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Guest Post: Five Frugal Multi Millionaires

November 18, 2009 · Filed Under Random · 2 Comments 
This guest post was written by Kris who writes about managing personal finances for a credit card comparison website which compares a range of balance transfer cards and cash back credit cards. When not writing, Kris enjoys spending quality time with his young family.

Not every millionaire was born with a silver spoon in his mouth, nor does every millionaire live the lavish lifestyle often associated with the title. In fact, many millionaires live very reasonable, unassuming lifestyles, often combining frugal spending habits with wise investment choices to build immense wealth. It’s important to remember that being frugal doesn’t necessarily mean you are cheap, it just means you make well-informed and smart choices regarding your money. For many millionaires, it isn’t necessarily their lofty incomes that create their fortunes so much as their frugality and ability to save and invest the money they do earn. Here are a just a few examples of prodigious savers who turned their frugal savings into fortunes.

1. Warren Buffett

It’s hard to find someone who hasn’t heard of Warren Buffett, either because of his extreme wealth or the amazing way he achieved that wealth. This Nebraska native turned successful investor and business owner, came from a working-class family in Omaha, and even joined a fraternity (Alpha Sigma Phi) during his college days at The Wharton School, University of Pennsylvania. Along his path to millionaire and then billionaire status, he never lost sight of living frugally and making level headed business decisions. According to Forbes Magazine, after losing $25 billion (USD) in 2008-09 Buffett is still the second wealthiest man in the world at a net worth of $38 billion. On his Wikipedia.com profile his annual salary — $100,000 (USD). Talk about living frugally in the overall scheme of things — wow!

2. Marjorie Kennedy & Jack Lynch

You might not remember their names, but you might remember hearing their stories or ones similar to them. Both were unassuming librarians, (Marjorie in Scotland and Jack in North Carolina). Both of them lived unassuming lives, saving and investing well, and living within their means. At the end of their lives, both were able to leave vast fortunes (well over a million dollars), far larger than their librarian salaries would belie. These are the typical ‘millionaire next door’ type stories you never expect due to the relatively normal and unassuming lifestyles these people live. See, it doesn’t take a huge salary and fancy job title to becomes rich!

3. Ingvar Kamprad

What, this name doesn’t ring a bell? How about IKEA? Ah yes, now you’re making the connection. He is the Swedish billionaire, one of the richest men on the planet, who not only grew IKEA into a name recognizable worldwide, but also maintained the characteristics of a frugal millionaire in the process. In his Testament of a Furniture Dealer Ingvar states, ‘Expensive solutions to any kind of problem are usually the work of mediocrity. We have no respect for a solution until we know what it costs.

4. Jen Smith: ‘Millionaire Mommy Next Door’

On her website, Millionairemommynextdoor.com, Jan chronicles her path from minimum wage earner to self-made millionaire. It is a remarkable, yet for most of us, very attainable path that made her a success. Unlike Warren Buffet who, while starting small has built a nearly unimaginable fortune compared to the everyday investor, Jen Smith’s story gives us all hope that hard work, common sense, and learning to do things yourself rather than paying others to do them for you, can lead to financial independence and success. Here are two quotes from Jen’s website that I think sum up the lifestyles of many frugal millionaires:

“We tend to be do-ers, not have-ers. For instance, we don’t care much for ‘stuff’ (a McMansion home, fancy cars, clothes or jewelry), but we spend generously on recreational pursuits, organic foods and long trips to faraway places.”

“The morning I calculated our net worth to be over one million dollars, we were living in a rented apartment, driving a six-year-old car, and wearing used consignment store clothes. At age 40, we were ‘closet millionaires’.”

5. Dave Ramsey

Ramsey is the host of a nationally syndicated radio program and podcaster giving live, one-to-one personal finance advice to callers. Dave made a fortune from real estate in his 20’s but he went broke. With lessons learned and a resolve to do it the right way he started again and made his second million from real estate. Now, Dave is renowned for his Christian background and no nonsense approach to personal finance, especially when it comes to getting out of debt, staying out of debt, and living financially free. So, if you listen to Dave’s advice, you’ll be taking personal finance advice from a wealthy man, not your broke friends or family.

Earning Money is Good but Keeping Some of it is Even Better

July 28, 2008 · Filed Under Net Worth · 2 Comments 

expensive car We all know people around us who are really rich. You know, the guy driving his expensive car from his gated neighborhood to the country club on Saturday morning or the family down the street with the big SUV to pull the boat and the camper (hopefully not at the same time) when they’re not at home watching their 60” Plasma HDTV. Without really knowing their finances though, are we sure that they really are wealthy?

How do you define wealth?

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Book Review: The Millionaire Next Door

July 28, 2008 · Filed Under Book Reviews · 4 Comments 

Authors: Thomas Stanley, PhD & William Danko, PhD

My very first book review

Since early 2007, I have read a number of personal finance books during my search to ensure that I was on the right financial path. As I search for other books to read, I also found it tremendously helpful to see what other people with similar interests were reading. My goal is to pass on this information to you as well. I hope to give you a brief overview of the book and the authors, touch on the good and bad in the book, and finally give you my personal recommendation for whether you should borrow the book, buy the book, or act like the book doesn’t exist.

The Millionaire Next Door is the second book I read during this process and it still is what I consider one of the most important to righting my financial ship (shoot, I just gave away the ending!). Click here to continue reading…

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