Top Billionaire Picks a Volvo Over a Bugatti

By: Glady Reign

If you got it, flaunt it. That is the viewpoint that most people practice. Hence, it is just but ordinary to see well-off individuals showing off their wealth. Colossal houses, designer clothes, pricey jewelries, and multi-million cars. But Warren Buffet is an exception.

Warren Buffett, the second richest person in the world according to the 2007 Forbes list of the wealthiest people, is one of the five frugal billionaires at the present time. Buffett earlier traded in a six-year-old Lincoln Town Car for a 2006 Cadillac DTS. These luxury cars cost only a fraction of Bentley or Rolls-Royce models and these are the vehicles that Buffett choose to own (or use).

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

"Sometimes, it's just not practical for a 60- to 70-year-old to squeeze into a Ferrari or a Lamborghini," said Tom Stanley, a wealth expert and the author of The Millionaire Mind and the upcoming book, Acting Rich in America.

Another reason is building lasting family values for the next generations and prioritizing philanthropy over purchasing pricey 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," said Milton Pedraza, the 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," said Bill Bartmann, the author of Billionaire Secrets to Success. "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."

Another attribute that shapes billionaires spending habits is the stable, middle-class upbringing. "Generally, we find that most billionaires come from very typical middle-class backgrounds," said 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."

Another billionaire by the name Jim Walton, heir to the fortune his father Sam Walton and is number 23 on the billionaires list, drives a 15-year-old Dodge Dakota pickup. Jim and his equally-rich sister Alice, who also drives a 2006 Ford F-150 pickup, had a notoriously frugal and conservative father who must have instilled similar values in his children. "If wealth was inherited, then a billionaire is much more likely to indulge in exotic cars and other such luxury goods," said the Luxury Institute's Pedraza.

The kinds of businesses self-made billionaires own may reflect their spending habits. Ingvar Kamprad, the Ikea founder, built his massive wealth from selling low-price Swedish furniture and home goods. Kamprad drives a Volvo that's nearly 15 years old. He is not just fascinated by a and Pedraza explains: "Ikea's target customer is not driving a Bentley or Rolls-Royce. They probably drive Swedish Saabs and Volvos, like Kamprad."

According to the Department of Motor Vehicles' records, the mentioned five frugal billionaires 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," said Merrill Lynch's Westmoreland.

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