How a 27-year-old millionaire in the Seattle area spends his money

27-year-old millionaire who saves 80% of his income refuses to spend on 2 things

Mar 2 2020
Kathleen Elkins
@KATHLEEN_ELK



Todd Baldwin’s net worth crossed $1 million when he was 25.

Today, at 27, he brings in $615,000 annually ($305,000 after business expenses) thanks to a mix of

• income from rental properties, 
• his day job working in commercial insurance sales and 
• the extra cash he makes as a secret shopper.

The majority of his revenue comes from the six rental properties that he owns with his wife, Angela: They earn $460,000 per year in rent. After expenses, including mortgage payments, taxes, insurance and utilities, they keep about $150,000 of that per year.

“Although our net worth is seven figures, we don’t do a lot of the typical things that most people envision millionaires doing. We are super frugal,” says Baldwin, who wears a $12 rubber wedding band and shares a 2009 Ford Focus with his wife. Because he keeps his expenses so low, he’s able to save more than 80% of his take-home pay.


The millennial millionaire refuses to spend money on a couple of things, he tells CNBC Make It: For starters, he won’t pay for entertainment, like restaurants and the movies, “but only because I know how to get paid for that.”

Baldwin is a “secret shopper” and gets paid for dining out, going grocery shopping, seeing movies and even visiting hotels and casinos.

“There are a lot of businesses out there that want to know how their employees are doing and how the market is responding to their products,” he explains. “So those companies will hire mystery shopping firms to find independent contractors like me to go pose at their establishment as a regular customer, buy the product or service and then report on it.”

He’s made about $30,000 since he started mystery shopping years ago in college. The surveys he fills out after the experience aren’t too time consuming, and for that reason, he has a hard time justifying spending money at bars and restaurants. “If a buddy wants to go to a bar or someone wants to go see a movie, I usually try to wait until I can get a mystery shop,” he says, “because if you’re going to go there anyway, you might as well get it for free and get paid on the top.”

Thanks to secret shopping, he and his wife spend just about $25 a month on food.



“Another thing that I’ll never spend money on is unnecessary bank account fees or credit card fees,” says Baldwin. That’s not to say he doesn’t use credit cards — he has 13 of them — but he never racks up a balance and makes payments on time to avoid late fees.

Baldwin, who was raised by a single mom and started working when he was 12, gets a thrill out of saving. “It’s actually really fun being able to buy something and then choosing not to,” he says.

He thinks through all of his purchases, especially the big ones: “My wife and I want to start a family in the next couple of years, and I was thinking we might get an SUV. I was looking at ones that were about $60,000.” After running the numbers, though, they decided to redirect that money elsewhere. “We took the 60 grand and bought another rental property — and now that property cash flow is $4,000 per month.”

Eventually, the rental income “could pay for four of those SUVs that I liked,” he adds.

The only time Baldwin likes to splurge is if it’s something for his wife — if he’s allowed to, that is. “My wife is more frugal than I am!” he says. “A couple years ago, I bought her a designer purse for like 500 bucks. But when I surprised her with it, she immediately took it back, exchanged it for a $60 purse at Macy’s and then we invested the difference.”

“So we don’t normally splurge.”

https://www.cnbc.com/2020/03/01/millennial-millionaire-shares-what-he-refuses-to-spend-money-on.html

Author of “The Millionaire Next Door” dies — 7 key insights from his book

You may not know the name Thomas Stanley, but chances are you’ve heard of “The Millionaire Next Door,” the blockbuster book Stanley cowrote in the mid-1990s.

The book sold more than two million copies and spawned a slew of spin-offs, including “Millionaire Minds” and “Millionaire Women Next Door.” Sadly, Stanley died last week at the age of 71 in a car accident near his home in Marietta, Ga. At the time of his death, he and his daughter, Sarah Fallaw, a psychologist, were working together on the latest iteration of the “Millionaire” series, with a fresh look at millionaires in post-recession America, according to the Atlanta Journal-Constitution.  

Although Fallaw said she would continue her father’s work posthumously, it will be a while before the results of their research are published.

In the meantime, we decided to crack open “The Millionaire Next Door” and revisit some of Stanley and co-author William D. Danko’s findings.

When the duo set out to create a composite of the modern American millionaire, they conducted their own survey of 1,000 high-net-worth individuals. At the time, Stanley was a professor of marketing at Georgia State University and Danko was Stanley’s former research assistant who would go on to become a marketing professor in his own right. What they found was that most millionaires shared seven key traits in common, all of which create a lifestyle “conducive to accumulating money,” they write:  

1. They live well below their means.

• In their research, Stanley and Danko found most millionaires weren’t heavy spenders. 
• The majority spent less than $200 on shoes and only half could justify paying more than $235 for a wristwatch. 
• Another surprising finding: two-thirds of the millionaires they surveyed said they followed a household budget.

2. They allocate their time, energy and money efficiently, in ways conducive to building wealth. 

• For example, the authors found that millionaires were more likely to invest time planning their household finances than, say, shopping for a car. 
• On the flipside, most people would have a lot more fun allocating time comparing car prices than sitting down with a financial planner and figuring out how much more money they have to save to be able to stop working at a certain age.

