Practice stealth wealth if you know what’s good for you. Showing off how much you make and how much you have is not the way of the Financial Samurai.
Becoming wealthy has never been easier in America. Both stocks and real estate have performed phenomenally well since 2009. However, feeling comfortable as a wealthy person on the other hand, has never been tougher.
The pandemic created a K-shaped recovery where the investor class has widened the wealth gap between the working class.
Tthe investor class crushed it in 2020 and 2021. Both the stock market and housing market boomed, making millions of investors much richer.
Be More Humble During Difficult Times
Then a bear market hit in 2022. Many people with inappropriate asset allocations got crushed. Now there’s a Fed-induced recession and bank runs. This widening wealth gap is why I’m a big proponent of practicing Stealth Wealth.
To be open about your income and wealth gains would be completely foolish when so many people are hurting. Instead, if you are rich, it’s much better to convince people you are middle class. This way, when the revolution comes, you will be spared.
Further, just look at how the government taxes your money. The government taxes you based on income and much less so on wealth. Taxes are likely going up under Joe Biden as well. Therefore, stealth wealth is paramount.
Stealth Wealth To Avoid The Government
Once you make much more than $250,000 a year, you will face an abundance of taxes or tax phaseouts: Medicare tax, AMT, deduction phaseout, credit eliminations, education tax, Net Investment Income tax, etc.
With Joe Biden as president, he has promised to raise taxes on households making over $400,000 a year. Therefore, I argue that in 2023 and beyond, the best income to earn is around $180,000 per individual.
However, you can pass on $12.92 million per person in wealth, tax-free to your heirs in 2023. This sounds like a lot of money, however, you already paid taxes on the $12.92 already. So don’t think the high estate tax threshold is really a great benefit and it’s likely to change.
President Biden has proposed raising the top capital gains tax rate. He might also abolish the stepped-up basis if he has his way. Therefore, the government is clearly targeting the wealthy to try and better distribute some of the wealth.
I can understand targeting centi-millionaires and billionaires. But if you’re a six-figure income-earning household working 60 hours a week, I’m not so sure this won’t cause disdain. You’re already exhausted from working so hard and paying so much taxes, to pay even more sounds impalpable.
You must practice Stealth Wealth to avoid the government’s growing reach.
Stealth Wealth To Avoid Anger And Resentment
If the government doesn’t get you, regular citizens will. Who did you cheat or rob to get to where you are? Take your millions and shove it! Is the common attitude among those who feel left behind. This is a real problem for those who want to make it big in the land of dreams and hand guns.
Freedom is one of America’s greatest attributes. Yet, if you go too far on the income curve you’ll start feeling like a prisoner to society. Hundreds of millions of Americans know what losing freedom is like due to months of shelter-in-place to combat the coronavirus pandemic.
Despite the rich giving more to charity in one year than many others will give in their lifetimes, people will protest their wealth and hate them forever. Despite paying more taxes each year than what the median household makes, the rich person will be demonized for “not paying his or her fair share.”
Class warfare is no fun, even if you do have the financial means to own a bazooka. The last thing you wanna do his face and angry mob full of resentment.
Practice Stealth Wealth To Be Happier And Free
Most readers here are ambitious folks who want to improve their financial health. Thanks to disciplined savings and investing habits, in another 10 years, I’m sure everybody is going to be that much wealthier, if not millionaires.
But once you get to where you are going, you’ll wonder what’s next. Never lose site of the fact that it’s really the journey to financial independence that’s most rewarding.
When society turns their back on you for being successful, just recollect on all your struggles and take a deep breath. Be proud of your accomplishments because you know you’re not just doing it for yourself, but for your family as well.
You don’t have to be ashamed for not being the dumb ass in high school who thought it was cool to skip class every week to smoke weed. You shouldn’t feel bad that you worked summer internships during college while your buddies went off to play. And you should certainly not feel embarrassed by your frugal habits and smart investments once you found a job.
If you’re getting up at 5 am every morning to make extra income before work, good on you! Feel proud of working more than 40 hours a week and not complaining why you can’t get ahead. Alas, stealth wealth is important because the minority won’t put that type of effort into their work.
