These millionaires hide their wealth behind shabby clothes and modest ways. Often, only death and generosity unmask them.
Gordon Elwood of Medford, Ore., kept his pants up with a bungee cord, accepted handouts from a food bank and refused to have a phone installed in his home because of the cost. When he died in October at age 79, he left a $10-million fortune.
Elwood was among a small fraternity of America’s upper class: the penny-pinching, often shabbily dressed wealthy who are almost as much a mystery to the people who know them as to the millions of strangers who read their stories and wonder, “Why?”
And their stories, while rare enough to make the headlines, are similar enough to sound familiar.
There was Emma Howe of Minneapolis, who left $1 tips but bequeathed $31 million to the poor and disadvantaged.
And Anne Schieber of New York, a former IRS auditor who wore the same frayed black dress every day, but built a $22-million fortune.
And Gladys Holm, a Chicago secretary who never made more than $15,000 a year, accumulated $18 million and gave it all to a children’s hospital.
All were buy-and-hold investors who rarely sold their shares. Each was shaped by the Depression, although none ever suffered extreme poverty. All left most of their money to charity, which helped bring them to public attention after a lifetime of secrecy.
Although the number of millionaires in America rises with each stock market uptick, no one really knows how many are hiding their wealth behind secondhand clothes and modest homes filled with old newspapers, twice-used tea bags and saved balls of string.
The inconspicuous rich are a tiny part of the largest generation of millionaires in American history; the Spectrem Group research firm in San Francisco estimates there are now 8.8 million U.S. households with a net worth of $1 million or more, more than double the number 10 years ago. Yet in a country where many purchase the accouterments of wealth by going ever deeper into debt, these anomalous millionaires refuse to spend what they have.
Experts struggle to explain their behavior, so out of sync with American norms.
Psychologists say that these lowest-profile millionaires are probably motivated by fear, guilt or habit: fear of economic catastrophe or of others’ reactions if their wealth were revealed; guilt over their good fortune when others have less; and the frugal habits of a lifetime.
“If one is used to living on a shoestring all of his or her life, these spartan habits may be so wellingrained that to change them would be stressful,” said Joseph Tecce, a psychology professor at Boston College.
People who know these millionaires grope for explanations as well.
Robert Hutchins, Elwood’s friend and stockbroker, is still at a loss to explain why Elwood continued to pick up bottles and cans along the roadside for the deposit money when he was rich enough to start his own charitable foundation.
Elwood set up the foundation just before he died, funding it with $1.8 million in shares from companies that had stopped paying dividends. Elwood always bought stocks that paid dividends and felt he was somehow being cheated when the dividends ended, Hutchins said.
Researchers who have studied millionaires say the practices of this handful of tightwads may be just an extreme example of the frugal habits shared by many of the truly wealthy.
Thomas Stanley and William Danko, in their seminal book, “The Millionaire Next Door,” found that most of the millionaires they surveyed were in fact relatively frugal. Few had ever paid more than $1,000 for a suit or $250 for a watch.
And in researching a second book, “The Millionaire Mind,” Stanley found that none of his wealthy subjects were given to extremes. They might get their shoes resoled rather than buy new ones, but the shoes themselves were likely to be of high quality–not thrift store finds.
People who pride themselves on their thrifty ways offer another explanation for such behavior: cheap thrills. The happily frugal extol the sense of satisfaction that comes from making do and doing without, from finding new ways to beat the system that fosters overconsumption and disposability.
Amy Dacyczyn, the self-described “frugal zealot” who published the Tightwad Gazette newsletter before retiring from the public eye four years ago, often described the glee she felt in determining whether homemade brownies were actually cheaper than store-bought mixes.
It’s ‘Thrill of the Chase’ for Many
Gary Foreman, who runs the Dollar Stretcher Web site, believes that many of his readers scour for money-saving tips as much for the “thrill of the chase” as for a pressing need to save money.
“It’s a game,” Foreman said. “Even among people that like to spend money, there are very few that don’t like to think they got something for less than everyone else.”
Elwood certainly was far from stereotypical of the miserable miser. Hutchins described him as sociable and garrulous, always ready to strike up a conversation with friend or stranger.
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