The last generation of frugal millionaires saw the careful preservation of cash and conservative personal finance as essential to survival. These rich individuals gained their wealth slowly through careful planning and extreme saving. By living below their means, these individuals created freedom in their lives, and a buffer from the economic problems over the last decades. Precursors to the newest generation of frugal, yet generous millionaires, the following individuals broke many myths regarding the way that wealth can be generated and spent.
Final Savings: $1,613,000
Who: Born in 1912, Joseph Leek made his career as an insurance salesman. Joseph Leek's family never knew of the 1,080,040 British Pounds he had amassed during his lifetime. His entire estate was left to the charity Guide Dogs for the Blind. His donation will provide the funds for raising and training 19 guide dogs, significantly improving the lives of the visually impaired.
How He Did It: Joseph Leek was not a millionaire because of extraordinary business success. Leek worked as an insurance salesman for the majority of his life. After retirement, he gained the majority of his wealth by being careful with his money, and investing wisely in the stock market. He lived in a home worth an estimated 40,000 British Pounds. He traveled by bicycle when he could, and used a 20-year-old car for other transportation. Leek shopped for clothing at charity shops, and even saved electricity by watching television at a neighbor's home. He lived a life of simplicity and structure. His daughters say his favorite quote was: "Early to bed, early to rise, makes a man healthy, wealthy and wise."
What We Can Learn: An appreciation for simplicity, conservation and a resistance to waste can result in significant savings over the long term. Certainly the life of Joseph Leek was out of the ordinary, but the ideals he lived by make a good model for those looking for financial stability. Live within or below your means, take saving seriously, and stay committed over the long term.
Final Savings: $10,457,000
Who: Mary Guthrie Essame of East Sussex England, worked as a nurse for most of her adult life. Her neighbors and others who knew her described her as a very charming woman, who lived alone but was always very friendly and generous. She left all of her more than 7,000,000 British Pounds to various charities when she passed away, including the Save the Children Fund, Church Army, Christian Aid, Help the Aged, War on Want and the RSPCA.
How She Did It: Mary Guthrie Essame only made a modest nurse's living for most of her life, but Ms. Essame was very much a frugalist. She wore used clothes, old shoes, and took pleasure in activities that did not cost much money, like knitting and gardening. Despite her thrifty nature, she was always described as very generous. Neighbors who would occasionally ask for charitable donations for causes they were associated with would often receive large sums of money from her.
What We Can Learn: Ms. Essame had an extraordinary ability to save her money and eliminate waste. The interesting thing about Ms. Essame is that even when she was alive, she never hesitated with her generosity when asked for it. Being thrifty does not exclude the ability to be generous while one is still alive. One can still become wealthy by practicing sound spending and saving habits without being branded cheap, stingy or miserly. Like her modern day counterparts, Ms. Essame saw money not only as something that could ensure her own thrifty way of life, but as a way to give back to those less fortunate.
Final Savings: $3,800,000
Who: Roberta Langtry spent her life as an elementary school teacher in Toronto, Ontario, Canada. When she died in 2005, she left her entire estate, totaling more than 3.8 million dollars, to the Nature Conservatory of Canada, an organization that buys land and converts it into nature reserves. During her lifetime she also made numerous large monetary gifts to individuals she knew who were in need. These gifts, which often times amounted to tens of thousands of dollars, were donated anonymously—only to be made known after her death.
How She Did It: Although Roberta only earned a modest salary as a teacher, she was able to accumulate a large fortune through a couple of smart decisions. First, she supplemented her income with entrepreneurial side-projects, making recurring income by selling puzzle-based educational games. Second, she lived a modest lifestyle in a small bungalow. She was known for her frugality, but was likewise known for her generosity. Third, she invested early and often in the stock market. She bought long-term safe stocks that she held for very long lengths of time. Her best investment was likely the shares of IBM stock that she bought in the 1940s or '50s, which she held on to until she died.
What We Can Learn: Ms. Langtry left this world a wealthy woman because of her hard work, dedication to cheap living, and sound investment strategy. Ultimately, there was no one single source of her wealth. It came from several different sources, including her primary job as a teacher, supplemental incomes from pet projects, and long-term sound investment decisions. Ms. Langtry understood that financial security came not from a single lucrative windfall, but from a lifestyle that lent itself to prosperity in the long term.
Taking important lessons learned from their earlier counterparts, a new generation of wealthy, young, and frugal millionaires is emerging. In response to the ubiquitous Yuppie, this new generation makes and spends its millions in accordance with their commitment to simple living, and their perception that wealth should not buy opulence, but should be used instead for making the world a better place.