It’s OK To Be Proud Of Your Achievements
Unfortunately, society has a fantastic way of discrediting your achievements. “Nobody is self made,” and “You didn’t build that,” are my two favorite retorts.
Just try taking yourself completely out of the equation and see where that logic goes when there’s nobody to think, dream, and execute. When you are outnumbered, resistance is futile. You must blend in and rage with the rest of them.
With the below suggestions you’ll be able to better walk amongst the shadows without fear of retribution any longer. Your family will be more guarded from bullies lurking to recondition your children every chance they get.
Once you finish reading this post, never speak of its matters beyond your immediate family and friends again. Going on Twitter or Facebook to boast about your financial accomplishment is really stupid. We’ve got to protect our own little community on the web.
A Guide To Stealth Wealth
As America attempts to reverse capitalism due to widening income inequality, blending in as a middle class citizen has never been more vital. Below are 15 Stealth Wealth recommendations to help you assimilate better in society.
Stealth Wealth Rule #1: Never drive a nice car to work or to any public setting.
Drive the most economical, safe car you know so that when you ultimately run into your co-workers, they’ll think you’re frugal or poor. Take public transportation and proclaim your love for buses and trains profusely. You don’t want to roll into the office in a Benzo and have your boss see you. His or her immediate thought will be to cut your bonus since you are doing so well.
Driving up to an employee salary negotiation meeting in a Bentley isn’t going to work in your favor either. Instead of choosing a new Range Rover Sport and deducting the vehicle as a business expense, consider a more moderate BMW X3 or Jeep Grand Cherokee instead.
When cops huddle for breakfast thinking about which car they want to ticket, do you think they are going for the guy in a 10 year old Toyota Corolla? Cops make $50-$60,000 a year on average and are on a mission to equalize.
Having a regular car is the #1 easiest way to practice Stealth Wealth. Only drive a nice car to an event for everybody else drives a nice car. You must read the room.
Read: The 1/10th Rule For Car Buying Everyone Should Follow
Stealth Wealth Rule #2: Be careful who you give your home address to.
People love to snoop online to see what you paid for your house. Not only will they see what you paid for your house, they’ll also be able to tell whether you’re under water or making huge equity. Instead of giving an exact address, you can give them cross streets and a description of the house. e.g. I’m at the corner of Jackson and Teller. Brown wood shingle house. You can’t miss it.
Inevitably, they will find out your exact address if they pay attention, but delay that information for as long as possible. Your house is your sacred abode. Protect its privacy. I recommend claiming your house online and trying to make the house look as bad as possible. Property tax assessors look online all the time now to try and jack up your taxes.
Your home is now the easiest way to blow your Stealth Wealth cover. Be careful.
Stealth Wealth Rule #3: Don’t flash your bling
Whether it’s your Panerai watch, Birkin bag, Armani suit, or Louboutin shoes, keep them at home if you don’t want people to know you can afford the real thing. People who practice stealth wealth do not flash their bling. Or they may choose to tell someone they’re wearing a fake if asked.
Resist the urge to brag about your material things. You’re already an established individual. The quality things that you buy are for your own pleasure after all. Pretend you don’t know luxury brands or how much things cost. You can just say you like how they look.
Only wear nice things in the appropriate setting. If you’re going to a billionaires mansion party, then fine, flash your jewelry and watches all you want. You’re among other rich people who won’t hate you for what you have. They’ll appreciate your finer taste.
However, read the room. If you are in a low-key environment, you must also stay low key and stealth wealth.
Stealth Wealth Rule #4: Never reveal your full income or wealth.
Without question, never reveal the full extent to how much you make. Only those who are insecure, seek adoration, or want to make money by teaching you how to make money enjoy flaunting their wealth. There’s definitely an inverse correlation with how much wealth you have and how much you show. You’re an invisible tycoon remember?
If you have a particularly high income level and you’re hanging around with people who make a fraction of what you make, be cognizant not to talk about your vacations or things you’ve bought. Be aware that the median national household income is about $75,000. Earning anything more than 2X your state’s median household income will put you under fire.
