A Quora user wondered why wealthy people bothered being frugal, yet they had the means to live lavishly. People chipped in to answer him, and we have sampled some of the best responses here.
They Know That Time Is the Most Precious Resource
Frank says he values time over money, and if well used, one can have time to do meaningful stuff, “Honestly, it’s how I got wealthy. Bear in mind; frugal does not mean cheap. I don’t spend hours figuring out how to save a few dollars or a few percent. Frugal/wealthy people understand that time is the most precious resource. You may have a lot or a little money, you may have a lot or a few family members, but every living thing on the planet has 168 hours per week. In one hour, I can study the market and trends and make a decision that will increase the likelihood of me earning 1% more on my entire life savings this year. Or I can find a $5 off deal on a tool I need. Guess where I want to spend that hour?”
They Value Investing and Limiting Spending on Liabilities
“About 20 years ago, when I had just migrated to the US, I was dirt poor & was even homeless for a couple of weeks. I believe I got wealthy because I have been very wisely frugal. By wisely frugal, I mean I would save every cent I could by limiting my spending on liabilities & invest in assets that would make more money, like real estate. I took it to too extreme & that’s one of the reasons why I got very wealthy relatively quickly,” says an anonymous contributor
They Like To Keep More of What They Earn
Phil puts it simply “Wealthy people understand that it isn’t what you earn; it is what you keep.”
They Do Not Like Buying Things They Do Not Need
Ron illustrates that people stay wealthy when they stop buying stuff they do not need, “Sometimes people aren’t consciously being cheap or frugal. Sometimes stuff just loses its appeal when the day comes that you can actually afford it.”
They Are Hard Workers and Conscientious People
An anonymous user argued that hard work and being frugal helps them keep their wealth, “I am in my mid-40s with a net worth of close to $6M. Some might argue whether that qualifies as being wealthy, but few who know me would argue about my frugality. Frugality has contributed to my wealth, but I would say it takes a back seat to hard work and being generally a conscientious person (e.g., prioritizing earning potential vs. interest when selecting a college degree). One can certainly become wealthy without frugality, but it may be difficult to maintain.”
It Is a Mindset
Daniels argues that frugality has to be a habit, “Frugality is a mindset that creates, grows and keeps wealth. As Benjamin Franklin said, “a penny saved is a penny earned.” It’s true. People who make lots of money quickly end up poor if they don’t know how to manage it.”
To Be Free To Do Things They Value
Doug points out that his main goal of being wealthy was to have financial independence and enjoy things they loved, “We wanted to enjoy a time we weren’t worried about money. And also had the time and resources to help non-profit organizations we value. I’ve found most of the wealthy people I know, who built their wealth, have a similar focus. You learn to live frugally because you need to. Discover you’re happy. Then when your income increases rather than increasing your expenditures, you build financial prosperity.”
They Do Not Like Wasting Resources
“Even if I had $100 million in the bank, I would still fly coach, I would still prefer biking to work over driving, I would still shop at Amazon and Costco, and I would still take only one paper napkin at the restaurant. The question should be, why NOT be frugal?” notes Joe James
“It’s a complete waste of the world’s resources to take 20 paper napkins when I only need 1. People think they’re free. Wrong! Nothing is free. To make those napkins, a tree had to be cut down, wood ground into pulp, paper made, then napkins distributed to the restaurant. Regardless of your financial status, resources should always be conserved,” he adds.
It Has Been Passed Down From Childhood
Francis Ngo says that how you were brought up has a bearing on how frugal you are, “I noticed that those who like to spend grew up with parents who also liked to spend. They are accustomed to spending lavish amounts because they are not used to experiencing any guilt with spending a lot. On the other hand, wealthy people who are frugal carry the frugality from childhood. These are people who grew up feeling remorse when spending unnecessary amounts of money because of a shortage of money in their household. This is the reason why there are people who are frugal even when they have $50,000,000 in their bank accounts. It doesn’t matter how much they have; the frugality from their childhood keeps on giving them subconscious remorse whenever they spend on the unnecessary.”
They Already Possess Everything They Want
Neil Hansen says his frugality is not by design, “I’m wealthy. I didn’t intend to be frugal, but I am. Here’s why. For at least twenty years, I’ve had everything I want. I like my house, my cars, my furniture and electronics, Netflix, etc. There’s nothing I want that I don’t already have. I suppose I could spend money just for the sake of spending it. I can’t really see a reason for that. If I want something, I buy it. It is rare, but sometimes I see something I want that I don’t have. I go home and google it and find the best deal I can. Just because I have money doesn’t give me the right to waste it. I consider it a blessing from God to be used wisely.”
To Avoid Decision Fatigue
Daniel Oliech notes, “Billionaires such as Mark Zuckerberg practice frugality to avoid decision fatigue. When you have more decisions to make about which of your designer suits to wear and which of your 50 cars you should drive, you exhaust your capability to make better, high-quality decisions. Owning less is critical to making better decisions and producing high-quality work.”
They Spend Only When They See Money’s Worth
“Most rich people that I met tend to be frugal. They only spend money when they see its worth. Some are frugal because they were poor when they were young. But the rich people that I knew came from already wealthy families. However, they were educated not to waste money and not to show off wealth. I think such strong education about being humble and not greedy enables some wealthy families to preserve their wealth. Also, let’s remember that these wealthy people are frugal relative to their wealth, but they do spend large sums on things that they care about or see a need for. I knew a rich person who loved boats and spent a lot of money on them. However, every day, he wore plain cloth and saved money when eating out,” notes Pureum Kim.
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This article was produced and syndicated by A Dime Saved.