Practicing Stealth Wealth is the act of keeping your overall wealth a secret. It helps with keeping haters at bay and your family safe. For your well-being, it's much better to blend in with the majority than stick out when it comes to your finances.
When it comes to money, people have all sorts of ideas. Think about this situation. The security detail for Elon Musk's seven children must be extraordinary.
Given Elon has a ~$300 billion net worth, his family may be constantly at risk. Luckily, Elon could easily pay a ransom in the tens or hundreds of millions of dollars, which ironically makes his family even more of a target.
Not sticking too far out of the crowd is wise. However, is it equally wise to be stealthy with your donations? To appease his haters, he could announce a $10 billion donation to helping eliminate poverty where he lives. If so, how can you still hate someone after giving that much?
Even so, let's discuss why we should still probably keep our donations a secret.
The Pros Of Keeping Your Donations A Secret
By keeping your donations private, you stay consistent with the Stealth Wealth mantra. For many, donating is a luxury. If you suddenly announce you've donated $20,000 to optogenetics research, you instantly become a target.
People will start pontificating, if you have that much money to donate to optogenetics research, then surely you must have a massive net worth since there are so many other important causes. Why not donate $20,000 to your local church that feeds hundreds of homeless?
But what percentage of your income or net worth you donate to charity is really anybody's guess. You may have a legally blind son whose main hope for improved vision is through optogenetics. Therefore, you might be inclined to donate a large percentage to vision-related organizations.
By keeping your donations a secret, you also won't get judged by people who think you're wasting your money on a cause they deem less important. Emotionally unintelligent people have a difficult time viewing things from another person's point of view. Instead, they think their way is the only reality.
We can't help but judge how other people spend THEIR money.
A classic example is a billionaire donating $100 million to a prestigious university when the university already has a massive endowment, e.g. Yale University has a ~$42 billion endowment. When I hear about these donations I usually think, Well that's a big waste of money! Why the hell would you donate millions to already rich institutions?
Then I stop judging and think rationally. The billionaire has strategically paved the way for his multiple generations to gain admittance to said prestigious university, regardless of their descendant's aptitude. Then, by graduating from the prestigious university, it increases their descendant's chances of getting ahead without directly receiving money. Smart!
Another benefit of keeping your donations a secret is that people won't come out of the woodwork to ask you for money. I once had a friend who played in the NFL tell me he had an entire entourage to support back home. As soon as his career was over, his entourage started going away.
Everybody has a finite amount of capital to give. If people start hitting you up for money, it may alter the way you want to give. It may also start to feel very annoying.
If you attend a fancy private school fundraiser and donate, you will instantly elevate your profile and the number of people who will judge you.
The Cons Of Keeping Your Donations A Secret
Donating your money and time is a private matter. People should feel free to do what they want with their money without judgement. But the funny thing is, people who hardly donate any money or time are often the ones who judge the most!
I get judged all the time about how I spend my money, which is why I'll never reveal my overall budget. See the comments in Living A Middle-Class Lifestyle On $300,000 A Year With A Family. When it comes to sharing any personal money details, it may be better to come across as struggling.
Further, if you start telling the world how much money you donate, I feel like it diminishes why you're giving in the first place. Are you really donating because you believe in the cause? Or are you donating for attention?
It's likely a combination of both. Hopefully you're donating more because you believe in the cause.
It just feels a little icky if you're announcing how much you've donated publicly. Even if your intention is to encourage others to donate with you, it still doesn't feel 100% right. Sometimes, telling others how much you donate makes them feel bad as well. As a result, these people might start resenting you.
But regardless of your donation reasons, donating something is better than donating nothing.
The Main Negative For Keeping Your Donations A Secret
Being viewed as a selfish, greedy bastard is the main reason why you may want to publicize your donations on occasion. This may especially be true if you are not successful in practicing Stealth Wealth.
Some people, no matter how stealthy they are, can't escape the limelight due to the work they do. These types of people include entertainers, professional athletes, politicians, and CEOs.
When Jeff Bezos' wealth was constantly topping the charts, he was viewed as a greedy man for hardly giving any of his wealth away. People were saying he could single-handedly eradicate poverty in Seattle if he wanted to. Nobody needs $1 billion, let alone $100+ billion.
