2. Chuck Feeney, co-founder of Duty Free Shoppers Group, gave away $4 billion, leaving himself with (currently) $2 million, and he orders the second-cheapest wine on the menu. David Cheriton, worth $1.3 billion says he's "quite offended" by people who build big mansions, thinks "there's something wrong" with those people, and recently bought a Honda Odyssey.

3. Ingvar Kamprad, the founder of IKEA, worth $3 billion, claims to drive a 15-year-old Volvo and alway fly economy. He eats in cheap restaurants and has his house furnished with IKEA stuff.  More on him here, including a picture of his unassuming ranch-style house.
He always does his food shopping in the afternoon, when the prices in his local market start to fall....

Explaining his frugal nature, he said: "I am a bit tight with money, a sort of Swedish Scotsman. But so what?

"If I start to acquire luxurious things then this will only incite others to follow suit. It's important that leaders set an example. I look at the money I'm about to spend on myself and ask if Ikea's customers could afford it."
But Kamprad's image may be a big fake, and who knows about those other characters? The modest image helps the company's reputation, and they don't want to attract the attention of tax collectors, government regulators, and criminals (e.g., kidnappers).

56 comments:

Expat(ish) said...

I think I could make a second career of calling BS on Warren.

He flys private jets (BH owns a leasing company),or first class, stays at the best hotels and resorts, is driven almost everywhere he goes, and, trust me on this, never eats at McDonalds. His medical care is at specialty locations depending on what tests/exams are needed, etc.

I dunno if he has custom made clothe or shoes (which is what I would get first as they are much more comfortable) but I bet he doesn't try to stretch a dry cleaned shirt to two days on a business trip to save the laundry fee.

He is so full of krep I can barely stand to read his name anymore. I have the same reaction to Clinton, for different reasons.

-XC

mccullough said...

Howard Hughes is still the weirdest American billionaire who ever lived.

Maybe living in a Las Vegas hotel penthouse isn't frugal, but eating nothing but Hershey candy bars for years is pretty cheap.

Plus, the guy died without a will.

campy said...

He eats in cheap restaurants and has his house furnished with IKEA stuff.

I took a tour of the royal palace in Stockholm a couple of years ago. There's a room in there I think is furnished with IKEA stuff.

Shanna said...

I'm seriously tired of hearing about Warren Buffett lately.

I prefer the Millionaire Next Door. I have no doubt these billionaires live within their means (but that's not exactly hard).

Mitchell the Bat said...

Let's see what their mistresses look like.

Shanna said...

I do love that the one guy described himself as a 'swedish scotsman', though.

Everybody is frugal on somethings and spending on others. That's what most of these guys seem to be saying.

Levi Starks said...

These people will all be role models for me, after I win the lottery

KLDAVIS said...

"It's important that leaders set an example."

If only the government could set a similar example.

traditionalguy said...

This is an image carefully crafted to please the Banks and other investors. Trust me.

Their money is their only interest in life. Sad but true. So spending their money feels like suicide to them.

bagoh20 said...

Some people just don't get a thrill from buying personal stuff. In many cases, I'd say that is a big part of how they ended up rich.

I often get buyers remorse when I buy something expensive, and it's simply because it rarely delivers a commensurate satisfaction for the cost. That might be an unfortunate personality defect or a blessing. A little of both I suspect.

Alternatively, I have no problem investing money, even going deep in debt to do it. It just flat out spending that's very hard. It's the teach-a-man-to-fish thing. I want money to be working, earning it's keep - not just laying around looking good, like a trophy wife.

Just a few minutes ago I made an offer to buy a restaurant for my sister in Florida to set her up and get her out of the job carousel she's been on for decades in that business. She is a very hard worker, but never saved any money until recently. She has incredible potential, but has always spent it away. I'm hoping she has matured, and I think she has. God, please make it so. I can't afford her to fail. It would break my heart, and my wallet will weep.

TosaGuy said...

I have a friend who lives across the street from Buffett's house.....Warren isn't there much.

Lydia said...

