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Inside the lives of surprisingly frugal millionaires and billionaires, from businessmen like Warren Buffett and Richard Branson to A-list celebs like Jay Leno and Jennifer Lawrence
Inside the lives of surprisingly frugal millionaires and billionaires, from businessmen like Warren Buffett and Richard Branson to A-list celebs like Jay Leno and Jennifer Lawrence
To identify characteristics most predictive of net worth, Stanley Fallaw conducted two studies that included a group of individuals with a net worth ranging from $100,000 to $1 million and a group of high- and ultra-high-net-worth individuals.
She found that six behaviors, which she called "wealth factors," are related to net worth potential, regardless of age or income. One of those is frugality - a commitment to saving, spending less, and sticking to a budget.
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That's not surprising when you consider the habits of some of the world's richest people - Warren Buffett is notoriously frugal, and Richard Branson has previously said that displays of wealth embarrass him. The same extends to some A-list celebrities who rake in millions for their movies and TV appearances.
Here's a look inside the lives of some famously frugal millionaires and billionaires.
Sarah Stanley Fallaw, director of research for the Affluent Market Institute, studied more than 600 millionaires for her book, "The Next Millionaire Next Door: Enduring Strategies for Building Wealth."
She found that six behaviors, which she called "wealth factors," are related to net worth potential, regardless of age or income.
One of those factors, frugality, came up several times during Stanley Fallaw's research — many of the millionaires she interviewed stressed the freedom that comes with spending below their means.
"Spending above your means, spending instead of saving for retirement, spending in anticipation of becoming wealthy makes you a slave to the paycheck, even with a stellar level of income," she wrote.
Several of the world's most well-known millionaires and billionaires built wealth by living frugally — a habit they continue to practice even while rich.
Consider billionaire Warren Buffett, who's worth $82.8 billion and is the world's third-richest person. Not one for lavish purchases, he spends relatively little money.
He previously told CNBC and Yahoo Finance's "Off the Cuff" that he's "never had any great desire to have multiple houses and all kinds of things and multiple cars."
He still lives in his modest Omaha, Nebraska, home, which he bought for $31,500 in 1958. Adjusted for inflation, it's about $276,700 in today's dollars.
And he doesn't pay much for food — he spends no more than $3.17 on his daily McDonald's breakfast and gets dinner at the modest Gorat's steakhouse, where the menu ranges from $3 to $41.
Then there's "Canada's Warren Buffett," billionaire Jim Pattison, who earned his nickname from his own, relatively frugal lifestyle. Pattison is worth $6.57 billion ...
... but, like Buffett, he keeps his wheels modest, driving a Dodge Ram 1500 Laramie truck around his hometown. The pricing for the 2019 model ranges from $31,695 to $56,495.
His frugality partly stems from his upbringing: Pattison was born during the Great Depression and grew up poor, wearing hand-me-downs and living in "Vancouver's gritty east side."
Billionaire Richard Branson — who's now worth $5.28 billion — also has modest roots. He's frugal when it comes to luxury items, largely because he grew up in a middle-class family.
"The idea of having a possession that is there just as pure luxury, and is not actually paying its bills is something which I'd be embarrassed about," he previously told The Guardian.
To Branson, the biggest luxury isn't money: "If we're talking about personal luxuries — and the luxury of being your own boss — the biggest reward is the amount of time one can find for family and friends."
Like Pattison and Branson, Charlie Ergen's frugal habits at work and home also take root in the way he was brought up. Ergen stepped down as CEO of Dish Network in December 2017 and currently has a net worth of $11 billion.
Despite her $4.59 billion net worth, Judy Faulkner, founder of Epic Systems, also resists the lavish life: "I never had any personal desire to be a wealthy billionaire living lavishly," she wrote.
He's also been spotted driving relatively inexpensive cars, including an Acura TSX, a Volkswagen hatchback, and a Honda Fit, all of which are valued at or under $30,000.
With a net worth of $136 billion, Bezos is the world's richest person, but he used to drive a 1987 Chevy Blazer. As of 2013, he was still driving a Honda Accord.
But billionaires CEOs, investors, and businessmen aren't the only ones who live frugally. Some celebrities don't act like they have millions to their names.
Consider Tyra Banks, who has always been more of a saver than a spender. One estimate puts the businesswoman, model, and producer's net worth at $90 million.
"While a lot of models were partying it up and going shopping and buying a closet of designer clothes or staying at the top hotels during fashion week, I was at the DoubleTree or Embassy Suites, saving my money, and bought a house at 20 years old," she once said.
"I was always more interested in experiences over things," she told MONEY magazine. "Things didn't make me happy. I saved, saved, saved. But I saved to a fault."
Her accountants told her she needed to spend money and had her set up a frivolous account, in which she had to budget to spend money on "stupid stuff."
When he hosted the "Tonight Show," he saved all of his "Tonight Show" money — reportedly as much as $30 million per year, according to CNBC — and only spent the money he made from stand-up-comedy touring.
Even after her rise to fame and consequently hefty payouts — she received $15 million for the 2018 film Red Sparrow and was one of the highest-paid actresses in the same year — she lived for several years in the same three-bedroom apartment she got when she moved to Los Angeles.
She's particularly a fan of Bed Bath & Beyond's 20% off coupons. "I may or may not have stolen them out of my neighbors' mailboxes sometimes," she told Conan O'Brien.
That's pretty frugal for someone who reportedly makes $125,000 per episode of the TV show The Good Place — and that's not counting her undisclosed earnings from the movie Frozen, which grossed over $1.2 billion at the box office.
