Secrets of Penny-Pinching Billionaires

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How the frugal life made these 5 celebs richer

Ben Franklin is supposed to have said that a penny saved is a penny earned. Turns out a handful of rich celebrities have taken his advice to heart and are getting wealthier by living on less.

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This penny-pinching bunch has learned that the frugal life really does have its rewards—from fat retirement accounts to significant stock options. While these celebrities may not be living on the cheap like a tightwad or the extreme cheapskates you see on TV, some of their best ways to save money are ways that every American feeling the pinch of a smaller paycheck could learn from.

Here are 4 ways that a little penny pinching and living on less can go a long ways towards putting more money in your pocket.

  1. Skip the fancy car. You’ve probably heard that a new car loses a portion of its value the minute you drive it off the lot. It’s one of the reasons that our family only has used cars in our driveway—a 2003 Honda Accord and a 2005 Ford Freestyle. Plus, we drive our cars until their respective odometers are in the six digits, and they’re simply not worth fixing anymore. We’ve taken a page from Warren Buffett’s book on car ownership. Buffet is said to drive a seven-year-old Cadillac. Before that he drove a Lincoln Town Car. Facebook founder Mark Zuckerberg is equally thrifty with his car. Supposedly he drives an Acura sedan that cost about $30,000.
  2. Keep your starter home. Even after Facebook’s Mark Zuckerberg became one of the richest men in the world, he continued to rent a modest home in Silicon Valley. Warren Buffett still lives in the same home he purchased in the 1950s in Omaha, Nebraska. He spent as much on that house back then as Mark Zuckerberg did on the Acura car mentioned earlier!
  3. Pay in cash when possible. If you don’t have enough money in your wallet and you don’t carry credit cards, then you can’t spend. Millionaire T. Boone Pickens, who got rich in the oil industry, supposedly lives a frugal life using cash only.
  4. Don’t be embarrassed to bargain shop. Rumor has it that actress Hilary Swank never hits a grocery story without coupons in hand. She could afford to pay full price, as Hilary Swank is rumored to be worth about $40 million, but she doesn’t. Similarly, first lady Michelle Obama likes to shop at Target and H&M, both places where you can get a bargain on clothing.