3. They believe that financial independence is more important than displaying high social status. 

• “They inoculate themselves from heavy spending by constantly reminding themselves that many people who have high-status artifacts, such as expensive clothing, jewelry, cars, and pools, have little wealth,” the authors wrote.  

4. Their parents did not provide “economic outpatient care.”

• Millionaires rarely become millionaires in their own right if their parents are constantly financing their lives. 
• Otherwise, they risk becoming too financially dependent to make their own way.

5. Their adult children are financially self-sufficient.

• Teaching kids to be self-sufficient not only encourages them to create their own financial security but ensures that they won’t be draining their parents’ finances later on.

6. They are proficient in targeting market opportunities.

• Essentially, the wealthy become wealthy often by targeting occupations that serve other wealthy people (that’s their “market”). 
• That’s where the real money is, Stanley and Danko argue. Jobs that serve the wealthy — for example, estate planning, law, accounting — often come with bigger paychecks.

7. They chose the right occupation. 

• The authors found that roughly half of the millionaires they interviewed owned a business of some sort, but the vast majority said they would not encourage their children to follow in their footsteps. 
• Millionaire couples with children were five times more likely to send their children to medical school than other parents in America and four times more likely to send them to law school, according to their findings.

Stanley and Danko’s findings may still ring true today, but the audience couldn’t be more different. When the book was published in 1996, the economy was booming and most people we were blissfully unaware of the pending dot-com bubble and bust. And no one knew that in just over a decade, the Great Recession would squeeze the middle class beyond recognition and deeply divide the rich and the poor.

“The Millionaire Next Door” encourages the view that the real millionaires of America — the frugal spenders, the self-made entrepreneurs, the savers “next door” who don’t seek attention or flaunt their wealth — haven’t actually done anything all that extraordinary to achieve financial success.

But, if we learned anything from the Great Recession, it’s that unanticipated setbacks — a job loss, an unlucky diagnosis, a bad mortgage loan, a spouse’s unexpected death — can send anyone’s personal finances teetering. Not to mention factors beyond most people’s control, such as lagging wage growth and rapidly increased fixed costs like housing, health care and education. Despite all we’ve been through, however, the message that anyone can accumulate wealth if they put the work in is one that still sells in America. Books like Stanley's can help inspire good financial habits, but the reality facing most workers today is that they’ll need much more than a seven-step guide to get them there.

http://finance.yahoo.com/news/author-of-%E2%80%9Cthe-millionaire-next-door%E2%80%9D-dies-%E2%80%94-7-key-insights-from-his-book-213300777.html

SECRET MILLIONAIRE: Petrol station attendant leaves behind millions

05 February 2015 16:03

Perhaps the only clue that Ronald Read, a Vermont gas station attendant and janitor who died last year at age 92, had been quietly amassing an US$8 million (S$10 million) fortune was his habit of reading the Wall Street Journal, his friends and family say.

It was not until last week that the residents of Brattleboro would discover Read's little secret. That's when the local library and hospital received the bulk of his estate, built up over the years with savvy stock picks.

"Investing and cutting wood, he was good at both of them," his lawyer Laurie Rowell said on Wednesday, noting that he read the Journal every day.

Most of those who knew Read, described as a frugal and extremely private person, were aware that he could handle an axe. But next to no one knew how well he was handling his financial portfolio.

Read, the first person in his family to graduate from high school, dressed in worn flannel shirts and spent his free time scavenging for fallen branches for his home wood stove. He drove a second-hand Toyota Yaris.

"You'd never know the man was a millionaire," Rowell said. "The last time he came here, he parked far away in a spot where there were no meters so he could save the coins."

Read graduated from Brattleboro High School in 1940 and during World War II served in North Africa, Italy and the Pacific theatre. Returning home, he worked at Haviland's service station and then as a janitor at a JCPenney store, marrying a woman with two children.

Before his death on June 2, 2014, Read's only indulgence was eating breakfast at the local coffee shop, where he once tried to pay his bill only to find that someone had already covered it under the assumption he did not have the means, Rowell said.

Last week, Brooks Memorial Library and Brattleboro Memorial Hospital each received their largest bequests ever. Read left US$1.2 million to the library, founded in 1886, and US$4.8 million to the hospital, founded in 1904.

"It was a thunderbolt from the sky," said the library's executive director, Jerry Carbone. While a surprise, he said the gift made sense once he learned more about the quiet, shy library patron appropriately named Read.

"Being a self-made man with his investments, he recognised the transformative nature of a library, what it can do for people," Carbone said.

Read's stepchildren survive him but were not immediately available for comment. - Asiaone

Full article: http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=455171:secret-millionaire-petrol-station-attendant-leaves-behind-millions&Itemid=4#ixzz3QsFZjRIf

How to tell if you're rich? Who is “rich” and what is “fair"?

One of the biggest points of contention in the last election was whether the rich pay their fair share of taxes. Polls show the majority of voters don’t believe they do.

Of course, this begs the questions: Who is “rich” and what is “fair"?
 

