What do billionaires drive?

[kang]

http://www.msnbc.msn.com/id/17534426/


Billions in the bank, bargains on the drive
World’s top billionaires prefer a Volvo over a million-dollar Bugatti


Ikea founder Ingvar Kamprad is massively wealthy, but drives a Volvo that’s nearly 15 years old.

Unlike mere millionaires, who may flaunt wealth with flashy rides, some of the world’s top billionaires own cars as utterly average as their middle-class childhoods. At least five of the wealthiest people in the world share traits that make them thrifty when it comes to cars.

One reason is simply age. “By the time a person has become a billionaire, if they haven’t inherited it, they are often older,” says Rod Westmoreland, a private wealth advisor for Merrill Lynch’s Private Banking & Investment Group. “Flashy, expensive cars are not a priority for these people.”

Billionaire Warren Buffett, the second richest person in the world, according to the 2007 Forbes list of the wealthiest people and among our roster of five frugal billionaires, recently traded in a six-year-old Lincoln Town Car for a 2006 Cadillac DTS. Granted those are both luxury cars, these traditional American sedans cost a fraction of the price of a Bentley or Rolls-Royce and are frumpy compared to exotic sports cars. “Sometimes, it’s just not practical for a 60- to 70-year-old to squeeze into a Ferrari or a Lamborghini,” says Tom Stanley, wealth expert and author of The Millionaire Mind and his yet-to-be-released book, Acting Rich in America.

Establishing lasting family values for future generations and working philanthropically take priority over buying expensive things for many of the world’s aging billionaires. “They spend a lot of time giving away their money and their main goal in life is to solve big world problems, and that is why the car becomes less important,” says Milton Pedraza, CEO of the Luxury Institute, a New York City-based research firm.

Billionaires tend to have a high level of confidence and self-assuredness, which can guide what vehicles they choose to own. Bill Bartmann, author of Billionaire Secrets to Success, says that once someone reaches billionaire status “it’s not about showing off the car, the clothing or the house. More often, billionaires are trying to preserve their business, their family and their wealth.”

A stable, middle-class upbringing can also shape billionaires’ spending habits after they strike it rich. “Generally, we find that most billionaires come from very typical middle-class backgrounds,” says Stanley. “They never had to worry about having enough food to eat and were never deprived growing up. They don’t have to look back and compensate for any deprivations they had.”

One example is Jim Walton, heir to the fortune his father Sam Walton created through Wal-Mart. He drives a 15-year-old Dodge Dakota pickup and is number 23 on this year’s billionaires list. Jim and his billionaire sister Alice, who also drives a pickup — a 2006 Ford F-150 — had a notoriously frugal and conservative father who must have instilled similar values in his children. One thing’s for sure, the fact that Jim and Alice Walton drive pickups and not Porsches makes them the opposite of most of the ultra-wealthy who are born into money. “If wealth was inherited, then a billionaire is much more likely to indulge in exotic cars and other such luxury goods,” says the Luxury Institute’s Pedraza.

The kinds of businesses self-made billionaires own and run may dictate their spending habits. For example, Ingvar Kamprad, Ikea founder, built his massive wealth from selling low-price Swedish furniture and home goods. He drives a Volvo that’s nearly 15 years old. “Ikea’s target customer is not driving a Bentley or Rolls-Royce,” Pedraza says. They probably drive Swedish Saabs and Volvos, like Kamprad. The same can be said about the Walton Wal-Mart heirs, who drive pickup trucks like many Wal-Mart shoppers do.

We've tracked down Department of Motor Vehicles records to find out what some of the wealthiest people in the world drive, and according to those records, the five frugal billionaires we highlight spend their money on things other than pricey cars. “Many high-net individuals focus more on their businesses, running their foundations and contributing to their communities than they do on indulging themselves,” says Merrill Lynch’s Westmoreland.

[adrian jaye]

They don't

they either

1> get driven
2> got flown

[cantdrv55]

Same info that was in Stanley's old book, The Millionaire Next Door. The rich often drive older vehicles that are paid off and won't deperciate any more. They also tend to live in established, appreciating neighborhoods rather than by a golf course w/country club dues required. These are miilionaires not billioniares though.

[pwd72s]

Once you ARE rich, you no longer feel the need to APPEAR rich by buying $$$ cars, wearing the gold watch....it's also an age thing...once you pass the big six-oh, "stuff" just doesn't hold the importance that it once did. Not that I'm rich, but now that Cindy & I have reached the financial state where we could APPEAR to be so, we don't want to. Would a GT3 in my garage make me happy after I became weary of a pristine '72S? Nope...it's just different "stuff". Would a $30,000 gold rolex tell time any better than a $200 stainless Hamilton? No...but it makes one mugger bait, an exotic car makes one cop bait. At age 63, I'm more into reducing life's hassles than adding to them.

[tabs]

Originally posted by pwd72s
I became weary of a pristine '72S?

Thats something Tabs would say... how many people wish they could say that, and that is just about the most jaded and faded statement anyone could utter.

New wealth or those with a lot of cash flow tend to indulge themselves. Age while a factor isn't the driving force behind a frugle mindset, MONEY IS.

[pwd72s]

Jaded? Naw, just tired...perhaps a wrong word choice on my part.

[Aerkuld]

Thier neighbors mad?

[scottmandue]

When I worked "behind the gates" in Rolling Hills CA. (millionaire country) I was amazed to see so many run of the mill cars parked in the driveway.

As has been said I think at some point of achievement the need to impress diminishes.

That and some people just don't give a fuch about cars.

My dad had a very successful HVAC business and still owns a few commercial rental properties he bought back in the seventies plus a house he bought with an ocean view in S. Cal back in the sixties, needless to say he has done rather well.

