I’m talking about multi-zillionaires, like Gates, Buffet, Bezos, or even other guys with so much money that prices they pay for things has zero consequence for them. So do they even pay attention to prices? If they’re considering this potential purchase versus that one, does the price enter into the consideration? Do they pay attention to what might be on sale? And so on.
I can think of 3 reasons why they might.
[ol]
[li]A lot of these people have most of their assets tied up in assets which are either illiquid or which they in any event are not interested in liquidating. They devote a certain amount of cash flow to their living expenses, which could be low enough that relatively small amounts (relative to their assets, that is) can make a difference to their budget.[/li][li]People feel good about getting a “good deal” and dislike getting “ripped off”. So even if the actual money spent makes zero difference to them, they might feel bad about overpaying and feel good about getting their money’s worth.[/li][li]Related to the above, my brother has a theory that people’s conception of the value of money and which things are or aren’t “worth the money” is fixed at a young age, and that people who grew up relatively poor sometimes retain these fixed conceptions even after they no longer make sense in their current circumstances.[/li][/ol]
[As an anecdote along the lines of the third point, I know/knew various people related or otherwise connected to a certain NY real estate billionaire. (This guy is not any sort of miser, and quietly supports a lot of worthy causes.) One time one of these people was at his house, and his wife brought out some band-aids for one of her grandchildren who got a bruise of some sort. This person remarked about the band-aids being cute band-aids, because they were the type which had cartoon characters on them, and the woman responded that she wouldn’t have bought them ordinarily but they happened to be on sale when she was in the store …]
I’m not super-rich or even rich by any means but one thing I have never paid attention to the price of is groceries. I just buy what I want or need and don’t bother looking at the price. I’ve probably bought a gallon or half gallon of milk every 2 weeks for the past 25 years and I couldn’t begin to guess at how much a gallon sells for. I never look for sale items at the grocery store and have never used a coupon. Maybe I could have save hundreds or thousands it grocery bills over the years but I much prefer the freedom of just grabbing the stuff I want.
Would seem to depend for one thing on prices of what? Prices of large private islands, prices of cars, prices of quarts of milk? But assuming you mean stuff which is in fact a very tiny % of their assets (not $bil things), then
I doubt the first one applies much to people with $10’s+ bil. It might apply to some degree to various lesser tiers of super rich, rich et.
Along the same lines, one might worry that allowing oneself to get ripped on little thing might signal it’s OK to try to rip you off on big things.
I bet that’s part of it.
I doubt the answers or reasons would be distinctly or categorically different between people with $10’s bils, $bils, $100mils or $10’s mils. At all those levels there’s stuff the price of which is practically important to $50k/yr not-much-saved ‘normal’ people but not practically important to those people. But it’s unusual if they don’t care if they are being ripped off. Which isn’t the same as say giving a very big tip, that’s not being ripped off. And there are various gray areas where it’s hard to say if a person’s aggressiveness or reticence in price haggling is because they are well off or just their personal inclination regardless (how aggressive different people are with car dealers, home contractors etc. also sometimes huffing and puffing about prices is just that and doesn’t result in a better outcome). Or IOW in terms of previous answer, don’t care about grocery prices knowing you are getting a reasonable price at a major grocery chain, or don’t care if somebody wants to sell you groceries as a special service just to you at 10X the normal price? All these things will depend on degree of ‘good price’ besides how much money the person has.
Right. I mean things which have zero conceivable impact on them given their wealth.
Depending on the level of wealth that would apply to different items and price levels. For many rich people it would apply to quarts of milk but not to cars, for some it would apply to cars and not islands, and so on.
I think a lot of depends on what they’re buying. I’d imagine they’d be more concerned about the price of their new Gulfstream or house than they are about the price of a banana.
Must be nice. Even though I have reached a point financially where I could just buy anything I want at the grocery store (or fast food restaurants), years of poverty has ingrained me to the idea of always checking prices, using coupons and buying on sale.
I probably only save $100-200 a month doing it too. So yeah its money, but its not ‘real’ money I’m saving.
When the lottery gets super-huge and I indulge in flights of fancy, I have wondered, assuming I hit the big one, whether I’ll worry about the price of groceries or jeans or gasoline or vacations. I’ve got a feeling it’d be a hard habit to break. Except, maybe, the vacation thing. I’m pretty sure I’d book a cruise in one of the plush suites with the grand piano and the hot and cold running butlers.
Warren Buffet lives in the same house he bought for $31,000 in 1958. Granted, $31,000 for a house in Omaha in 1958 was big money, but he’s still there. I don’t know whether he’s thrifty or just has simple tastes.
