The not so luxurious life of frugal billionaires - February 13, 2019

The not so luxurious life of frugal billionaires

Frugal billionaires. That’s the expression for the people with great wealth who still live a penny-pinching life. Warren Buffett has a simple home in Omaha. Mark Zuckerberg wears t-shirts and jeans. Ingvar Kampard had a 20-year-old Volvo. They don’t live a luxurious life and many applaud them for it. But the subject has a twist ending.

The world’s wealthiest can buy anything they want, but sometimes they don’t want much. There’s even an expression for the richest who are living a penny-pinching life. They are the frugal billionaires, and there are some very well-known people among them.

Buffett and his $84 billion

The first one is Warren Buffett, CEO of Berkshire Hathaway. Buffett has a wealth of $84.4 billion, making him the third richest man on Earth. It’s not an overstatement if we say the now 88-year-old billionaire could get anything money can buy.

Still, there’s not much he wants. He lives in the five-bedroom house he bought in 1958 for $31500. Although that’s around $250 thousand in today’s dollars, it’s still not a lot considering he has more than $80 billion on his name. He also drives a very moderate vehicle: a Cadillac XTS, a $45 thousand car. Which he only changed from an older model because his daughter convinced him itwas embarrassing.

Zuckerberg’s jeans and t-shirts

Founder and CEO of Facebook, Mark Zuckerberg also has a place on our list. He became the youngest billionaire in history at age 23. Now he’s 34 and his wealth is around $55 billion. Although he could buy any clothes he wants, he still usually wears jeans, t-shirts and hoodies.

But his frugality isn’t only about his clothes: for a long time, he drove a $30 thousand Acura, which he swapped for a Volkswagen GTI around the same price. His $7 million home in Palo Alto may be unreachable for many, but it’s still not a lot considering his breathtaking wealth.

Kamprad’s good old Volvo

The founder of IKEA might be one of the best-known frugal billionaires ever. According to Bloomberg’s estimation, the furniture-king Ingvar Kamprad had a $58.7 billion when he died. With that, he was the eighth-richest person on Earth.

Still, he drove a $22 thousand Volvo 240 GL from 1993 for two decades. But it wasn’t only his ride he saved money on. He himself once said that he purchased at least some of his clothes on the flea market. And while he could have afforded private jets and luxury hotels, he stuck with economy class and budget hotels.

Their life is not that simple

Although the life of frugal billionaires is a popular subject, the topic is not as simple as it first sounds. Vox published an article about some myths considering the frugality of these people. They point out for example that Zuckerberg might wear a hoodie every day, but it’s a $2 thousand cashmere hoodie. It’s also known that Buffett has several houses, and while they are not super expensive, they aren’t cheap either.

They also point out that the famous frugal billionaires may not spend that much on some things like cars or clothes, they do spend a lot on things like family vacations, private school tuitions and home renovations. In short, they might live a frugal life for their wealth, but that life might still be far beyond the reach of an average person.

Disclaimer: This analysis is for general information and is not a recommendation to sell or buy any instrument. Since every investment holds some risk, our main business policy is based on diversification to minimize threats and maximize profits. Innovative Securities’ Profit Max has a diversified portfolio, which contains liquid instruments. This way, our clients can maintain liquidity, while achieving their personal investment goals on the long term.