The people bragging about their income are people with the lowest self-esteem. They clearly do not know the importance of Stealth Wealth.
Stealth Wealth Rule #5: Spread your assets around.
Do not become one of the biggest land owners in your community. Do not become one of the biggest shareholders in a private equity deal unless you really, really believe in it.
Spread your investable assets around so people can’t really tell how much you have. Diversification also ensures that your wealth doesn’t take a beating in case of violent downturns either.
Chopping up your assets and putting them into different LLCs is one of the best ways the rich practice Stealth Wealth.
Read: The Recommended Net Worth Allocation By Age Or Work Experience
Stealth Wealth Rule #6: Get out of your bubble.
Once you know your State’s median household income and average net worth, adjust your outlook accordingly. Not everybody had nurturing parents, attended great schools, worked hard, got a lucky break etc. Some people are born into poverty, and it’s damn hard to get out because of negative influences all around. Believe that people truly want to do better.
When you start visiting other communities, you realize that despite all your hard work, you are probably luckier than most. The better understanding you have of others, the less chance you’ll come across as an arrogant snob and the better you can assimilate. Take every chance you get to travel internationally and live abroad.
Just know that if you are signaling to the public about your averageness, make sure you signal consistently. Here is a Stealth Wealth case study on what not to do to blend in. The Tweeter made herself appear middle-class, when she was anything but.
Stealth Wealth Rule #7: Pretend you do not understand.
You might be a brilliant person, but brilliant people are intimidating. Instead, pretend you don’t fully understand what another is saying by asking questions. Don’t think you’re better than others just because you see solutions easily. Guard your intelligence like you guard your full income and wealth.
It’s better to start your intelligence at a low level and dial it up if the occasion requires. Some of the smartest people I know have this eery look about them that screams stone cold aloofness. You know they are already thinking multi-variably, but from the outside it seems like they are a dull brick wall.
The expert Stealth Wealth practitioner has a high enough Emotional Quotient to understand that imposing one’s intelligence on someone else is not the right move.
Read: Are You Smart Enough To Act Dumb Enough To Get Ahead?
Stealth Wealth Rule #8: Praise others for their success.
Always be encouraging and positive of other people’s milestones. People who are insecure tend to be the ones who want to toot their horn the most.
You know the types who constantly post pictures of themselves online, name drop who they hung out with the other day, or constantly share how great they are. Once in a while is absolutely fine. All the time just cries for desperation and attention.
Try really hard to bite your tongue and not “one-up” someone else despite any successes you have. Give glory to them. Be happy for others and never belittle their achievements.
A Stealth Wealth practitioner knows there’s enough praise to go around for everyone. Praise other people, and attribute your success mostly to luck.
Stealth Wealth Rule #9: Volunteer to be on various charitable boards.
Although charitable boards are a breeding ground for some of the wealthiest people, it’s hard to get attacked if your name is prominently on the brochure for good. Your role as a charity board member is mainly to fundraise since it is assumed you are relatively well-connected.
Rich people attract other rich people, who enjoy rallying around a cause. The more money you can raise for the charity, the less bad things other people will have to say about your wealth.
Just be aware that usually only very wealthy people have time and the connections to land a board position at a charity. And when it comes to your charitable givings, stay consistent and keep those donations a secret as well.
Stealth Wealth Rule #10: Always stay humble.
Consistently mention your failures. Sooner or later, people will figure out you are not as poor as you make yourself out to look. When they do, they will realize how humble and unassuming you were all those times they were talking about their wealth and their achievements.
You know those movies where a girl falls in love with an ordinary guy she meets at a park, but he turns out to be a prince instead? You want to be that guy. They’ll love you even more and you may even affect their financial lives in a positive way.
Since 2012, when I retired from finance, I’ve been internet retirement policed for not being truly retired. One year, I decided to share with people that I got a job as a high school tennis coach making $1,000 a month.
The IRP on Twitter went into an uproar and attacked me because Financial Samurai is a relatively large site that earns money. However, if Financial Samurai was a small site, nobody would say anything.