Way back when my spouse was running his own business one of his backers/investors was a billionaire. I had the chance to meet the man and visit him in his home. While the man had billions and clearly had spent quite a bit on his home, as we were leaving to travel back to our home state he informed us of which local gas station had the cheapest prices.
He clearly had the money to purchase/fund just about anything imaginable, and equally clearly wasn’t shy about paying for quality, and could (and was) very generous to his guests, but also retained knowledge of how much things cost.
I think it was partly because he had been actually poor in his early adulthood, and because he spent a lot of time with folks who weren’t super-rich and thus was in more in tune with how things were for ordinary folks and not just the super-rich.
But he’s the only billionaire I’ve ever been personally acquainted with and thus may not be representative of the group as a whole.
I’m definitely not super-rich, but I am richer than I was when I was younger, and I’ve definitely become less price sensitive. I can imagine that continuing if I were to get way richer. On the other hand, a lot of my psychological approach to spending money was set when I had a lot less of it. That might never go away.
To some extent, when you get rich, you just staff out the stuff that you don’t care about, and the staffing cost is much higher than the cost difference in things anyway.
Like, the reason Bill Gates doesn’t know what things cost isn’t that he’s not sensitive to how much the gallon of milk he puts in his shopping cart. It’s that he hasn’t gone grocery shopping for decades. He has an employee to do that! And that employee’s salary is much higher than the grocery budget.
I don’t know any billionaires, but I know a few people with net worth > $10 million, and while they are aware of the costs of basic necessities like groceries and gas, they don’t really pay attention to them. Those prices don’t have any impact on their lives.
Until you’re rich enough to have a chauffeur take you everywhere, you’re probably going to at least be aware of gas prices just because they’re so prominently displayed.
I think it depends very much on where the wealth came from, and personality type. If you make a lot of money in the financial markets by obsessively looking for value-based opportunity, it can be difficult to shake the mindset of seeking value even when trivial amounts are involved. If you inherited great wealth and have never been challenged to think too hard about it, that engenders a completely different mindset.
I’m not rich, but pretty comfortable. My price-point is $20. If an item or purchase is less than $20, I don’t care how much it is or even notice. Exceptions are gas - I just fill the tank when I need it, it’s over $20 but I don’t care how much it is. And groceries - I buy what I need, but luckily almost everything is under $20.
I would imagine that super-wealthy people have higher price-points.
Oh, the guy I met definitely had a chauffeur - he loaned the guy to me to go sight-seeing while he and my husband worked at business-related project I wasn’t particularly interested in. The rich guy also did his own driving when he felt like it. They didn’t own an airplane but they certainly could fly first-class or charter a plane when they wanted to travel.
But the guy still knew the cheapest place to buy gas in town. Maybe he looked it up as a courtesy to less-wealthy guests, but that shows an awareness that even if the price didn’t matter to him he hadn’t forgotten it mattered to other people.
He has done a lot of upgrades to that house and it is over 6000 square feet at this point.
Buffet also owned at least one other home, a 10 million dollar home on the California coast.
He may not be splurging on homes like Mike Tyson and Holyfield did, but he is living pretty nicely when it comes to homes. A 6000 sq ft primary residence and a 10 million dollar California home.
Probably depends on how they grew up. If they grew up rich they might not notice prices, but if they grew up poor they might have finding the best value ingrained in them.
And remember, if they are making the equivalent say of $10,000 an hour, spending five minutes to save $20 is not a good use of their time.
This.
I am single and middle class. I think of cash - which i don’t spend a lot - as units of $20.
I don’t really go out to bars or spend on lavish clothes etc. I mainly keep a budget for my food, gas ( I commute over 250 miles per week for work) and things like taxes.
Once I know that I put away about 25% in my 401k (I need to catch up ) I only pay attention to the amounts more than what I have in my bank account - savings.
I always try and keep $800-1,000 in my checking account.
The rest I don’t pay attention to as I am saving enough now and I already have plenty to worry about at work.
I guess I could be saving more but I know friends with and without kids who spend hours driving around trying to save the equivalent of $25-40 in shopping who don’t seem to have much time.
I still remember the days when I was working 2 jobs and scrounging to put $7 in my gas tank to get me through the week until payday (lunch was a bagel and whatever I could scrounge up from the office kitchen left out) Of course gas was a lot cheaper back then.
I’m not rich, but I’m comfortable - and I would like to remain comfortable.
I notice grocery prices. I almost never buy grocery items that are not on sale. We have a huge pantry and a huge freezer and we make them work for us. We use coupons for items that we ordinarily purchase, and don’t use coupons to"save" money on an overpriced brand name that we would otherwise ignore.
