From what they drive to where they shop, the affluent act a lot more
like the rest of us than you might think.
By CATEY HILL
There are millions of reasons to be frugal.
“Ocean’s 8” and “Crazy Rich Asians” star Nora Lum — you may know the
rapper and actress by her stage name, Awkwafina — seems to know this
well. Though she’s worth millions, she recently admitted to many frugal habits. Earlier this month on the “Death, Sex & Money” podcast, she
noted that she didn’t splurge on “literally anything” and that she was wearing pants from Target.
“Rich people don’t get rich by spending it all.”
Pam Danziger, founder of Unity Marketing
Plenty of other uber-rich people also pinch pennies. Probably the most
famous among them is investor Warren Buffett, who eats breakfast at McDonald’s MCD, +0.34%. Each morning, he asks his wife to set out $2.61, $2.95 or $3.17, which determines which breakfast he gets. “When I’m not feeling quite so prosperous, I might go with the $2.61, which is two
sausage patties, and then I put them together and pour myself a Coke,”
he says in the 2017 documentary “Becoming Warren Buffett.” He also still lives in the five-bedroom home he bought for just over $30,000 in 1958
Lots of rich people are frugal, experts say. “Rich people don’t get rich
by spending it all,” says Pam Danziger, a researcher focused on the
affluent market and founder of Unity Marketing, which helps brands
better connect with affluent consumers. “They know better than anyone
that by being careful shoppers they can achieve a lifestyle several
rungs up the income ladder.”
There are myriad reasons that many affluent people are, well, cheap.
Some of them are self-made and spent years before they were rich being
thrifty. “Thriftiness is habit-forming,” says Scott Tucker, the
president and founder of financial firm Scott Tucker Solutions in Chicago.
Others fear that their wealth isn’t permanent, so they don’t spend a lot
of their money. This is particularly true of the top 10% of the income spectrum, according to the 2015 Survey of Affluence and Wealth by
research and polling firm YouGov. “The resourcefulness, financial independence and spending constraints that arose from the fear of the
recession are now enduring attitudes of family financial management,”
the authors wrote.
During the 2007-2009 recession, fear drove many Americans to “step up
their savings, cut spending, and retool their household budgets, and to
become more resourceful and independent when evaluating and making
significant purchases. Over time, panic has given way to confidently
applying these practices to their purchasing habits.”
Of course, rich people spend plenty, dropping $234 billion a year on
luxury goods and services, Business Insider notes. Still, many of them
are very thrifty. Here are five things that show that:
You’ll find them in the aisles of Target and Walmart...
Beyonce is crazy in love — with Target TGT, -0.20%. Earlier this year,
the star was reportedly spotted at a Target in Los Angeles. And seeing
as how the singer is worth an estimated $355 million, according to
Forbes, the internet responded with shock. Model Chrissy Teigen, for
example, joked that the music star need not go to the big-box store, as
she could send Beyonce her line of Cravings cookware for free.
But she’s far from the only wealthy person who shops at big box stores
like this: One in three people with a net worth of more than $5 million
says they shop at Walmart WMT, +0.22% , according to a survey of 1,200 ultra-high-net-worth investors released by financial information site Millionaire Corner. What’s more, nearly half say they shop at Costco
COST, -0.03% and more than four in 10 at Target.
Indeed, when actress Busy Phillips saw that Beyonce had reportedly
shopped at Target, she said she couldn’t believe it was on a day she
…and dropping coin at the dollar store
Many dollar store shoppers make $100,000 a year or more, data released
by research firm NPD Group found. “Considering that nearly one in five dollars spent there is contributed by the affluent, dollar stores’ value proposition clearly resonates across economic segments,” says Andy
Mantis, executive vice president of Checkout Tracking, a division of
NPD. The average wealthy dollar store shopper makes about one trip a
month to those stores, the data showed (though, to be fair, lower income
people do make more frequent trips).
They tool around town in a Ford
Just because you’re a football star, doesn’t mean you spend like one: Indeed, as The Wall Street Journal reported, a number of pro athletes
scrimp on their wheels; — the story mentions that quarterback Kirk
Cousins drives a GMC Savanna passenger van.
And data released in August 2016 by car site Edmunds.com found that the
most popular car among people with incomes above $250,000 a year was the
Ford F-Series F, -0.08% , followed by the Jeep Grand Cherokee and the
Jeep Wranger; the Lexus RX and BMW X5 were only the No. 4 and No. 5 on
“There will always be an interest in and market for high-end exotic vehicles,” says Edmunds.com executive director of industry analysis
Jessica Caldwell. “But, overall, most of the wealthiest Americans look
for their vehicles to perform the same kind of functional tasks that
everyone else does.”
