extreme saving

The Secrets of History's Most Successful Savers

Anthony Hall — Thu, 01 May 2014 08:12:14 +0000

History divides penny-pinchers into three categories: the frugal, the misers, and the savers. They make for entirely different types of stories.

There is overlap, of course, but the media also loves to find billionaires in blue jeans instead of Armani suits and label them skinflints. The world's richest man, Carlos Slim Helu, has lived in the same six bedroom house for 30 years and still drives himself to work, albeit in a $300,000 Bentley. Warren Buffett, the Sage of Omaha, worth $62 billion, still lives in his hometown in a house he bought in 1955 for $31,000.

But Buffett is hardly a miser. He is a generous philanthropist, who practically begged the government to raise taxes on the rich in response to the last recession.

Here are some of history's most notorious savers for you to ponder.

Hetty Green, "The Witch of Wall Street," (1834 – 1916)

People love to pick on Hetty Green. She was said to begin reading financial news at age six. She then inherited $5 million when her father Edward Robinson died in 1864, having earned a fortune in whaling and trading with China.

Today, Green's inheritance would be worth $77 billion dollars, making her the world's richest person. But that didn't stop her from suing to claim a $2 million estate from an aunt who died the same year as her father. Five years later, she was awarded another $600,00 from that estate.

Green was a Quaker, who rode to work in an old carriage and was famous for wearing the same black dress until it wore out, whereupon she would get another. She was too cheap to rent an office, so she camped out at the Seaboard National Bank, where she worked from a suitcase full of the paperwork she needed. She was rumored to eat oatmeal heated on a radiator and to have never used the hot water in her house. When she married, of course she had her betrothed sign a prenuptial agreement.

She also made a fortune in Civil War bonds and was once seen scrounging around the bottom of her carriage for a two-cent stamp she had lost.

Oseola McCarty (1908 – 1999)

McCarty was a washerwoman who would have won a gold medal in the Olympics if saving was a sport.

She never owned a car, choosing instead to push a supermarket cart to get her errands done. She lived in a one-bedroom apartment, where she held on to her black and white television, which she watched from broadcast channels (which means no dish and no cable). She never subscribed to newspapers, considering them too expensive.

Her saving technique was simple enough. She tucked her money away in various savings accounts at local banks. Then, shortly before she died, the frugal washerwoman surprised everyone by setting up a trust for the University of Southern Mississippi valued at $150,000.

That was a huge sum considering her occupation, but she had money left over, giving $50,000 to her church and $50,000 to three relatives when she died.

Jack McDonald (died 2013)

McDonald is the Seattle version of Oseola McCarty. He is also famous for keeping his wealth a secret during his lifetime and living a very modest lifestyle. He rode public transportation, lived in a modest apartment, and wore "threadbare clothing." He also bought his food with coupons. He swore his family to secrecy about his wealth, which he earned by playing the stock market — and apparently playing it quite well.

Although no one suspected he was rich, he left $187 million to the Seattle Children's Research Institute, the University of Washington School of Law, and the Salvation Army when he died. He was considered a little eccentric, but nothing more.

Ben Franklin (1706 – 1790)

The American inventor, statesman, author, and printer is one of the world's most famous savers, not because of a fortune he made, but because he gave voice to the frugality of the Puritan lifestyle. He was author of "The Poor Man's Almanac," with which he spread the gospel according to thrift. His many quotes on frugality include, "Necessity never made a good bargain," and "Beware of little expenses; a small leak will sink a great ship."

Apple Corp. (1976 to Present )

It can't be denied that one of the greatest savers in history is a corporation from California known as Apple.

The figures are so large it is scary, but the U.S. Federal Reserve reported in 2013 that American corporations — not including financial firms — had amassed $1.7 trillion in cash, a great deal of that the result of the last recession, which caused a major pullback in corporate investments.

By far, the largest corporate cash hoarder, however, is Apple. While the valuation of the company soared to $621 billion in the summer of 2012, Apple kept to its long-term strategy of not buying companies, leaving that to the more aggressive Google, Facebook, and Microsoft.

By 2013, Apple was sitting on a cash hoard of $160 billion, a large enough pile to bring on a lawsuit by investor David Einhorn, who was pushing Apple to increase rewards to shareholders.

How big is $160 billion, exactly? It's about the size of the economy of Vietnam.

The People of China (1980 to Present)

The No. 1 saver of all time also not a person or a corporation. It is the Chinese people.

For comparison, let's start with savings in the United States. Here, the average rate of savings doubled from 3% of disposable income to 6% as a result of the Great Recession. That raised some eyebrows in Washington and maybe provoked some snickering in Beijing.

The Chinese save on average 30% of their disposable income, a figure that has been increasing since the late 1980s.