Who: As an employee of Microsoft working in India, Sean was privy to much of the poverty and difficulties facing the Indian youth population. Making an impressive salary, Blagsvedt quit his job and left his paycheck behind to begin an entrepreneurial venture focused on improving the lives of others. With poverty and desperation an overwhelming part of Indian life for many individuals, Sean wanted to find a way to grow a business that enriched and enhanced a community in a nation faced with overwhelming financial and social difficulties.
How He Did It: In a move that is becoming more and more common among the next generation of frugal young men and women, Sean created a job Web site to aid in the difficulty many Indian employers face in connecting with possible job seekers. Sean is what would be considered by Evelyn Nieves of the Associated Press, a YAWN (Young and Wealthy But Normal), an acronym now being used to describe a new generation of socially-conscious individuals who earn their wealth by living within their means, and grow their businesses by giving back to their communities.
What We Can Learn: Today's youth are taking a page from yesterday's frugal millionaires. By living well below their means, becoming entrepreneurial, and focusing on giving back to the community, YAWNS are paving the way for a new type of wealth—and a new paradigm for how money is saved and spent.
Who: Rik, a millionaire in his mid-thirties, made his millions by working for multiple startups in the dot-com boom. While Wehbring didn't accumulate his wealth penny-by-penny like some of his counterparts, he has weathered the storm of difficult financial times, and is walking in the footsteps of other young, socially-conscious, frugal Americans.
How He Did It: Rik continues to grow his fortune by living well below what he could spend in his native city of San Francisco, California. Allotting himself only $50,000 per year in salary, he cuts costs at every turn. Rik focuses on being environmentally-conscious, buying from local vendors and farmer's markets, and living in a low-rent building while driving an energy-efficient car.
What We Can Learn: Rik is a great example of a young and wealthy American who has taken charge of the money he has, and is using it as a tool to make change. While the frugal penny-pinchers of the past may have had an extreme aversion to spending money, the new generation of frugal spenders make it their mission to spend little on themselves, and use the money they have accumulated and saved to make a difference in the world.
Who: Philip is an excellent example of an entrepreneur whose riches came through innovation, but whose millionaire status has placed him as one member of a growing community of the young, wealthy and frugal.
How He Did It: Berber sold his online trading company in 2000 for more than $400 million. While his wealth continued to grow since he became an entrepreneur, Berber's financial success is predicated on his frugal nature, and his propensity for making sound financial decisions. Living in a small single-family house outside of Austin, Texas, Philip doesn't use his money to buy ostentatious yachts or million-dollar mansions. Instead, like many of today's young, wealthy entrepreneurs, Philip Berber spends his money battling poverty in Africa, and by giving back to his community through large donations.
What We Can Learn: In our growing society, those who have the wherewithal to recognize the power of money to do good, and have the skills to build their businesses by saving their money and growing organically, or through innovation, are poised to redefine what it means to be frugal. The new generation of wealthy is more like Warren Buffett than they are Donald Trump, and are redefining the purpose of accumulating wealth.
Who: Ray, another frugal game-changer from the dot-com boom, is an archetype of a new generation of simple-living millionaires. Relatively speaking, Ray's extreme wealth lies in stark contrast to the way he chooses to spend his money, and gives us a unique picture into the way today's young and wealthy look at money.
How He Did It: Ray reaped the benefits of being an early player at Google, and cashed out his stock options at a profit of millions of dollars. While Ray won't reveal his net worth, he lives below his extraordinary means in a 4-bedroom house in Nevada, and has concentrated his efforts on giving his money away. Like his young, wealthy and frugal counterparts, money for Ray is something that can provide freedom for those who don't have it. He spends on others, and on projects he expects will give back to the community he lives in—like his current project, an environmentally- friendly housing development for lower income families.
What We Can Learn: While creating and maintaining wealth are great goals, just having money is not usually what will make us feel happy or fulfilled. It is important to keep our monetary goals in line with our personal values, and make decisions based on developing a life we enjoy. Many wealthy people find that flashy cars, big houses and expensive gadgets will only go so far, and that they find real happiness in their wealth when sharing its fruits with others.
The older generation of savers, and the newer generation of multi-millionaire entrepreneurs, with their penchant for giving back, share a common thread: Each has not made wealth the end goal. Instead, these wise planners saw money as a means to something much more important. Whether that meant freedom for themselves or their family, or meant the betterment of their communities and less fortunate individuals, these extraordinary individuals make it clear that the accumulation of wealth is possible with the right outlook.