I recently was talking to a friend of mine who lives in Sweden and found out that the owner of Ikea, Ingvar Kamprad (who is now in his late eighties), one of the richest men in the world (in October 2012 it is estimated that he is the fifth richest person in the world, and has net worth of over $40 billion as per Wikipedia) is very frugal despite his immense wealth.
My friend told me that he eats at Ikea restaurants (you know, instead of fine dining he has his under-$4-swedish-meatballs) for a cheap meal, and drives a 15 year old car (a Volvo, no less) and lives in a modest home. According to curbed.com, he also likes to take the salt and pepper packets to save them for later use, travels economy class on the airplane, and asks his employees of Ikea to use both sides of a sheet of paper and turn the lights off when they are not in the room.
Apparently he did have a phase when he was quite the spendthrift and drove around in a Porsche, so maybe he got “it” (as in spending money) out of his system.
Lifestyle Inflation Warriors
I love hearing about how some of the wealthiest individuals are also very frugal and penny pinching. I have no idea why, but I actually find this combination of penny pinching frugality and ability to keep it very sexy. For example, the other well-known frugal billionaire is Warren Buffett.
According to Business Insider, Warren Buffett who also has a net worth over $40 billion, lives in his modest Omaha, Nebraska home that he bought for $31,500 a few decades ago. He also drives around a modest car and is has committed to donating most of his wealth to charity.
Also, Mark Zuckerberg, the founder of Facebook, is worth over $9 billion and drives an Acura. He was also seen eating at a McDonald’s while on his honeymoon in Italy with his new wife.
Zara’s billionaire (worth over $50 billion) is also very frugal (though less frugal than his counterparts) and drives an Audi A8 (okay it’s a little fancier than an Acura and a Volvo) to work and eats at the Zara cafeteria every day at work.
Values Run Deep
I think that all of these billionaires realize that money is not everything. It’s true, money isn’t everything. According to Lifehacker’s post on Warren Buffett’s best money saving advice, Warren Buffett is quoted as saying:
Some material things make my life more enjoyable; many, however, would not. I like having an expensive private plane, but owning a half-dozen homes would be a burden. Too often, a vast collection of possessions ends up possessing its owner. The asset I most value, aside from health, is interesting, diverse, and long-standing friends.
I can’t agree more. I see people get freaked out by a spill in their fancy car, get consumed by monthly payments for their toy, and get stressed out by this. Relationships and the health to appreciate and enjoy these relationships are in my opinion as well, what matters most.
Values do run deep, don’t they? (I still have not bought a new lap top, I will just keep using it until it goes kaputz, thank goodness for Time Machine!)
How to Avoid Lifestyle Inflation
Basically the way to avoid lifestyle inflation is to realize that just because you make more, does not mean you need to spend more. I know that this can be hard to realize, I have trouble with it sometimes too.
Other than some typical reasons for lifestyle inflation, such as starting a family, acquiring a mortgage, there is little reason to treat yourself ostentatiously just because you are making a little more money.
Adopt these lifestyle deflation idols (Buffett, Kamprad, Zuckerberg…) to avoid your lifestyle inflation. I do understand that some may feel that their habits are extreme, but this is what makes them who they are (though one could argue for “once a spender always a spender” too).
Readers, do you know other lifestyle deflation idols who are wealthy but live a frugal, simple life?