5 Shocking Saving Secrets of Millionaires
Stories abound about the things well-known billionaires do that border on extreme frugality. We’ve heard and read about Monaco’s Prince Rainier buying sets of socks in matching colors and designs so that when one gets lost or worn out, there is always a ready match, eliminating the need to buy a new pair. In the same manner, much has been written about the old Omaha home of 20th century’s most successful investor Warren Buffet, which he bought in 1958 for $31,500, and his old Lincoln Town car with plate number THRIFTY that he traded for a 2006 Cadillac.
And while frugality is a common trait among first-generation filthy-rich who knew the hard work involved in creating and amassing wealth, some of the younger sets are not to be out-scrimped.
Last year, Facebook founder Mark Zuckerberg came under fire for not tipping after lunching in Rome, where meal gratuity is not really expected, except when you are an American, or famous. Social critics failed to note that the kid wears hoodies and flip-flops and was fine with dorm meals before he gets to billionaire status. Of course, there’s the Duchess of Cambridge Kate Middleton (daughter of self-made British millionaires) famously known for her preference for DIY and her frugal fashion sense despite marrying royalty.
It is noteworthy that the billionaires on our list are not just your typical, run-off-the mill frugal types who clip coupons, grow their own mint leaves and buy, use and hold on to their second-hand cars. What we have rounded up are super-rich individuals who are so tightwad it can be said that they literally skate through cheap avenue. Know what these shocking habits are, and see if you can pull them off yourself, even without the additional digits in your bank account.
Here are our top five frugal billionaires, in reverse order, and their shocking tightwad secrets:
TOP 5: MICHAEL BLOOMBERG (1942)
The controversial mayor of New York City (now on his final term since he was first elected in 2002) is a self-made billionaire courtesy of Bloomberg L.P., the international financial information company (valued by Merrill Lynch at a whopping $22.5 billion) where he controls 88 percent of the shares. It earned $7.9 billion in 2012, which upped Bloomberg’s net worth by $5 billion this year. He also owns 11 properties plus some equity investments which he cash out from time to time.
NET WORTH: $27 billion
SHOCKING TIGHTWAD ACTS:
Bloomberg’s unseemingly frugal trait came out in the form of footwear and is said to be in keeping with his personal and governmental money management. The mayor was said to have only two pairs of work shoes for the past ten years, both are black loafers – a penny loafers and a loafers with a tassel. His spokesman Stu Loese said the loafers predate his tenure as mayor and “both are so well worn, with labels so long gone.” Comfort and functionality keep the mayor from looking elsewhere for shoe replacements.
He only choose the smallest size option when buying coffee, purchasing only what he wants to drink, when he needs one.
When he first filed his candidacy, Bloomberg’s financial declaration showed that he was only receiving a token salary between $5,000 to less than $20,000 annually from 1997 to 2000, equivalent to what his firm’s lowest-paid employees receive.
TOP 4: JOHN DONALD MACARTHUR (1897 – 1978)
MacArthur was the sole stockholder of Bankers Life and Casualty Company of Chicago which he acquired for only $2,500 in 1935. He slowly built a business empire around it. He died of pancreatic cancer in 1978 with a fortune of $1 billion ($3,697,278,582.93 in 2013 based on www.dollartimes.com). The businessman-philanthropist had many siblings and they all grew up in poverty in coal-producing Pennsylvania. He credited their Scottish roots and their mother’s resourcefulness to his frugal lifestyle.
SHOCKING TIGHTWAD ACTS:
At a time of no Internet and virtual team is unheard of, MacArthur pioneered a sort of work-from-home mode. He saved so much on office lease overheads, permit fees and home mortgage payments. How? He did all his business dealings and office work from a coffee shop table in the Colonnades Beach Hotel in Florida, which he owned. The home he shared with his wife was the apartment above the hotel bar, with a parking lot for view.
Living at a time of the suave rich in America as depicted in 1960s and 70s Hollywood films, MacArthur had no press agents and no yachts, and managed on a $25,000 annual personal fund.
In an interview in 1976, MacArthur took pride in his frugal ways. “I want my money’s worth. Fancy labels don’t mean a damn to me. If I can get better value on a diamond at a pawnshop, I’d sooner get it there than at Tiffany’s,” he shared. One of his most memorable frugal billionaire words: Being frugal is just another way of being a good businessman.
TOP 3: ROSE F. KENNEDY (1890 – 1995)
There are many stories about the Kennedy frugality, but the democrat family matriarch Rose Fitzgerald Kennedy’s unusual penny-pinching habits top them all. Her spending and saving attitude have been described as “eccentric” by many people close to her. Like other rich people, she would willingly spend for the “necessary luxuries” like a $50 shrimp dish in her time, but would think hard before forking pennies over what she would consider non-essential expenses.