Wonder if good old Ingvar clomps around his Ikea-furnished house in some kind of old uniform:

"In 1994, the personal letters of the Swedish fascist activist Per Engdahl were made public after his death, and it was revealed that Kamprad had joined Engdahl's
pro-fascist New Swedish Movement in 1942. Kamprad had raised funds for and recruited members to said group at least as late as September 1945. When Kamprad quit the group is unknown, but he remained a friend of Engdahl until the early 1950s."

The Farmer said...

It might not be just living frugally. A Honda Odyssey is a good vehicle. How much better are you going to get in a minivan?

The thing that surprised me the most once I began meeting upper-class to wealthy people was what incredibly bad taste many of them had, especially in furniture and home decoration. National Geographic ran an interesting piece recently on the nouveau riche of a small farming town in Romania. Their homes are comically ostentatious and jaw-droppingly ugly. It's like a 1970s comic book idea of what rich people's stuff should look like.

The Farmer said...

bagoh, a restaurant is a terrible investment but I suppose you already know that. Look at it as money that's gone forever and if you get it back, hooray!

dreams said...
This comment has been removed by the author.
bagoh20 said...

"It's like a 1970s comic book idea of what rich people's stuff should look like."

You see that a lot in the homes of lottery winners too. It's so completely opposite of my sensibility, that it just looks ridiculous, and I have to imagine their friends - old and new - think so too.

Bob Boyd said...

If I was a billionaire I'd have a big fireplace next to a stream and in the winter, when the stream froze, I'd drive my genuine Zamboni up and down it.

Freeman Hunt said...

I went to see if Jim Walton was on there. Sure enough.

bagoh20 said...

"bagoh, a restaurant is a terrible investment but I suppose you already know that."

Yep, heard it from everyone. I tried to interest her in something else, but that's where her passion is, and that's what it's all about in the long run.

Michael K said...

"

Howard Hughes is still the weirdest American billionaire who ever lived. "

Hughes was not weird until he got old. He was eccentric but a lot of that was the fact that he was very deaf, probably from flying early planes. My mother-in-law worked for him for years and he was a nice guy. He had some odd folks working for him. (Not her) One time he landed a DC 3 at Santa Monica airport and as they left, he said to one of his guys, "Keep an eye on the plane, will you ?" Then he forgot about it and learned several years later that there was a 24 hour guard on the hanger. Who was weird there ?

Chuck66 said...

Tosa...maybe Warren's frugal house in Omaha is really just a cottage for him to relax in between stays in 4 star (or is it 5 star?) hotels.

My great uncle's next door neighbor (farmers) lived very frugally. He didn't have indoor plumbing in his farm house when he died a few years ago. He farmed, fished, and hunted. All on his property. And liked to watch sports. That was his life. He died leaving a $4.5 million estate to his 13 nieces and nephews (my family is close to this family). Much of it property, but also cash. Unfortunately the government rewarded his lifetime of hardwork and frugality by confiscating 50% of his estate upon his death.

lemondog said...

Buffet=hypocrite

JBC said...

Ol' Carlos Slim (69 billion, not million as is posted and the world's richest vato) isn't all that frugal. He spent a considerable chunk to purchase an interest in the New York Times. Surely that was a vanity buy, as it certainly isn't a profitable enterprise. 'Cept shortly thereafter, the NYT started running more and more pieces on the plight of undocumented immigrants and fewer and fewer articles on union workers, especially whites, who were previously its favorite underdogs. Carlos has a monopoly on cell phone service in Mexico. Probably a coincidence.

Paddy O said...

He is a man with double bottoms?

That's even better than the man with three buttocks.

EDH said...

What I Like About Scrooge
In praise of misers.
By Steven E. Landsburg

Here's what I like about Ebenezer Scrooge: His meager lodgings were dark because darkness is cheap, and barely heated because coal is not free. His dinner was gruel, which he prepared himself. Scrooge paid no man to wait on him.

Scrooge has been called ungenerous. I say that's a bum rap. What could be more generous than keeping your lamps unlit and your plate unfilled, leaving more fuel for others to burn and more food for others to eat? Who is a more benevolent neighbor than the man who employs no servants, freeing them to wait on someone else?