Instead of denying the Internet Retirement Police’s claims, I accept them. I give in. I can’t help that I love to write and connect with other like-minded folks on the internet. It’s one of my biggest joys in retirement.
By writing, Why I Failed At Early Retirement: A Love Story, I’m no longer harassed by the IRP. And you know what? It feels quite liberating. The IRP have moved on to harass other people to work out their own issues.
Stealth Wealth Rule #11: Donate to both parties or donate nothing at all.
If you donate aggressively to one party, you run the risk of being ostracized if another party comes into power. Think about all the senior government officials and big backers who were loyal to Obama when Trump assumed power. Their careers instantly got shut down.
Now think about all the loyal backers of Trump once Biden became president. All of Trump’s backers will be run out of town as well.
The solution is to donate to both parties equally and sing their causes for a greater America. Once you identify yourself as an American rather than as a Republican or a Democrat, it’s easier to justify being a patriot.
For a real-time case study, Sam Bankman-Fried donated $40 million each to Democratic and Republican politicians. He also donated to many media organizations. As a result, he still roams free and gets invited to speak at The New York Times and other institutions, despite misappropriating client funds.
The collapse of FTX has lost its clients ~$10 billion. But if you donate aggressively to powerful people and institutions, you can be more stealth and last longer than you should.
Stealth Wealth Rule #12: Set up trusts for your children and charities.
One of the great ways to hide and protect your wealth is by setting up revocable living trusts. You don’t want your heirs to go through a public and potentially messy probate court to fight for what they think they should get.
Trusts are all about leaving a legacy you desire without other people getting up in your business. Just be careful not to leave your kids too much, or else they might become spoiled brats with no purpose in life!
I also recommend putting businesses you own under someone else’s name (a proxy, usually a lawyer) or under the shelter of a trust. Keep the inquisitive eyes guessing and even play along if they start getting very aggressive. A trust within a trust, just like a dream within a dream.
Stealth Wealth Rule #13: Stop smiling so much and acting all happy.
One of the biggest annoyances is being around someone who is always so happy when you are not. The happy person usually lifts your spirits up. Smiling is the #1 thing you can do to improve your chances of being liked.
But if you are always happy, some people start thinking what’s wrong with you. And more importantly, your constant happiness might make other people feel bad for not feeling as happy. People are much more empathetic to people who are feeling down and out. Misery loves company!
Instead of always being happy, develop a poker face in your daily life and practice your frump. Since money can’t buy happiness after ~$200k per person and $300,000 per household, society will be thrilled if you are worth multi-millions and sad.
Of course, if you are amongst happy people, smile and be happy as much as you want! The Stealth Wealth practitioner is highly aware of his or her surroundings. Ideally, you learn how to smile internally.
Stealth Wealth Rule #14: Understand pop culture and sports.
The more you can connect with someone, the less they will hate you. Americans spend six hours a day on average watching TV instead of producing. If you don’t have six hours a day to waste, read the online synopsis of The Game Of Thrones, Keeping Up With the Kardashians, Strangers Things and more.
Make sure you know who are the top four contenders in the NFL and NBA. The more sports and pop culture you know, the more you are able to assimilate. The greatest thing I like about sports is that it breaks down all race, cultural, and economic barriers. It’s what you do on the field that counts.
Now that tens of millions of people are sheltering in place forever, you should also become familiar with all the top shows on Netflix, Hulu, Amazon Prime, and HBO Now.
Stealth Wealth Rule #15: Always attribute your success to luck.
Eventually, people might catch on that you are wealthier than you make it seem to be. When they confront you, it is vital you attribute your success to lucky breaks. Once you do, there’s nothing more than can say because you’ve already acknowledged your skills and hard work didn’t get to where you are.
Take the confrontation a step further and buy them a drink or a meal to share your luck. You will instantly gain an ally if you do.
I truly do believe anybody with a significant amount more wealth than average is lucky. Therefore, if you are wealthy and start claiming it was mostly your skill and hard work that got there, you will instantly make enemies. Accept that your wealth is mostly due to luck.
The Benefits Of Stealth Wealth
Here are some of the key benefits to stealth wealth.
1) Truer relationships.