Suffice it to say, that blows away the competition. In absolute terms, Forbes reports, China, with an economy about half the size of the that of the United States, saved $4.6 trillion, while in the U.S., savings amounted to $2.8 trillion.

One study suggests there are multiple reasons behind China's obsession with savings, including rapid wage growth in a country with underdeveloped insurance options, a sense of political instability, a culture of subsistence consumption, and falling birth rates. Whatever the reason, nobody else has a bigger stash.

Who's your favorite saver from history? Don't be miserly — please share in comments!

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This article is from Anthony Hall of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

12 Extreme Ways to Save Money That Could Work for You

Mikey Rox — Mon, 14 Apr 2014 08:48:15 +0000

Just about everyone is interested in ways to save money — some of us more than others. For many, pinching pennies is the only way to get through the month and cover the essentials, such as electricity and food. (See also: 101 Ways to Save Around the House)

Although most people are familiar with obvious money saving techniques, such as cooking their own food and shopping less, these aren't the only ways to be frugal.

Think outside the box, and you'll discover a variety of clever, and sometimes extreme, ways to hold onto your cash.

1. Stop Eating Meat

Beef, pork, and chicken can drive up your grocery bill, especially if you're shopping for a family. If you cut meat from your diet and plan meals around protein alternatives like tofu, beans, lentils, quinoa, and tempeh, you can knock several dollars off each grocery trip. (See also: Frugal Items for Your Vegan Pantry)

2. Barter With Friends

Get with a few of your friends and barter services to save money. For example, if you need plumbing work or other household repairs, you can trade services with someone who has expertise in the handyman arts. If this person agrees to fix your plumbing issues, you can agree to offer your own expertise and services.

3. Hang Dry Your Laundry

Yes, it'll take longer to dry your clothes. However, using a drying rack instead of your clothes dryer can reduce your energy cost each month, especially if you wash and dry several loads a week.

4. Resole Your Shoes

Old, worn shoes are a good excuse to hit the store and buy a new pair. But don't quickly replace your shoes. Go to a shoe repair store, and you might be able to resole the bottom. This extends the life of your shoes, ultimately saving you money.

5. Move Into a Smaller Place

Most people don't want to give up space. However, downsizing to a much smaller home is a practical way to reduce expenditures. You'll save on housing, and with less room to store items, living in a smaller space might curb shopping too. (See also: How to Downsize and Life Better)

6. Sleep at the Airport When Traveling

If you have an overnight layover, or if your flight's canceled due to bad weather, skip the hotel and bunk at the airport. It might not be the most comfortable sleep, but at least you'll avoid hotel costs, and the cost of transportation to and from the airport (if the hotel doesn't offer a free shuttle service). To keep belongings safe, use your carry-on bag as a pillow or footrest.

7. Stop Buying New

Join the Compact and challenge yourself to buy nothing new for a year (with a few exceptions for food, healthcare, and services). While the Compact is primarily about environmental and economic awareness, nearly all of its pledgees wind up saving hundreds — even thousands — of dollars during the challenge. Many, of course, continue the lifestyle once the year is up — and continue to save.

8. Give Coupons as Gifts

Buying gifts for Christmas, anniversaries, birthdays, and other special events can take a chunk from your already tight budget. Since there is no rule that says you have to spend money on gifts, get creative with your gift-giving.

Save up good coupons that you aren't going to use and gift them to people who would. If you have a rewards credit card, redeem your points for gift cards and give these as gifts. You can also make your own coupons for gifts!

9. Eat Before You Go Out to Eat

Eat at home before meeting up with friends at a restaurant, and you won't have to spend money on an expensive entree. You can order a dessert or a cheap side and enjoy good conversation without the expensive bill. (See also: Frugal Ways to Hang Out With Friends)

10. Use a Single Light Bulb

Keeping multiple lights on in your home drives up your electricity bill. If your house is small enough, only use one light at night — perhaps a hall light — and keep the remaining lights off.

11. Let Students Practice on You

Going to a spa, getting your hair done, and dental visits can be costly. However, you can save money by using students in training.

For example, schedule an appointment with a local hair school or massage school and receive services at a fraction of the cost. And if you live within vicinity of a dental college, you might be able to schedule routine dental services for less. (See also: Get Free High-End Haircuts as a Hair Model)

12. Surf the Internet Outside Your House

Home Internet service isn't cheap — costing $40 (or more) a month. The truth is, if you're not a big Internet user, you can probably survive without the service. Use your smartphone if you have a data plan, and there's always the option of using free Wi-Fi at a fast food restaurant, coffee shop, or the library. Also, if your neighbor has a strong signal, ask permission to use his or her Wi-Fi. Offer to share the cost, or maybe barter something in exchange?

Have you tried any extreme measures to save money? Did they work for you?

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: