My kind of guys.

[uscitizen]

The Frugal Billionaires
Asher Hawkins 11.14.07, 2:00 PM ET

Sure, billionaires fly private jets, live in massive mansions, dine at the world's finest restaurants and shop at Gucci, Prada and Louis Vuitton. After all, they're rich. But some of the world's wealthiest people aren't so flashy. They're frugal--for billionaires, at least.

Take John Caudwell, who got his start as an auto-repair shop owner and went on to create a $2.2 billion fortune (when last measured by Forbes in March) by selling his 85% stake in cellphone outfit the Caudwell Group in 2005. An avid sportsman, he used to bike 14 miles to work every day. He cuts his own hair because going to a barber is a waste of time. He buys his clothes off the rack at British retailer Marks & Spencer (other-otc: MASPY - news - people ).

"I don't need Saville Row suits," he tells Forbes, adding that splurging on extremely pricey bottles of wine is often a waste. "I don't need to spend money to bolster my own esteem."
In Pictures: The Frugal Billionaires

Caudwell does have his indulgences. He owns both a Ferrari and a Bentley.

Jim C. Walton, the Wal-Mart (nyse: WMT - news - people ) scion and member of America's richest family, has different taste in vehicles. He inherited his money--and spending habits--from father Sam. Worth $16.4 billion when we valued his fortune for the Forbes 400 list in September, Jim prefers pickup trucks to sports cars. Reportedly, he drives a 15-year-old Dodge Dakota.

Ikea founder Ingvar Kamprad built a $33 billion fortune selling affordable furniture to the masses. Yet the self-made Swedish tycoon drives a 15-year-old Volvo, flies coach, tries to avoid wearing suits and often eats meals at lower-tier restaurants.

Indian billionaire Azim Premji made his $17.1 billion fortune through tech-services giant Wipro. Despite being one of Asia's richest men, Premji drives a Toyota Corolla, flies coach and stays in company guest houses instead of five-star hotels when traveling on business. He even served food on paper plates at a lunch honoring his son's wedding.

Famously frugal investor Warren Buffett has been making headlines recently for railing against the Bush administration's tax policy and sticking up for the middle class. And he walks the walk: Despite earning $46 million in taxable income last year and boasting a net worth of $57 billion, he lives in the same home he bought for $31,500 nearly 50 years ago.

Stanford professor David Cheriton made his billions by introducing Google (nasdaq: GOOG - news - people ) founders Sergey Brin and Larry Page to the venture capitalists at Kleiner Perkins Caufield & Byers. He was rewarded with a sizable chunk of Google stock.

Canadian Cheriton says he prefers to ride his bike around his Palo Alto, Calif., neighborhood, and relies on an old Volkswagen (other-otc: VLKAF - news - people ) van or a Honda (nyse: HMC - news - people ) sedan when he needs to get behind the wheel. He says he only flies commercial, prefers jeans to designer clothes and claims to reuse his teabags. He also cuts his own hair to save time going to a barber. His indulgence: two windsurfers.

When contacted about this story, Cheriton cited the Wikipedia definition of frugality: "The acquiring of and resourceful use of economic goods and services in order to achieve lasting and more fulfilling goals." He says, "That's certainly something I aspire to."

http://www.forbes.com/business/2007/11/14/billionaires-walton-buffett-biz-cz_ah_1114frugalbillies.html?partner=aol

 

[IHG]

There is a lot of misconception and stereotypes about how most of the rich live

"Who is the prototypical American millionaire? What would he tell you about himself?(*)

* I am a fifty-seven-year-old male, married with three children. About 70 percent of us earn 80 percent or more of our household's income.

* About one in five of us is retired. About two-thirds of us who are working are self-employed. Interestingly, self-employed people make up less than 20 percent of the workers in America but account for two-thirds of the millionaires. Also, three out of four of us who are self-employed consider ourselves to be entrepreneurs. Most of the others are self-employed professionals, such as doctors and accountants.

