ARBOR WEALTH: How the rich stay that way

Published: Thursday, December 5, 2013 at 04:27 PM.

• Actress Hillary Swank, who grew up poor in Washington State and once lived out of a car with her mother, has retained her frugal habits in the midst of big screen stardom. Swank, whose net worth is $40 million, is still a coupon clipper. “When you open up the paper and you see those coupons, it looks like dollar bills staring you in the face. It’s how I grew up … why not?” she says in the interview.

• Bethany Frankel is credited with originating the Skinnygirl cocktail brand, and recently sold her company for $100 million. But she still only buys her clothes on sale and frequently buys from discount sites online.

Of course, watching your spending will not make you rich. But it’s a good habit, one that many members of the “Super Rich” cannot shake, even when they can afford to splurge. Waste is something they cannot abide.

Imagine encountering a fantastic, outdoor waterfall in front of an advisory firm’s office. The waterfall is designed to impress the potential investor and to suggest that the firm inside is powerful and successful. The fact that the cost of the expensive outdoor decoration was borne by clients is lost on some, but not on others.

The homes, office space and cars of investment advisors are often clues as to how they handle their own finances. Like most smart buyers, advisors want to purchase quality, and sometimes must pay for it. Buying a home in a solid neighborhood where property values are expected to appreciate, for instance, is a wise move for anyone, investment advisors included. 

But an advisor who doesn’t respect money on their own personal level might not be respectful of yours either.


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