Sandbagging As A Way Of Life To Build Greater Wealth

The other day I made $10 winning a set of tennis at a public park. It was a funny situation because I didn't set out to make money playing tennis. It just happened.

I was hitting with my long-time buddy, Richard, next to a young man and a couple of regulars. We asked them if they'd like to play doubles and mix things up. They said no, and we said no problem. But then one of the regulars said I should test my skills against the young man. I said sure, but the young man again said nah. Then the regular said to the young man, I bet $10 you'll lose to Sam, and then it was game on!

I also wanted in on the action, so the young man agreed to bet $20 total, $10 against each of us. As an ex-high school tennis coach who helped the school win their first Northern California Sectional championship in history, followed by a repeat the following year, I had some experience evaluating talent. And I figured he was a mid-range 4.0-level player, so I figured I had the odds.

Besides, I'm 49 years old with a dad bod and stand at an unimposing 5'10” tall. There was no intimidation whatsoever by me against this young buck. That said, I did play at a USTA 5.0 level for four years.

Ultimately, he lost 0-6 as he couldn't handle my consistency and accuracy. Sweet! With an audience, I was $10 richer. There was only one problem. He had no cash and he wanted to weasel out of the bet. All good. Venmo it was.

The Importance Of Sandbagging To Build Greater Wealth

Sandbagging is a tried and true strategy for winning in any sport or activity. The classic example some people think about is cleaning up on the pool table for money. But people don't sandbag enough due to one thing: ego.

We have a natural tendency to think we are better than we are. This belief is why I receive comments all the time on Financial Samurai where someone says something like, “everybody is suffering, the economy is in dire straits, but I'm doing fine.” Well, if everybody says everybody else is suffering, are we not everybody else?

Therefore, the key to sandbagging is to deflate your ego and put your pride aside. Because remember, you ultimately want to focus on the results, not the recognition or the accolades.

Let me share some real-life examples of ways you can sandbag in order to get ahead.

Sandbagging At The Office

If you are the hardest working, most competent worker bee in the office, guess what can happen? Your boss and senior colleagues might pile on more work for you to do. Why not give you a pile of work to do at 6 pm? You're working until 7:30 pm anyway. And if you never speak up and vouch for yourself, you may get consistently passed over for a promotion and a raise.

You think meritocracy naturally gets rewarded. But due to corporate politics, it's who you know that's more important in getting ahead than what you do. Therefore, your goal should be to sandbag just enough so that your boss and colleagues don't think they can just walk all over you.

Instead of leaving at 7:30 pm, you leave at 6:30 pm. Instead of responding to e-mails and Slack messages after 9 pm, you respond the next morning at 8 am. It is vital to manage expectations. Many employees successfully did this with the quiet quitting movement during the pandemic. They did just enough not to get fired, and enough to keep getting paid.

Unless you get skilled at selling yourself, or you have no life outside of the office, be careful about outperforming your peers. Your peers might end up resenting you, which will also limit your career.

Sandbagging In Social Settings

Let's say you're a veteran investor who has built a $20+ million portfolio over the past two decades. If you let people know about your investing acumen, you will never be left alone again. In every social setting, the people who know your financial background will ask you for your next hot stock idea or what they should do with their portfolios, when all you want to do is relax and talk about anything else.

Therefore, your goal is to sandbag your investing knowledge and investment portfolio. Instead of talking about how much you've made, do the opposite. Talk specifically about the times you invested in some value trap and lost 40% of your money. Talk about how you bought a vacation property only a year before the global financial crisis instead of the house you bought right at the beginning of COVID.

This way, not only will they leave you alone about prodding for investment advice, they will also take pity on you and maybe even start helping you.

Sandbagging At The Poker Table

Start bragging about your wins at the table and you put a target on your back. Stay quiet, or better yet look a little lost, and the sharks go hunting elsewhere given their egos wants a challenge. Ask what the blinds are for the second time. Fumble the count when you announce a raise.

Then watch what happens. The regulars stop respecting your bets, so they call you down when you actually have it. They start bluffing into you, which is exactly what you want when you're holding the nuts. And nobody ever puts you on a hand only a competent player would hold.

But the version of this that actually costs people money isn't the acting. It's sitting in a game they can't afford because getting up feels like admitting something.

