Frugality may not be common among millionaires, but some swear by it. Speaking to CNBC Make It, three self-made millionaires opened up about why they do not support spending indiscriminately and what they refuse to spend money on even if they can afford it.
For real estate investor Todd Baldwin, frugality is something almost a game. “It’s actually really fun being able to buy something and then choosing not to,” he told the publication.
The Washington-based entrepreneur also does not like spending on trips to restaurants or to the movies with friends because he knows he can be paid to do so. Why spend on an activity that can generate income for you? Baldwin told CNBC Make It.
The “secret shopper” also revealed that he gets paid for dining out, going grocery shopping, watching movies, and even visiting hotels and casinos, in exchange for reviewing the products and services he uses.
“If a buddy wants to go to a bar or someone wants to go see a movie, I usually try to wait until I can get a mystery shop,” Baldwin said. “Because if you’re going to go there anyway, you might as well get it for free and get paid on the top.”
Another self-made millionaire and founder of Parent Portfolio, Jonathan Sanchez, said he maintains a low clothing budget and likes to keep things straightforward.
“I don’t overthink my outfits. I keep a small closet of simple, timeless clothes,” the millionaire told the publication. “If I’m going casual, I’ll pair blue jeans with a T-shirt or polo. If I’m attending a formal event, I’ll wear a suit and tie.” This, he added, allows him to avoid the temptation of splurging on fast fashion outfits.
“I only buy new items when I need to replace clothes with unforgiving holes from normal wear and tear," Sanchez added.
CNBC host Jim Cramer, who is also a self-made millionaire, believes it's a "waste" to spend on expensive alcohol. The frugality, he said, came from his parents who wouldn’t let the kids order sodas at a restaurant until the food arrived to avoid paying extra for the refill.
“When I see a bottle of wine that’s for $500, I say, ‘What a waste,’” he told the publication. “Why don’t you just go buy a beautiful sweater? Can you imagine the kind of sweater you can get for that? $500? You could get two great cashmere sweaters.”
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