* Many of the types of businesses we are in could be classified as dull/normal. We are welding contractors, auctioneers, rice farmers, owners of mobile-home parks, pest controllers, coin and stamp dealers, and paving contractors.

* About half of our wives do not work outside the home. The number-one occupation for those wives who do work is teacher.

* Our household's total annual realized (taxable) income is $131,000 (median, or 50th percentile), while our average income is $247,000. Note that those of us who have incomes in the $500,000 to $999,999 category (8 percent) and the $1 million or more category (5 percent) skew the average upward.

* We have an average household net worth of $3.7 million. Of course, some of our cohorts have accumulated much more. Nearly 6 percent have a net worth of over $10 million. Again, these people skew our average upward. The typical (median, or 50th percentile) millionaire household has a net worth of $1.6 million.

* On average, our total annual realized income is less than 7 percent of our wealth. In other words, we live on less than 7 percent of our wealth.

* Most of us (97 percent) are homeowners. We live in homes currently valued at an average of $320,000. About half of us have occupied the same home for more than twenty years. Thus, we have enjoyed significant increases in the value of our homes.

* Most of us have never felt at a disadvantage because we did not receive any inheritance. About 80 percent of us are first-generation affluent.

* We live well below our means. We wear inexpensive suits and drive American-made cars. Only a minority of us drive the current-model-year automobile. Only a minority ever lease our motor vehicles.

* Most of our wives are planners and meticulous budgeters. In fact, only 18 percent of us disagreed with the statement "Charity begins at home." Most of us will tell you that our wives are a lot more conservative with money than we are.

* We have a "go-to-hell fund." In other words, we have accumulated enough wealth to live without working for ten or more years. Thus, those of us with a net worth of $1.6 million could live comfortably for more than twelve years. Actually, we could live longer than that, since we save at least 15 percent of our earned income.

* We have more than six and one-half times the level of wealth of our nonmillionaire neighbors, but, in our neighborhood, these nonmillionaires outnumber us better than three to one. Could it be that they have chosen to trade wealth for acquiring high-status material possessions?

* As a group, we are fairly well educated. Only about one in five are not college graduates. Many of us hold advanced degrees. Eighteen percent have master's degrees, 8 percent law degrees, 6 percent medical degrees, and 6 percent Ph.D.s.

* Only 17 percent of us or our spouses ever attended a private elementary or private high school. But 55 percent of our children are currently attending or have attended private schools.

* As a group, we believe that education is extremely important for ourselves, our children, and our grandchildren. We spend heavily for the educations of our offspring.

* About two-thirds of us work between forty-five and fifty-five hours per week.

* We are fastidious investors. On average, we invest nearly 20 percent of our household realized income each year. Most of us invest at least 15 percent. Seventy-nine percent of us have at least one account with a brokerage company. But we make our own investment decisions.

* We hold nearly 20 percent of our household's wealth in transaction securities such as publicly traded stocks and mutual funds. But we rarely sell our equity investments. We hold even more in our pension plans. On average, 21 percent of our household's wealth is in our private businesses.

* What would be the ideal occupations for our sons and daughters? There are about 3.5 millionaire households like ours. Our numbers are growing much faster than the general population. Our kids should consider providing affluent people with some valuable service. Overall, our most trusted financial advisors are our accountants. Our attorneys are also very important. So we recommend accounting and law to our children. Tax advisors and estate-planning experts will be in big demand over the next fifteen years.

* I am a tightwad. That's one of the main reasons I completed a long questionnaire for a crispy $1 bill. Why else would I spend two or three hours being personally interviewed by these authors? They paid me $100, $200, or $250. Oh, they made me another offer--to donate in my name the money I earned for my interview to my favorite charity. But I told them, "I am my favorite charity." "
http://www.washingtonpost.com/wp-srv/style/longterm/books/chap1/millionairenextdoor.htm