So before you sit, know the net worth and income you should have for each poker stake. Sandbag your stakes, not just your table image. Variance doesn't care how good you are over one night.

Sandbagging Corporate Earnings Guidance

Spend 13 years in equities and you eventually realize that quarterly earnings are not a report card. They are a sandbagging event.

I sat through hundreds of management meetings where the CFO would walk my institutional investor clients through next year's guidance. And the number was always beatable. Guide to 8% revenue growth when the internal plan says 11%, then beat by three points, pop 5% on the print, and look like a genius three quarters in a row.

Guide to 15% because you're proud of your business, then deliver 13%, and you get destroyed. Same company, same growth, same everything. The only difference is the expectation you set six months earlier.

The market does not pay for performance. It pays for performance relative to expectations. Once you internalize this, you realize you should be running your own life the same way. Set the bar where you can clear it, then clear it.

Sandbagging When Raising Capital To Go Public

We all expect Anthropic, the foundational AI LLM company, to eventually go public. It last raised in May 2026 at a $965 billion valuation, and revenue has since grown rapidly. Therefore, you would logically expect the company to trade for more, if revenue growth continues. There are talks in the media about Anthropic IPOing anywhere between a $1.2 trillion to $2 trillion valuation.

If I was the Managing Director and lead book runner, I would not push Anthropic to raise at a $2 trillion valuation or higher. That would look greedy as public investors were shut out of Anthropic's meteoric rise. Nobody grows up wanting to be exit liquidity for the ultra-wealthy. Besides, the higher the valuation you raise public capital, the higher the hurdle to beat. The last thing the lead bankers want to do is raise capital from thousands of retail investors only to watch the IPO lag or decline post listing.

Therefore, my recommendation would be for Anthropic to go public anywhere between a $1.5 – $1.8 trillion valuation, not $2 trillion as widely reported by the press. Leave some upside for the rest of us. All the Anthropic employees are already incredibly rich. Raising at a $1.5+ trillion valuation makes little difference if the market cap ultimately rises to a $2 trillion valuation or higher when shares unlock.

Meanwhile, raising at a $2 trillion valuation and watching the shares flatline or go down 10% will deflate employee enthusiasm, disappoint public investors. Of course, if the book runners have sufficient demand for Anthropic stock well above a 2 trillion market capitalization, then that’s a different story.

Sandbagging When Selling A Property

In San Francisco, real estate agents regularly list homes for 10% – 20% below the market to create a bidding war. Listing agents know that real estate is a highly emotional purchase, as prospective buyers like to imagine what their lives could be like in a particular home.

So once two or more people are involved, financial discipline tends to get thrown out the window. On a $3 million house, what's an extra $300,000 over asking when life could be so much better over the next 18 years we raise this little bun in the oven. You want to price your property inside the frenzy zone and let the market take it away, not outside it.

Yet, out of honor or pride, some listing agents and sellers will want to price at market or above market. After all, they think their home is the best in the neighborhood, despite the vinyl bathroom floors and unpermitted office space. As a result, the property lists and goes starfish, as buyers shy away and look for something more interesting. The seller and agent both lose.

Sandbagging As A Husband

Let's say you consistently drop off and pick up your children from school. Then you consistently spend five-to-seven hours on Saturdays and Sundays taking care of your children. Your presence is admirable, and your children appreciate your effort especially. But the one day you decide to go golfing with your buddies from 10 am to 3 pm on a Saturday is when looks of disapproval greet you when you get home.

Meanwhile, the hobby husband, who is obsessed with golf and golfs with his buddies every Saturday or Sunday for years, suddenly looks like a hero for skipping one weekend to be with his family.

Although you may love being a stay at home parent and love spending time with your children during the golden window, you will naturally grow bitter and resentful if your spouse starts questioning your commitment when you occasionally decide to spend more time on yourself. Therefore, it's up to you to force yourself to slack off on parenting once in a while to manage expectations down.

Sandbagging With Your Creativity To Help Others

Publish three times a week for over 17 years for free, and your readers will question your commitment the moment you drop to once a week over the winter holidays. Go most of the year without a sponsor for your newsletter, and some of them will be upset the one time you do, even if the product fits the topic and could actually help them.