Other studies show a similar penchant for modest cars among the wealthy:
Among the top 10 most popular vehicles in America’s wealthiest
neighborhoods, half are non-luxury vehicles, an analysis of car-buying
habits of residents of the 10 wealthiest zip codes in America by
TrueCar.com found. These include the Honda Accord, Toyota Camry, Honda
CR-V, Volkswagen Jetta and Toyota Prius
They clip a lot of coupons
Millionaire actress Kristen Bell says she’s an avid couponer. Her
favorite: the Bed Bath and Beyond Coupon. And she’s not the only rich
person to do so. People making over $100,000 were actually more likely
than those making less to use coupons, a survey of more than 8,000
shoppers by deal site Deals.com found.
What’s more, one in four people who often use six or more coupons during
each shopping trip reported incomes of $75,000 or more, according to
research by the University of Arizona’s John Davis Norton School of
Family and Consumer Sciences. They’re known as “coupon divas” by the researchers. “They don’t use coupons because of financial constraints
but because they perceive coupons as saving them money,” said Anita
Bhappu, an associate professor at the University of Arizona.
They give a lower percentage of their income to charity
“The rich aren’t the most generous,” concludes a 2012 study published in the Chronicle of Philanthropy. “Middle-class Americans give a far
bigger share of their discretionary income to charities than the rich.”
The data, which looked at IRS records, found that while households
earning $50,000 to $75,000 give an average of 7.6% of their
discretionary income to charity, households making $100,000 or more give
an average of 4.2%.
This story was originally published in 2017 and has been updated.
5 thing's people with no money always do in every generation
Spend the rent money
Eat out every day
max out their credit cards
borrow money from friends and never pay it back
These are generalization just like this article.
They do not waste countless hours posting comments on blogs, and that is
time they will never get back, that is for the very dim.
Tesla's are the rage too, and no tin box chevies either.
Our biz only works for the wealthy. Sorry everyone else.
Having never met anyone we could work for that is newly wealthy...the
younger ones are a pain, looking at the world as it should be. The older
ones mostly look at the world as it is.
Of course there are exceptions on both sides but that is how I approach customers at first meet.
I think there’s an important distinction between stinginess and
frugality ! People who’ve worked hard all their lives are used to
spending money carefully and looking for value. One of my favorite
customers once told me, "I’m to poor to buy cheap"!
For example, I like to drive a good quality, nicely styled luxury car so
I drive a BMW X5 and my wife an X3....both of which I bought used! Only
once in my life did I buy a new Audi, and regretted the huge bath I took
on the depreciation!
My best car deal ever was my father in law's 4 year old Lincoln with
less than 30,000 mi for $6,000, which cost him $40,000 new! We are
careful investing and spending, and never lived beyond our means,
shopping at Costco.
Want to call that cheap? Go ahead, on the other hand, I leave the waiter
25%, and donate my old cars.
Most well off people I know started out without much and have the two
habits: get to know successful people, and do not waste money. I washed
dishes and waited tables at UC. I took the opportunity seriously. It
is the second and third generation that waste it - economic recycling.
All the successful people I've met have come from stable upper middle
class backgrounds; generally 3rd/4th generation wealth perhaps.
There are those that come from absolute nothing, few and far between in
modern times, but it doesn't detract that for 90% of the population
inherited wealth and stability is the greatest foundation for success.
People overestimate how lucky they are just to have a stable family or
the typical suburban household in a mid-tier school district.
Interesting...The wealthy should consider that life is finite and that
they can't take their money with them when the croak!
....but now they get to pass it off tax free to their spoiled kids
I have solved that problem. Cryogenics, yep I am going to be frozen and revived in the distant future, and I will need my money upon my wake.
So, the kids need to find their own funds.
I don't have a problem if wealthy people choose to eat at McDonalds or
shop at Walmart. My problem comes when I know illegal immigrants are landscaping their houses. Painting them. Maintaining them. When your
wealthy you Should pay people what their worth. I live in a pretty
affluent area. I'm just a average Joe that bought before the super
wealthy moved in. Unfortunately, I see too many illegals working on
their yards. Hb2 workers are know everywhere, living like cattle. Most
of my friends businesses have folded because they payed a decent wage
and couldn't compete. My business is on its last legs as illegals are
in my field. I'm actually making a decision if I Should sell my house as
I can't compete. All my contracts are gone. I've had clients tell me to
hire illegals so I can " compete" . It started about 10 years ago and
has finally caught up to me. That trickle down effect is running right
down my leg. Not saying it's all the wealthy, but, its prevalent where I
I'm guessing you are in a nicer California zip code! I had my folks
house in one of those zip codes for a while. People who don't live in a
nice zip code in California don't understand the exodus of people from
the barrios each day to clean those homes, wash the dirty clothes,
manicure the gardens and keep those swimming pools crystal clear ...
nice slave labor. I sold the house partly because of the 'snobbery', but
mostly because I wasn't going to let that house drain my retirement, The
house was 60 years old and I was 62. I knew the clock was ticking on
an outdated electrical system, crumbling sewer pipes under the
foundation, and an outdated interior ... sold 'as is' and still got a ridiculous price ...