...In this whole world, there is nobody more generous than the miser—the man who could deplete the world's resources but chooses not to. The only difference between miserliness and philanthropy is that the philanthropist serves a favored few while the miser spreads his largess far and wide.

If you build a house and refuse to buy a house, the rest of the world is one house richer. If you earn a dollar and refuse to spend a dollar, the rest of the world is one dollar richer—because you produced a dollar's worth of goods and didn't consume them.

Who exactly gets those goods? That depends on how you save. Put a dollar in the bank and you'll bid down the interest rate by just enough so someone somewhere can afford an extra dollar's worth of vacation or home improvement. Put a dollar in your mattress and (by effectively reducing the money supply) you'll drive down prices by just enough so someone somewhere can have an extra dollar's worth of coffee with his dinner. Scrooge, no doubt a canny investor, lent his money at interest. His less conventional namesake Scrooge McDuck filled a vault with dollar bills to roll around in. No matter. Ebenezer Scrooge lowered interest rates. Scrooge McDuck lowered prices. Each Scrooge enriched his neighbors as much as any Lord Mayor who invited the town in for a Christmas meal.

edutcher said...

Let's see Buffet put his money up for taxes like the rest of the peons.

Then they can tell me how he lives like regular people.

elkh1 said...

"The modest image helps the company's reputation,..."

Like politicians, being liberal and hypocritical help the billionares' image too. Not-pay-enough-tax billionaire Buffett keeps lobbying for higher taxes on other people and more loopholes and stimulus for himself. His A123 battery has gone bankrupt with hundreds of millions of taxpayers' money. He was made whole, taxpayers lost. He never reaches a point that he has made enough money.

themightypuck said...

Wasn't Seneca the original frugal billionaire.

Rusty said...

The Farmer said...
It might not be just living frugally. A Honda Odyssey is a good vehicle. How much better are you going to get in a minivan?

The thing that surprised me the most once I began meeting upper-class to wealthy people was what incredibly bad taste many of them had, especially in furniture and home decoration. National Geographic ran an interesting piece recently on the nouveau riche of a small farming town in Romania. Their homes are comically ostentatious and jaw-droppingly ugly. It's like a 1970s comic book idea of what rich people's stuff should look like


I went to an exclusive boarding school in Wisconsin. You could always tell old money from new money.
Old money Buick, Lincoln, Oldsmobile. Always the best but never flashy.
New money Cadilacs, Bentleys, and on one occasion a Rolls Royce touring car. Always the best. Always flashy.

Seeing Red said...

Chuck Feeney walked the talk.

Buffet doesn't.

Dust Bunny Queen said...

bagoh, a restaurant is a terrible investment but I suppose you already know that

Ditto that!!

As a former commercial lender AND a former restaurant/smoked food deli owner I can attest on several levels.

First as a lender. Most people who have the dream of a restaurant have zero skills as a business owner or managing finances and cost control. You may be the best cook evah!! but if you can't control costs or manage people, you are doomed to failure. The artistic side of cooking will be at war with the cost control needed to be able to price your food properly. How much per unit is EACH item in the meal, the sandwich and include the per unit cost of labor and overhead? If you aren't willing to crunch those numbers.....fuggidaboudit.

As an owner. You will underestimate the incredible amount of time that the enterprise is going to take up. If you had a life before....plan to not have it when you are running the business. When you aren't actually AT the establishment, you are going to be spending your time marketing, planning, reviewing and never ever being able to NOT think about it.

We sold our business at a profit to another entrepreneur (aka sucker) after we realized that with two other businesses we just didn't have time to do the restaurant/deli properly. THANK GOD.

If you want your sister to be successful, make sure she can understand those two things. AND more to the point (as a former lender seeing businesses fail one after another) is willing to take advice from other people.

Kevin said...

This is covered extensively in Paul Fussell's "Class." The reason is the upper middle class and the lower upper class have fear of falling to lower levels, so they meticulously adhere to all the physical/visual trappings of their class to continuously re-state and re-emphasize their high status among all viewers. Whereas the upper upper class is insulated from falling and therefore don't care what anyone thinks of them. It isn't uncommon for them to drive 30 year old crappy cars or eat vienna sausages from a can when you are trying to talk to them, because they are like the honey badger. They really don't care, in the truest way of not caring that can only be bought with infinite cash.

sabeth.chu said...

