Bill Gates Ensured Microsoft's Future By Staying Frugal — He Still Maintains A Year's Worth Of Payroll In The Bank To Stay Liquid

When it comes to the world's richest people, Microsoft founder Bill Gates is often found near the top of that list, and he achieved that by doing one simple thing: staying frugal. Here's how Gates ensured Microsoft's successful future and his own financial success. 

Bill Gates, also known as William Henry Gates III, is a striking example of how frugality can lead to immense wealth. As one of the world's richest individuals and co-founder of the powerhouse software company Microsoft, Gates’ net worth in 2024 is a staggering $128 billion, currently placing him in 7th position on Forbes’ list. 

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Right from the beginning, when Gates and Paul Allen signed that fateful Altair deal in 1975, Microsoft experienced a successful trajectory that continues to this day. Statista revealed that in the second financial quarter of 2024, the software company brought in over $62 billion in revenue and boasts over 1.2 billion users globally. This success comes with hard work and careful financial management. 

As a billionaire, Gates endeavors to be as financially conservative as possible and practices frugal living. Gates has adhered to this principle for years, and during an interview back in 1998, Gates said, "I wanted to have enough money in the bank to pay a year's worth of payroll, even if we didn't get any payments coming in, and I'm true to that almost the whole time." Gates has now established an emergency fund for Microsoft to ensure the company's financial stability during challenging times. For example, Gates revealed that one of his significant financial regrets for the company was missing out on competing with Apple after the release of the first iPhone, however, Gates learned from this mistake. 

During an appearance on the Ellen DeGeneres Show, Gates elaborated on this emergency fund and how he built it. He told the host, "I always had to be careful that we wouldn't hire too many people," and added, "I was always worried because people who worked for me were older than me and had kids, and I always thought, What if we don't get paid? Will I be able to meet the payroll?" 


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Gates's frugality extends beyond his business practices and into his personal life. One of his habits involves avoiding spending money on expensive clothing and spending money cautiously. According to reports, Gates purchased his Porsche automobile only after he knew Microsoft was successful. For Gates, being frugal doesn't just mean hoarding your money, but using it for the betterment of others, much like Dave Ramsey's philosophy of serving others. His Bill & Melinda Gates Foundation, which has donated billions of dollars, is a testament to this. 

In addition to being frugal, Gates has other surprisingly simple habits that have helped him build a successful company and gain wealth. One of the habits Gates makes sure he carries out daily is reading. Gates reveals that he is constantly reading and aims to read at least 50 books per year by reading at least one hour per day, often including headlines from The Economist and The Wall Street Journal. According to reports, Gates has a massive library of 2,100 square feet. Another habit that Gate follows is following a routine and avoiding procrastinating. 

Gates enjoys schedules and routines so much that his day is organized into five-minute intervals with fixed slots.He does this to avoid getting stuck on a task for too long, to avoid distractions, and to ensure that he does not procrastinate. The final habit that Gates believes in is giving credit where credit is due, and in the world of business, this is a refreshing change. 

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