Frugal Japan » Frugal Living

Millionaire Women

Frugal Japan — Sat, 12 Jun 2004 21:00:57 +0000

Thomas Stanley (who wrote The Millionaire Next Door with William Danko) has come out with a fascinating sequel: The Millionaire Women Next Door, which shows that women millionaires are even thriftier than their male counterparts.

According to Stanley, “the typical female millionaire is 49 years old, works 49 hours and 18 minutes per week, has a household income of $240,217 per year (she earns 71 percent of that), spent less than $300,000 for the most expensive home she’s ever purchased, and has a household net worth of $2.9 million.”

Millionaire women are, by most standards, also apparently pretty frugal. Most millionaire women spend, at most, $139 on a pair of shoes, and $400 on a suit. Instead of buying new clothes, 52 percent of millionaire women are more likely to have their clothes mended or altered.

Billionaire Takes the Bus

Frugal Japan — Sat, 24 Apr 2004 21:00:59 +0000

An interesting news tidbit arrived in my inbox a few days ago, with an irresistible headline: “Create Ikea, make billions, take bus — IKEA founder Ingvar Kamprad flies coach, takes the subway and drives an old Volvo, but could he be the richest man in the world?”

Apparently, the celebrated entrepreneur is also a closet cheapskate! Kamprad built Ikea from a one-man operation by first using his village’s milk van to deliver his products into the world’s largest
furniture retailer, with annual sales of $12.2 billion. However, he still apparently takes the subway to work, drives a 10-year old Volvo, and is rumored to replace expensive hotel mini-bar Coca Colas with cans bought from the store, to avoid overpaying. The notoriously press-shy Kamprad admitted in a 1989 Fortune interview that his frugal tendencies were loosening up a bit: “I seldom wash disposable plastic glasses anymore.”

People chuckling at this will probably sit up a bit straighter when they realize that Kamprad’s net worth is estimated at anywhere between $53 billion (Swedish sources) to something a bit lower by
Forbes, which ranked him at No. 13 on its list of the world’s richest persons. While the $52.5 billion would rank Kamprad higher than Bill Gates ($46.6 billion), there is no doubt that Kamprad’s burn rate is much slower than Gates’s.

I was both inspired and encouraged by this article, as it offers a rare association of frugality with wealth. While there is no doubt that many other factors (including timing, ability, luck, and the strong Swedish krona) played a much greater role in creating Kamprad’s wealth, something inside me believes that his careful spending habits and frugal outlook helped create what is special about Ikea today — quality furniture at an attractive price. Conscientiously pinching pennies alone will not create wealth — eventually, a higher income, regardless of how it is achieved, becomes necessary. However, careful spending habits can help build wealth more quickly, and also make it last longer.

I’m not encouraging everyone to start washing out their plastic cups (I choose to wash out Ziploc bags!) or denying themselves an occasional celebration of their success. But the example of Mr. Kamprad does provide a fascinating view on how it is possible to be a “frugal billionaire.”

To check out the original Fortune article, see: Create IKEA, Make Billions, Take Bus

Tokyo is the Most Expensive City in the World: True or False?

Frugal Japan — Sat, 20 Mar 2004 21:00:11 +0000

Today, I’ll address a common myth – that Tokyo is the most expensive city in the world to live. By some statistics, that’s actually true. According to a June 18, 2003 article about Mercer Investment Consulting’s survey of the world’s most expensive cities to live, Tokyo ranked No. 1, Moscow No. 2, and Osaka No. 3, with a standard basket of costs some 26% higher than the baseline city New York (ranked at No. 10). Despite Japan’s four continuous years of price deflation, the appreciation of the yen vs the dollar put Tokyo back on top.

But real people living in Tokyo know that there are plenty of bargains to be had, despite Tokyo’s top ranking. Seeking to replicate a three-bedroom home, two-car lifestyle one might have enjoyed overseas will certainly come at a premium in a nation where space is limited, and a car a luxury item. The key to enjoying an abundant lifestyle at a lower cost in Japan is both adjusting your expectations and learning where and how to shop!

Here are a few tips to help ease Tokyo’s “sticker shock!”

1) Stop converting prices into your home currency. If both your income and consumption are in yen, it’s pointless to continually convert prices back into dollars or Euros. Learn to recognize roughly how much items cost on average in yen – it will help you develop real price awareness to sniff out bargains!

2) Learn to distinguish between the luxury and everyday items in Japan, and adjust your shopping accordingly. Everyone’s heard stories of melons priced for hundreds of thousands of yen at department stores. It seems ridiculous, but remember – very few people actually buy or eat these melons for themselves! They’re most often given as seasonal or thank you gifts. There are plenty of reasonably priced melons and fruit at your local grocery store or vegetable stand – you just have to know where to look!

3) Go native. Incorporate local ingredients and brands into your cooking. Learn to recognize common Japanese equivalents of household products to avoid shopping at expensive import stores. Brave the unfamiliar menus and foods to discover more reasonably priced Japanese and Asian cuisine at neighborhood shops and diners.

While trying to live a New York style life in Tokyo certainly costs more, living a Tokyo-style life in Japan is cheaper than ever. Help disprove the “Tokyo is expensive” myth by exploring and celebrating the rich variety of bargains to be had here!