Answers are largely a matter of opinion. But here is a fact: IRS figures show that the top 10% of income earners make 43% of all the income and pay 70% of all the taxes. Is that fair? If not, how much should they pay: 75% … 90% … all of it? And how about the now widely recognized fact — thanks to Mitt Romney’s secret videographer — that 47% of Americans don’t pay any income taxes. Is that fair? Opinions will vary.
 

According to the IRS, the top 2% of income earners — the ones who just had their marginal tax rate raised 13% to 39.6% — already pay approximately half of all income taxes. President Barack Obama says it’s about time these folks “chipped in.” What a kidder.
 

And who is “rich"? For today’s discussion, I’ll leave aside the truism that you are rich if you enjoy good health, a loving family, close friends and varied interests. Politicians (and most voters, apparently) seem to believe that a person’s wealth can be determined by his or her income. I would argue that you determine real wealth by looking at a balance sheet not an income statement. But why not look at both?
 

According to the Tax Policy Center, if your annual household income is $107,628, you are in the top 20% of income earners. If your income exceeds $148,687, you are in the top 10%. You are in the top 5% if it is $208,810. And if your household income is $521,411, congratulations. You are in the top 1% … and perhaps demonized by those who view hard work and risk-taking as a matter of good genes and good fortune.
 

However, net worth is a far better measure of wealth, in my view. According to the Federal Reserve Survey of Consumer Finances, a net worth of $415,700 puts you in the top 20% of American households. You are in the top 10% if your net worth is $952,200. (This jives with the findings of Dr. Thomas J. Stanley — author of The Millionaire Next Door — that one in eight American households has a net worth of $1 million or more.) If your nest egg totals $1,863,800, you are in the top 5%. And — trumpets please – if you have a household net worth of $6,816,200, you are again in the top 1% … and possibly frowned upon by redistributionists who resent folks who live beneath their means, save regularly and handle their financial affairs prudently.
 

How do you get rich if you aren’t currently? The basic formula is pretty simple: Maximize your income (by upgrading your education or job skills). Minimize your outgo (by living beneath your means). Religiously save the difference. (Easier said than done.) And follow proven investment principles. (Which we write about here every week.)
 

Most millionaires — folks with liquid assets of one million dollars or more – are not big spenders. Quite the opposite, in fact.
 

According to extensive surveys by Stanley, the most productive accumulators of wealth spend far less than they can afford on homes, cars, clothing, vacations, food, beverages and entertainment.
 

On the other hand, the wanna-be’s (people with higher-than-average incomes but not much net worth), are merely “aspirational.” They buy expensive clothes, top-shelf wines and liquors, luxury cars, powerboats, all kinds of bling and, often, more house than they can comfortably afford. Their problem, in essence, is that they’re trying to look rich. This prevents them from ever becoming rich.
 

It surprises many, but the vast majority of millionaires in the United States:

• Live in a house that costs less than $400,000.

• Are more likely to wear a Timex than a Rolex.
• Generally pay $15 or less for a bottle of wine.

• Have never paid more than $400 for a suit.
• Are more likely to drive a Nissan than a BMW.

• Spend very little on prestige brands and luxury items.

Yes, they’re frugal. But they’re also happy, not to mention financially free. They are not dependent on their families, their employers or the federal government. What a feeling.
 

Some can’t abide by this important lesson but the bottom line is clear: If you want to be rich, you have to stop acting rich… and start living like a real millionaire.

Alexander Green is the chief investment strategist at InvestmentU.com. See more articles by Alexander here.

- See more at: http://www.hcplive.com/physicians-money-digest/personal-finance/How-to-Tell-if-Youre-Rich-IU#sthash.edqDi0sq.dpuf

The income and wealth gap in this country and many others continues to expand. Take the necessary steps to make sure that you and your family are on the right side of the chasm.

Three Steps Toward Financial Freedom

Marc Lichtenfeld | Thursday, April 04, 2013

 
I was at a school function and had every reason to be depressed…
 
With kids in elementary and middle school, I was getting an earful from a teacher about everything that’s wrong with education in the school district.
 
Emphasis on standardized tests, teachers whose work and skill are given no respect and, most shocking of all, the administration insisting to this particular teacher that a nine out of 50 on his history exam is a passing grade (despite his vigorous protests). In other words, a kid who filled out A for every answer of this multiple choice test would pass the course.
 
This is going on all over the country. We’re failing our kids, graduating young men and women who are not prepared for the real world.
 
But just as I was feeling pretty awful about the situation, I turned and walked into the exhibit hall. There, several hundred high school kids were up against each other in a robotics competition. These kids were smart. They were motivated. They were boys, girls, black, white, Hispanic and every other race and ethnicity you can think of. They were competing hard against one another, but having a party with each other at the same time.
 
Massachusetts Institute of Technology (MIT) was in the hall recruiting. So were Washington University in St. Louis and the U.S. Army. The army wasn’t there looking for infantry. It was hoping to nab some of the country’s brightest young engineers and technologists.
 
Seeing so many intelligent ambitious kids made me optimistic about the future — but it also got me thinking about differences in “the haves” and “the have-nots.”
 