He loves Corvettes... he drives a Dodge pickup.

[the]

Originally posted by pwd72s
...once you pass the big six-oh, "stuff" just doesn't hold the importance that it once did.

I reached that point by my late 30s. By which point I had already paid off my house, etc. etc.

I hate "stuff." "Stuff" even includes cars, extra sq. foot on the house, etc. I'd rather NOT have it, it's all just a headache to me. The only thing I'm interested in spending money on is things that can produce an income. The rest is all just trinkets, doodads and junk.

I do have my old Porsches that I work on and tinker with, though. But these are not big dollars, are not depreciating, and will likely always be worth what I paid for them. It is impt to have hobbies, and cars are a nice one, so many different skills to learn, paint, body, welding, mechanical, etc.

The daily drivers always have been, and always will be, used examples of quality cars that are 5+ years old (and thus depreciated by 60+ % already), but well maintained.

Family and relationships are what's important. The other stuff is all just junk.

[stomachmonkey]

The guy that started Dominoes has a huge car collection but does not have a license. He has other people drive him around in them.

[nineoneone]

A very hard bargain, that's how they GOT the billions!

[tabs]

Originally posted by the
The only thing I'm interested in spending money on is things that can produce an income.

I do have my old Porsches that I work on and tinker with, though. But these are not big dollars, are not depreciating, and will likely always be worth what I paid for them. It is impt to have hobbies, and cars are a nice one, so many different skills to learn, paint, body, welding, mechanical, etc.

Well thats what I have Mother for...and eveerybody has their DELUSIONS....

[Seahawk]

Originally posted by nineoneone
A very hard bargain, that's how they GOT the billions!

Bingo.

[Rich76_911s]

For every example of a Billionare with a pick-up, I bet you can find 10 with a Ferrari. Bill Gates had a 959 that he couldn't even drive, and a Mclaren F1. They only mentioned 2 of the 5 Waltons, I'd put some change on it that other waltons have a couple fast cars.

I will say that if you did the research and found CEO's of publicly traded companies that drive average cars, and bought those companies you would probably do well. It gives a picture of their character and where their priorities are. It would be interesting if you could back-test this theory.

[Jay H]

A very smart multi-millionare I know very well refuses to flaunt any sort of weath at all. He'll drive a new car, but it'll be a new Chevy Impala or something well under $30k. Clothes are cheap, never anything flashy.

This person never had weath as a child but built his fortune from just plain hard work and good forward thinking. Also, in his line of work, it's best to keep a very low profile so as not to piss off the neighbors too much so to speak. Everyone knows the players (in RE) in the area, but those that don't know the players, don't need to know. Hence the conservative nature of this guy I know. It works well for him.

[Markus33]

Flashy cars maybe not but, I bet that a few on that list have private jets!

Also, IMO most people who drive vintage sports cars do so as sort of a hobby rather than to try and impress others with 'flash'.

Markus

[MichiganMat]

Lets see, I would start with a Ferrari 288 GTO, a Baja racetruck, and a nice RSR replica, and then whatever else came along would be fine by me.

[competentone]

Originally posted by Markus33
Flashy cars maybe not but, I bet that a few on that list have private jets!

Exactly!

There are certainly some wealthy people who live extremely frugally, but most spend in ways that please themselves. The fact that some of them are not "car people" and don't drive anything exotic, doesn't mean that they don't indulge themselves in other ways.

If they are so "frugal" that they live like paupers while having extreme wealth, then they are just being stupid. Psychologically healthy people work hard to build and earn wealth so that they can enjoy life's luxuries -- and for a lot of people that may not involve driving a luxury car or living in a mansion.

[Dan in Pasadena]

(Hand up in the air and waving, looking ot be recognized) Oh, oh, oh....."Any ******* thing they want?" Is that the right answer?

[speeder]

Originally posted by competentone
Exactly!

There are certainly some wealthy people who live extremely frugally, but most spend in ways that please themselves. The fact that some of them are not "car people" and don't drive anything exotic, doesn't mean that they don't indulge themselves in other ways.

If they are so "frugal" that they live like paupers while having extreme wealth, then they are just being stupid. Psychologically healthy people work hard to build and earn wealth so that they can enjoy life's luxuries -- and for a lot of people that may not involve driving a luxury car or living in a mansion.

This might be the best answer, IMO. I grew up in a city with quite a few massively rich people w/ multi-generational wealth, and the city has a predominantly Scandinavian culture. (Minneapolis). I used to wash cars at a parking garage in the summers when I was a kid and remember washing George Pillsbury's car: a Buick Estate wagon w/ the fake wood on the sides. And it was not brand new, but a pretty dinged-up city car.

Jackie O.'s car, (which was part of her estate), was a 1978 BMW 530i IIRC. Some people just do not see the point in replacing a perfectly good car, or owning more than one. We car people are a separate breed. Now when you get someone with $$ who has our disease, then look out. And you don't need a huge fortune to go nuts on cars, that's for sure.

One last MN. person story; about ten years ago I had Easter down in LaJolla w/ some retired MN. friends, all in their 80s now and the men are WW2 vets. All from the (extreme) "right side of the tracks", Harvard grads and retired captains of industry, etc... Cargill MacMillan was there, they own Cargill and were billionaires back when a billion was still real $$. In fact, they own the largest privately held corporation in the world.

When we were all leaving, I had to be polite and compliment CMac on his obviously brand-new car. "New car, Mac?" "Yup".

It was a goddamn Ford Taurus.

A car that no RE agent in L.A. would be caught dead in. I had to laugh. Those people just don't need a lot of chrome around them to feel worthy. But as competentone alluded to above, if you think that these people are living lives w/o luxury or have taken some ascetic oath, you are seriously mistaken.