So as a creative, occasionally downshift when expectations start climbing too high. Because the people who get upset that you are no longer providing maximum value for free do not work for free themselves. Then return to normal and watch them suddenly appreciate everything you have been doing all along.

Sandbagging Your Health Prognosis

The best doctor tells you that you have three months when she really believes you have six to twelve. Every extra week then becomes a gift instead of a disappointment. You beat the number, you feel like a warrior, and you love your doctor for the rest of your extended life.

Except that is not what happens. In a landmark study of 343 doctors and 468 terminally ill patients, only 20% of survival predictions were accurate. 63% were too optimistic, and doctors overestimated survival by a factor of five. Even better, the longer the doctor had known the patient, the worse the guess got.

Doctors do not sandbag. They anti-sandbag, because delivering bad news is uncomfortable and hope feels like kindness. The cost is that families skip the hospice conversation, skip the last trip to Hawaii, skip updating the revocable living trust, and then get blindsided in three weeks instead of the year they were promised.

Anti-sandbagging feels generous in the moment. It is actually the most expensive thing you can do to somebody you care about.

Sandbagging Your Retirement Assumptions

Which brings us to the way most people anti-sandbag their own money.

The optimist builds his retirement plan on 10% annual returns forever, no layoffs, no divorce, no disability, full Social Security, and a body that holds together until 95. He is not running a plan. He is running a hope with a spreadsheet attached.

The sandbagger assumes 4% real returns, equal to the 4% Rule. He assumes Social Security gets trimmed 25% in the 2030s, while also expecting to live to 100. Then he assumes a 30% drawdown the year he retires, because sequence of returns risk does not care about your feelings. Finally, he saves and invests accordingly.

Look at the asymmetry. If the sandbagger is wrong, he dies with too much money and his kids give him a very nice funeral. If the optimist is wrong, he is greeting shoppers at 78 with bad knees and a broken back.

This is the entire logic behind a conservative safe withdrawal rate. It is institutionalized sandbagging, and it is the single cheapest insurance policy you will ever buy. Set your expected returns low, set your expenses high, and let reality outperform.

It's Easy To Flatten Your Ego If You Want

Sandbagging is easy if you want to protect your time and boost your wealth and chances of success. You simply find someone who is doing far better than you to put yourself in a more humble place.

If you feel you're hot stuff with a $20 million net worth at 50, just look over to your classmate who never went to college and owns 18 auto dealerships with a $100 million net worth. If you think you're the greatest musician on earth, just look to videos of 5-year-old child prodigies who can run circles around you.

There is always someone who is doing better than you. It's whether you choose to recognize this truth to help you keep humble and happy or not.

Remember When You Did Poorly

Whenever my head starts to get too big, I think back to my days in high school where the highest I could get on my SATs was a 1,140 out of 1,600. Then I start thinking about my time attending a public university, partly because I had no chance of getting into a top-tier private one.

Then I think about my perpetual failures: getting rejected by every tech company I applied to in 2012 when I transitioned out of finance, getting rejected by a startup accelerator, getting rejected by all six preschools we applied to until we found a lucky break, and my lack of the four-pack abs I used to have in high school.

After reviewing all the misses, I feel incredibly happy with where I am now because it is so far beyond my expectations as a high school kid who got in trouble with the law senior year.

So I say hooray for sandbagging. If we can keep our ego in check and set our expectations at a realistic low level, I dare say we will be happier because of it.

Readers, what are some things you like to sandbag on? Have you ever set expectations so high at work, at home, or with your portfolio that clearing them became impossible? Is sandbagging just a polite word for being a coward about your own potential?

Set Realistic Expectations And Build Your Fortune

The uncomfortable takeaway from that study is that the warning shot you are counting on may never come. If your doctor is going to be optimistic by a factor of five, the paperwork has to be done long before anybody says the word prognosis.

I bought a 20-year term life policy through Policygenius when my son was born, and the whole thing took a couple of weeks of mild annoyance. Compare quotes from multiple carriers in one place and be done with it, because the version of you who needs the policy is not going to be in a position to shop for one.

To get my posts in your inbox as soon as they are published, join 60,000+ others and subscribe to the Financial Samurai newsletter. You can also get new post notifications, ad-free for the first few hours here. Everything I write comes from firsthand experience since 2009, because money is too important to be left up to pontification.