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.