BOB
WEIDNER likes to play a game when he goes to a high-end outlet store
like Brooks Brothers or Ralph Lauren: How many things can he buy and not
spend more than $100? On his last visit, the answer was seven.
“Every year, we go up to the outlets and find a deal,” he said. “It’s worth it.”
His
wife, Angela Marchi, who chides him for darning his socks (just the
toes, not the heels, he said), prefers to buy her clothes twice a year
when her favorite stores put last year’s styles on sale. But she
recently made an exception and bought her husband a Tommy Bahama shirt
he had wanted — on a website that sells slightly worn clothes.
“He refused to pay full price,” she said.
You
wouldn’t know it from their shopping habits, but Ms. Marchi, 56, a
senior health care executive who has run hospital chains, and Mr.
Weidner, 57, a senior researcher at a large nonprofit company, are worth
millions of dollars. And while they own three homes — condominiums in
Naples and Boca Raton, Fla., and a house in Lebanon, Pa., where they
grew up, none of them are huge. One splurge is an annual trip to Italy.
The
couple are the face of the self-made millionaire who has the financial
security of true wealth, not the fleeting rush of sudden riches. While
the popular perception of millionaires is that they are more
ostentatious than frugal, recent research shows that single-digit
millionaires, at least, are generally far more mindful about how they
save, spend and invest their money.
“It’s
about paying attention to what makes you happy and not just doing what
our society tells us to do,” said Donna Skeels Cygan, a financial adviser in Albuquerque and the author of the book “The Joy of Financial Security.”
“They
look upon money as a tool,” she said of couples like Ms. Marchi and Mr.
Weidner, with whom she has worked. “It’s an important tool. They don’t
neglect it, but they also don’t worship it.”
A
recent report from UBS Wealth Management found that people with more
money are generally happy, which probably doesn’t come as much of a
shock. “I would say that millionaires in general are very happy,” said
Paula Polito, chief client strategy officer at UBS Wealth Management
Americas. “I wouldn’t confuse happiness with contentment or satisfaction
or achievement.”
The
UBS report found that satisfaction rose in line with wealth: 73 percent
of those with $1 million to $2 million, 78 percent of those with $2
million to $5 million and 85 percent of those with over $5 million
reported that they were “highly satisfied” with life.
What
piqued my curiosity was how conflicted the report’s respondents seemed
to be about the source of their wealth. They often have jobs that entail
long hours, high pressure and working vacations.
“Part
of this pressure to keep going is less about greed and more about
insecurity that might be self-imposed,” Ms. Polito said. “If you ask
people, ‘If you knew you had five more years to live, would you act
differently?’ they say they would. That’s a showstopper.”
Money
buys happiness, the report said. But what good is that happiness if the
millionaires who have it cannot enjoy the freedom the money gives them,
the freedom that most people would love to have?
I
set out to talk to people who had what I considered an attainable level
of wealth for people with well-paying jobs and the ability to control
their spending and saving through their lifetime. They had wealth
starting at several million dollars, but it did not stretch above the
$10.86 million estate tax exemption level for couples.
(Once
people’s wealth goes substantially past the estate tax exemption, they
need tax and legal advisers for planning to minimize the estate tax.
It’s a good problem to have, but it changes how they think about money.)
There
were common threads in this group. These were people who had all made
the money in their own lifetimes and done that as much by saving,
investing and making careful choices about spending as by making large
salaries.
One
of the big choices was what they spent money on. A common thread was
frugality about cars. Not only did they buy modestly priced vehicles,
they kept them for a long time.
But
fancy cars were more of a proxy for unnecessary purchases. Steve
Ingram, a real estate and oil and gas lawyer in Albuquerque, said he and
his wife simply didn’t care that much about material possessions.
“We
have some nice things, but I drive a car for 10 years and then trade it
in and get another car for 10 years,” he said. “We like to travel, and
we’ll spend the money for that because it’s worth it having a real
experience together.”
Mr.
Ingram, 53, said he and his wife, Mary, 50, went to Charleston, S.C.,
and Savannah, Ga., last summer and on a New England foliage trip in the
fall.
“We
did go to Las Vegas one time and went into Cartier and bought watches
for each other,” he said. “That was a real splurge. Or maybe we’ll buy a
piece of art on vacation. That’s the time you let go a bit.”
Heather
and John Darby, both in their mid-60s, said they waited until they were
going to retire to build the house they always wanted, after making do
with more modest homes. Their dream house is 3,600 square feet in
Columbia, Mo., 15 minutes from the center of town, and far from their
old lives in Los Alamos, N.M.
But
they said they realized that what they really liked about their home
was the privacy, so they bought three adjoining half-acre lots. “They
form a semicircle that is a buffer between our property and where anyone
else would build,” Mr. Darby, a nuclear engineer, said. “I tend to
spend money on good investments.”
Why
the habits that helped many of these people save millions of dollars
persist when they are wealthy is harder to say. They may want to leave
money to charity or to their children. Or they may simply not want for
more than they have.
“Whether
or not they realize it, they pay attention to what makes them happy,”
Ms. Cygan said. “They have selective ways to spend on extravagances.”
Or
they may not be comfortable spending because they have worked and saved
their whole lives, said Sandra Bragar, director of wealth management at
Aspiriant, an adviser that has clients with $3 million to $200 million.
She
said she often encouraged clients to spend money on things that make
their lives better or easier, like housekeepers, trainers and even
personal chefs, but also on experiences that will make their lives
fuller.
Either
way, this group learns from its mistakes. Ms. Marchi said she and her
husband had not been immune to the siren song of a large, beautiful
home. “The two times that we did it we said, ‘Why did we do this?’ ” she
said. “It’s just two of us. We don’t need this much space.”
They lost money on both houses when they had to sell them to move for work.
Given
that experience, she never imagined having three homes, but she has a
thought-out explanation. Naples is their permanent residence; the home
in Lebanon, Pa., is close to her sister and elderly mother. They bought
the condo in Boca Raton, where she works, cheaply, fixed it up and pay
less on their mortgage each month than they would pay in rent.
And
while she said she expected to lose money on their home in Lebanon when
they were ready to sell it, she did not consider that a mistake. After
her father died nine years ago, she said, she liked being able to fly up
and stay close to her mother. It’s an example of spending money on
something that matters.
But
are multimillionaires who darn their socks really just cheapskates? Or
are those little habits integral to their accumulation of wealth and
part of the reason they have achieved a level of financial comfort?
“It’s
interesting because it’s less about greed,” Ms. Polito said. “They’ve
come from the middle class, the working class, and they still believe
they’re part of the 99 percent, no matter what, because that’s how they
identify themselves.”
And
they don’t seem to take their wealth for granted. Ms. Marchi and Mr.
Weidner play a gratitude game each night. One night this week, Ms.
Marchi said she was grateful for antibiotics for an infection she had.
For Mr. Weidner, it was shepherd’s pie — made by his mother-in-law.
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