In terms of education, these kids were clearly the haves. Not because they came from great schools — some of them didn’t. They were the haves because either a parent or teacher pushed them to grab the opportunities in front of them, or because they were self-motivated. Likely, a combination of the two.
 
Financially, in the United States, the gap between the haves and have-nots has widened significantly over the years.
 
According to the Spectrem Group, there are 8.99 million households in the United States worth at least $1 million, up 300,000 in 2012 due mostly to the stock market.
 
Unfortunately, Americans receiving food stamp assistance is at record levels at 47.8 million.
 
Former Florida Governor Jeb Bush recently told MSNBC, “We’re no longer socially mobile as a country,” and “You have people that are born poor and there’s a higher and higher probability that they’re going to stay poor. And you have people that are born rich and there’s a greater probability that they’ll stay rich.”
 
Life isn’t always fair. Sometimes you don’t get that deserved promotion, or an injury or accident hurts your ability to generate income. But if you’re motivated, there are still ways you can ensure your family is among the haves. And you don’t need a ton of money to start.
 
Here are three simple steps to get you underway:

1. Live below your means and start early
Pretty obvious advice here, but by God it works.

And don’t tell me it’s impossible. When I graduated college, I lived in Manhattan while making $18,000 a year and saved money from every paycheck. While friends of mine were living in high-rises with doormen, I shared a room with a friend in a nasty walk-up apartment. I contributed to a 401(k), had enough for pizza and beer (admittedly, it was bad, cheap beer) and put a few bucks away that I invested and turned into a few more bucks.

Saving and investing money for the past few decades has created a portfolio larger than anything I could have imagined when I was fighting off roaches the size of dachshunds in my New York apartment.

2. Make the right investments
My favorite is dividend stocks. But not just stocks with high yields. I’m more concerned with dividend growth. Here’s a perfect example of why:

This week, Barron’s reported that from 2007 to 2012, the dividends of the S&P 500 grew 14% while inflation totaled 12%. In other words, today, you need $1.12 to buy $1′s worth of 2007 goods. If you received $1′s worth of dividends from S&P 500 stocks in 2007, today you’d get $1.14, so you’re ahead of the game.

Owning Perpetual Dividend Raisers (companies that raise their dividends every year) is the best way, in my opinion, to increase your buying power over time. Whether you take the income today or are saving for decades from now, these stocks ensure you’ll have more money in your pocket that you need to keep up with inflation.

3. Learn as much as you can
There are so many good books and resources out there for investors.

If you’re new to the markets, my favorite book is Understanding Wall Street by Jeffrey Little. This book goes into the basics of what a stock, bond, option and ETF are. If you’re new to investing, I can’t recommend it highly enough.

The Little Book that Beats the Market by Joel Greenblatt is a terrific resource on value investing.

If you like the dividend growth method I mentioned above, Get Rich With Dividends is for you. Written by an author with one of the most insightful investing minds of the past 100 years (OK, it’s me), Get Rich With Dividends shows you exactly how you can generate significant income or wealth by investing in these conservative dividend-paying stocks.

Even if you’re behind, it’s not too late to ensure that in the future you’re a “have” instead of a “have-not.” The income and wealth gap in this country and many others continues to expand. Take the necessary steps to make sure that you and your family are on the right side of the chasm.

Marc Lichtenfeld is a senior analyst at Investment U.

- See more at: http://www.hcplive.com/physicians-money-digest/personal-finance/three-steps-toward-financial-freedom-iu/P-2#sthash.PKnShqWS.dpuf

How to be Frugal

Laura Joszt | Monday, May 20, 2013

Warren Buffett may be one of the richest people in the world, but he still lives an incredibly frugal life. And Oscar-winner Jennifer Lawrence may be a young Hollywood “it girl,” but she is also careful with her recent millions and surprisingly prudent with her money.

If even the people who have money to spend are thrifty, then why shouldn’t the rest of us be as well? In fact, it is by being so frugal that some people actually become rich. By maximizing your income and living below your means, you’re enabling yourself to live a fuller, financially independent life.

That doesn’t mean you can’t splurge every once in a while, but the great thing is that living frugally means a splurge won’t break the bank and won’t put you into debt.

So to help you start on the very difficult path of being economical, H&R Block turned to some experts in the area: budgeting and personal finance bloggers.

Large purchase
Stephanie Halligan (The Empowered Dollar) and David Ning (Money Ning) took two different approaches to saving for something like a vacation. Halligan approached saving for the large purchase by curbing impulses, while Ning took a more structured financial approach.

Halligan suggests creating very visible and daily reminders of what exactly you are saving up for to help prevent unnecessary purchases. She wrote to H&R Block:

“For example, when I was saving up for a trip to Vietnam, I wrapped a note around my debit card that said, ‘Every $1 you spend today is one less bowl of Vietnamese Noodle Soup tomorrow.’”

Ning recommends charting the progress by tying saving goals to a date of when the money should be saved up. If you know you need $2,000 by September 1 and it’s January 1, you can start by saving $223 a month, putting away the money each first of the month.

