Millionaires Who Are Frugal When They Don’t Have to Be - NYTimes.com: "You wouldn’t know it from their shopping habits, but Ms. Marchi, 56, a senior health care executive who has run hospital chains, and Mr. Weidner, 57, a senior researcher at a large nonprofit company, are worth millions of dollars. And while they own three homes — condominiums in Naples and Boca Raton, Fla., and a house in Lebanon, Pa., where they grew up, none of them are huge. One splurge is an annual trip to Italy.
The couple are the face of the self-made millionaire who has the financial security of true wealth, not the fleeting rush of sudden riches. While the popular perception of millionaires is that they are more ostentatious than frugal, recent research shows that single-digit millionaires, at least, are generally far more mindful about how they save, spend and invest their money.
“It’s about paying attention to what makes you happy and not just doing what our society tells us to do,” said Donna Skeels Cygan, a financial adviser in Albuquerque and the author of the book “The Joy of Financial Security.”
“They look upon money as a tool,” she said of couples like Ms. Marchi and Mr. Weidner, with whom she has worked. “It’s an important tool. They don’t neglect it, but they also don’t worship it.”
A recent report from UBS Wealth Management found that people with more money are generally happy, which probably doesn’t come as much of a shock. “I would say that millionaires in general are very happy,” said Paula Polito, chief client strategy officer at UBS Wealth Management Americas. “I wouldn’t confuse happiness with contentment or satisfaction or achievement.”
The UBS report found that satisfaction rose in line with wealth: 73 percent of those with $1 million to $2 million, 78 percent of those with $2 million to $5 million and 85 percent of those with over $5 million reported that they were “highly satisfied” with life.
What piqued my curiosity was how conflicted the report’s respondents seemed to be about the source of their wealth. They often have jobs that entail long hours, high pressure and working vacations.
“Part of this pressure to keep going is less about greed and more about insecurity that might be self-imposed,” Ms. Polito said. “If you ask people, ‘If you knew you had five more years to live, would you act differently?’ they say they would. That’s a showstopper.”
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Money buys happiness, the report said. But what good is that happiness if the millionaires who have it cannot enjoy the freedom the money gives them, the freedom that most people would love to have?
I set out to talk to people who had what I considered an attainable level of wealth for people with well-paying jobs and the ability to control their spending and saving through their lifetime. They had wealth starting at several million dollars, but it did not stretch above the $10.86 million estate tax exemption level for couples.
(Once people’s wealth goes substantially past the estate tax exemption, they need tax and legal advisers for planning to minimize the estate tax. It’s a good problem to have, but it changes how they think about money.)
There were common threads in this group. These were people who had all made the money in their own lifetimes and done that as much by saving, investing and making careful choices about spending as by making large salaries.
One of the big choices was what they spent money on. A common thread was frugality about cars. Not only did they buy modestly priced vehicles, they kept them for a long time.
But fancy cars were more of a proxy for unnecessary purchases. Steve Ingram, a real estate and oil and gas lawyer in Albuquerque, said he and his wife simply didn’t care that much about material possessions.
“We have some nice things, but I drive a car for 10 years and then trade it in and get another car for 10 years,” he said. “We like to travel, and we’ll spend the money for that because it’s worth it having a real experience together.”"
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The couple are the face of the self-made millionaire who has the financial security of true wealth, not the fleeting rush of sudden riches. While the popular perception of millionaires is that they are more ostentatious than frugal, recent research shows that single-digit millionaires, at least, are generally far more mindful about how they save, spend and invest their money.
“It’s about paying attention to what makes you happy and not just doing what our society tells us to do,” said Donna Skeels Cygan, a financial adviser in Albuquerque and the author of the book “The Joy of Financial Security.”
“They look upon money as a tool,” she said of couples like Ms. Marchi and Mr. Weidner, with whom she has worked. “It’s an important tool. They don’t neglect it, but they also don’t worship it.”
A recent report from UBS Wealth Management found that people with more money are generally happy, which probably doesn’t come as much of a shock. “I would say that millionaires in general are very happy,” said Paula Polito, chief client strategy officer at UBS Wealth Management Americas. “I wouldn’t confuse happiness with contentment or satisfaction or achievement.”
The UBS report found that satisfaction rose in line with wealth: 73 percent of those with $1 million to $2 million, 78 percent of those with $2 million to $5 million and 85 percent of those with over $5 million reported that they were “highly satisfied” with life.
What piqued my curiosity was how conflicted the report’s respondents seemed to be about the source of their wealth. They often have jobs that entail long hours, high pressure and working vacations.
“Part of this pressure to keep going is less about greed and more about insecurity that might be self-imposed,” Ms. Polito said. “If you ask people, ‘If you knew you had five more years to live, would you act differently?’ they say they would. That’s a showstopper.”
Advertisement
Continue reading the main story
Money buys happiness, the report said. But what good is that happiness if the millionaires who have it cannot enjoy the freedom the money gives them, the freedom that most people would love to have?
I set out to talk to people who had what I considered an attainable level of wealth for people with well-paying jobs and the ability to control their spending and saving through their lifetime. They had wealth starting at several million dollars, but it did not stretch above the $10.86 million estate tax exemption level for couples.
(Once people’s wealth goes substantially past the estate tax exemption, they need tax and legal advisers for planning to minimize the estate tax. It’s a good problem to have, but it changes how they think about money.)
There were common threads in this group. These were people who had all made the money in their own lifetimes and done that as much by saving, investing and making careful choices about spending as by making large salaries.
One of the big choices was what they spent money on. A common thread was frugality about cars. Not only did they buy modestly priced vehicles, they kept them for a long time.
But fancy cars were more of a proxy for unnecessary purchases. Steve Ingram, a real estate and oil and gas lawyer in Albuquerque, said he and his wife simply didn’t care that much about material possessions.
“We have some nice things, but I drive a car for 10 years and then trade it in and get another car for 10 years,” he said. “We like to travel, and we’ll spend the money for that because it’s worth it having a real experience together.”"
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