When you’re powerful or wealthy, you’re never quite sure whether a person showing interest likes you for who you are or for the benefits they think you may provide them.
When it comes to romance, we’ve learned from a previous post one should look out for one’s mannerisms to unveil stealth wealth. A good life is all about genuine relationships that are not soiled by the taint of money.
2) Less people come out of the woodwork to bother you for money.
As soon as your old acquaintances and relatives find out you have money, you’ll inevitably get e-mails and phone calls from people who are looking for financial assistance. You might even get a call from your baby mama or baby papa to discover a child you never knew you had!
3) Lower expectations for you to always pay.
There’s a tendency to push the group bill on the wealthiest person in some cultures or circles. You may very well be the wealthiest person at the table, but it starts getting incredibly annoying when people who are not starving are always asking you to pick up the bill.
The same lower expectations go for when it comes time to donate to charity. People should pay or donate out of the goodness of their hearts, not because they are simply wealthier than others.
Remember this equation: Happiness = Expectations – Reality. If people are always expecting great things from you because you’re rich, you might close up and experience a trough of sorrow.
4) Lower chance you will look like a cheapskate.
People who don’t have as much money enjoy highlighting what a cheapskate some rich person is for not tipping more than he should. If you don’t practice stealth wealth, people will judge you for the things you buy.
A large reason why people are wealthy is because of the financial discipline they’ve practiced all those years while working. They saved and invested aggressively, eschewing the trappings of wealth.
Wealthy people tend to save more and invest more of their money. Less wealthy people tend to take their extravagant spending habits and extrapolate them if they had X amount more money.
5) Less likely you will get ripped off.
If you are a foreigner landing in Mumbai, the taxi driver will easily try to charge you double because what’s an extra 200 rupees to you? You’ve got to spend your time haggling for the standard downtown fare for all passengers.
Highway patrol officers tend to target fancy cars over beaters because they know fancy cars tend to move faster and there’s less guilt associated with giving a wealthy person a $250 ticket.
Sales people are trained to look out for wealthy customers. They’ll see what type of watch you’re wearing, what type of car you drive, what type of handbag you hold, and what type of shoes you wear all to size you up and see how much they can extract within an acceptable range.
6) Less likely to get kidnapped or mugged.
No kidnapper is going to bother kidnapping a person from the slums. They are going to go after some rich doctor’s son playing in the park after school one day.
Muggers are wise to drive five minutes further to a wealthier zip code in San Francisco to mug unsuspecting pedestrians. Why mug in the Bronx when you can mug in the Upper East Side?
All one has to do is look up online those people in society magazines, or those who frequently report their outsized incomes to target. Kidnapping and mugging is a high risk business. Might as well get the most bang for your buck!
Related: My Beijing Abduction Saga: Never Risk Your Life For Money
Tip Toe Away From The Spot Light
If you have a substantial amount of wealth be grateful. You might feel ostracized by the world, and hence end up hanging out with only rich people who won’t attack you for being you. However, I encourage you to not lose sight of reality.
Learn to diversify away from those who spend $50,000 a year on private high schools, $2,000 on fund raiser galas, $85,000 on BMWs and $100,000 on fancy country clubs. Hang out with regular public school people.
Flashing your wealth is a sure fire way to get the hammer by not only the IRS, but by your fellow citizens who can’t stand your success.
It is much better to be rich and a nobody than be rich and famous. Trust me on this one folks. Having the freedom to do what you want in public is priceless. If you are not wealthy based on your own definition of wealth, I encourage you to channel your frustrations at the wealthy by improving yourself.
The rich and powerful have a tendency to get more rich and powerful. Their children will likely have a huge head start over the average kid graduating from school.
We’ve just got to try harder to get ahead by studying more, coming in earlier, leaving later, taking more risks, and being steadfast in our resolve of never giving up until we find success. Practice Stealth Wealth!
Related: The Stealth Wealth Compendium Of Useful Phrases to deflect attention.
Invest In Real Estate For Financial Independence
Every stealth wealth practitioner I know invests in real estate. Real estate is a tangible asset that is less volatile, provides utility, and generates income. The combination of asset price appreciation and rental price growth is a power combination to create stealth wealth.
