I’m a proponent of stealth wealth. It makes for a more peaceful life with lower expectations and less scrutiny. The last thing you want to do is show off and put you and your family in danger.
Stealth wealth is also the natural endgame of following FIRE principles for decades. If you keep living well below your means, which is required to retire early, your investments will eventually compound faster than you can spend. At some point, your passive investment income and returns will surpass your living expenses.
So by default, every long-term FIRE practitioner eventually becomes a stealth wealth practitioner. Whether they mean to or not.
The Three Easiest Ways To Practice Stealth Wealth
In private, you can do whatever you want. But in public, staying low-key is better.
1) Dress simply. No designer brands or fancy outfits. Clean, comfortable clothes are all you need. Think jeans, t-shirt, warm jacket, sweater, sneakers, baseball hat.
2) Drive an old car. Driving a new car is stressful and can attract unwanted attention. If you insist on a luxury brand, try to keep it for at least 10 years.
3) Stay quiet about your spending on social media. Don't post vacation photos or the nice things you buy. If a tree falls in Hawaii and nobody sees it on Instagram, did the vacation still happen? Yes, and it was more relaxing.
Do these three things and you’ll join the Stealth Wealth club, a group of operators who move in and out of the shadows unnoticed.
Once you’re in, you’ll realize there are far more members than you think. That realization is oddly bullish. A lot more people are doing better than the media or politicians would have you believe. They’re just not wearing it.
But I wasn’t always this way.
Loud Wealth Back In Middle School
In 8th grade in Kuala Lumpur, Malaysia, I wanted two things: to be cool and to have girlfriends.
My parents drove a 1976 Datsun with missing hubcaps. Getting dropped off in that car was social agony. So I had to find status elsewhere.
At the time, there were two ways to increase your coolness as a teenager: be a good skateboarder or dress in designer clothes. I chose both.
I still remember forking over 160 ringgit, about $64 back then (roughly $150 today), for a used pair of Armani Exchange jeans. 30-inch waist, 30-inch cut length, bronze eagle triangle on the back pocket. That was an absurd amount of money for a 13-year-old to spend on pants. But all the cool rich kids had them, so I had to have them too.
Then came the equally expensive Doc Martens. Then a Guess shirt. Looking back, nearly all my work and allowance money went to clothes and shoes.
And you know what? I enjoyed it. It made me feel good, and I was part of the cool crowd with plenty of friends.
Today, I couldn’t give two shitake mushrooms about designer labels. I want comfortable, practical clothes with zipper pockets so I don’t lose my wallet, phone, and keys. I cut my own hair to save time and money, and I usually cover it with a frayed baseball cap anyway.
So what happened between Armani jeans and black running pants?
I stopped needing respect from strangers.
Materialism Is The Logical Pursuit Of Respect
I’m writing this post because of a clip from author Min Jin Lee explaining why some people with little money spend lavishly on material things. As personal finance enthusiasts, we shake our heads at such lavish spending. Don’t they want to eventually be financially free? But we’re missing something important.
Her point: when you grow up in a poor community, respect matters enormously. It becomes a kind of currency. And when you don’t have much else, you tend to overvalue it. So you buy the nicer clothes, shoes, watches, and cars, hoping they command respect, even if it means carrying credit card debt.
This resonated with me. Respect, especially for elders, is a big part of my culture. When people disrespect me online or in real life, it can be infuriating. In my younger years, I’d go after them to defend my honor.
When you think about it this way, materialism isn’t irrational. It’s a logical strategy for buying respect when you don’t have other ways to earn it. With this understanding, I'm going to try and be extra respectful to everybody I interact with from now on.
At 13, I spent a fortune on Armani jeans to earn respect from my skater friends and the girls I liked. When I started working in finance, I dressed to earn respect from my peers and bosses.
Then I left finance in 2012. Overnight, the nice clothes went untouched. I no longer needed respect from anyone outside my home.
Funny enough, they're all still hanging in my closet 14 years later in pristine condition.
The Desire For Respect Never Disappears, It Just Narrows
Today, the only people I want respect from are my wife and children. Having respect from my parents and sister would be nice too, but we don’t see each other day-to-day so it’s no big deal if not. As any parent and provider knows, taking care of a family is hard work.
As a result, on our family trip to Las Vegas, I confess that a part of me felt disrespected when my wife gave me a bothersome look when I asked her to take a few more profile photos of me at Redrocks.
In that moment, my brain immediately pulled up the receipts. I agreed to this $7,000 trip despite being in a liquidity crunch. I went to bed at 2 am and still woke up by 6 am to get everyone breakfast. What’s the big deal?
Yes, I realize feeling disrespected in that moment might sound ridiculous. But that’s the point. A man wants to feel respected by his wife and children he provides for.
Reaching financial independence doesn’t eliminate the desire for respect. It just shrinks the circle of people whose respect you care about. The flip side is that when you don’t get respect from the few people who matter most, it stings far more than any stranger’s opinion ever could.
If You’re Still Buying Lots Of Fancy Stuff
It’s worth doing an honest self-assessment of your spending on material things.
Maybe you genuinely love watches, cars, clothes, shoes, jewelry, or handbags. That’s fine, as long as you can comfortably pay cash and never carry a revolving credit card balance.
But if you’re buying expensive things you don’t even use or love, you may still be chasing status to earn respect. Maybe the midlife sports car is compensating for something. Maybe the designer wardrobe is a response to someone who once made an unkind comment about your body. Or maybe the nonstop social media highlight reel is an attempt to prove the middle school bullies wrong.
Whatever the reason, it’s worth exploring. Because the people you’re trying to impress are probably too busy trying to impress someone else.
For many of us in the FIRE community, the desire for stuff fades over time because the need for outside respect fades too. Once you’re living the life you want and own the things you need, strangers have nothing left to grant you. Nobody can hand you a better life than the one you’ve already built.
That’s the real luxury of stealth wealth. Not hiding your money, but no longer needing an audience for it.
Readers, did you go through a loud wealth phase when you were younger? What was your version of the Armani jeans? Do you think materialism is really about respect, or is something else going on? And now that you’re older, whose respect do you still care about, and how do you feel when you don’t get it?
Track Your Wealth Quietly With Empower
Stealth wealth means nobody else needs to know your net worth. But you should.
I’ve used Empower’s free financial tools since 2012 to track my net worth, cash flow, and investment fees. And if you link over $100,000 in investable assets, you can get a free consultation with an Empower financial professional to review your portfolio and retirement plan. Sign up here for a free consult.
People spend thousands on designer clothes to impress strangers. A free expert review of your finances is a far better flex, even if nobody sees it.
Sign up for Empower here. Empower is an affiliate partner of Financial Samurai.
