5 Frugal Celebrities Who Live Large on a Small Budget | Ep 92

James: [00:00:00] Today we're gonna look at five celebrities and how they model frugal behavior. Ooh. That I've often seen in a lot of wealthy investors. Mm-hmm. To help them just invest more wisely because you're not spending it all. Okay. And one of them actually held on to, what was it? It was an iPhone six s for seven years.

And he did it on purpose. Amazing. So we're gonna talk about that today on the Furlo Capital Real Estate Podcast, where we dive into the intricacies of passive real estate investing celebrity gossip. Mm-hmm. And. Yeah. And our mission is to equip people to to invest wisely in both properties and peoples and celebrities so that together we can build wealth while improving housing.

I'm James, and this is my wife, Jessi.

Jessi: Yeah. Speaking of frugal I get irked. I like having nice nails, but I get irked by how much like a salon costs. Yeah. And then you go, you pay these 60, $80, [00:01:00] whatever, and then a week later your nail chips or Yeah. You know it's coming off or whatever. Totally. It's understand what you're talking about and yeah.

All those spa days that you get your nails did. Yeah. Yeah. You get your, anyways, so. I, a friend recently told me like their daughters were like, Hey, we've been used as like at home gel nail polish. And it's like, you know, it's a, a really affordable kit and then you cure your nails under this light thing.

Yeah. Fancy. And it fancy it instantly dries so it like, doesn't get messed up and it lasts a long time. So I was like, cool. Yes. Sign me up. So Eleanor and I have been. Doing the nails fun. Saving money. Fun. I love it. Fun. It is super hard to get off. So

James: I guess that's from the point, I guess downside.

Jessi: I mean, which, if you were to go to the salon, I think, I don't know about gels.

I, I acrylics definitely they like sand off of your nail.

James: Wow. Which is

Jessi: like, hmm. This. Seems a little in like Dremel. Dang. They just drum it right off. So I think maybe with [00:02:00] gels they do that too. I don't know. I don't know. I tried soaking it anyways, but I think there's a lot of different

James: celebrities who are also probably looking into.

Frugal ways to do things like that, that yeah, you think you, some celebrities do their nails at home. You still wanna look good on the red carpet, but you don't necessarily need someone to paint your nails, so might as well do it yourself. Wow. So I don't know specifically about these people, but we're gonna talk about 'em.

Okay. And here's why this is important. I mean, yeah, it, it's interesting, but if you allow lifestyle inflation to take hold mm-hmm. That can outpace your capital deployment and it can just make it harder to invest in the future. Interesting. And so. And a lot of these people that we're gonna talk to, they're not like, not spend any money type of people.

Sure. They're just really like, let's pay attention to the value and what is it worth actually spending money on. So it's about value maximizing, not, Hey, let's spend not penny pinching. Correct. Makes sense. Yeah. All right. So the very first one. It's Cameron Diaz. Really? Yeah. All right. She was quoted as saying, spend on what matters, not what [00:03:00] signals.

Oh.

But, you know, in that kind of industry, talking about like the glitzy dresses Sure. And whatever. Yeah, yeah, yeah. Brand. So she had a very frugal upbringing, and so she chooses to spend on relationships and experiences Oh. Over, as she calls them, flashy assets. All right. And so she goes she said, I'm not just gonna throw away my.

I'm not just going to throw my money away. She goes, I spend money on plane tickets, having feasts, buying tons of groceries and cooking. Mm-hmm. And so I think like an investor takeaway from that is like, deploying is greater than displaying. Hmm. So instead of saying like, you could say things like, I'd rather overspend on things like talent and inspections and contingencies than say, marble in a lobby.

Yeah. Or something like that. Sure. Not just flashy stuff, it's the same dollars, but just a different return on investment. Mm-hmm. I think is what's important there. I like that. Yeah, I knew you would. Alright, number two, Matthew McConaughey. Go ahead. All ride.

Jessi: All [00:04:00] ride. All right. There you go. That's pretty good.

James: He actually lived in a minimalist airstream for a bunch of years. I could kind of see that. Yeah. He has that vibe. Vibe. He's got that vibe. Yep. Yeah, he customized it. He lived and worked in it. It was low overhead base that prioritized freedom and focus over square footage. So I think from an investor standpoint, the way we can look at that is, you know, keep your fixed costs light to keep your optionality high.

Jessi: Okay.

James: It's kind of the, the idea behind there. So you know, it might be like negotiating for, let's say flexible debt or short construction types of things, or having a portable team that kind of thing. Hmm. And so think of it as you want to trade your footprint for freedom.

Hmm.

Yeah. And so you know, I, it's funny, I've been halfheartedly looking at offices for my property management business.

Mm-hmm. And it was really like reading about him being like, huh. I had, I'm maybe had office that Yeah, maybe you don't want office. Maybe I don't wanna get stuck to it 'cause I do [00:05:00] suddenly lose a bunch of optionality mm-hmm. If I do that. And flexibility. Hmm. And so, yeah, just trying to be a little bit more, maybe just get a bunch of air streams.

Jessi: Oh my word. Yeah.

James: Probably not Airstream office, but like, but yeah. What does it look like to have just lean operations? Hmm. I think is and yeah, thought it was a good lesson from him,

Jessi: which, I mean, Airstreams are pretty nice. It

James: can be, depending on

Jessi: lean operations can be, I could see that. Yeah. Yeah.

That's the idea. So the garage office is not necessarily bad.

James: Right. And again, it's not about, well just don't spend money on stuff, but it's how do you, yeah. What gives you the

Jessi: most,

James: what gives you the most opportunity? Options. I liked that phrase. Yeah. So you may, you actually may decide to spend money on something to give yourself

Jessi: mm-hmm.

James: Even more choices.

Jessi: Yeah. Of something

James: to do like a mobile

Jessi: office.

James: Right. Yeah. Yeah. Well, well,

Jessi: what I'm thinking of is it. When you got your van. I

James: was just thinking that too. Go ahead. Yeah.

Jessi: And you, you, because you were like, okay, well I have a garage, or I have a space in one of the properties. I [00:06:00] could store all the tools, but then I have to go and get them and then I have to drive.

So if I have a vehicle that just holds the tools, it's like a mobile workspace. Yeah. And they're secure and in there, and then I can just take them with me and I have everything I need. Yeah.

James: It allows for give you a lot more option. Yeah. Optionality. Optionality. A lot more flexibility. Hundred percent. See,

Jessi: you

James: get it.

Yeah. Number three. Jennifer Lawrence.

Jessi: That's the Hungry Gangs girl. Yes. That is for whatever reason you said Jennifer Lawrence and I, and I saw J-Lo in my head and was like, that's not right. That's not right. That's not right. Yeah, she, that's Jennifer Lopez.

James: Strike me. The next case is striking you as frugal maybe.

Okay.

Jessi: Jennifer Lawrence does strike me as Frug.

James: Yes. Mm-hmm. She is very practical. She talks about yeah, she talks about value for money as a rule. Mm. So her quote is, I was raised to have value for money, to have respect for money, even though you have a lot of it. That's why mini bars are difficult.

That's just [00:07:00] yeah. So what you can think about is like, what are those habitual price disciplines at small scales that can inoculate you to big ticket waste? Hmm. Okay. Because those are often the, the same muscles, so. The way I think of it is like you treat every line item on like a capital expense budget.

Mm-hmm. Kind of like that mini bar. Right. Can I justify the delta in rent growth or downside protection? Again, it's not about vanity, it's about spend. Hmm. And so it's really like, yeah, let's practice caring about the little things and really questioning them so that when we get to the big things, we've got that discipline built in.

Yeah.

Jessi: Yeah. You're maximizing value for where you're spending.

James: All, all

Jessi: the time. Mm-hmm. It doesn't matter if it's a big thing or little thing. Yeah, I like

James: that. Yeah. Yeah, yeah. So now we're gonna talk about the other half of Benef.

Jessi: Nice.

James: Yeah. So Ben Aflac there was a, a story where he was with his 13-year-old and his son asked for a [00:08:00] $6,000 designer pair of sneakers.

Yikes. And Affleck said, no, you need to work for it. And then publicly defended the decision as teaching him a financial responsibility, which I'm like, sure. You had to defend that. Okay. Cool. Cool. And so from an investor standpoint, the way you could think about it is like, this is the same discipline we wanna have with our partners, right?

Who's earning the return and what needs to be true? And replacing really, like, impulse with like unit level math. Hmm. Right? Like, let's, let's think through the numbers here. Does this actually make sense? Mm-hmm. So if a 6,000 splurge is need, like if a $6,000 splurge will require, let's say a thousand hours of work at minimum wage to pay it off.

Like, does that make sense? Mm-hmm. What must a $600,000 remodel earn in a net operating income return to justify itself? Yeah. Is kind of the way that mm-hmm. Think about it.

Jessi: The, the question I've heard you ask before that, that I really like [00:09:00] is, especially in that kid scenario, is like, it's not a no, but what would need to happen to make this a reality?

James: Yeah. Like. Sure. Right. And in this particular case, it's like, Hey, let's tie this actually back to like, what would the return be? Does this make sense?

Jessi: Yeah. Does this actually make sense? How do we need to structure this? So it could make sense. Yeah.

James: And just even on the personal finance side, I think that's an important question to ask as well.

Like, yeah, what do we actually gain from this? Yeah. Like, let's not just impulse this, let's, let's take it through, let's do the math.

Jessi: Yeah. That's the other thing I have seen you do before, especially like on, on the smaller things you say, let's just wait. Like we don't need to get it. Now we can think about it and then after we have justified earned, set it up, really know that this is gonna provide the value we want.

Yeah. Then we can do this.

James: Okay. Yeah.

Jessi: Don't do the impulse.

James: Exactly. Yeah, do the impulse. Yeah, that's a good one. Finally, number five, captain America himself, Chris Evans. Nice. He is all [00:10:00] about delaying gratification. He's the guy who held onto his iPhone six s for seven years. He publicly eulogized it when it, when he finally upgraded and even lamented over losing his home button.

Aw. And the fact that his device was now heavier. Ah, yes. That's amazing. I know. So the investor lens here, think of it, it's like it's all about timing. Mm-hmm. You know you wanna upgrade when the return on investment is clear. Mm-hmm. Not when the market necessarily says so. Sure. Again, it comes back to doing that math.

The same might be true for different software when it comes to trucks. Mm-hmm. When it comes to office moves. Interesting. Again, like you want to do it when there's a clear Yes. This makes sense. Yeah. Yeah. And, yeah, that's basically it. The best time to replace something is when the marginal utility.

Makes sense. When it makes sense for you members, are there. Yeah, yeah.

Jessi: Yeah. That, I mean, talking about celebrities too, my

James: office conversation like, ah, I'm not there. Right. It's fun to think about, but I'm actually not quite there yet.

Jessi: Yeah. Well, and, and talking about celebrities and that whole comparison game [00:11:00] too.

I, I feel like that can be hard sometimes in business or in investing when you're like, ah, like, look at what those other people are getting to do, or what they have, or they're, you know, like, they're doing a bunch of improvements or they're getting the new flashy thing and it's like, well. Yes. And they may not be getting the greatest returns and that is okay.

Like you can adjust and not just go with the flow of what everybody else is doing.

James: Yeah.

Jessi: You can keep your iPhone six s for years. Yeah. It's all

James: good or not. People

Jessi: will make fun of you and it's okay. Ah,

James: yes. They make fun of you if you upgrade every year as well. That's what I've learned.

Jessi: Ah, well it's okay though, you know.

James: Yeah, so a couple, you know, three other points here, just kind of like big picture level stuff. Being frugal doesn't necessarily equal living a small life. Mm-hmm. You can still do it and you can make choices that expand that surface area. Expanding opportunities for spontaneity, serendipity. Mm-hmm. I hate that word, but and scale.

Mm-hmm. Right. And again, you could think of like [00:12:00] McConaughey and Diaz's, you know, their relationships with monies. Mm-hmm. So it's, you do those things. Focus on people and mobility instead of like just stuff. Yeah. Also your bank cares. Right? In our previous episode we were talking all about a credit score.

Mm-hmm. And in this case, like lowering your personal expense rate mm-hmm. Improves your debt service coverage ratio just personally improves your debt to income ratio. Like, it just makes it a lot easier for you to qualify for loans and credit. And so what you're saying

Jessi: score is if you don't have the money.

Don't spend it

James: in general, but these are people who have a lot of money. That's true. Right. And even then, it's like, doesn't mean you have to spend it. Doesn't mean you

Jessi: don't have to spend it.

James: And also status is a financing cost. Hmm. You know, and so you gotta, it's okay to just ignore other people.

Mm-hmm. And for every dollar that you're spending on yourself and other fun stuff. Beyond what's needed to survive. That's what you [00:13:00] didn't put into earning or growing or helping other people or whatever. So got some takeaways for you. So adopt a value or velocity test for any personal business upgrade.

If it doesn't increase your earning power, durability, or joy per hour,

hmm, you

should probably take a pass on it. You should do an annual life audit. You know, maybe like, how about this one cancel 10% of non compounding spend and reallocated to opportunities to fund other stuff. So yeah, just look at your budget and be like, man, if I had to cut my budget 10% somewhere, what would cut?

Wow. It's a good exercise. That would be hard. Hard.

Jessi: I feel like that would be hard.

James: Yep. You wanna opt for flexible assets. Mm-hmm. Oftentimes leasing can be greater than buying. Mm. For, for things that you're not gonna fully utilize. Mm-hmm. Obviously if you're gonna use it a lot Yeah. Go for it. Mm-hmm.

You want to only upgrade when it makes sense, like, you know. Mm-hmm. There's clear math there that it makes sense. You also wanna teach your operators, in my case. Like people like [00:14:00] me when to say no to like really interesting, but potentially low yield expenses and really only say yes to the big things that like make sense or allow for a lot of optionality.

Hmm. Again you wanna invest in relationships, not necessarily optics. So, and we've talked a lot about that. Mm-hmm. It's been on people and That's Okay. Like communications. Mm-hmm. Attended experiences. Inspection depth mm-hmm. I think is a good place. Like yeah. That's a good place to spend money on.

Mm-hmm. And, you know, keep your fixed cost light as much as you can.

Hmm.

So, question for you. What line item in your life or business gives you no compounding and what would happen if you cut it out for 90 days? So what's something that's not helping you grow? You could cut out for 90 days. Oh, pressure's on Get rid of those lattes.

I, I know, I,

Jessi: I jumped to food right away for some reason, but it's like, it's snacks or [00:15:00] candy or, you know,

James: I tried cutting heat out of our house at one point time. Cool. Yep. That was bad. We did not survive the whole 90 days. Not good.

Jessi: I mean, we'll try that

James: experiment again.

Jessi: Long underwear and sweaters, like they, they work, but still, and I,

James: I didn't turn the heat off.

I just lowered. Yeah, we just lowered it house by like three degrees. You just always had to have a sweatshirt on. Yeah. Everyone hated it. Even me, so I've tried that one.

Jessi: Not worth, that one wasn't worth it.

James: Yeah. Yeah. How, what? We

Jessi: cut what A cut and, and like, I don't know. In a business aspect, that would be a little bit different too, but.

James: Yeah, that's true. Hmm. There's probably some software that I've, that I'm regularly like, ah, do I need this? I use it every once in a while. Does it make sense? Hmm. I, I often will ask those questions about things. Mm-hmm. You're just not sure. Yeah.

Jessi: You and I are super frugal. We've chatted about it on different pod podcast, but like, you know, an example is like, I [00:16:00] rarely buy clothes new.

I always thrift them or, you know, exchange them. I shred by clothes, consign them. You just really buy clothes. So it's like. That's one area that we're like, we, we don't know. We spend there and it's worth, yeah. Worth. And I keep thinking about like, what are those,

James: what are the really big ones? Mm. You know, what are those 10,000 types of expenses Sure.

That we could potentially think about. You know, vacations are one of 'em, but, you know, yeah. I think I'm okay with those, but yeah. I wanna put that back to, back to you, humble listener. Yeah. What is an area in your life where you're like, yeah, if I cut this out for 90 days, would I be okay with it? How would I go?

Something to think about. You know, like those celebrities, they obviously could spend a lot. Yeah. But they choose not to. And I think, well they probably

Jessi: do also spend a lot, but in some areas choose not to all proportionally speaking. Yeah, yeah, yeah.

James: Very much. So there you have it. Just some good hopefully inspiration on how to live and how to think about investing and spending.

And if you would like to spend some of that excess cash on an investment, you absolutely can. And you can check us out [00:17:00] at furlo.com where you can learn all about our investing thesis, the types of projects we're working on right now, and what it would look like to invest with us. So thanks for listening, and have a great day.