Warren Buffett is worth more than $ 70 billion, but he often doesn’t act like it — and neither do many other affluent Americans.
The documentary “Becoming Warren Buffett” that aired Monday on HBO TWX, +0.03% shows Buffett, the CEO of Bershire Hathaway BRK.A, -0.51% BRK.B, -0.79% , eating breakfast each day at McDonald’s MCD, -0.41% . Each morning, he asks his wife to set out $ 2.61, $ 2.95 or $ 3.17, which determines which breakfast he gets.“When I’m not feeling quite so prosperous, I might go with the $ 2.61, which is two sausage patties, and then I put them together and pour myself a Coke,” he says in the film. He also still lives in the five-bedroom home he bought for just over $ 30,000 in 1958 in Omaha.
He’s not the only rich person behaving like this: “Rich people don’t get rich by spending it all,” says Pam Danziger, a researcher focused on the affluent market and founder of Unity Marketing, which helps brands better connect with affluent consumers. “They know better than anyone that by being careful shoppers they can achieve a lifestyle several rungs up the income ladder.”
There are myriad reasons that many affluent people are, well, cheap. Some of them are self-made and have spent many years before they were rich being thrifty. “Thriftiness is habit-forming,” says Scott Tucker, the president and founder of financial firm Scott Tucker Solutions in Chicago.
Others fear that their wealth isn’t permanent, so they don’t spend a lot of their money. This is particularly true of the top 10% of the income spectrum, according to the 2015 Survey of Affluence and Wealth by research and polling firm YouGov. “The resourcefulness, financial independence and spending constraints that arose from the fear of the recession are now enduring attitudes of family financial management,” the study authors write.
During the recession, like many Americans “fear drove them to step up their savings, cut spending, and retool their household budgets, and to become more resourceful and independent when evaluating and making significant purchases. Over time, panic has given way to confidently applying these practices to their purchasing habits.”
Of course, rich people spend a ton. In 2015 alone, the affluent upped their spending by 6.6% on luxury goods — largely driven by increased spending on travel, dining out, home entertainment and cars, YouGov found.
Still, many of them are very thrifty. Here are five stats that prove that:
They tool around town in a Ford
Sure, there are plenty of loaded Americans driving BMWs, but many drive far more modest cars. Data released in August 2016 by car site Edmunds.com found that the most popular car among those with incomes above $ 250,000 a year was the Ford F-Series, followed by the Jeep Grand Cherokee and the Jeep Wranger; the Lexus RX and BMW X5 were only the No. 4 and No. 5 on the list. “There will always be an interest in and market for high-end exotic vehicles,” says Edmunds.com executive director of industry analysis Jessica Caldwell. “But, overall, most of the wealthiest Americans look for their vehicles to perform the same kind of functional tasks that everyone else does.”
Other studies show a similar penchant for modest cars among the wealthy: Among the top 10 most popular vehicles in America’s wealthiest neighborhoods, half are nonluxury vehicles, an analysis of car-buying habits of residents of the 10 wealthiest zip codes in America by TrueCar.com found. These include the Honda Accord, Toyota Camry, Honda CR-V, Volkswagen Jetta and Toyota Prius.
You’ll find them in the aisles of Wal-Mart …
One in three people with a net worth of more than $ 5 million says they shop at Wal-Mart WMT, -0.60% , according to a survey of 1,200 ultra-high-net-worth investors released in 2014 by financial information site Millionaire Corner. What’s more, nearly half say they shop at Costco COST, -0.50% and more than four in 10 at Target.
…. And dropping coin at the dollar store
Many dollar store shoppers make $ 100,000 a year or more, data released by research firm NPD Group in July found. “Considering that nearly one in five dollars spent there is contributed by the affluent, dollar stores’ value proposition clearly resonates across economic segments,” says Andy Mantis, executive vice president of Checkout Tracking, a division of NPD. The average wealthy dollar store shopper makes about one trip a month to those stores, the data showed (though, to be fair, lower income people do make more frequent trips).
They clip a lot of coupons
Millionaire actress Kristen Bell says she’s an avid couponer. Her favorite: the Bed Bath and Beyond Coupon. And she’s not the only rich person to do so. People making over $ 100,000 were actually more likely than those making less to use coupons, a survey of more than 8,000 shoppers released in 2010 by deal site Deals.com found.
What’s more, one in four people who often use six or more coupons during each shopping trip were affluent, reporting incomes of $ 75,000 or more, according to research released in 2011 by the University of Arizona’s John Davis Norton School of Family and Consumer Sciences. They’re known as “coupon divas” by the researchers. “They don’t use coupons because of financial constraints but because they perceive coupons as saving them money,” said Anita Bhappu, an associate professor at the University of Arizona.
They give a lower percentage of their income to charity than do other groups
“The rich aren’t the most generous,” concludes a study published in the Chronicle of Philanthropy. “Middle-class Americans give a far bigger share of their discretionary income to charities than the rich.” The data, which looked at IRS records, found that while households earning $ 50,000 to $ 75,000 give an average of 7.6% of their discretionary income to charity, households making $ 100,000 or more give an average of 4.2%.