Billionaires like to save money too: Aron Moldovanyi explains how the ultra wealthy save and make money by spending it
Benjamin Franklin wrote, “If you would be wealthy, think of saving as well as getting.” Two hundred years later, that advice still holds true. Most of us try to save our money and budget what we can afford to spend; for example, the average billionaire spends USD 80 million annually (Insider, September 2018).
While we know that these ultra-high-net-worth individuals have the means to spend a lot, have you ever wondered how they save money? Especially when you’re surrounded by temptation: jets, cars, private islands, jewelry…you name it.
So, are billionaires as focused on saving as they are on becoming richer? I asked Aron Moldovanyi, Global Director of Properties and Chief of Staff to some of the wealthiest individuals in the world, as he knows their lifestyles—and spending habits—quite intimately. Aron has worked for four Forbes-listed billionaires, and he’s tasked, among many other things, to save them money on everything…
Is saving money for billionaires part of your job description?
No, although, there is a good reason why billionaires’ family offices like to hire people with a background in hotel management. Spending years in the ultra-luxury hotel sector as Director of Operations and General Manager, you learn budgeting, forecasting, and creating P&Ls—and you
pick up a few tricks on how to save on expenses along the way. Billionaires’ private estates are on budgets, too, and saving on the operating costs means extra money for adding a full spa for the guest house, upgrading to a newer jet, or refurbishing one of the vacation homes.
I understand that everyone likes to save some money, but how is it different from us ordinary people who try to “make it stretch”?
Many perks come with billionaire status. Whereas you have to pay to go places, they get invited for free. You pay for insurance and gas—they do too, but they get a great fleet discount on both, as they own so many cars. You fancy that super-expensive Balinese handmade dining table? They can fill up a container and ship it directly from the island to any house they own for a fraction of the price. I could go on with examples, but the point is that they often get great deals on goods and services. Just ask their personal shoppers at those fancy malls. They can afford to buy in bulk or create a competitive environment as they have the resources and connections to do so.
Shaving off a few bucks here and there is helpful, but billionaires must have high expenses to maintain their properties and belongings.
They certainly do. However, it’s all relative. If portfolios—even on this scale—are managed properly, you can easily cover those costs, and in rare, cases even make some money. Let’s say you have a private jet or a sizeable yacht; if it is owned by one of your companies, you can charter it when not en route to one of your vacation homes or private islands. If you have a property that you don’t fancy visiting this summer, scouts love renting unique villas to film productions for big bucks. Super toys cost millions to service, maintain, and park annually, so if you can just cover the operating, maintenance, and running costs, you can enjoy them for free! Wouldn’t you love that?
Ok, this all makes sense. They—obviously—are very good with money and know how to be smart with their assets to minimize costs or make a profit. I can’t imagine, though, that they fuss about the smaller things, like turning off all the lights in empty rooms and switching off the AC when stepping out of the house.
You would be surprised. Every Principal I worked for was particular about having smart home technology and energy-efficient lighting in every property they owned. Sensors turn on and off LED lights, floating solar heaters keep the pools warm, thermostats control the climate, and some of them even owned their own solar and gas power plants to generate energy for their home. Nowadays, their staff drive hydrogen fueled or electric vehicles. Wealthy doesn’t mean ignorant. Most of them support and finance great philanthropic causes and care about the environment and the future of our planet.
So, your role is to help them coordinate these opportunities to save money in their homes and lives in general?
Precisely. If you can execute a task to the highest level of satisfaction and save money while you’re at it, why wouldn’t you?
Good point. Well, we now know that even billionaires care about their pocket change. Surely, though, you’ve never seen a piggy jar in any of those mansions.
You are right, no piggy jars there; however, like all of us, they love a good deal! Remember, they did not earn and maintain their wealth by being careless with their spending and not knowing the value of their money. As the poet Berthold Auerbach once said: “To acquire money requires valor, to keep money requires prudence, and to spend money well is an art.”