SHOCKING TIGHTWAD ACTS:
She bought old desk calendars during year-end (naturally worthless already and sold for a pittance) instead of scrap paper rims which were costlier, according to her biographer Barbara Gibson. She also complained about the exorbitant price of potato chips being sold at 59 cents.
When she was younger, she would trade her worn clothes with a friend who has the same size so she can get an entire fresh wardrobe for a season without spending a cent for them.
America credits Rose’s resilience and longevity in saving the historical 6-acre Kennedy Compound in Marchant Avenue, Hyannis Port, Massachusetts from being sold at various times along the family line drama associated with the Kennedys. Purchased in 1928, it is now converted into a research facility and historical museum.
TOP 2: DAVID CHERITON (1951)
Canadian-born Cheriton is one of the first investors of Google, along with Sun Microsystem’s Andy Bechtolsheim. His $100,000 investment in 1998 helped made digital history. As a billionaire, he is getting used to the fact that so many catalogs – from yacht magazines to watches, are being sent either in his home or office in Stanford University where he is a computer science professor. However, it might be hard to interest him, unless you are a startup company. To date, he has a number of investments in lucrative technology businesses.
NET WORTH: $1.3 billion
SHOCKING TIGHTWAD ACTS:
Saving half of his meals from expensive fancy restaurants so he will have something to eat the next day, without having to buy or cook anew. The guy certainly knows how to make it last, and last. Brilliant way to use leftovers, save on gas and save money.
Aside from that, he has been his very own barber for the past 15 years, not having to pay a single cent for a guy’s haircut, not having to tip, or endure personal small-talk with the barber. The best thing, he saves on making appointments and waiting time. For someone like Cheriton who works an average of 12 hours a day, time is gold.
With five other siblings, Cheriton credits his frugal ways to their parents. Both grew up in Canada during the Great Depression, where penny-pinching is a must to survive.
Finally, we’ve reached the part where we declare the most shockingly tightwad billionaire to beat all tightwad billionaires in the world, past and present:
TOP 1: HETTY GREEN (1834-1916)
Infamously known as the Witch of Wall Street, Henrietta “Hetty” Green was a feisty multi-millionaire in her time (big billionaire if her assets are valued today) and one of the most unforgettable business personalities whose eccentric tightwadness buffled her neighbors, colleagues and even strangers. She also had the honor of being listed by the Guinness Book of World Records as the World’s Greatest Miser after she died. It was said she spent all night in search of a 2-cent stamp that got lost in her carriage. Kooky or cool? You be the judge.
NET WORTH: Estimated from $100 million to $200 million during 1916 (or $4,458,271.84 in 2013 based on www.dollartimes.com), which makes Green the richest woman in her time.
SHOCKING TIGHTWAD ACTS:
There are a lot of things that Green scrimped on – from fashion to food. Reports say she wore the same black dress (earning for her the Witch tag) and an undergarment – day in, day out and changed only when they were already threadbare. It was also told that only the dirtiest parts of her dress were washed like the hemlines to save on soap.
For food, her meals consisted of 15-cent pies. It was also said that she would consume oatmeal heated on the office radiator.
On home and hygiene, she didn’t bath using hot water and never turned on the heater. How this banker, real estate and railroad financier and her family survived the dead of winter year after year remains a mystery.
As if all these extreme frugality cannot justify the miser tag, her biographer recounted an incident in which she tried to have her son Ned’s broken leg treated in a charity hospital for the poor. This, after perhaps thinking over whether to have him medically treated at all. She was eventually found out, paid the doctor’s bill, and tried to seek herbal home remedies for her son, as well as other forms of medical treatment. Later on, the child’s leg was to be amputated.
Despite the miser tag that is forever associated with her, Hetty Green was one of the pioneering successful businesswomen in America, paved the way for women empowerment in Wall Street and even saved the city of New York quite a few times when it needed money to stay out of bankruptcy. She also had a Quaker upbringing, which somehow explains her shocking tightwad traits.
These five billionaires knew what it takes to earn money and the hard work involved in accumulating wealth. With most of them starting out poor, they knew just how it was to have nothing and so dispenses money very carefully.
We’re not to judge whether the shocking tightwad habits they exhibited are good or bad. It all depends on the person and the situation anyway. Most rich people share their tightwad habits with pride, while some are known to lead stingy yet happy and inspiring lives. And whatever people may think of them and their habits, one fact remains: they’re billionaires! And a feel-good fact to add to that: our miserly megabucks, despite their shocking penny-pinching secrets, are all philanthropists! Nothing like public generosity to wash away personal stinginess.Category: Frugal Living