As you go along, you can adjust the monthly savings. So if you can sock away $275 on May 1, then you only need to save $203.25 on the first of the next two months. Or if May is a tough month where the dog gets sick or the car is towed and you can only put away $110, then you know that you need to be careful the next four months and save $249.5 if you want to reach your goal.

Income stream
David Weliver from Money Under 30 suggests creating a designated income stream that can help supplement your savings. For instance, you might take on side work for the weekend. Physicians can find a way to do this as well by using their skills to create programs, become speakers, etc.

Of course, you could always increase income by getting rid of some old belongings by selling them on eBay.

Your turn
So pick the method that works best for you and stick with it. If you know you’ve got some extra marketable skills and a little more free time (perhaps you’re working locum tenens?) then Weliver’s path might be for you. For those more structured people, Ning’s might be easier to stick with. But if you know you need to continuous reminder to keep you on track, you’d do well to heed Halligan’s advice.

http://www.hcplive.com/physicians-money-digest/personal-finance/How-to-be-Frugal-LBJ

Is Your Financial Situation Sustainable And Renewable?

Two words that have attracted a lot of attention are "sustainable" and "renewable." These words are generally used in an environmental sense when discussing energy and natural resources, but they should also be applied to your personal financial situation. Using sustainable and renewable sources of energy, for example, can create a secure supply of energy upon which people can rely. Similarly, ensuring that your lifestyle, savings rate and income can be sustained and/or renewed will help you achieve long-term financial security.

Your Lifestyle

Let's start by examining the spending portion of your financial equation. Do you know how much money you spend each month? If you don't, there's no time like the present to take inventory.

Even if you don't know how much you spend, you should certainly know how much you earn. Starting there, do you know what you would do if your next paycheck did not arrive? How long could you continue to support your current lifestyle? Even if you can't bring yourself to create a budget, at the very least you need to stash away some cash in case you find yourself unemployed.

Your Savings Rate

Now let's look at the savings portion of your financial equation. How much do you save each month? Include all sources, from money set aside in your checking or savings account to your 401(k) plan or other employer-sponsored plan. Don't overlook the cash you stash in the cookie jar.

Now figure out how difficult it would be to save that same amount if you were unemployed or were forced to accept a lower-paying job than the one you have today. When you are saving for long-term goals, such as retirement or the cost of a child's education, the amount you end up with is significantly impacted by the amount you put away early on because of the effects of compound interest. Any interruption of the steady stream of savings could significantly reduce the likelihood of achieving your goal.
When you put your savings plan under the microscope, be sure to view it in the context of your income. Are there places where you could cut your spending if times get tough? Is there a way to cut other expenses before you reduce the amount allocated to savings?

Your Income

Now, let's examine your primary income source. If you are counting on a paycheck from your job to finance your expenses, you should put some thought into where your job ranks in terms of sustainability. Are your skills likely to be in demand five years from now? 10? 15? Is your present employer stable? If not, are your skills easily transferable to another employer? Could you earn an equal or greater paycheck if you changed jobs?

If not, are you taking action? Remember, today is the best time to start preparing for tomorrow.

Hope for the Best, Plan for the Worst

Although the future is unknown, taking inventory of your life will certainly let you know where you stand today and take the stress off your tomorrow. If your current level of income would not be easy to replace, spend some time contemplating the merits of living with less.
Simplifying your lifestyle without reducing your income is a great way to free up some cash to build up your emergency fund or give your investment plan a major boost. With a little forethought, you can be prepared for any eventuality. 


The Bottom Line

Of course, if your cash inflows are steady, your savings plan is on track and your source of income is secure, there's nothing wrong with living the good life. Just do so responsibly. Don't buy more than you can afford, keep your debt-to-income ratio low and have a backup plan in the event that life rains on your parade.

Read more: http://www.investopedia.com/articles/pf/08/personal-finance-sustainable-renewable.asp#ixzz28Je6NVlP

The Everyday Lives Of Frugal Billionaires

When you think about the richest people in the world, you may envision them surrounded by all the trappings of wealth: race cars, yachts, mansions and other toys that most of the rest of us can only dream about. The term "frugal billionaire" may seem like an oxymoron, but a small subset of the richest of the rich are well-known for their penny-pinching ways. While most people will never have that kind of money to throw around, everyone can take a page from the fiscally-responsible habits of these billionaires. 

Warren Buffett

Probably the most famous cheapskate since Scrooge, Buffett lives a modest lifestyle despite his net worth of around $44 billion. He purchased a five-bedroom house in Omaha in 1958 for $31,500 and has lived there ever since. Buffett doesn't spend his money on electronics and reportedly doesn't carry a cell phone or have a computer at his desk. Although he could afford a whole fleet of limousines to be at his beck and call, he prefers to drive himself and owns a Cadillac DTS, which comes in at a modest $50,000 or so. When it comes to entertainment, the investment mogul shuns splashy parties and trips and spends his time playing bridge.

