Sunday, December 09, 2007

"So When You're Rich, You Won't Have To Be Frugal," He Told Me

I was on a street corner, when a reader stopped and offered kind words about one of my newspaper columns in the home & design section of the Miami Herald. Very nice man! But he concluded his praise with the comment: "What are you going to write about when you're rich and don't have to be frugal anymore?"

I laughed and tried to explain that even if I were very wealthy, I would still live frugally. In fact, many of the wealth management books that I've read -- including the The Millionaire Next Door: The Surprising Secrets of America's Wealthy (1996, ISBN 0-671-01520-6) by Thomas J. Stanley and William D. Danko-- are filled with examples of very frugal millionaires. Here's a snippet from The Millionaire Next Door.

Here are the reasons why I'd still be frugal even if were a millionaire:

1. My children. Quite frankly, I don't want my kids to be brats. If we spent, spent spent, I'd worry about the message that I would be sending to my children. I also worry about affluenza--a financial illness that strikes spoiled kids from affluent homes. As a banking reporter, I once interviewed a very wealthy man who sold his bank for about $300 million in cash. He spoke about the issue of affluenza in harsh tones.

This is the advice he gave me. He told me that it is important to raise your kids with good thrifty values. "You can spend money to fix everything: their teeth, nose, skin. But you can't fix their personalities if they're brats." I really took that advice to heart.

What's more, I've noticed that some of my very, very high-net worth friends are very serious about making sure their kids work for a living. They find part-time jobs, internships and other money-earning enterprises for their kids or they encourage their kids to find those opportunities on their own. It's not about the money; it's about character.

2. My Children: I want to leave them with the means to live comfortably after I've gone to the next world. But if I spend it all now, I won't have anything to leave them later.

I've heard horror stories about families who have lived a luxurious life, but have been reduced to low-income status after a main wage earner suddenly died. Why? The family was living above its means and the lofty lifestyle was really only a fat paycheck-to-fat paycheck existence.

Also, if I were very wealthy, I'd live frugally in order to have enough money to share with my extended family and to pay them back for all of the years of hard work and support.

3. My own sanity. I've gone on marathon shopping sprees that have filled my arms with packages, but have depleted my heart and bank account. The worst shopping trip: In Manhattan during my late 20s, I once went went to every Ann Taylor store on the island (from the Upper West Side to the Lower Manhattan). I was searching for one shirt that was on sale for $20. I found the shirt and purchased one in every color.

Obviously, something was really missing from my life. But definitely, that missing piece of my heart was not in my shopping bag. And clearly, I was clueless. Frugal living, in contrast, keeps me more honest about what's really going on in my life.

4. Environment: When I live very frugally, I conserve energy, money and other resources. I just pay more attention to the world around me.

5. Good Karma: Now this logic may not apply to everyone: but in my heart of hearts, I think that if I save and spend money wisely, I'll have more funds to donate to charities, cultural organizations and to the homeless. And that cycle of giving will enhance the quality of my life.



The Frugal Duchess Booktique
The Frugal Duchess of Beauty Store

Book Shop of Fear
The Poetry & Drama Queen
Frugal Jazz & Blues
Frugal Comic Book Connection


Marcus Aurelius said...

The publisher of Forbes Magazine (William Baldwin, IIRC) once jetted to Green Bay. He then wrote about his visit.

He noted Green Bay has an astonishing number of millionaires. He also wrote, most are still living in their original 1000 sq ft homes and driving six year old Fords.

To be sure, it was part being in the right place at the right time for many of these (mill workers who were paid part in company stock a very successful company), but for those who do not manage wisely no amount of money is enough.

Frugal Duchess said...


Thanks for that story about William Baldwin.

I agree with you. After I read the Millionaire Next Door, I began to notice some of the quiet millionaires that I knew.

One of them is a fellow who owned a printing company. He lives in a pretty plain house, does not wear fancy clothes and his car is so non-Lexus.

He does, however, go on great trips and cruises. And after he sold his business for big bucks, he can afford to spend lots of time with his grandchildren.

I appreciate your comments so much.

Andy said...

Great post as usual.

One piece of feedback on your site and advertising. You should try and blend your ads in more to match the site colors. Do this by chaning the color palette in the adsense manager. I don't use adsense any more (was showing too many irrelevant ads for my site).
Also no need to say sponsored links...


Frugal Duchess said...


Thanks so much! Your advice is so helpful.

I appreciate your feedback very much. Wow! Thanks!