IKEA - this year they finally apologized - in public - that some of their products were manufactured - in days gone by - by political prisoners in the former eastern bloc.
Now it's all over now, so why moan about it, but this frugality is NOT a sign of superior morals or something. Just the selfrighteousness of your common and garden lefty,

ricpic said...

What they fail to tell you is that Buffett had a bat cave installed under his basement and a bat car and a bat helipa....

Mike said...

Isn't the point of the article, that they hold on to some of the trappings of normal life? The modest homes, the reasonable cars, the good-enough restaurants? And that makes them more of a normal person? I don't think that investing in the New York Times makes you less frugal, just an investor. And where else are you going to park your money? It's nice that at least some of these people recognize the value of being normal.

kristinintexas said...

[Warren] has also ... begged Washington to increase his taxes.

Newsflash: "regular people" don't have the luxury of begging Washington to increase their taxes. At least this regular person doesn't.

bagoh20 said...

DBQ,

All good points, and well understood. What can I say? She's my sister, I love her, and she loves the restaurant business. She's wasting her life working her ass off for other people who will never be able or willing to repay her for that.

I can loan her the money and hope she makes it work. We both know she is buying a full time job, not a money making operation, but she works hard now for nothing, so it's an opportunity at least.

Foolishly, I have not done the level of due diligence I know should be done for such a thing, I've just done the basics, and I'll do more before closing, but I'm mostly just rolling the dice here, because I want it for her so much.

I'll let you all know how it works out. Now stop scaring me. I'm already shaking.

Michael said...

bagoh20: Notwithstanding DBQ's excellent advice and observation regarding the restaurant business I think you are taking a reasonable flyer with your sister. It sounds like she has been in the working end of the industry for a long time and if that is the case she will have no illusions about the effort required, the personnel matters and so on. What she will need your help on will be in the matter of initial capital expenses to fit the place out and, next, discipline on the purchasing front. When your inventory rots bad things happen. If it doesn't work out at least you are both on opposite coasts!

bagoh20 said...

I do promise you fine taxpayers that if this venture fails, I will lose my money, and unlike Warren Buffet and many others like him, I will not ask you to pay me back, since it will be entirely my fault, my risk.

I know what you're thinking: surely there must be a way for Bago to put us on the hook for his stupid gamble if it fails. Probably there is, but this business is actually design to make a profit so it doesn't qualify for the Obama stash.

Fr Martin Fox said...

I'm all for rich people living frugally, but I don't buy the notion they "owe" it to anyone.

As a spiritual discipline, living simply--and not being possessed by ones possession--is a very wise choice. Of course, our Lord said that, not I. I'm just repeating it.

But the Lord never said every rich person had to sell all his goods. The advice applies to those who love them too much.

There is another side to this.

God made the world good. We are made to appreciate it. What happens if no one buys the best wines? The best foods?

If I could afford it--and I weren't someone (i.e., a priest) who is obliged to live simply--I would certainly enjoy many of the finer things in life I can't afford now. Why not?

Why not fly first class, if you can? Why not enjoy the best wines? The best steak? The best clothes?

I'm not saying turn into Imelda Marcos.

I'd love to have two or three pair of really fine shoes, and not feel bad about wearing them (i.e., I can afford to replace them).

And the craftsmen who make them would be really happy to. I'm betting they aren't rich.

In short, this talk of rich people being obliged to live poorly actually means more poor people living poorly.

Why is that good?

EMD said...

Had a funny moment with the wife. She was going to get some groceries to make soup and saw a Marc's grocery (we've never shopped there before.) I went online to check it out. They said that their stores were "unpretentious."

She said that was good as she was in her North Face coat with her Coach purse talking on her iPhone.

I commended her on not being all that interested in image.

MadisonMan said...

So what you're saying is that I live like a billionaire.

Good to know.