Mark Zuckerberg

Zuckerberg makes the list as the world's youngest billionaire. Though he's still in his 20s, this Facebook creator has an estimated net worth of $17.5 billion. Almost all of his money is tied up in the social media company's equity. It can be argued that Zuckerberg simply hasn't had enough time to splash his wealth around or that it really doesn't exist until he takes the company public later this year. By all accounts, Zuckerberg keeps his life low-key and spends up to 16 hours a day at the office. He doesn't own his home, but prefers to rent a house down the road from Facebook's Palo Alto headquarters. Zuckerberg chooses t-shirts and jeans over expensive tailored suits and sneakers and sandals over Italian leather loafers.



Carlos Slim Helu

In 2010, Helu passed Bill Gates on the billionaire list to become the richest man in the world, with an estimated net worth of $69 billion. He built his fortune in Mexico, where he owns over 200 companies including Telmex, the country's largest telephone service provider. He shares many frugal traits with Warren Buffett, including living in a modest home and eschewing computers. Helu, widowed since 1999, spends most of his downtime at home with his six children and his grandchildren. In a country where security is often sketchy, he still chooses to drive himself wherever he goes. Although much more dandily dressed than Mark Zuckerberg, Helu purchases most of his clothing off the rack from one of the many retail franchises he owns.



John Caudwell

You might argue that Caudwell, now retired from the British cellphone empire he built from scratch, doesn't belong on this list at all. He owns many rich toys including a helicopter, yacht and a car worth more than most people's homes. When it comes to wasting money, Caudwell is a skinflint at heart. He cuts his own hair because he thinks barbershops are a waste of time and money. He buys his clothing off the rack at the British retailer Marks and Spencer. Before retirement, he would bike 14 miles to work each day rather than have someone drive him in his Bentley. Now, he bikes 40 miles every week to and from his favorite pub.

The Bottom Line

The uber-wealthy don't always live the high life, which helps them stay rich. The frugal billionaires listed above all came from modest means and frugality was learned and practiced by their families. They carried these lessons with them in business and, one hopes, they will pass them on to their children.

Read more: http://www.investopedia.com/financial-edge/0412/the-everyday-lives-of-frugal-billionaires.aspx#ixzz28JPtDUir

Spending money is simple - anyone can do it. Making money is not.

Living below your means

Frugality is a natural aspect of Buffett's character.  As his wealth increased, he indulged in minor extravagances.  He bought an executive jet he named The Indefensible.  

But wealth didn't change his natural frugality.  It is easy to see how the consequence of living below your means is important when you're starting out.  It's the only way you can accumulate capital to invest.  What's less obvious is how this mental habit remains crucial to your investment success even after your net worth has soared into the billions.  

Very simply, without this attitude to money you won't keep what you have earned.  Spending money is simple - anyone can do it.  Making money is not.  That;s why living below your means is the attitude that underlies the foundation of the Master Investor's success:  Preservation of Capital.

10 Frugal Living Tips To Happiness On A Tight Budget

10 Frugal Living Tips To Happiness On A Tight Budget
By Matthew CenzonΙ Published September 28, 2011

Whether you're dealing with a mountain of debt or trying to save money for your retirement, there are numerous circumstances that can force someone to change his or her spending habits. Frugal living is typically viewed in a negative light, where the word "sacrifice" becomes synonymous with "suffering." However, this does not have to be the case. Here are 10 frugal living tips to achieve happiness on a tight budget.

1. Keep Track of Your Spending

If you're planning to live on a tight budget, you need to start by keeping track of all your expenses. From car repairs to that cup of coffee you buy every morning, everything must be recorded. It's easy to lose track of how much you spend in any given week. The next thing you know, you are looking at a credit card bill that is well outside your means. So, you pay the minimum payment, which is another no-no, and the cycle of perpetual debt begins. Keeping better track of your spending can help you avoid wasting money on unnecessary expenses.

2. Change Your Spending Habits

Now that you're keeping track of what you're spending your money on, look through your monthly expenses and start trimming the fat. This is where people begin to think that frugal living is a complete downer compared to a lifestyle of superfluous spending. Don't think about limiting yourself on the things you want, start thinking about cutting out the things you don't need or waste money on. Avoiding name brand items, buying in bulk, and buying used or refurbished items are just a few examples to help you save and change your spending habits.

3. Monitor Your Money

Many people are guilty of not knowing how much money they are carrying in their pocket or purse on a daily basis. Even worse, many people are guilty of not knowing how much money they have in their bank account. How are you supposed to follow a budget if you don't even know what you are working with? What if you dropped some cash without even knowing it? Finding random cash in your pocket is the best feeling in the world, but you should be taking better care of your money if you plan on living on a tight budget.

4. Carry a Coin Purse

Want to live happy on a tight budget? Start carrying a coin purse, and stop treating loose change like it's the plague. Most people become annoyed with fishing through their pockets for change, so they just pay with large bills and get more loose change that they don't want. Keep those coins organized with a coin purse. If you still refuse to pay with exact change, just stuff the coins in the coin purse and empty it into a jar when you get home. When the jar is full, take it to a coin counter at your local grocery and exchange it for cash or a gift card.

