Get Rich Slowly points to a story of a social worker that amassed a $1.4 million net worth. How did she do it -- amass a fortune way above what most Americans will ever own while earning an "average" salary at best? A few of the details:
She drove a 30-year-old car, watched an ancient TV, lived four decades in a house bought with cash in 1969, and just kept stacking charity donation envelopes in her sun room, until, once a year, she sent them all in.
[She] saved because spending more just didn't occur to her.
She dressed plainly. She wore costume rings. She dyed and permed her own hair.
The house furniture was her parents'. She resisted replacing the old TV and icebox. And when she went out with friends, they nearly always split the bill.
When she died, coupons waiting to be clipped still covered her dining room table.
"Always, always. She'd reach into her purse, pull out a handful of coupons, and ask me where I wanted to go to lunch," said Brueggemann, her co-worker.
Buri even looked for deals within deals. For instance, she would buy five sandwiches for $5.95 from Arby's. She'd eat one and freeze the four others for later.
Nor did she deny herself small indulgences. Some weeks, she ate out three meals a day, friends said. She traveled to Europe, and to the Rose Parade in California. She bought a baby grand piano. There was nothing she wanted and didn't buy, said Brueggemann, the co-worker.
"She was frugal because she didn't need anything else," she said. "She wanted that old car. She dressed the way she wanted to dress."
There are a few things that hit me from this piece:
1. She was able to spend less than most people because she was more content with the "simple things in life" than most people are.
2. Despite the fact that she never had a huge salary (as far as I can tell from the story), she ended up with a HUGE net worth (compared to the net worths of most people, that is.) She serves as yet another example that you can become wealthy on almost any salary as long as you spend less than you earn. Of course if you keep your spending low AND grow your income, you'll be even better off.
3. Want some more examples of people like this lady? Here are a few:
If you think about it, it all boils down to psychology. Most people suffer from wanting that immediate gratification. Many people are materialistic and want to keep up with the Jones. This woman found a very good balance between her wants and her needs and did an excellent job on capitalizing on that balance. If everyone could suppress that need for STUFF, I think we would all be in a better place.
I've hit a point where I don't want for that much anymore. So, I've been on a savings kick and a pay down debt kick for several months now. It is really a good feeling not to be tied down to always wanting for something. That feeling drives you to spend money you don't have to get things you don't need.
Posted by: rdub98 | April 24, 2009 at 01:12 PM
"For instance, she would buy five sandwiches for $5.95 from Arby's. She'd eat one and freeze the four others for later."
Hasn't everyone done that? :-)
I remember learning the hard way while reheating one of thier sandwiches in my microwave that Arby's used a metal foil to wrap their sandwiches.
The woman probably had a decent salary. Right now social workers in St. Louis can make over $60k. She probably had pretty good benefits and pension plan.
Posted by: Jim | April 24, 2009 at 01:27 PM
I think one key was the lack of payments on a vehicle and house. We save a large part of our income but not as much as we pay in our dang mortgage payment each month. This is our own fault since we stretched to get the house we wanted. Get rid of my mortgage and our average salary would add up pretty quick!
Posted by: Bill | April 24, 2009 at 01:36 PM
What the hell is the point of amassing $1.4 million and then dying? Who do you think is going to get this money? Answer: The US Government via death taxes. Gee how wonderful is that?
When I read stories like this I CRINGE and think that it has been a wasted life to squander your life to squirrel away money.
Suffering like this isn't a virtue it's stupid. Now the government will get the money and it'll be flushed down the toilet. If this woman took vacation all over the US or over the world she would have helped so many more people.
Disgusting!
Posted by: Trask | April 25, 2009 at 08:41 PM
Trask --
The point I was making (and make in all these related posts) is that you CAN amass wealth on a limited income (contrary to what most people say -- they'll use a small income as an excuse for why they aren't doing well financially.) What someone does with that wealth...that's a broader topic and for another post.
Posted by: FMF | April 25, 2009 at 09:51 PM
While it's true that you can amass wealth on a limited income, I don't know if this woman's life should be used as an example: she amassed this huge wealth, yet she's never enjoyed it. She died clipping coupons and left all the money to others.
I doubt a lot of people would want to follow her example. Sometimes these blogs make it sound like there are only two ways: 1) spend like crazy on things you cannot or can barely afford and have a huge debt and/or no savings or b) save every penny without ever buying a nice thing or two and live like a pauper while leaving a huge amount of money to your heirs (if you have any). Between these two extremes there is a huge in-between area. You can live within or slightly below your means, save some part of your salary and still spend some money on things you love - within reason and not all the time.
Posted by: kitty | April 25, 2009 at 11:47 PM
I agree with Kitty. Living within means is different from using a 30 year old car, box set tv and living off your parents furniture. Why not then just recommend living in your parent's basement and saving the money? There has to be a balance between financial wisdom and enjoying life. Also this style of living hurts economy as much as people spending beyond their means. Capitalism (a bad word these days !!!) works by circulation of money in the market and no other financial system has come close to being as fulfilling to humankind as capitalism has.
Posted by: AJ | April 26, 2009 at 08:06 AM
9 times out of 10 when someone talks about increasing their nest egg they mention spending less to save more.
There are two sides to every equation, rather than spending less (though I do not waste often) I focus on increasing my income to save more rather than cutting my expenses to save more.
Cutting expenses has limited potential - increasing income is limitless.
Just my opinion.
I did like the article, thank you.
Posted by: CW | April 26, 2009 at 11:30 PM
Ok this is too frugal for me, there are other ways of building wealth. I save 30% of my income and live off the rest, once I run out, I wait until next income. I rather make more money than go to this extreme like the Social worker
Posted by: moneymonk | May 01, 2009 at 04:24 PM
To those who think this woman lived like a pauper, I diagree. The article specifically mentions, she DID go to Europe. She DID go to the Rose Bowl in CA. She DID buy a baby gand piano. Paupers can't afford to do these things. However, she likely focused on the things that were really most important to HER and ingored the stuff that was only marginally important. Most people have difficulty focusing on what's most important. They thing EVERYTHING they want has equal value, and try to have it all, but that doesn't work.
Personally, I would not drive a 30 year old Chevy or live with my parents until they died, but she LIKED the car and didn't mind living with her parents. She made different choices than I would have...but the point is, she made choices, and focused only on the things that were truly important to her and let the rest go.
Posted by: mysticaltyger | June 09, 2009 at 06:31 PM