How Branson's life is Virgin on the frugal
Mark Anstead discovers that the tycoon who is thought to be worth at least £1bn still has a mortgage, justifies every expenditure and puts a few thousand away each month in a tracker fund
called from The Guardian,
Although he's worth at least £1bn and lives in a £10m house, Sir Richard Branson deplores being wasteful with money. He doesn't feel he can justify buying such things as expensive art, or bottles of wine worth more than £10. Even the beautiful Necker Island in the Caribbean, bought as a personal holiday retreat, had to be a business proposition before he considered it properly. During the periods when he isn't there, you can rent the island and it's 31 staff at £10,000 a day (food and drink included) and spend your time being treated like royalty. "We go there quite a lot," says Sir Richard. "It's almost our real home because when we're in the UK we're all working, and when we're on the island we're relaxing. "If we're talking about personal luxuries - and the luxury of being your own boss - the biggest reward is the amount of time one can find for family and friends." He was born into a middle-class family who had to be cost-conscious. His father was a barrister struggling to make his mark and not quite earning enough to match outgoings, so his mother was always finding things to make or sell to pay for holidays. They would turn off the light bulbs when the children went to bed so that even today, struggling through dark corridors to find the loo is a vivid childhood memory for Richard. "The idea of having a possession that is there just as pure luxury, and is not actually paying its bills is something which I'd be embarrassed about," he says. "My parents drummed that approach into me. By contrast, my wife was brought up in a very poor part of Glasgow - with four or five children sleeping in the same bed - and she cannot understand my frugal approach. She says: 'You only live once, so you can afford to buy a decent suit'." He drives a Range Rover, and even that is given to him each year as thanks for some nice things he said about the brand after surviving an accident in one. Money saving tip of the week - be famous. He bought his current home in Holland Park 10 years ago for £2.5m and converted two of its five bedrooms into offices for himself and a small number of staff. He also owns a cottage in Oxfordshire, left over after the company disposed of The Manor House - the fabulous country studio where the Rolling Stones and Mike Oldfield recorded their early albums. "I would spend unreservedly on my home," he says. "Having been brought up in the country I want to feel that I'm in the country, and Holland Park is about the closest you can get to that in London. There is no question that it is a luxury, but I know it will go up in value, so I don't feel too bad about that." There is obviously an ego at play with his attempts to dominate countless areas of business - from trains to cosmetics to cars. Not all have been successful. It was his car firm - Virgin Cars - that recently gave a Jobs & Money reader a hard time, turning a 13-week wait time into 25 weeks. In a letter to the Guardian, Sir Richard said the blame lay with car makers who wanted to control the market. He wants to be seen as someone who breaks down old cartels and working practices. Despite some failures, he could sell his stake in the Virgin Group for a vast sum, yet he puts a few thousand pounds away every month in a tracker fund investing in the top 800 shares. "I think that as long as people are thinking about investing for five years or more, statistically, over the last 80 years, that's proven to be the best way of investing in shares. The great advantage of tracker funds is that you haven't got expenses, they attract only very low charges." He also takes his maximum Isa each year. He operates a Virgin One bank account and his mortgage is financed that way. "It makes economical sense to me to have a mortgage. I don't have a specially arranged discount, only because it might be embarrassing to have a special rate." Owning up to just one extravagance ... and (at a push) one mistakeMistakes: At a push he'll point to his airship and ballooning company never having made a profit, although it still runs today. He realises that the real reason he set it up is because of his passion for balloons, but he doesn't regret it. Failure: His ambition to knock Coca-Cola into number 2 position in the soft drinks market. There's still a long way to go on that. Lottery: He doesn't play it (of course not - he wouldn't want to contribute to Camelot's profits). But if he won £1m through any other route, he'd give it all to charity. "I think I would have no choice - it would be expected of me." Extravagance: Necker Island, no question. "It's our escape and if everything else had to go, it would be the one thing I'd keep." Tipping: He tips based on performance. "I certainly tip larger if I feel that people have done their work with a smile. But I don't splash out because I think that's embarrassing." Art: He'll have things on the walls, but they won't be enormously expensive. "Watercolours at a reasonable price - maybe a painting of the area I happen to live in. So that it has a reason for being there, rather than something that is just a particularly famous artist." Clothes: Voted the world's worst-dressed man, he doesn't spend much on clothes, he just puts his hand in the cupboard to "grab whatever I've got." Retirement: He doesn't want to, and won't tell us his exit plan. But it's unlikely that he'll pass his business on to his children because they are pursuing their own careers. So he's going to have to sell out at some stage...
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