5. Give Yourself an Allowance

Limit yourself to a set amount of spending cash per week, like $100, and only withdraw that amount from your bank account. Stretch that weekly allowance as far as you can, and if you spend it all, don't withdraw more money until it's time for your weekly withdrawal. Giving yourself an allowance will help you develop better spending habits to help you save money for when it counts.

6. Start Living a Healthier Lifestyle

Yes, your health can play a factor in how much money you're spending. One of the best frugal living tips anyone can follow is to get in better shape. Those who smoke, consume too much alcohol, have poor eating habits, are out of shape or are overweight tend to spend more money than a person who is living a healthy lifestyle. If you are in shape, you will eat less. If you quit smoking and drinking, you aren't wasting money on alcohol or cigarettes. If you jog, walk or run on a regular basis, you are giving yourself an activity that will make you healthier and hardly costs any money.

7. Look for Ways to Earn on the Side

While you don't necessarily have to take up a second job or even a part-time gig, finding ways to earn money on the side is a frugal living tip that will help you reach your retirement goals, or give you more spending money. Earning money on the side will also keep you preoccupied so that you feel less tempted to waste money, and what better way to live happily on a tight budget than to spend time earning money rather than spending it.

8. Stop Impulse Buying

Never walk into a store and purchase something without thinking about it first. Frugal living requires you to consider all purchases with at least a 24-hour timeframe. If you still feel compelled to have the item in question after 24-hours, then it might be worth buying.

9. Never Buy Anything at Full Price

Have you ever purchased something, only to see it go on sale a month later? If you find an item, and followed the suggestion in tip #8, make sure that the item you must have is at least on sale. If it's not, then wait till it goes on sale before you buy it. Hopefully, by the time the item goes on sale, you'll no longer feel compelled to buy it, thus saving even more money in the long run.

Another useful tip would be to only allow yourself to purchase something if you are able to find a coupon for it. Websites likeCoupounMountain.com provide free coupons you can use for online purchases. This is another great way to help you curb your shopping impulses and practice frugal living habits.

10. Change the Way You Eat Out

Giving up on restaurant dining and eating out may be a good tip to save money, but it probably won't make you very happy. Instead of giving up on it completely, try changing the way you eat out. Always keep an eye out for promotions or deals. Restaurants tend to offer discounted meal prices during off hours, so try eating earlier or later than usual to save. Scan the appetizer section and see if you can turn an item into an entrée. Many times, a restaurant will have an appetizer and an entrée that are virtually the same, only the appetizer is a bit smaller and comes at a cheaper price. Also make sure you take advantage of any coupons you receive in the mail, or print your own from online.

http://www.candofinance.com/debt-management/frugal-living-tips/

Stories of frugal females who amass their fortunes through hardwork, consistent savings and wise investing.

Wednesday, February 15, 2006

Frugal Females Found

Occasionally we hear amazing stories of frugal females who over a lifetime of living beneath their means and saving and investing have managed to amass fortunes. Generally because these women do not have immediate family they bequeath this wealth to a private university, non-profit organization, or even to our government to help pay down our national debt. Margaret Elizabeth Taylor, a widow since 1977, died at age 98 (Nov. 2005) and having no surviving siblings or children "bequeathed her $1.1 million estate to the federal government and requested that it be used to help pay down the $8.1 trillion national debt."Woman Leaves Fortune to Pay Nation's Debt Anna Patocka, who worked as a cook, died at age 95 (July 2005), and left "$1 million to local organizations". "She didn't make a million by inheriting it," friend Helen Linhart said. "She saved it." GRAFTON, N.D.: Woman leaves behind $1 million Anne Scheiber, who worked for the IRS as an auditor, died at age 101 (1995), and left $22 million to "Yeshiva University, with the stipulation that the money be used to establish a scholarship and loan fund for deserving female students at YU's sister institution of Stern College" The Butterfly Effect (Anne Scheiber) The fact that these women had so much wealth to bequeath surprised the folks who knew them. Each was a secret millionaire. The money was accumulated by hard work, consistent savings, and wise investing.  Anne Scheiber made quite the news splash when her bequest was made public in 1996. I remember the article in TIME magazine and the news stories which made much of her stagnant career at the Internal Revenue Service. She was someone who had a law degree and was obviously smart, but because of her gender she spent her entire IRS career in a junior position and never received a promotion nor much of a raise. This prompted her to vow never to enrich the IRS if she could help it. To keep that vow she never sold the stocks she purchased and each stock had the dividends reinvested. This meant her money just grew and grew since only sales would trigger a tax payment. While she was a wise investor, she was also an extremely frugal woman. She saved approximately 80% of her take home pay when working. She lived in a rent controlled apartment, almost never purchased new clothes, and for entertainment attended annual shareholder meetings of corporations she invested in and after using her auditing background to grill the executives would fill her handbag with the free food at the buffet and live off that for days. I find reading these stories inspiring. There is something about knowing that these women had control of themselves and their wealth and did with it as they saw fit. While some may say "but how deprived they must have been, wearing the same clothes and eating left-over stale food". I really don't see it that way. They obviously felt that clothes were not important. You could almost look at it as they were wearing a self-made uniform day in and day out. Nothing so wrong with that. I enjoy food too much to eat stale stuff, but who knows how much I will enjoy food when I am 90? I think that is part of the problem, these women lived so long that most of the folks who did know them and spoke of them reminisced of the 80, 90, or 100 year old woman. What were these females like in their 20's, 30's, or 40's? What personal experiences kept them on their frugal paths? I wish we found these ladies while they were still alive and could tell us their full stories... http://www.bostongalsopenwallet.com/2006/02/frugal-females-found.html