In 2016, I started diversifying into heartland real estate to take advantage of lower valuations and higher cap rates. I did so by investing $810,000 with real estate crowdfunding platforms. With interest rates down, the value of cash flow is up. Further, the pandemic has made working from home more common.
Take a look at my two favorite real estate crowdfunding platforms. Both are free to sign up and explore.
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most people, investing in a diversified eREIT is the way to go.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have a lot more capital, you can build you own diversified real estate portfolio.
Investing in online real estate is one of the easiest ways to stealth invest. Unlike owning physical property, it’s extremely difficult to figure out what real estate stock, ETF, or private syndication deal you invested in.
Stealth Wealth Management Tool
To manage your stealth wealth, try using Empower’s free financial tools. It helps you track your net worth, control your cash flow, and growth your wealth on stealth mode for free.
One of their best features is their Portfolio Fee Analyzer, which runs your investment portfolio(s) through its software in a click of a button to see what you are paying. I found out I was paying $1,700 a year in portfolio fees I had no idea I was hemorrhaging!
Their second amazing tool is their Retirement Wealth Planner. It is the best on the web because it pulls in real data you’ve linked up and runs thousands of algorithms to give you a financial picture of your future. You can run multiple different scenarios with different spending, income, and life events to help anticipate your future.
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I love the stealth wealth concept, ideals, etc!
And being a former resident of Denver and a new resident of San Francisco there’s a lot of stealth wealth going on in these cities (more so in SF, obviously).
I have my stealthy-ness down, I’m a pro…now I need to work on my wealthy-ness!
Reading these posts and comments from fellow readers is always motivating. And tracking every dollar and living by the more frugal rules I’ve set for myself I know I can reach the wealthy state I’m striving for.
Financial Samurai says
Thoughts on SF vs. Denver life? Denver is so laid back I enjoy it. Just gotta get use to the altitude and dryness.
Good luck working on that wealthy-ness!
Fist bump on stealth wealth! Yep, I’m not retired, I’m unemployed. Jeans, sneaks and pocket tee for me…hoodie if it’s cold. BTW, is Left at Albuquerque in San Jose, CA still open? (I have their laminated menu I use as a desk blotter that I picked up when visiting friends in the area.)
Financial Samurai says
Hmmm.. don’t go to San Jo you kno! There was one in SF on Chestnut St. and Steiner, but that shutdown b/c the food sucked. The Brixton has replaced it.
Greedy American says
Have you seen the show American Greed on CNBC? The guys who always get caught are the flashiest of flashy people! They roll around in their Lamborghini’s and throw lavish parties all the time. The one common denominator is that they all went to poor schools and came from lower income backgrounds. All their flash was a way for making up for their poorness and lack of education.
Financial Samurai says
American Greed is a great show! Totally spot on about those scammers who are totally delusional and insecure about their backgrounds.
The College Investor says
Love this post. People show off their possession very often these days especially on social media, they bought the best cars, grand houses, and whatever their money can buy for people to see. And, most often no one wants to be branded as the person who uses fake items, though if you don’t want to be victimize by people who will use your wealth against you then better tone it down just as the article says.
Financial Samurai says
Social media really gets annoying sometimes. I need to shut FB and Twitter down as I know I will get annoying too.
Really thoughtful post! Almost all of these points can be practiced by anyone, and a lower profile can benefit everyone. Things like being mindful of one’s home address, not acting like a baller in public, being self-aware and aware of others by ‘getting out of your bubble’ are also helpful personal security practices. The book ‘Gift of Fear’ is a really helpful primer for those interested in protecting themselves, their family and friends, and their property.
One thought as I read this, S. American money has been practicing ‘stealth wealth’ for decades. Some families have come by their money through criminal and corrupt practices in S. America and recently, former Eastern Bloc nations (as in China, those billionaires didn’t go to prison because they were wealthy, they went because they were corrupt).
As for the growing income disparity in the U.S., the idea of ‘all men created equal’ has been part of the foundation of the country. But the idea of largely equal incomes has only been around for the past 70 years. It can’t be stopped, but government taxation is an attempt to slow it.
