Across wealth levels, Frugality ranks among the primary factors in wealth creation, according to recent surveys by the Spectrem Group. In Mass Affluent households with a net worth between $100,000 and $1 million (not including primary residence), it ranks beneath just Hard Work and Education. Millionaire (from $1 to $5 million in net worth) and Ultra High Net Worth (from $5 to $25 million in net worth) households put a greater premium on Smart Investing, but Frugality does rank fourth.
It is obvious that one of the ways one accumulates wealth is not to spend a lot of money. This attitude becomes more is prevalent in wealthier households. Whereas 61 percent of Mass Affluent investors consider themselves “savers” rather than “spenders,” 69 percent of Ultra High Net Worth households identify themselves as such.
Frugality is not a new-found ideal inspired by the ravages of the recession. It has maintained its Wealth Creation rankings across wealth levels dating back to 2008 before the economic crisis when Spectrem first surveyed affluent investors.
Old habits die hard, and surveys of wealth levels reveal that the oldest investors are likely to consider themselves savers. Baby boomers ages 55-64 (65 percent) and those 65 and up (64 percent) are more likely than investors ages 54 and under (51 percent) to identify themselves as “savers.” Seventy-one percent of Millionaire investors ages 55 and up are likely more likely than younger Millionaires (67 percent) to extol the virtues of saving.
But then again, to quote the immortal words of Mel Brooks, “When you got it, flaunt it.” The wealthiest Ultra High Net Worth investors with assets between $15 million and $25 million are most likely to consider themselves “spenders.”