The Othmers' Story

The Othmers' Story

James K. Glassman | July 14, 1998

The Washington Post, Tuesday, July 14, 1998; Page A15

Donald Othmer, a professor of chemical engineering in Brooklyn, died three years ago. His wife Mildred, a former teacher and a buyer for her mother's dress store, died in April. Both were in their nineties. They lived quiet, unpretentious lives -- which is why it came as a shock to their friends to learn that their combined estates were worth $800 million and that they had given nearly everything to charity.

How did the Othmers get so rich? Like many other Americans, they simply put their money into sound stock market investments and left it there for a long time.

This they had in common with a woman named Anne Scheiber, who worked as a government drone, never making more than $4,000 a year. In 1944, she put a total of $5,000 into stocks such as Coca-Cola and Merck, and when she died in 1995, she left her estate to Yeshiva University. It was worth $22 million.

As for the Othmers: In the early 1960s, they turned $25,000 each over to Warren Buffett, an old family friend from their hometown of Omaha. "They just rode along," Buffett told the New York Times. The investment "never changed their lives."

In 1970, when the Othmers received stock in Buffett's new company, Berkshire Hathaway Inc. (which invests in other companies such as Gillette and American Express), it was trading at $42 a share. Last week, it was $77,000 a share. Mildred Othmer's 7,500 shares alone are worth $578 million. Donald's, which were sold on his death when the price was lower, were worth $210 million.

The Othmers were smart -- or lucky -- to pick Buffett to manage their money, but that's not the lesson of this story. After all, even if they had simply put their funds into the broad market, they still would have ended up with a fortune of between $50 million and $100 million.

No, the lesson is to live modestly, invest sensibly, don't touch the money and grow rich. This lesson is at the heart of the current debate over transforming Social Security.

Today, it is a government-run plan by which Americans retiring over the next few decades will get minuscule (or even negative) returns on a lifetime of payroll contributions. But reformers, including New York Democratic Sen. Daniel Patrick Moynihan, want instead to create a system of private accounts by which retirees can get the returns that the stock market has been generating for the past century.

Why shouldn't every worker be able to get the returns -- and build the nest eggs -- that Anne Scheiber and the Othmers built? They can -- but only if they have money to save. Currently, 10 percent of every worker's pay is going to taxes to fund Social Security retirement benefits. No wonder Americans are strapped.

William Beach of the Heritage Foundation has calculated that the average single black woman born in 1960 will receive lifetime benefits from Social Security totaling $173,000. But, Beach found, if the woman invests the same money that now goes to Social Security taxes in a mixed portfolio of stocks and bonds instead, she will accumulate $414,000.

Blacks, in particular, are victimized by the Social Security retirement system, since they don't live as long as whites -- and thus don't collect benefits for as long. Under a private retirement plan, they could pass assets on to their heirs.

There are other lessons in the Othmers' story:

(1) Frugality pays. Donald Othmer was a smart scientist who contributed to more than 40 patents at Eastman Kodak. But his wealth came from following the simple virtues. The Times wrote that as a boy "he developed a lifelong frugality as he earned money picking dandelions from neighbors' lawns [and] delivering newspapers." He and his wife "lived comfortably but not ostentatiously and rarely talked about their money."

Thomas Stanley and William Danko, authors of the surprise bestseller "The Millionaire Next Door," came to similar conclusions about the rich people they studied for their book. They wrote that "frugal" is the best adjective to describe millionaires. More own Fords than any other car, and only 25 percent of the men studied paid more than $600 for a suit in their lives.

(2) Saving pays. This is a notion that should be drummed into the head of every young person. Put away money early, and don't touch it. If you can leave it undisturbed in a decent investment for a long time, it will grow to immense proportions through the miracle of compounding.

Savings can also be eroded by capital gains taxes, but both Scheiber and the Othmers managed to avoid them by not selling their stocks, then passing them on to their heirs. Still, the cut in capital gains from 20 percent to 15 percent that Congress just passed is a move in the right direction that will boost savings.

(3) Philanthropy will boom. The Othmers' estates will provide $190 million to Brooklyn Polytechnic University, where Donald taught, $160 million to Long Island College Hospital, $75 million to Planned Parenthood and so on.

Rich people, more and more, are giving back what they've earned in an effort to make society better. They would rather make these choices themselves than leave them to Uncle Sam, so they are preserving their estates against taxes.

Eliminating the estate tax entirely could touch off a philanthropic flood. But, even without that change, generous Americans like Scheiber and the Othmers are turning frugality into wealth into good deeds. They deserve attention and praise.

http://reason.com/archives/1998/07/14/the-othmers-story/singlepag
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