Some millionaires are wearing old clothes, driving second-hand cars. Here's why

Luxury cars, designer wardrobes, and extravagant lifestyles – it’s the image we’ve always associated with millionaires. But what if some are rewriting the script?

Imagine a millionaire driving a second-hand car, shopping for clothes at thrift stores, and living in a rented home. It sounds improbable, but a growing number of the ultra-wealthy are embracing frugality as a way of life.

And this isn’t about penny-pinching—it’s a lifestyle called “underconsumption”.

Gaining traction on social media platforms like TikTok, the ’low-consumption’ lifestyle is meant to counter the extravagant shopping hauls and lavish routines often flaunted by influencers on the internet.

Advocates of this movement are rewriting the rules and rejecting material excess, encouraging practices like decluttering and no-buy challenges to encourage a minimalist approach to life.

But how are some millionaires adopting this lifestyle? Here’s a closer look at their journey.

Rented home, frozen groceries

Entrepreneur Shang Saavedra, a Harvard graduate who runs a personal finance website, has built a multi-million-dollar net worth alongside her husband. Yet, their surprisingly modest lifestyle reveals little about their financial success.

According to The Fortune, the couple rents a four-bedroom home in Los Angeles, drives a 16-year-old secondhand car, and shops at budget supermarkets like Aldi, primarily purchasing frozen groceries to cut costs.

Saavedra’s two young sons, aged five and two, wear hand-me-down clothes, play with toys sourced from Facebook Marketplace, and enjoy free activities rather than the pricey Disneyland trips their peers often take.

Their spending priorities are clear: education, property investments, and philanthropy. Saavedra’s children attend private school, she owns real estate in New York, and the family actively supports charitable causes.

Before becoming an entrepreneur, Saavedra held corporate roles at CVS and Victoria’s Secret. She revealed to Fortune that early in their careers, she and her husband significantly cut back on expenses. They lived in a rent-controlled apartment in New York with unreliable plumbing, saving one of their salaries to prepare for starting a family.

“Underconsumption has to have a purpose,” Saavedra shared. “If you just do it for the sake of saving, you’ll burn out. For us, the goal was financial freedom and family, which made it worthwhile. Of course, I’m tempted by luxury items, and occasionally we indulge in a nice date night, but understanding the ‘why’ behind your choices keeps you grounded.”

Secondhand clothes, no salon trips

Annie Cole, a personal finance expert and contracted researcher, has achieved impressive financial success, with assets exceeding a million dollars and a six-figure income. Yet, her monthly expenses are strikingly modest—just $4,000.

To put this into perspective, her monthly budget is even lower than the average US household expenditure of $6,440, as reported by the US Bureau of Labor Statistics in 2023.

Embracing underconsumption, Cole, 36, sold her car a few years ago, she cooks in bulk to minimise food costs and even cuts her own hair. Rather than splurging on new items, she shops for clothes only three times a year at her local Goodwill, with her most recent purchase funded by a gift card over a year ago.

When it comes to holidays, Cole keeps things simple, funding her travel through air miles accumulated during her previous corporate job. Her leisure activities are equally modest, often involving free pursuits like hiking and swimming.

Looking ahead, Cole has planned for early retirement in her 40s, although her current part-time work already feels like semi-retirement.

“I’m doing all the things I want to do and knowing that I could retire feels like a nice financial cushion of ‘Hey, you’re taken care of as you get older and in the meantime you have the flexibility to live and work differently.’ That’s a blessing in itself,” she told Fortune.

Shared commutes, carrying lunch boxes

For Robert Chin, a dentist in Las Vegas, adopting an underconsumption lifestyle came as a response to rising costs and a desire to better align spending with his finances, despite earning a comfortable six-figure income.

Chin and his partner, Jessica Pharar, run a successful dental practice but have opted for a more frugal approach to everyday life.

Chin and Pharar now share a short commute to work, cutting down on fuel costs, and carrying packed lunches to work instead of dining out. Chin, who once frequented restaurants multiple times a week, now eats out just once or twice a month.

To combat inflationary grocery prices, they shop at wholesale market Costco to stock up on essentials and save money where possible.

Their ultimate goal is simple: flexibility. Whether it’s having more time off together or the possibility of retiring earlier, Chin says their decisions are all about creating the space for a different kind of lifestyle.

“In five years, we hope to bring in another practitioner to allow us more time off,” Chin shared. “As business leaders, it’s challenging to take breaks because if we’re not working, the practice doesn’t generate income.”

As someone rightly said, true wealth lies not in extravagant spending but in the freedom to live life on one’s own terms.

With input from agencies