Millionaire Lectures America About Joys Of Frugality

In a recent NY Times Op-Ed piece, Treehugger.com founder Graham Hill waxes philosophical about his life as a minimalist millionaire.

Hill was fortunate enough to sell his tech consultancy start-up, Sitewerks, for millions back in the late 90s. That helped him foot the bill for a 3,600-square-foot Seattle home, a personal shopper, all the gadgets he could ever want, and more.

But he became bored with wealth. He sold everything and moved into a smaller apartment. He traveled with his girlfriend and enjoyed the small pleasures in life.

And he's decided the American people should, too.

"I live in a 420-square-foot studio. I sleep in a bed that folds down from the wall. I have six dress shirts. I have 10 shallow bowls that I use for salads and main dishes. When people come over for dinner, I pull out my extendable dining room table. I don’t have a single CD or DVD and I have 10 percent of the books I once did," he writes, later finishing with, "My space is small. My life is big." 

As backup, Hill even cites studies that show that American homes have gotten bigger, that we waste more food than ever, and that some families can't park their cars in their garages because of all the stuff they have piled up.

But none of it matters. Here's why: 

1. No poor person wants to be taught lessons in frugality by a millionaire.

"There is a big difference between choosing minimalism and minimalism being a harsh aspect of daily life," one NY Times commenter wrote. "At any moment, Mr. Hill could choose to buy more things. If one of his 6 dress shirts rips, he can simply buy a new one. It's a far cry from a minimum wage worker who has this lifestyle by default, because there isn't money to rent a larger apartment or money to replace a torn shirt." 

And unlike the personal finance gurus who have become millionaires and gained legions of fans by selling their recipes for financial success, Hill isn't offering any real, actionable tips here. His advice is simply, If I can start a tech company, sell it during the Dot Com boom, make a fortune, get rid of everything and travel the world with one suitcase, then anyone can!

Like so many before him, Hill bases his logic on the fact that Americans can live better by simply trimming the excess in their lives –– the shopping, the McMansions, the expensive lattes, etc. 

It's the "myth of overspending" that has been beaten like a dead horse over the last decade to convince Americans they have nothing short of 100% control over their own financial shortcomings. The uncomfortable truth, as the Nation's Richard Kim points out in his response to Hill, is that Americans are actually spending a smaller portion of their income on so-called "stuff."

"For example, in 1949, the average American household spent 11.7 percent of its annual budget on clothes; today it spends just 3.6 percent. By the early 2000s, when Warren and Tyagi wrote their book [The Two Income Trap], American households were spending 44 percent less on major appliances, 30 percent less on furniture and 20 percent less per car than they did just a generation ago in the late 1970s," Kim notes. 

And at the same time, we've watched our wealth shrink. 

According to the Federal Reserve's Survey of Consumer Finances, the median income for households run by consumers between the ages of 35 to 44 fell by 14 percent between 2001 and 2010, from $63,000 to $53,900.

The Bottom Line: Hill shouldn't be berated for writing a heartfelt piece about his lifestyle choice, but the fact of the matter is that he had a choice.