Meanwhile, after his divorce, his ex-wife began publicly giving away billions of dollars. Mackenzie Bezos was the hero, Jeff Bezos was the goat. Or perhaps Mackenzie was the hare and Jeff was the tortoise in terms of donating.
Either way, accumulating so much wealth when there is concurrently so much poverty is disturbing to many. It doesn't matter how many people you employ or how much better you've made the world with your product or service, you will always get hate.
My Selfish, Greedy Bastard Example
A reader once accused me of profiting from my friend's death because I have ads on Financial Samurai. I have had contextual ads on Financial Samurai since 2009 when the site first started.
But what the reader didn't know when he sent me his prickly pear e-mail was that I had already sponsored two charity events for my friend's family for over $1,600.
First, our Softball Meetup group raised money for my friend Wynn's family by increasing the regular participation fee from $7 to $24. Wynn's jersey number was 24, so the organizations thought it was a good gesture to honor our friend. Instead of the two organizers keeping the fees as they normally do, they donated the $528 to Wynn's memorial fund.
The second way we raised money for Wynn's family was by me sponsoring a game with incentives. Here were the incentives I suggested for the first Saturday morning meetup game.
Game Day Incentives
$50: Homerun
$30: Triple
$20: Double
$10: Single
$10: Stolen Base
$10: Throwing out a base stealer
$20: Double play
$30: Triple play
$20: Diving catch in the outfield
I thought the incentives would be a positive way to motivate everyone to do their very best because that is how Wynn played the game each week. It was a difficult and emotionally charged day, especially since his wife and baby came out in the third inning to watch.
In the end, we raised $750 in performance incentives that Saturday game, which I thought was a good outcome. So I decided to sponsor a second game two days later on Monday, September 6. The second game raised $886 for a total of $1,636.
At Wynn's funeral, our Softball Meetup leader gave Wynn's wife a wonderful picture book from all of us with words we each said about our relationship and thoughts about Wynn. Included in the picture book was a check for $3,000 from the group and my $1,636 check from the two sponsored games.
Just Want To Act Well For My Kids
I don't mind being viewed as frugal, stupid, or irrelevant. It's fine if someone doesn't appreciate what I write. Everything is free and you can always click away. But I don't want to be viewed as a greedy and selfish person, which is the only reason why I shared my latest donation with you.
Before I had children, I may have ignored this judgmental person criticizing how I live my life and spend my money. But with young kids who might eventually read what I write, I want to set a good example. It would pain me if my children thought I didn't want to help others.
We plan to host the Wynn Padula Memorial Day tournament every year for as long as possible. After all, raising a baby until adulthood costs a lot of money. Further, we all want to be there for Wynn's daughter when she grows up.
One day, Diana might want to hear more stories about her father. Maybe she will play softball in high school too. If so, many of us will come out to cheer her on!
Therefore, I'm pleased to say I will be sponsoring next year's tournament and donating at least $1,000 to his family. As a reader, feel good knowing you are participating in making this happen. Any revenue generated from this post and others will go to Wynn's family.
Oh, if you are in the SF Bay Area and want to participate or contribute to Wynn's softball tournament, let me know.
If you still want to tell people about your donations, then consider only mentioning your volunteer work. When it comes to donating time, people are more appreciative.
Follow Up Questions About Donating And More
Here is the funniest video I've ever watched about donating money anonymously or publicly. The solution is to donate as Anonymous, then tell people you are Anonymous! Check it out and let me know if you agree.
Related posts to read:
The Average Amount Of Money Donated To Charity Can Improve
Never Tell Anybody How Much You Really Make
Do you think we should keep our donations a secret? In what circumstances do you think it's worthwhile to tell the world you've donated? Why do people judge others for how they spend and donate? For more nuanced personal finance content, sign up for my free weekly newsletter here.
Sam, I think mentioning that you donate is a net positive, even if it runs counter to stealth wealth. By being open with your charitable gifts, you raise awareness and cause self reflection for others, who in turn may donate. If everyone was bragging about their donations versus which celebrity they spotted, the world would be a better place!
