If You're a Millionaire, You May Be a Terrible Spender

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You have worked hard for the last 40 years and have been a diligent saver to accumulate the wealth you have. Reports tell you that it is nearly impossible to run out of money because you have done so well. Now what?

Should you continue accumulating as much wealth as possible? If so, what purpose does it have now and when you are gone? Is your goal to give as much money away as you can? Is your goal to leave money for the kids? Is your goal to spend every last dollar?

My goal with this article is to challenge you to think deeper about the purpose of your savings. Why have you worked so hard to accumulate what you have? Then, hold yourself accountable to make sure that you do what you want to and live the retirement that you've dreamed of.

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Many of our clients are considered the “millionaire next door.” This means that they have done a great job saving and are very frugal. In other words, they are great savers but terrible spenders. We love working with these people because they are good people with a good work ethic and integrity, and Midwestern values. I grew up in a rural community with less than 500 people, a farming community filled with good people who work hard and care for one another.

Guilty as charged

When it comes to being great savers but terrible spenders, my parents are guilty as charged. They are very frugal. That's the way they raised me, and I am grateful for that because it taught me to value everything and be content with what I have. Therefore, at this point in their lives, I have to challenge them to enjoy what they’ve worked so hard for.

In my book, I Hate Taxes, I tell the story of my mom and her love for blueberries. Even though she loves them, she would never buy them unless they were on sale. She came from a big family and was taught to be frugal. It’s definitely a great trait to have and something that I honor her for. But at this point in her life, if blueberries give her joy, then she should probably buy them and pay $1 or $2 more from time to time. A little extra cost is not going to affect her retirement goals at all. I have to consistently remind her to buy the blueberries, even if they are not on sale.

If this sounds like you, then you're the one I'm challenging with this article.

What can we do with our wealth?

Let's first think about all the things that we can do with our wealth at this point in our lives. I like to categorize it into three areas:

Spend on things for yourself
Give to charities
Give to kids/grandkids/friends

At the end of the day, those last two are the only places your money can go when you pass. There won’t be a U-Haul hitched to your hearse, as we all know. It is our job to be the best stewards of our money now while also making sure there's a plan when we pass away. This is what our firm specializes in — we help people protect and preserve their wealth for their retirement but also for generations to come. And to give their money the most purpose.

If your goal is to spend all your money, then you better get busy spending. When people have millions saved up in their investment accounts, they should take at least 4% of their money out every year. Otherwise, it’s likely that their investments are going to just keep growing and compounding, which means the money may never be used for any purpose while you're living.

If this is an issue that you have, then you will want to set a budget and have someone hold you accountable, like a financial adviser, who can ensure you are spending the right amount of money and seeing where it goes.

We do this with many of our clients, helping them achieve their goals by guiding them through the process of shifting their mindset. For example, we had a family who wanted to make improvements to their home. One spouse wanted the improvements done right away, but the other spouse wanted to DIY it but hadn’t found time to get it done. We were able to clarify that paying someone to get the project done would be much easier for the DIYer and would also be much more comforting for the spouse wanting it done quickly.

This is not easy for “millionaire-next-door” people to do because they have grown their wealth by DIYing many things in their lives. But at this point, if the expenditures are in the budget, you should allow yourself to use some of your money and enjoy yourself.

Maybe you want to leave a legacy or give to charity

On the other hand, many of our clients want to leave a legacy to the generations to come. While this is great, it needs to be done the right way. Too much money left to kids, family members, or friends could cause problems down the road if they're not planning for it. If they are planning for it, then it can lead to success. But typically, an inheritance is “found” money, and people want to spend it right away.

So I challenge you to be very careful with how you do this and to have the right conversations with loved ones to prepare them. If you’re concerned that receiving a large amount of money could eventually cause problems for your loved ones, then you may want to look at charitable options to ensure that your money goes to the best possible use. You also may want to consider giving some money to your loved ones while you're living so you can see where it's going. Plus, your loved ones may see more value in that now vs after you pass.

Leaving money to charity can be very impactful and may be the most tax-efficient way of passing your money on. If you're considering doing this, I recommend that you make a plan for how you want to accomplish it.

We also encourage our clients to consider that giving while they're living may be better than giving after they pass away, because then they might be able to see the results of their gift. Think of the impact you can have if you give thousands of dollars, or hundreds of thousands of dollars, to a charity that your heart is set on. That's the type of impact where they will put a statue of you in front or name a building or a room after you, but most important, it helps those in need and does good for the world. It’s a lasting impact!

The best savers are the worst spenders, and that’s generally a good thing. But when you’re considering what will happen to your money once you’re gone, you may need to have a mindset shift. Then, go live out the retirement you worked so hard for and dreamed about. Money is a tool and a resource that, when used the right way, can lead to a lot of success and fulfillment in your life.

If you are looking for more info on this topic, then I have a whole chapter on it in my book, I Hate Taxes.

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Joe F. Schmitz Jr., CFP®, ChFC®, CKA®, is the founder and CEO of Peak Retirement Planning, Inc., which was named the No. 1 fastest-growing private company in Columbus, Ohio, by Inc. 5000 in 2025. His firm focuses on serving those in the 2% Club by providing the 5 Pillars of Pension Planning. Known as a thought leader in the industry, he is featured in TV news segments and has written three bestselling books: I Hate Taxes (request a free copy), Midwestern Millionaire (request a free copy) and The 2% Club (request a free copy).

Investment Advisory Services and Insurance Services are offered through Peak Retirement Planning, Inc., a Securities and Exchange Commission registered investment adviser able to conduct advisory services where it is registered, exempt or excluded from registration.