The nation’s woefully inadequate response to the pandemic is jeopardizing millions of retirement futures.
The Kiplinger’s Personal Finance magazine, a prime American source for advice on all matters money related, has just published a piece fetchingly entitled “Frugal Habits of the Super Rich.”
The piece graciously invites readers to meet ten people of substantial means “whose modest lifestyle habits — from clipping coupons to clipping their own hair — has helped them maintain vast fortunes.” The spending discipline the 10 all model, Kiplinger’s promises, can help the rest of us “learn more about the cost-cutting moves that help make these successful millionaires and billionaires who they are.”
Kiplinger’s has actually been promoting frugality as a freeway to grand fortune for some time now. Knight Kiplinger, the magazine’s editor in chief, a dozen years ago penned a column that declared that the “biggest barrier to becoming rich is living like you’re rich before you are.”
Profligate spending on everything from chic apartments and cars to frequent travel and restaurant meals, Kiplinger went on to write, “crowds out the saving that will enable you to be rich someday.”
Ready to become rich? Let’s all look at the frugalities Kiplinger’s highlights. We can start with Danica Patrick, the race-car driver worth $60 million. She makes her own meals while traveling. Mitt Romney — net worth, $250 million — buys golf clubs at Kmart. T. Boone Pickens, the billionaire Texas oilman, buys new business suits only once every five years.
“People are always surprised that I don’t have a closet full of suits,” says Pickens. “I buy three suits every five or so years and only own ten total. That’s all I need.”
There you have it, buy three suits every five years and grand fortune will soon be yours.
Kiplinger’s has even done the math.
“If you spend $8 buying lunch from a restaurant every day,” the magazine informs us, “you can save $60 a month and $720 a year by bringing your own lunch made using ingredients that cost only $5.”
Frugality, these Kiplinger’s calculations suggest, might not be enough all by itself to reach super-rich status. You may need some patience, too. Saving up a mere million via $720 worth of annual lunch-time frugality would take almost 1,400 years, more than a millennium.
Saving up to the level of a true super-rich fortune — what researchers define as a net worth over $50 million — would take considerably longer than this millennium-plus. In fact, let’s admit what ought to be undeniably obvious: Frugality has never made anyone super rich. And those who have achieved super-rich status don’t need to be frugal to maintain that status.
Consider, for instance, the daily lives of those 72,000 American adults who last year, according to the Credit Suisse Research Institute, held fortunes worth at least $50 million. The “poorest” of these super rich, assuming a modest annual return on their investments, can spend $2.5 million a year on whatever luxuries they chose — the equivalent of about $50,000 a week —and still end the year just as wealthy as they began it.
These rich need not practice frugality. And they don’t. They outfit their homes instead with $30,000 “gift-wrapping” rooms and $15,000 “smart toilets.” They install biometrically secure “safe boxes” for their mobile valuables in their $200,000 Bentleys. They dress their Dachshunds in bejeweled vests that run nearly $1,000.
Those frugality secrets that Kiplinger’s assures us will turn average Americans into super-rich ones? Kiplinger’s can’t reveal these secrets because they simply do not exist. But Kiplinger’s — with its “Frugal Habits of the Super Rich” — may have revealed something far more significant than any frugality secrets could ever be. Kiplinger’s has revealed just how powerfully the “myth of merit” still dominates our national discourse over our super rich and their fabulous fortunes.
This myth of merit holds that the ultra rich among us owe their incredibly good fortune to good behavior of one sort or another. Either they work incredibly hard or perform incredible feats — or discipline themselves to lead fantastically frugal lives. As a society, in effect, we simply do not want to believe that our rich may have gained their riches through exploiting others or rigging our economy or just finding themselves in the right place at the right time. So we ascribe to our awesomely affluent rich noble qualities that make them ever so deserving of their wealth.
Yes, by all means, let’s honor frugality and try to live frugally. The Earth will thank us for our effort. But to take frugality seriously, our staggeringly unequal society would have to challenge — not fawn over — the fortunes of our super rich. Only these ultra wealthy, after all, can afford to pay frugality no mind.
Sam Pizzigati co-edits Inequality.org. Among his books on maldistributed income and wealth: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970. His latest book, The Case for a Maximum Wage, will appear this spring. Follow him at @Too_Much_Online.