This is great advice. At what point did you feel like you were donating more regularly? I am definitely in the “building” phase so candidly I do not donate as much or as often. I tend to think that by saving and building I can give more later.
I also really liked your point re: Billionaires donating to already asset-rich schools is interesting and not so obvious at first thought.
“The billionaire has strategically paved the way for multiple generations to gain admittance to said prestigious university, regardless of their descendant’s aptitude. Then, by graduating from the prestigious university, it increases their descendant’s chances of getting ahead without directly receiving money. Smart!”
Very smart!
Nice post, as always ! I agree that donations can stay anonymous, unless there are specific reasons to disclose them.
Would be curious to read on what’s your view on “stealth wealth” and “social medias”.
Do you think there is dangers in the use of social medias that we should be aware of when posting online. What information can be disclosed and what information should not ?
I think that’s great to remain private. But at the same time, there is so much value in sharing useful information with others, including personal finance information.
Other personalities – like Dave Ramsey or Jim Cramer – talk about finance publicly without hiding and we all know they have a lot of money.
So, what is the difference between regular people and media personalities ? Should we be more careful ? Are we more susceptible to harm than they are ? If you already posted about this subject, let me know, I will be glad to read about it !
Thanks !
Should you donate publicly or anonymously to your child’s private school?
Agreed that a donation is not required but what if you do?
Reason I ask is because sometimes they publish a book each year showing who donated what.
Thanks.
If you live in the state of California and want to remain anonymous in your giving, you can contribute to charitable funds listed at the end of your state tax return. In 2020, there were 19 funds ranging from Calif Wildlife, School Supplies for Homeless Children, Cancer Research, and Suicide Prevention to name a few.
I like to donate this way because:
1) You remain anonymous to charities so they can’t contact you or sell your name — no more solicitations from other similar non-profits, for example.
2) It’s good to help those in your own state.
3) All charities are vetted by state govt so they’re legit.
3) Donations are tax deductible for the next year if you itemize.
It’s a great way to stay anonymous with your giving. Do other states have this type of charitable giving on their tax returns?
Appreciate this post, Sam. I always love when I read about philanthropy in the FIRE blogs I follow. Not a lot of them talk about giving, and it is something that is important to my family.
Sam, some years back you assembled a ‘best of’ e book, with proceeds going to a charity for keeping kids off the street. https://www.financialsamurai.com/the-best-of-financial-samurai-ebook/ You have a good heart.
I mostly agree on keeping donations to yourself but the well known giving book “The Most Good You Can Do” has a chapter on this subject. It argues that when you let others know it encourages more giving. It cited some small studies that supported this. I have not changed my giving ways in this respect though.
On another topic, Musk’s brother owns a small chain of restaurants in my town that for many years collected a “family fund” for workers in dire circumstances. Many employees gave regularly, each paycheck. During the pandemic a number of staff applied for benefits and were denied on the basis of them not currently working there (the places were closed). Now that they are open most of those workers do not want to return and they are having major staffing issues. The story is gaining traction and people are avoiding the places. Musk missed a perfect chance to give……
Nice post and nice way to commemorate your friend Wynn. Agree with keeping donations private and trying our best to blend in.
I don’t think I’ve ever told anyone where I donate. It’s never come up and I haven’t felt a need to share.
So true though on how quick to judge so many people are of how others spend their money.
And hilarious video clip on donations btw. I’ll think of that every time I see “anonymous” now!
Terrific advice and loved the Larry David episode!
I think it is unwise to tell others how much or who you donate to. The exception is your personal circle of trust.
The circumstances most likely are not with telling other. However, never say never. It’s always good to leave options open.
Other people passing judgement on any donations or philanthropy is not worth thinking about. Too many people involve themselves in other peoples lives. Worry about your own house. Don’t pass judgement unless you are intimately involved with all facts.
As for anyone passing judgement on Sam for allegedly earning money off his friends untimely death, that falls into the category of insanity or someone looking to create a little bit of chaos. Best to ignore such people. It is not a constructive conversation. It ain’t worth your time.
Be well, be water
Dunning kruger
It’s the same with people who want to raise taxes the most, but pay the least.
Everybody wants to do some thing. But nobody wants to do anything. If collectively, we all pitched in some thing, everything would be better.