Millionaires Who Are Frugal When They Don’t Have to Be

@jym- The reason is a number of things. Part of the answer is that things like vacuum cleaners were made out of strong components, and as a result were worth fixing, because they would last. A lot of what was made back then had motors that were metal, the plastics they used were pretty strong, and more importantly, the motor in a vacuum could be taken apart so you could replace the brushes, these days they are all one piece units pretty much,nothing to replace. Then, too, everything these days is controlled by circuit boards, and when they go there often is no replacement available, or if it is, it is really expensive. Washing machines used to be driven by belts, which could be replaced with little work, and the motors in the washing machine were beasts that could be fixed, too. The controls were basically clockwork mechanisms, that could be fixed or replaced pretty cheaply. These days washing machines use direct drive mechanisms that are often made out of plastic, and to replace would take a lot of labor and if you got it repaired, would cost a fortune. The circuit boards that drive them are expensive as well, and replacing them is a fortune.

The other side of it is many things comparatively are cheaper then we grew up. When I was growing up, a 19" color tv was a pretty expensive deal, around 400 bucks in 1970’s dollars, you can get a high def set for 400 bucks in today’s dollars. If you tried to get that repaired out of warranty, likely it would cost you a lot more than a new one would, so people just throw them out.

There is some irony to all that, cars are the exact opposite. Back when I was growing up, the typical car owner didn’t keep cars that long (and please, don’t tell me stories of cars your family kept running, my family was like that too, we fixed our own cars, and kept them running until they literally died), back then the average car was kept somewhere around 5 years or so, these days that number is well into double digits. A lot of people would trade in cars every couple of years, or would get a new one when the financing on the old one had finished (or often, dealers would ‘pay off’ the old loan, by including the pay off value in the cost of the new car,they still do that with leases and such). Part of the reason was cars were relatively cheap in one sense, the typical car in the early 1970s was around 2500 bucks or so, and even with inflation adjustments, it is still less than typical cars today adjusted to today’s dollars. However, people did that in part because despite what I get from some people, about how cars back then were a golden age, etc, they weren’t. Back then, for one thing, unless you lived in California or Arizona or the like, cars rusted out, you would routinely see cars with leprosy of rust after a couple of years, you don’t see that any more. Engines and drive trains back then, when you got to 30 or 40,000 miles, were considered ready for a total rebuild, these days 250,000 miles is the expected length they are expected to last, they are totally different. Cars are more expensive, but partially because they are expensive, and partially because they for the most part are infinitely more reliable then the cars of 40 years ago, it is worth fixing them. Appliances these days like washing machines and dryers have a useful life until the warranty runs out, cheaper units like coffee makers last a couple of years if you are lucky, cars can run for many years with only basic maintenance.

musicprnt,
Yes I know. It was a rhetorical question.

Lol, jym. You should have known better!!

I think the problem is in seeing millionaire as some sort of magic value, it isn’t. If you include wealth in the form of houses especially, that is a false image of things. First of all, while a house and property is a tangible asset, unless you are planning to sell it and go live in a rental, you need to live somewhere, so its value as an asset is very different IMO.

Likewise, the other part of that is how much of that ‘millions of dollars’ is on paper? Or tied up in things like retirement accounts and the like? There is a difference between making a 7 figure salary and having a million in assets, and they are two totally different worlds. People throw around numbers like these ‘millionaires’ are in the 1%, but they aren’t. When we talk of the 1% and the 99% were are talking family income, which having a house and property does not factor into (unless you have property that generates retirement income). Someone making 1 miillion a year is prob going to be in the top 1% (5% is 200k). A million dollar in assets is not going to put you anywhere near the top 1%, I suspect a million in assets/wealth is probably not even top 10% these days.

So if we are talking people with a millions or more in assets, it would be kind of stupid to spend a lot, because that is not that big a deal these days in many places, it represents the kind of assets a lot of middle income people can have in many places. More importantly, even if it is a million dollar in non property (ie cash savings, investments) , that isn’t a lot, as others have said, given how long people live, that money needs to last, even if it is invested wisely and making decent returns.

Last time I’ve read top 1% is if your net worth is more than $8 million. It could be higher now.

@DrGoogle raises a good distinction - wealth vs income. 400k income puts you in the top 1% (the bottom half or “working professional” group) but another measure of the top 1% is by wealth with a median of around 8-9M.

It’s pretty sad that saving 1M for retirement is just a crazy unrealistic number for many, many Americans, while at the same time 1M in retirement isn’t all that much for major metro areas with a high-ish cost of living. Although you could probably do quite well on 1M somewhere cheap. But unfortunately for many people that would involve moving.

Anyway, props to the people who saved a few mil for retirement, especially on a middle class income.

“I don’t darn holey socks but I get good shoes resoled”

Me too. It takes some effort to find a good pair, so it is worth to put new soles on it, even if the shoes did not cost a small fortune.

IMO, nothing says “poor” and “not well groomed” like a pair of shoes needing heels, polishing, or even new laces.

I guess people will think I’m poor when they look at my shoes. In reality, I’m just lazy, hate shopping, and don’t put a priority upon shoes.Yet the lady working at the restaurant I just went to might be considered rich and well groomed, by the looks of her shoes.

I used to wear expensive shoes from Nordstrom. Not any more. I like my flip flops. My husband like to wear shoes and I pay top price for them.

Well, you have to keep your man happy! The expensive shoes my husband likes are all some sort of fancy running shoes, so I don’t mind that. I wouldn’t mind looking nicer, but I really loathe shopping. I wear the same sort of clothing that I did in high school. Right now I’m wearing what my husband calls my “dollar store shirt”. But I really like it, and I would have worn it 30 years ago. In fact, I still have some high school stuff in my closet.

According to the Federal Reserve, the median balance of retirement accounts held by Americans who are saving for retirement totals less than $60,000.

Can’t say I notice most peoples shoes…well…unless they are a truly cool pair of boots, preferably a well worn in pair of Frye’s with a patina only age can provide.

“According to the Federal Reserve, the median balance of retirement accounts held by Americans who are saving for retirement totals less than $60,000.”

This probably includes a number of people who started working just several years ago (including one of my kids). The more relevant figure would be median account balance at common retirement age.

Omg, as I’m siting next to my husband I saw his sock with big hole on the heel. Do we call it holey heels?

If we get a good marketeer, holes in socks can be touted for its positives - aeration or fashion (like torn jeans) and they can charge a premium. Probably TMI, but stories of moms telling their kids not to wear undergarments with holes, in case they get taken to the ER, has guided me out of that frugal behaviour.

re:#45
I don’t see how saving that much is out of reach. My grand parents saved well over that amount when it actually meant something.
Admittedly, inflation.
My grandmother was a retail clerk and my grandfather was a pipefiter.
They lived on one income, paid cash for the house in an upper crust part of town and left their daughter quite a bit of money, despite living into their mid 80’s.

Just remember, if you have enough money (metaphorically) to fly first class but choose not to do so because of extreme frugality, your kids or grandkids can and might just do so in your stead. Past a certain number needed to address retirement and late-in-life care, there is a danger in hoarding money like Scrooge. And using the power of money to exert control over later generations is something I do not plan to do.

But if you metaphorically fly first class when the cost exceeds the benefit, and then if at some point you don’t have enough to pay your bills when you are older and in a tough place, should your kids, who perhaps have been frugal and living within their means, pay your bills??

I know very few people who paid any of their parents expenses, and considering the self absorption of some folks, I expect even fewer of the next generation to take on that responsibility.