I noticed an article on yahoo today called 7 Spending Tips From Frugal Billionaires in which the article goes on to talk about how many Billionaires are frugal too.  The article was a good one with a good message, which basically states that if billionaires are frugal shouldn’t we non-billionaires be frugal too?

I’m not disputing the message of the article, but I think Billionaires should spend their money instead of being frugal and hoarding their cash like a Scrooge!

When Billionaires act frugal and keep their money tight, that keeps the money from the hands of the middle-class people!  This means the money supply is constricted, and then not as many people purchase goods which in turn slows down the economy.

Now you might think that when Billionaires spend money, they buy expensive things like yachts, personal jets, and other such luxuries.  And this is true, but even when Billionaires spend money on luxury goods, that money pays workers that build or create those luxury goods.  Then those workers spend money on ordinary goods, and once again money flows freely again.

So, while I believe in being frugal, I don’t think it’s such a great idea for a billionaire (or high-end millionaires) to do so.   These extremely rich folks should enjoy life a bit more instead of being so frugal.

Recently, Warren Buffett and Bill Gates went around and convinced over 40 Billionaires (and near Billionaires) to give over half of their money to charity.  While that’s an admirable goal, I think some of the money would have been better served to help the economy by them spending some of it.   Don’t get me wrong, I think it’s great that these billionaires are giving their money away to charity!!!  But, I know that during the recession, I actually spend more of my money, and I’m not a millionaire…, yet.  Of course, I didn’t go into debt when I was spending more money during the recession.

An outstanding example of a frugal billionaire hurting their local economy would be the richest man in the world, Carlos Slim.  Carlos Slim is a Mexican, and very frugal.  But if he were to buy more things from Mexican business, wouldn’t that help the Mexican economy?  I know that Mexico has complex and not easily solved business issues, but every little bit counts…

What do you think of frugal Billionaires hoarding their money?

MR