The Gold Digger said...

alway fly economy

If I were rich, I would never fly economy. I might even get my own planee.

The Gold Digger said...

incredibly bad taste many of them had

BlessElvis'heart, Graceland.

PS I know "plane" has only one "e" at the end.

slumber_j said...

Carlos Slim bought the Duke Mansion on Fifth Avenue in Manhattan in 2010 for $44 million, so he's not exactly under house arrest in Mexico. He has yet to renovate it despite the permits posted in the windows.

As I discover whenever I walk my daughter to school in winter, he doesn't shovel his sidewalk either. Imagine the slip-and-fall lawsuit you could bring!

EMD said...

Hmm. Do I care about how other choose to live?

Not really. Not one of those nebby* busybodies.


* - Showing my Western Pa. roots.

John Orzechowski said...

"Kamprad saving quite a game for the gallery. He is a man with double bottoms."
Thank you, Google Translate...

Freeman Hunt said...

I don't see the allure of having a private plane unless one is flying it oneself. What are the chances that the pilot you hire has skills on the level of a commercial jet pilot?

fivewheels said...

I would guess that depends rather a lot on the pay and benefits. I think a billionaire could get to 100 percent pretty easily, and then move on to "better skills" in a flash.

AllenS said...

I graduated from White Bear Lake, MN. There is an island in the lake called Manitou Island with a bridge to it. Very, very expensive houses on the island. Had a friend that lived there and use to go see him. The very, very rich elderly man who lived across the street in probably the biggest house, had a 1949 Ford. He painted it every year. With a brush.

Bart Hall (Kansas, USA) said...

I'll always be quite a few zeroes short of being a multi-millionaire, but I'm a farmer, and good years or bad I live more or less the same. I could win a big lottery and life would remain pretty much the same -- except farming is plenty enough gambling for me, so I never buy a ticker.

Consequently I can understand folks with orders of magnitude more money than I'll ever have continuing to live quite simply. It's like a comfy old pair of slippers you never want to discard.

ken in sc said...

Even if you can afford to pay more, you should support the low cost provider so that that they will be there for those who can not afford it. It's you duty. I'm not kidding.

Darrell said...
This comment has been removed by the author.
Darrell said...

Warren Buffet is an asshole. Been that way for a long time. The Star/Enquirer did a series on him and his kids in the 1970's or W's. The kids were on their own after college (Fine, self-sufficiency is always a great thing to learn.) But the son lost his job when the company he worked for was bought by another and was unable to find anything else at remotely the same salary--leading to the expected financial troubles. And his daughter was diagnosed with cancer and her life was turned upside down with bills and debt. Both had borrowed from friends and took advantage of programs to help people in their situation. Btw, they both always lived within their own means and didn't own anything that would be considered a luxury item. Neither had anything bad to say about their Dad. They both more or less said the same thing word for word--Dad's wealth has nothing to do with me.

A follow up story months later did have the kids getting minimal help from Buffet--after they had been flooded with offers of help from readers. And after, apparently, Buffet started to catch flak from people he was dealing with--or not taking his calls.

A multi-billionaire father that doesn't rush in with help when his daughter is diagnosed with cancer is the definition of an asshole. It doesn't matter what she says "No, I'm all right," The best care, the best doctors, bills taken care of/all sources of external stress/worry eliminated. Regular people do that. Those given more should do the same--at minimum.

Rusty said...

Freeman Hunt said...
I don't see the allure of having a private plane unless one is flying it oneself. What are the chances that the pilot you hire has skills on the level of a commercial jet pilot?

Sometimes they are commercial pilots. The FAA mandates that a commercial airline pilot has to retire at 60. Some of em get jobs flying rich folks planes. Also ex military transport pilots looking to build up hours. I know of a couple of guys that bought more than one Gulfstream so that they an lease em out to pay for both.

The Gold Digger said...

What are the chances that the pilot you hire has skills on the level of a commercial jet pilot?

I would hire my uncle, who is a captain at Delta and nearing retirement age, or my high school boyfriend, who is a pilot at Southwest. Or one of the many pilots I knew when I was a kid and living on an air force base. :)