Just a few years ago Warren Buffet auctioned off his long-time driving companion, a 2001 Lincoln Town Car. The proceeds went to charity. After the auction, he picked up the winning bidder from the airport himself, then turned over ownership. He then bought a 2006 Cadillac DTS for around $42,000. While that is quite a price for a new car, Mr. Buffet is one of the five richest people in the world, yet lives frugally.
Mr. Buffet’s Frugal Lifestyle
In addition to purchasing a car that many other Americans can afford, Mr. Buffet lives modestly in all things possible. He lives in the same home he purchased over 50 years ago. At the time he spent around $32,000. Other interesting facts about Mr. Buffet include:
- He drives himself everywhere and picks his visitors up from the airport in person.
- His company, Berkshire Hathaway, owns more than 60 companies, yet he does not waste time or money flying to see the CEOs or holding needless meetings.
- He avoids cellphones and computers when possible.
- He avoids name brands.
- He only buys what he needs and believes that ”keeping up with the Joneses” will wreck personal finances.
- He believes that everyone should avoid credit cards, but if you do have them, you should rarely use them. A cash lifestyle is best.
If you have ever doubted the benefits of living a frugal lifestyle, all you need do is read about the lifestyle of Warren Buffet and some of the other uber-rich. Of course, you have to look at people who have had to earn their money through hard work, like Mr. Buffet–not talent or inheritance.
What We Can Learn from the Car-Buying Habits of the Uber-Rich
In fact, it’s interesting to note that the most popular cars in America’s wealthiest zip codes are not exotic brands like Maserati and Bentley and Ferrari. They are brands like Mercedes, BMW, Lexus, and even…Jeep. Fairly expensive cars, yes, but far from the opulence that might be expected from zip codes where the median home price is $4.2-6.7 million dollars. What’s more, the hyper-expensive models from these brands are not the biggest-sellers. For instance, it’s the Mercedes entry-level C-Class and midsize E-Class that are most popular in many areas–far from the German automaker’s most expensive offerings. And it’s the Jeep Wrangler–not Grand Cherokee–in others. In many wealthy West Coast communities, the Tesla S is actually the biggest-seller.
What this tells us is that America’s wealthiest, who can spend a fortune on a car, don’t. They purchase vehicles that are well within their means, which is what all of us should do.