Given the bull market has exacerbated the wealth gap, practicing stealth wealth is a strategically wise move. You don’t want to attract haters just because you decided to diligently save and invest all these years. Instead, you want to blend into the crowd so you can live a carefree life.
The global pandemic has also exacerbated the wealth gap. One the one end is the investor class who has experienced robust asset price appreciation. On the other end is the working class without much investments at all. They’ve been hit hard by pandemic with big unemployment.
What I’ve come to also realize is that it’s important to practice Stealth Action as well. Stealth Action is where you keep what you’re doing private so as to not attract any attention, criticism, and unnecessary stress.
I’m in a funny situation where I publicly write about some things I want to do. As a result, I get a lot of criticism from people who either don’t believe what I’m doing is right or know they probably should be doing what I’m doing, but are unwilling.
But in real life, I always keep mum about my plans. The only person I share everything with is my best friend, my wife.
Let me share with you four examples that demonstrate why Stealth Action is important.
Figuring Out How To Retire By 45 With Two Kids
I write in my Early Retirement Master Plan that I will get up by 5 am every morning to do a couple hours of work online before my family wakes up. I also say that I plan to dedicate 10 more hours a week on Financial Samurai (30-35 total) in order to try and generate more revenue.
Since 1999, I’ve always been an early riser because I had to get into the office by 5:30 am before the stock market opened. As a result, I’ve been conditioned to wake up early. I automatically wake up after six hours of sleep without an alarm. I also like to take 30 – 60 minute naps after lunch every day.
Because I don’t have anybody to report to, it’s sometimes easy to slack off and go to bed later than I should and not get things done in the early morning. Hence, my new goal of waking up by 5 am requires me to regularly go to bed by 11 pm.
Here’s an interesting comment from a reader,
I love how you optimize everything by taking calculated risks and reap the rewards. I was wondering if you could write an article on how you determined 5 hours is the optimal amount of sleep? You certainly get ahead now, but may have to pay in the form of Alzheimer’s years earlier than an 8 hour a night sleeper. How do you calculate tradeoffs between wealth and health?
And another reader,
There is a 2016 study of older women in which people that get self-reported less than 6 or more than 8 hours a night for many years had a significantly higher risk of Alzheimer’s. But forcing yourself to stay in bed awake does not make sense either. Perhaps avoid the nap and you may end up sleeping longer at night.
Holy crap! I’m going to die a miserable death! I asked the readers how many hours of sleep do they average a night. Of course, both said 8 or more hours.
I then asked both readers to get back to me with the exact percentage of increased risk for Alzheimer’s risk for those sleeping less than eight hours, but so far, I’ve gotten no responses.
Are we talking about an increase from 1% to 1.5%? Or are we talking about an increase from 1% for those who sleep 8+ hours a night to 80% for those who sleep less than 8 hours a night? There is a big difference. Be careful talking in absolute terms.
Despite naturally waking up after six hours of sleep for years, I now have a new Alzheimer’s worry because I didn’t practice Stealth Action. I’ve tried to sleep longer, but I just can’t. Maybe being in good shape and having no gray hairs at 42 doesn’t really mean anything due to my sleeping habits.
Stealth Action And Sleep
Then I recalled this chart below that shows the average sleep duration by percent for the population in America. Apparently, roughly 3.5 percent of the American population only naturally sleeps around six hours a night. Perhaps I’m part of this minority group? Maybe I have a rare gene mutation, ADBR1, which is linked to with heightened wakefulness and less sleep necessary. Who knows.
It doesn’t make sense to say that just because you sleep 8 hours a night must mean that someone else should also sleep 8 hours a night. Could it be that stating my goal of waking up by 5 am has made some readers feel bad for sleeping in? Possibly, which is why I would never say this goal to anybody in real life. Instead, I’d tell them that I have a hard time getting up and am always sleeping in until 9 am.
Point: If you do something different than the norm, some people will point out where you’re wrong or try and make you feel bad about your efforts. Take Stealth Action to avoid unnecessary stress.
In the post, Determining How Much To Save In Your 529 Plan, I write that my goal is to save $500,000 per child. It is very obvious to me that in 16-18 years, four years of undergraduate education will be much higher than it is today.
If I end up accumulating more due to investment gains, no big deal. I’ll just pass down the surplus to hopefully my grandchildren. I also don’t plan to tell my kids that I’m saving $500,000 each for their education. As far as they’ll be concerned, they’re going to have to work summers and part-time jobs to earn some money to help pay for their tuition. Further, I’m going to try and convince them to go to a reputable public school or only go to a private university if they can get scholarships.
Here are a couple responses to my plan.
Reader #1, a measured response:
I think you save too much for the 529. I saved about $100k (including gains) for each of my children and one is 1st-year college and the other is 4th-year college. They both go to UCs and the graduating one still has $50k left.
The first year has a little bit of merit scholarship (5k year or something like that) so he will have lots leftover as well. Not really worried because we can use the surplus in case they want to go to grad school.
It doesn’t seem like reader #1 realizes my kids are 0 and 2.8 years old and that college will be more expensive 16-18 years from now.
Reader #2 with a much more aggressive response:
You are over-saving, I 100% agree with reader #1. Your other posts also show your over-investment attitude to your kids. You don’t leave them a chance to do it themselves at all.
Let them attend public school, let them shoot for scholarships and teach them that you will fund no more than 30% of their college costs – for other 70% if they don’t even have scholarship – they can 1. start saving themselves when they are 10+ (and you can help with that!) and 2. work in summers and earn their way up (you can help with that too). Teach them how to live!
