Some Lessons from the ‘Homeless Billionaire’

Over the past several years, a number of media articles have popped up that discuss Nicolas Berggruen, a person known colloquially as “the homeless billionaire.” Why is he known that way? This article from the Wall Street Journal explains it:

When I first met Nicolas Berggruen, I was struck by two things. First, he was a multi-billionaire I’d never heard of — the most interesting kind. Second, he didn’t own a home.

“I stay in hotels,” he told me.

A billionaire without a home? This, I figured, was worth a story. My article about Mr. Berggruen in today’s Journal focuses mainly on his investing life and his push toward socially responsible investing. But what interested me most was his unconventional personal life.

After making his billions, Mr. Berggruen, 46, lost interest in acquiring things: They didn’t satisfy him, and in fact had become something of a burden. So he started paring down his material life, selling off his condo in New York, his mansion in Florida and his only car. He hatched plans to leave his fortune to charity and his art collection to a new museum in Berlin.

For him, wealth is about lasting impact, not stuff.

“Everybody is different and I think that we live in a material world,” he told me. “But for me, possessing things is not that interesting. Living in a grand environment to show myself and others that I have wealth has zero appeal. Whatever I own is temporary, since we’re only here for a short period of time. It’s what we do and produce, it’s our actions, that will last forever. That’s real value.”

When I pressed him on why he no longer got much enjoyment from acquiring more “things,” he said this: “First, I don’t need it. Secondly, maybe in a bizarre kind of way, I don’t want to be dependent on it or have the responsibility. I don’t get that much enjoyment out of saying ‘I own it.’ ”

Mr. Berggruen makes clear that his philosophy is his own, and he has nothing against those who want to enjoy their wealth by having big homes, cars and all the rest. And of course it’s easy for a billionaire to say “money and things aren’t important.”

But his perspective seems to be increasingly common among today’s superwealthy — and even wealthy — who are looking for more lasting meaning in their lives beyond their possessions. I’m not saying they’re right or wrong or that possessions are inferior to other measures of wealth — people should use their wealth however they choose. Yet for all that, Mr. Berggruen’s personal downsizing may be a sign that the voluntary simplicity movement could be moving up the wealth ladder.

I’ve written about the voluntary simplicity movement in the past. In the words of the most influential book of the movement, “[s]implicity means taking charge of lives that are too busy, too stressed, and too fragmented. Simplicity means cutting back on clutter, complications, and trivial distractions, both material and nonmaterial, and focusing on the essentials – whatever those may be for each of our unique lives.”

In other words, it’s a conscious effort to pare down and even minimize one’s obligations, one’s distractions, and one’s possessions in order to focus on the essentials and the things the person finds truly important.

It might be easy to hear that kind of talk from someone who is already financially restricted, at least in the sense that they’re not incredibly wealthy. It’s a philosophy that seeks to maximize the resources you already have – time and energy – and minimize other resources – money and possessions – so if you already are lacking in the money department, that philosophy can really hit home.

However, Nicolas Berggruen proves the point that even if you’re already in control of a lot of money and possessions, time and energy may still prove to be more important.

His life is practically possession free. He lives in a way that instead maximizes his time and energy and makes it possible for him to have a lot of experiences and devote his time to a lot of projects.

He lives in the most time and energy efficient housing available to him – hotel rooms. Because of his wealth, he can actually afford constant hotel visits, where someone else takes care of the tasks of cleaning and changing the sheets and so on. That choice basically eliminates the time he might have to devote to household tasks.

For most of us, that’s impossible, but we can minimize that time by living in a very small home or apartment where there simply isn’t that much room to clean up. It’s far faster to clean up an efficiency apartment, for example, than a multi-bedroom home.

He’s able to live in such a small space because he doesn’t have many possessions, and the ones he does have are well-made and he uses them to death. This Bloomberg article describes him as living out of a tote bag and wearing ragged clothes: “Berggruen, 50, lives his whole life this way, always on the move, as he seeks out companies to buy from Berlin to Bangalore to Brisbane. For the past decade, the dual American and German citizen has had no fixed home address. He constantly roams the world on his Gulfstream IV jet, living out of five-star hotels. Most of the time, he carries only a small tote bag containing clothes and his BlackBerry. ‘If you have things and if you are a perfectionist, which I am, you have to really tend to them, and it takes energy away from other things,’ says Berggruen, whose pink shirt, monogrammed with his initials in red on the pocket, is fraying at the cuffs and collar.”

First of all, he doesn’t own many possessions, period. He lives out of a rather small bag that contains a few electronic devices, some clothes, and presumably a few toiletries.

I’ve been thinking about this idea a lot. What would I do if I had to live out of my duffel bag? I’d probably put my laptop in there, my Kindle, and chargers for both. I’d probably have one set of nice clothes, along with two pairs of jeans and a few t-shirts, as well as undergarments and maybe one extra pair of shoes. I’d probably also have a notebook or two and some pens and a little bag of toiletries. I think I could be pretty happy with just those possessions – after all, I’d have very little to worry about besides them.

If Sarah and I both committed to that, we could actually have a very small house and be just fine.

Second, the possessions he does have are sturdy and well made, and he uses them until they fall apart. His clothes, for instance, are “fraying at the cuffs and collar,” but he’s still wearing them, likely until they tear. That means they’ve survived a lot of washings and a lot of use – he’s getting maximum value from those clothes.

And he’s a billionaire.

Whenever I read about him, I think to myself about what it would be like to live that kind of life. I might not necessarily live in hotel rooms, but I could easily live a very minimalist lifestyle where my possessions largely fit into a duffel bag. If I did that, and Sarah did it, too, we could live in a much smaller home. We probably couldn’t become migrants for professional reasons, but we wouldn’t need a big house, that’s for sure.

But then I tell myself, “But I’ll never live like that.”

And then I ask myself, “Why not?”

There may be specific elements of my life that would make this kind of minimalism extremely difficult, but it wouldn’t be impossible. It would just require a commitment from everyone in my family to these ideals… but it’s a commitment I wouldn’t be able to obtain.

However, in terms of the possessions I have that are clearly “mine” and no one else’s, this type of approach certainly would be possible at the very least. After all, if this is something I believe in, why not work toward it, a step at a time?

That’s why, over the last few weeks and for a while going forward, I’m taking a cue from Nicolas Berggruen. I’m doing a pretty deep purge of my possessions as time affords it, selling off entire sets of my possessions and strongly paring down other sets.

It’s going to take a while, but as I look around and think about which possessions of mine actually matter as possessions, the number is pretty small. Many of the items I have just represent possible experiences… but the reality is that I won’t actually ever enjoy those experiences on a deep enough level to warrant having the stuff on my shelves.

What I really value is experiences and time. Piles of possessions don’t really give me that, but money in the bank helps greatly.

I might not be able to live out of a single bag, but I can certainly downsize and reduce. In fact, that’s how I’m spending the rest of today.

I’m starting by purging my board game collection of the majority of my titles. I realize that most of my game playing takes place in a social context with other people who also bring games, so there’s not a burning need to maintain a big collection.

I can also pare down the vast majority of my pocket notebook collection, as I have acquired them at a faster rate than I actually use them and I have some old ones that actually have secondary market value. After that, there are a lot of possibilities.

It’s time to let go of some of my possessions, to give myself more free time and less space requirements, and the homeless billionaire is my inspiration.

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