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That's Why They're Wealthy!

Posted on June 21st, 2011

"That's Why They're Wealthy" was the original title of  The Millionaire Next Door.  Give credit to my brilliant editor, Suzanne DeGalan, for suggesting the final title. One of the main reasons that "they are wealthy" is that they live below their means and shopping for value is part of their lifestyle.  

But now even among the more general population "'Value' becomes a shopping mantra:  'Stigma is gone' from clipping coupons," as reported in a recent article in USA Today.  The writer mentions:

Few things are more practical than the use of coupons.  Before the recession, 22% of the households reported using them.  During the recession, the figure ballooned to 35%. . . .   . . . now, an even higher 37%, say they use them, Nielsen reports.

Does 37% mean that there is no longer a so-called "stigma" attached to redeeming coupons?  I think that the stigma is an illusion.  Fully 49% of multimillionaire households, representing the top 1% with an average [median] net worth of $9.2M [$4.3M] and an annual income of $749K [$436K], consistently redeem coupons (see The Millionaire Mind).  Interestingly, the median household net worth in America is just under $90K.  There is a greater portion of these millionaire households than households in general which never felt a "stigma" and is actually proud of its coupon usage.

As as an example of frugality among the rich, you may recall what I wrote in The Millionaire Next Door:

How did the wife of a millionaire respond when her husband [a client of mine] gave her $8M worth of stock in a company he recently took public? . . . she said, 'I appreciate this, I really do.'  Then she smiled, never changing her position at the kitchen table, where she continued to cut out twenty-five and fifty-cents-off food coupons from the week's supply of newspapers.  She does today like she always has done, even when all we owned was a kitchen table. . . .

 That's Why They're Wealthy!

Category: Studying the Wealthy
Tags: The Millionaire Next Door, USA Today,


This Post Has 3 Comments:

On September 16th, 2012, 10:04 AM, Raquel said:

I remember being in high school and talking about things my parents used coupons for. The other other kids would constantly make fun of me and I didn't understand why. Meanwhile, their parents were renting and my parents not only owned our family home, but also paid cash for their used cars. Now 20 years out of high school, I use coupons regularly and am a homeowner (stopped renting over 10 years ago). When I run into old classmates, many of them are still renting or living in their parents' apartment. I know this because I'm a real estate agent and always ask if they need to buy or sell a home :-)

On July 4th, 2011, 11:42 PM, cindy's agitator said:

Cindy, you realize that between the added power your "investment draws" and the fact that it is not actually an investment but an expense, you've effectively wiped out your coupon savings?

If you don't have room for it, it is not a "really good deal" - it is something you don't need.

On June 21st, 2011, 3:10 PM, cindy said:

i am far from being a millionaire, but figure i still have time to reach the average age which i believe was 44. i never clipped coupons until recently. i had always figured i wouldn't bother cutting out 25 cents off when i could buy the store brand with my frequent shoppers card for less.

boy was i wrong. it wasn't until my cousin turned me on to the fine print that i realized exactly what i was missing. many stores take competitors coupons and combine store coupons, ecoupons, manufactures coupons and even competitor's coupons for $10 off $50 for example.

i used to save between 15 and 20% of each order, but now i save betwen 40 and 60% of my orders. i do have to be careful not to buy things i don't need. and we invested in a small freezer for our garage to store the really good deals that are too hot to pass up.

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