By helping them in a way you are trying to help – you are putting them in a golden cage, and that is a “no brainer” how to spoil your kids.
Are you really trying to hyper-compensate for what you had in your own childhood?
I’m not sure what reader #2 means by hyper-compensate for what I had in my own childhood. I went to a private international school for middle school, then to a public high school and finally, to a public university. I had a pretty interesting experience growing up in multiple countries. Further, I’m not telling my kids how much I’m saving for their education.
It feels like me saving $500,000 per child has offended reader #2 in some way because he isn’t saving as much for his child’s education. I’m not even sure if he has children. But reader #2 probably doesn’t like me because of my savings plan.
If reader #2 was a colleague, boss, fellow parent at school, or someone in my social circles, this could cause unnecessary friction. Therefore, if you plan to save for your child’s education, absolutely don’t tell anyone. Instead, just commiserate how expensive tuition is nowadays and how you’re praying your child goes to community college or can get a scholarship.
To me, it makes more sense to save too much than to save too little.
Point: You never know what type of innocuous activity you do that might offend or make someone uncomfortable if they find out. Even though your activity has no bearing on the other person’s life, it may still evoke a negative response. That negative response can fester and ruin your relationships in real life. Take Stealth Action and practice Stealth Wealth!
Caring For A Sick Family
Being sick is terrible, especially if you have to not only provide for your family but also take care of a sick baby. Despite all our hand washing and face mask-wearing, our baby still caught the virus that our son gave to us.
As a result of her illness, she’s constantly waking herself up because of a chronic cough. Her crying more and sleeping less hurts our sleep and we feel terrible for her. Poor little one. But instead of letting this virus defeat me, I wrote a post called, The Worst Thing About Daycare And Preschool Is Not The Cost. Always make lemonade out of lemons!
Here was a reader’s response:
Just wait until you get Hand Foot Mouth Disease… Or pinkeye. This is turning into a parenting blog. I only want to read things that make me money.
This is a depressing comment because it reminds me that the average person doesn’t really care. They have their own problems to deal with. If you don’t provide value, they’ll just move on to something else.
The reader’s comment is also a reminder that I really do need to focus more on money-making topics and less on personal topics. The best finance sites in the world don’t have any personality. Take a look at some of the latest titles from several award-winning personal finance blogs:
Best VA Loan Lenders 2020
Survey Junkie Review: A Legit Online Survey Website?
7 Best 0% APR Credit Cards For 2020
PNC Bank Checking Account Review
Citizens Bank Promotions
Vaulted Review: Simple Way To Buy Physical Gold
Although these posts might not be interesting, it makes the blogger money and doesn’t attract any criticism because none of the articles have any comments. This is a win-win!
Point: Most people don’t care about your problems, even if you’re trying to help because they have enough of their own problems to deal with. For some reason, some people always believe you owe them something as well. As a result, make sure you take care of yourself and your family first. The world is a competitive and cruel place with little loyalty. As Marshawn Lynch said after losing in the NFL playoffs, “Take care of your chicken!”
Business Strategy Requires Stealth Action
Let me share a final example of why practicing Stealth Action is important.
In mid-2019, after I announced that I would focus more on entrepreneurship and less on retirement, I wanted to gain some motivation and insights from people who were very focused on making money online.
One episode highlighted how two guys had built a one million visitors a month site with over $200,000 a month in revenue (not profits) in just three years. I was very impressed and also surprised that they were revealing all their business strategies.
The two partners ended the episode saying their plan was to aggressively grow the number of visitors and revenue in 12 months. But check out what happened to their traffic six months later.
They went from a peak of 1 million visitors a month in May 2019 to 341K visitors in December 2019. I have never seen such a large and steady descent in traffic before, especially from two partners who seemed to have it all figured out.
I’m confident their traffic and revenue will eventually rebound given the cyclicality of the business and their smarts. But experiencing a 66% decline in traffic so quickly must have been a little jolting, especially since they’ve also got staffers to pay.
The traffic decline doesn’t look like a Google penalty since the slope is pretty steady. Instead, I hypothesize many competitors listened to the episode, copied their strategy, and competed aggressively in their space.
Point: If you are running a business, don’t boast about its success. The world is full of copycats who will arbitrage away your profit margin as soon as you reveal your strategy. Even though being an original will let you stand out from the crowd, it’s much easier to copy than be an original.
Take Stealth Action
The reason why we sometimes don’t practice Stealth Action is due to ego. We have a need to sometimes brag about our accomplishments for affirmation. We also need to tell the world what we’ve done so we can establish some credibility.
The final reason why some of us don’t practice Stealth Action is because we want to share our experiences to try and help others navigate unknown dangers. But unfortunately, this lack of Stealth Action often backfires because people often don’t appreciate advice even if they are the ones venturing over to seek your advice!
The more you publicly announce all your plans to improve your life, the harder it will be to get ahead. It’s much better to keep things on the down-low and surprise people on the upside. Make the change or else suffer the consequences!
For the optimists out there, not all is lost. If you are a self-secure person with a lot of empathy, you still have a great chance to come out ahead. Just be careful not to let others take advantage of your generosity.
Track Your Stealth Wealth
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Note: Please keep the criticisms and observations coming when I do write personal posts. It helps me see blindspots and gives me a lot of motivation. If you are OK with more personal stories, then subscribe to my newsletter. Thanks!