7 spending tips from Frugal Billionaires

Originally Posted by Holstein Bilter

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+1 on this one.

What's the point of having it, if you're not going to enjoy it, or help someone else w/it?

There. THat's my comment. Stupid me.

Fine, you aren't dumb. But why post such a mind-numbingly asinine article? It's like posting a fourth grader's discourse on options pricing or posting an Artisan Fran post on politics.

my 5yr old cousin could've come up with these 7 tips. it's commin sense

Originally Posted by nlakind

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my 5yr old cousin could've come up with these 7 tips. it's commin sense

I am beginning to think that MC may have dumber posters than SW&D and Health&Fragrance, if that is statistically possible.

I loathe moralistic articles like this that purportedly give lifestyle tips from people that are supposed to be admirable by virtue of their immense self-created wealth.

Originally Posted by LabelKing

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I loathe moralistic articles like this that purportedly give lifestyle tips from people that are supposed to be admirable by virtue of their immense self-created wealth.

You don't like these articles because Billionaires poo poo at your $500 MTM dream shirts.

One useful moral: buy what you want and what will make your life better, not what you think you should want. Most people never quite get there.

A particularly irritating thing about the article, though-- apart from its general uselessness. "Buffett" has TWO "t"s.

These are not what I suspect to be fun-loving people.

The very idea of "frugal billionaires" is kind of offensive. They've spent decades obsessively making money, between a dozen of them they control some sickening proportion of the entire world's wealth -- and they aren't doing jack **** with it.

If you want to use it to reach Mars, fine. If you want to give it to cancer research, or the DNC, or some other pet cause, more power to you. Hell, if you want to spend it on frivolous **** to have fun with that's totally fine too, because the money you're spending is going to other people who will spend it in their turn.

But consciously building up the largest possible amount of money in your bank account, just to have it? It borders on cruelly inconsiderate.

You do understand that their 'money' is actually assets in companies and holding debt? Arguably they're doing quite a bit more with that money to help the economy than splurging at Bergdorfs.

They're wealth estimations are just that, estimations based on the value of what they own.

Buffett: Oxxford wardrobe, Rolex president, learjet ~ frugal

The comparisons and examples drawn from books like 'The Millionaire Next Door' are wholly misleading and irritating. They do however provide a good example of what survivor bias looks like.

Survivorship bias is the logical error of concentrating on the people or things that "survived" some process and inadvertently overlooking those that didn't because of their lack of visibility. This can lead to false conclusions in several different ways. The survivors may literally be people, as in a medical study, or could be companies or research subjects or applicants for a job, or anything that must make it past some selection process to be considered further.

Survivorship bias can lead to overly optimistic beliefs because failures are ignored, such as when companies that no longer exist are excluded from analyses of financial performance. It can also lead to the false belief that the successes in a group have some special property, rather than being just lucky. For example, if the three of the five students with the best college grades went to the same high school, that can lead one to believe that the high school must offer an excellent education. This could be true, but the question cannot be answered without looking at the grades of all the other students from that high school, not just the ones who "survived" the top-five selection process.

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Originally Posted by MetroStyles

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That's because American billionaires suck. Look to Russia for examples of how the wealthy should live their lives.

Don't get me wrong, I don't subscribe to the ideals of The Millionaire Next Door. I see no reason to be wealthy but live like a pauper. People often praise Sam Walton for driving a decades old pick-up truck to work every day -- I always wondered, couldn't he of even bought just a new Cadillac or something? What the hell is the point of being a mult-billionaire if the truck you're driving is a bigger piece of crap then my working class dad's is.

Delayed gratification is big with savers/makers. Some have emotional hang ups that prevent them from spending on luxury. An uncle of mine just tonight said he wanted to buy a new 6 Series BMW but would feel guilty spending that kind of dough on a car. He was a child of the Depression and is in his seventies. I said to him, "If not now, when?". The man worked so hard we'd love to see him enjoy some pricey toys. Lord knows after great savers come great spenders, so one way or another the money's goin'.

A couple anecdotes:

1 - A close friend of mine runs one of the best performing hedge funds in the city. Last Friday, we had lunch. Here was his look, from head to toe:

a. Disheveled hair, parted to the side, but not really, sort of hanging in his face. The IndoPak version of bama bangs:



b. Inexpensive glasses. Probably purchased here, two for $100 (on special): http://www.visionworkseyewear.com/

c. No shave in a week.

d. Short sleeve button-up, rumpled, probably straight from the dryer, top three buttons undone (Luca-style.)

e. Brown cotton pants rolled up at the bottom to ventilate the ankles.

f. Flip-flops.

2 - A friend of mine works for a guy who is considered to be one of the Godfathers of private equity. Here is what the guy wore to the office on a day I stopped by (this was for a "special occasion"):

a. Double breasted suit, enormous shoulder pads, enormous armholes, 4x1, purple fabric, likely polyester.

b. White shirting, OTR, lumpy, unironed, straight point collar, likely not cotton.

c. Some sort of hellishly old necktie, the sort of necktie that simultaneously evinces miserable taste, frugality and ugliness is one fell swoop:



Conclusion:

My experience in the world of finance has consistently been that, among elite money makers, there is almost a competition to demonstrate the poorest taste clothing-wise. Guess what? Who gives a ****. Anyone worth $1b+ doesn't need someone telling them about drape and fit and quality because they could give three *****. Billionaire fail? Who knows? From their perspective, anyone dumb enough to buy a $5,000 suit deserves to be poor, or - at a minimum - poorer than them. Just always keep in mind that you should buy good clothing for you. Because you like it, and you like to send a message to the world that you have great taste. But don't do it because you think it will make you one iota richer or more successful. In fact, it will not - and it will only make you more bitter when the guy wearing the $199 Jos. A. Bank sale suit and $12.99 matchie-matchie Van Heusen poly-cotton shirt/tie combo gets promoted and you do not (either because he's smarter or because the boss likes him more or both). It will - by definition - make you poorer to blow money on expensive clothing. So buy it because you like it, and understand that there will always be super rich guys who could care less.

Originally Posted by GoldenTribe

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The very idea of "frugal billionaires" is kind of offensive. They've spent decades obsessively making money, between a dozen of them they control some sickening proportion of the entire world's wealth -- and they aren't doing jack **** with it.

If you want to use it to reach Mars, fine. If you want to give it to cancer research, or the DNC, or some other pet cause, more power to you. Hell, if you want to spend it on frivolous **** to have fun with that's totally fine too, because the money you're spending is going to other people who will spend it in their turn.

But consciously building up the largest possible amount of money in your bank account, just to have it? It borders on cruelly inconsiderate.

Warren Buffett has signed away 99% of his wealth to be liquidated and donated to charities when he dies. Bill & Melinda Gates signed away their income to fund their charity, which despite all of its scam-ness has helped at least some people.

Originally Posted by deadly7

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Warren Buffett has signed away 99% of his wealth to be liquidated and donated to charities when he dies.
My roommate told me this an hour ago. So all the money he manages to make before dying will simply do that much more good. I crossed my fingers that my comment would slip quietly into the night. Then again, I wonder what proportion of billionaires dedicate what proportion of their money to charity etc in their wills.