2million - My Journey to Financial Freedom

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Wednesday, March 29, 2006

IKEA's Frugal Founder

I have a suspection that a majority of those that are truely wealthy share this trait. With the exception of many of the millionaire/billionaires created by stock options or inheritances I bet some form of frugality exists with all of them.

IKEA founder Ingvar Kamprad, ranked 4th richest man in the world, drives a 15-year-old car and always flies economy class, in part to inspire his 90,000 employees worldwide to see the virtue of frugality.

This article certainly helps with persepctive. It is amazing to me that the 4th richest man in the world drives a 15 year old car. I have been planning on keeping my 7yr old car for at least another 4 years, but if Ignvar can do it, I certainly think that I can keep mine longer too :-).

11 Comments:

  • Most first-generation people of wealth seem to fit this profile. Lucky for us, we're able to read about them/see them and feel okay when we don't own the latest and most expensive.

    By Anonymous Katie, at 10:29 AM  

  • Now THAT is truly cool. I read about a person like this and I think "This person has pure class."

    By Anonymous MoneyDummy, at 11:06 AM  

  • Very true... Even warren buffet drives a 2000 towncar... While larry eldison (oracle) drives a bentley gt

    OH well on my level of pay I know that a car is probably the most budget drainer...

    By Blogger pyroracing85, at 4:56 PM  

  • Yes, it is true the first generation of wealth generators are extremely frugal but you must know that when the time comes if you do generate substansial money, your time to look at the more important bit of taking care of your business and investments would out-weigh any nit-picking of a few dollars here and there.

    I can say that from experience before you become rich yes, time is plentiful and money must be saved carefully, but when you are investing CASH in properties worth millions of dollars, a few dollars here and there becomes less valueable. All I can say is "penny wise, pound foolish". You have to make sure the properties you invest in costing millions of dollars are worth the money that you are putting in, you have to make sure that the income generated would grow in the future and you have to make sure the area the property is located does not degenerate in the future. All of that is more important than saving a few dollars at Blocbuster videos.

    And by the way I am a lot younger than what most people think. I started generating money at a younger age than most people.

    Anonymous Millionaire.

    By Anonymous Anonymous, at 10:45 PM  

  • $2M,

    Have you read The Millionaire Mind?

    It's a very interesting book. Most first generation millionaires are very frugal savers.

    However, re: anonymous millionaire's comment, I think few ever make it to the point where they are buying multi-million dollar real estate investments on a regular basis. Perhaps that's the difference between low millionaires and high millionaires.

    Anonymous is really talking about priorities and the cost benefit between savings on consumption vs. investment effectiveness.

    He's also trying to encourage you to focus on growing your own real estate or other wealth (vs. finding ways to save money at block buster).

    I figure you'll do it when you're ready. I have to admit I get an equal amount of joy from striking a profitable business deal or investment and saving money in a novel way.

    Have a great day,
    Making Our Way

    By Blogger makingourway, at 8:57 AM  

  • Thank you for all the comments.

    I believe for me to reach my goal I need a 2 pronged approach. I believe a combination of frugality with smart investments is what I need to reach my goal. I feel I am closer to mastering the frugality part, less confident about my investment approach.

    MakingOurWay -Yes I read The Millionaire Mind - loved it.

    By Blogger 2million, at 10:26 PM  

  • I don't feel surprised at all that IKEA's founder is frugal. Some people just enjoy making money and doesn't care much about a lavish life style. I am doing okay with my investment but I don't think I will dump my 13-year-old Honda Accord soon. It's my first car and I just love it. However if my wife wants a Lexus, I wouldn't be against it either.

    As one of the "first-generation people", I think having the financial security is very satisfying. The next challage is to reach another level and the earlier success make me confident of the possibility.

    I read The Millionaire Mind and liked it.

    By Anonymous Anonymous, at 11:40 PM  

  • I agree with you 2m that it's frugality AND smart investments. That combination is going to get you where you want to go. Also, there's nothing wrong with living under one's means (regardless of income level) and living more simply than what is "expected" of you. Lastly, expensive/new cars are more worrisome than reliable, older cars. With reliable, older cars you are not going to be as big a magnet for theft, and if your car gets dinged you are not going to be that upset vs. a new expensive car. Keep it up 2m, you are on the right track !!!

    By Anonymous Anonymous, at 12:15 PM  

  • I think I've got a lot to learn here.

    By Blogger Apollo, at 2:30 PM  

  • What kind of car was he driving? That makes a difference! The cars I can afford do not last for 15 years. And long before they get that old it starts to make more sense economically to get a newer car with fewer maintenance costs than to keep fixing an old unreliable car.

    My understanding is that to get wealthy you need to make more than you spend. Life is meant to be lived. I want to live responsibly and this does not exclude living frugally but also can include indulging one self at times. As T Harv Ecker has said in his book, the world is extremely abundant so particpate in this abundance! How to do this though? That I am still working on.

    I see that many here have read his book but have any attended his training sessions?

    By Anonymous John, at 1:11 PM  

  • Thanks for the post. It was very interesting and meaningful.
    Web Development

    By Anonymous Web Development Company, at 4:36 AM  

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