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As much as I like money, I have found that being cheap looks bad, especially for a successful financial advisor.
“Well,” someone will proudly exclaim, “I told our waiter that I did not like the spices on my chicken and the asparagus wasn’t cooked to the texture I like. So, he knocked $10 off our ticket!” Eyes sparkling, they could not be happier recounting this victory tale.
Their expectation is that I will affirm those frugal ways. Performing a quick cartwheel, I will leap up to pat them on the back for adding $10 to the college accounts. Man, I will be thinking, another star pupil, scrupulously mimicking the austere lifestyle I recommend.
I have had other clients volunteer that they used a dental school for fillings or a barber college for haircuts. Others drove their junker car for 300,000 miles or demanded a discount at the furniture or clothing stores. They felt so noble.
Except…
I hate cheap. I would never badger a restaurant or hotel for a discount. I would almost never stiff a server for a tip, or cut my own hair, or fight some poor car salesperson for the last $100 on a new or used car.
Nope, that is not me or anyone else in my family.
I get the need to be frugal. I have been there. There are valuable lessons in being broke. I remember my young wife’s tears when a large jar of peanut butter shattered on our kitchen floor. We have come a long way since then, but that and other lessons are still with us.
My beginnings were humble. We did not have a lot growing up, but we were not poor. There was always food on the table and a new pair of jeans for each school year. Any pocket money I had came from mowing lawns or scooping snow. I learned the value of a dollar the hard way.
I worked in banking for a few years. I learned that it is hard to guess which people have money – indeed, hard to guess both ways. Some people who have money do not look like it, and some people who look wealthy are not. My favorites are the wealthy people who look modest.
My least favorite are wealthy people who look cheap. There people are genuinely wealthy, and everyone knows it. Maybe they own a prosperous company or inherited a fortune. Maybe they hit it big in Hollywood or Wall Street. In other words, they either have or had money. Everyone knows who they are.
Okay, good for them. They were hardworking, smart, lucky, or some combination thereof. All things considered; I doubt that being cheap created their wealth. It is possible that being cheap long enough might compound their wealth:
Most people try to get rich by being cheap and the price for that is that you live cheap and there is so much money out there; why would you want to live cheap? – Robert Kiyosaki
That is the part I do not like. There is no good reason to be cheap if you are already wealthy. A carton of coupons might save a few hundred dollars, but, come on, a few hundred dollars means little to a monster bank account. There might be entertainment value to a twofer at Burger King, but that $5 saved is meaningless in the scheme of things.
And it is not like the $5 is serving the world or going to someone in need. Truthfully, proffering that coupon looks like a form of greed. My general thoughts:
- It is a power move, demanding a discount for patronage.
- Bargaining is a competitive game for the wealthy buyer, but livelihood for the seller.
- The seller needs money more than the well-heeled buyer.
- The buyer is trying to prove they are smarter than the seller, or smarter than everyone.
- It is likely obnoxious, attention-seeking behavior.
It is not a crime. I know that. But greed is ugly. No one – no one – likes greedy people. It is like fighting below your division. It is like stealing from a thrift store. It is like running up the score against an opponent at a high school game. It is like stiffing a server for something that wasn’t their fault.
I pity the man who wants a coat so cheap that the man or woman who produces the cloth will starve in the process. – Benjamin Harrison
I also understand that pricing “give and take” is part of certain industries or transactions. Real estate, for instance, tends to be listed at a fantasy level knowing that a lower offer is likely. Nothing wrong with that, per se. Where this goes awry is those last few thousand or hundred dollars. Fighting over $500 on a million-dollar house… well, nope.
I am a capitalist through and through. I like that people can start with nothing and with hard work, smarts, and a few lucky breaks can end up with a pile of money. I admire many people who did just that. And my experience is that most wealthy people are both helpful and generous.
Being wealthy is fine, but being wealthy and cheap is bad. It is a bad look. Do not do it.
People who are frugal understand the value of a dollar and make informed and thoughtful decisions. People who are cheap try to spend as little money as possible. – Frank Sonnenberg
Dan Danford, CFP® is a NAPFA member in Kansas City, Missouri. He learned early ideas about money from his late father Thad Danford who charged rent on the family lawn mower while Dan cut neighborhood lawns. Danford is a practicing investment advisor and author of HAPPY TO BE DIFFERENT: Personal and Money Success Through Better Thinking.
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
