Is being "frugal" necessary in order to be rich?

[more freedom]

The Gap vs. Gucci article was yet another read this week for me that suggests that if you are rich, you got that way most likely by working hard and being frugal. I know a rich man says you don't have to be cheap in order to be rich, but maybe this fits in along the lines of self control and self discipline.

I am not frugal by nature. I don't even like the word. Yet, I am beginning to see that the issue is stewardship. I am beginning to set limits for myself to help me achieve my financial goals, which will be much more satisfying than some of the temporary things I could spend my $ on today.

What about you? Do you consider yourself frugal? What are you willing to give up or live without in order to achieve your goals? Or do you think you have to give up anything?

[disneysteve]

I think "stewardship" is a great word. You need to properly manage your financial resources.

Do you need to be frugal to be rich? Well, either that or you need to earn a boatload of money, so much that your spending habits are irrelevant because you couldn't possibly spend as much as you are making. Since that description applies to a tiny percentage of the population, I'd say yes, you do need to be frugal.

Of course, one could argue "what is rich?" One of my favorite definitions is this:
Rich is being satisfied with what you have.

By that line of thinking, even if you spend every penny you earn, if you love your life as is, you are far better off than the guy with a million in the bank who is miserable.

Sorry for being so philosophical.

[cschin4]

I think it is kind of a moot point. Most of us aren't going to be rich. Most people live off the labor of their hands/time, etc and that is all that they will earn. And, since that is the primary source of income to live, then being frugal only makes sense because there is a limit to how much you will probably earn over a lifetime of working. Investing for retirement is also important so money can grow and be available in the years when you can't work anymore.

[Ima saver]

Well you can be born rich or inherit a lot of money and you do not have to be frugal. since none of that is ever going to happen to me, I will have to work hard and be frugal if I ever want to be rich!

[PrincessPerky]

I think if you arere not a good steward of your money you wont be rich long even if you get a nice inheritance.

[Ima saver]

That is true, you hear of people all the time inheriting a lot of money and then blowing it all.

[kealina]

Originally Posted by Ima saver

Well you can be born rich or inherit a lot of money and you do not have to be frugal. since none of that is ever going to happen to me, I will have to work hard and be frugal if I ever want to be rich!

exactly...

[Blogging Away Debt]

Originally Posted by Ima saver

That is true, you hear of people all the time inheriting a lot of money and then blowing it all.

Sadly, my husband did receive an inheritance when we were younger and it was blown for the most part.

If we only knew then what we know now....

With my family, if we kept living the way we are now (which is pretty frugal), we could become millionaires if we save and/or invest what we currently pay on debt payments each month (for July it was over $1200).

The hard part will be keeping our frugal lifestyle when there is more money that we can technically spend.

[Diolla]

To me being 'frugal' means using my money wisely so I think no matter how much money I had I would still want to be frugal. This reminds me of another thread asking the difference between frugal and cheap.

[disneysteve]

Originally Posted by Diolla

To me being 'frugal' means using my money wisely so I think no matter how much money I had I would still want to be frugal.

I agree. My wife or I will see something advertised in a magazine or on tv and often make the comment that no matter how much money we had, we would never spend that much for that item, whatever it happens to be. Like I think anything much over about 25K for a car is ridiculous. Many (most) of my colleagues drive cars that cost 40K or more, sometimes a lot more. I drive a 9 year old Camry that I bought used for $18,500. When I replace it in a few more years, I'll probably look for another used Camry, hopefully in the 20K range. Can I afford to spend more? Absolutely. I just see no point in doing so. And I think it is that way of thinking that is contributing greatly to us acheiving our financial goals.

[Snoopy2645]

Yes I think you need to be frugal in order to be rich!! My mom had a friend who was really well to do husband & brother & son were all doctors her brother is the best around here for what type he is & my mom used to buy magazines her friend this lady married to the dr said she dont waste money on magazines she only gets them from the library my mom couldnt believe it.

And my uncle seems to be pretty well to do these days & my whole life he has been the cheapest person I ever knew he just bought his first computer used for $50 & I guarantee the man isnt wasting 2 pennies on the internet!! So yes from what I have seen if you are frugal you will save & become rich!!

[Broken Arrow]

I like what DisneySteve said in particular.

From a "big picture" perspective, no you don't have to be "frugal", since such a term is also subjective in itself.

It all really boils down and comes back to the well-used axiom, "Earn more, spend less" or "Live below your means". In that, if you earn 10k a year, but only spend 9k, I think you're doing fine. If you make a million, but spend only 900k, I guess that's fine too. The trouble comes in when people tend to spend 110% more than what their income. Sadly, I do think too many people do too much of the latter.

So, in that sense, being a good steward of your money is a good way to look at it.

In practice, however, you will most likely have to be frugal, and the more you are, the quicker you will advance, especially in the beginning stages when your contributions outweigh your investment returns.

[boefixepa]

I will says you have to incorporate everything everone has said here. It makes no matter how much you make, and each defines rich differently. What matters is what is important to each individual and then living in such a way as to accomplish it. Fugality, stewardship, responsibility, whatever name you need to give it so that it feels right to you, that's fine. I just want to know that I am able to take care of myself and have some to share. To me that's rich, irregardless of the dollar value. If someone can do without having to practice 'fugal techniques' I'd like to learn from them, but I have yet to see it.

[markio26]

i just purchased a new dodge caravan ext.. the last new vehicle i owned was a 1988 mustang... i paid cash.. or i would not have bought, sold my taurus se (1999) for $5000, got employee discount, taurus loyalty rebate matched, local dealer loyalty rebate, ( son had purchased new), and a cpl of other things too... i paid $20,500 out the door.. vehicle has 5 star safety rating, great on gas, cheap full coverage insurance, etc... it is great on gas for my type of driving..i like it very much and resale value was high also... has alot of options too.

[katwoman]

Do you have to be frugal in order to be rich?..........

.....this is a toughy. Why? As others have said, depends on what rich is and I will add depends on what you consider frugal to be.

Here's a case in point: an old friend would brag about how frugal she was. Did all the frugal things that have been written on this board. The thing that bugged me was she couldn't tell you what her bills were. She let her husband take care of all the BIG stuff while she was oblivious to everything except for the day to day spending. Let me rephrase: her day to day spending.

Anyway, here in Cook County we can go online to the Assessors site and pull up properties to check out their assessed value, etc. So I pulled hers up and guess what? She was paying the 3rd highest property tax on her block! All the while, other homes were bought and sold long after she bought hers and had been updated to a far greater degree than hers!

I always told her that she couldn't see the forest from the trees and that just proved it!

Oh yeah, she's not rich. Not poor, but definately not rich.

[Ima saver]

I think you do have to be frugal, but i am very guilty when it comes to cars. (or at least my husband is) I told him he works one week a month just for vehicles.

[Thrifty Ray]

Originally Posted by disneysteve

Of course, one could argue "what is rich?" One of my favorite definitions is this:
Rich is being satisfied with what you have.

By that line of thinking, even if you spend every penny you earn, if you love your life as is, you are far better off than the guy with a million in the bank who is miserable.

I agree with this statement with a caveat.

Rich is being satisfied with what you have -- so long as youre living within- or better yet ~ less than~ your means to have it.

My point- I wouldnt consider myself Rich if I was satisfied with what I have, but am in big debt to have it.