Some resources for those interested in the subject: 1) Bill Gross wrote an awesome column on the subject for his November 2013 newsletter, at pimco.com. 2) Robert Reich wrote “The Future of Success” which addresses increases in productivity and where that productivity comes from (hint: not from workers working harder or smarter), 3) ‘Smart Money Decisions’ by Max Bazerman (Harvard Business School) discusses business ethics, and the ‘psychology of money’. Great column FS, once again!
Financial Samurai says
Income inequality can only be stopped if the common man rises up and physically takes away the riches of the wealthy. Wealthy dynasties and power dynasties are hard to stop.
I’m not wealthy but I still follow some of the guidelines you laid out. One of the main reasons is that I’m pretty frugal but in our consumer crazy society frugal means I’m a cheapskate, so I’d prefer people think I just can’t afford the things they buy (which I can afford but wouldn’t buy!). It’s hard to keep income a secret at work as I work in government and it’s pretty easy to figure out how much someone makes based on their position and how many years they’ve been there.
I’ve met quite a few really rich people who seemed very average. Working in Telluride for years, you run across them from time to time. One giveaway is when they list their occupation as investor or retired and they are pretty young. If they have the right personality, I usually ask what they invested in or how they got to retire, and I’ve heard some pretty good answers.
I’m so glad to have found the PF community. You are right that you cannot talk about wealth to 99% of people you see every day. I’ve certainly had some odd exchanges with people when I cut back to part time work. It seems you can only be trusted if you work non-stop and still can’t pay the bills. I can only imagine how it will be when I walk away for good.
Financial Samurai says
Good to know not to put down one’s occupation as retired or investor. Why are they putting down their occupation in the first place? Best occupation to highlight is Unemployed or Consultant.
Brian @ Luke1428 says
It’s becoming increasingly harder in our ever evolving social media world to keep things private. I’m amazed at the information the teens I’m around each day at school think its OK to share publicly. They also buy into these words you used at the beginning of your post…”Who did you cheat or rob to get to where you are?” It’s all they think they see in pop culture, movies and the news.
Income inequality is worse than ever, and it has been increasing at an exponential rate since the 1970s, so both parties are “to blame”. It will continue and the next step is social unrest. We are already seeing it start. I wouldn’t be flashy because I have nothing to prove, anyway.
I agree with about half of what you said. I don’t believe that I am here today because I did it on my own. Society helped me, even though I am also tenacious and someone who really values her future. At the very minimum, society helped all of us see who we didn’t want to be and that motivated us.
Meghan brings up an interesting thought in regards to this post. It sort of feels paranoid. Do you feel, or do many of the people you associate with, feel under siege?
Financial Samurai says
Don’t you know that only the paranoid survive?
Sleep with one eye open.
Weird comment. Whilst I agree and disagree with a few of the statements in this article. I don’t feel the need to explain my situation online as others have. However I am in a position to understand entirely. A few of the issues raised are location dependent, who you associate with, how you make your money, how you socialise and your intentions. It’s a very paranoid way of thinking, to the point of distracting yourself from actually achieving great things / living how you desire. Playing games is useless, someone is always going to dislike you. Poor or wealthy. Being aware of your surroundings and generally using common sense is key. It seems like the article is based on your perception of how you think you will be perceived. Why do you care that much what others think? It’s generalising far too much. There are *some* very valid points. Unfortunately some people take advice religiously, advice is to be taken with a pinch of salt. Life is to be lived, not to live in fear. If you’re that afraid of comments from others, you need to work on that part of yourself or disassociate. The article is written from a a scarcity mindset. I enjoyed the comments section more than the article. It’s a great topic, but the way it’s written is ‘final’. This is your perception. There are another million perceptions out there, with an equal number of human examples. Just use your brain, keep it moving and don’t JUDGE.
Broke Millennial says
I love this post, but it’s incredibly disheartening that there is such animosity towards wealth. I still don’t understand what happened to striving to be the one percent. As a Millennial that’s still one of my goals, although I only voice it to a select few because it usually leads to a tongue-lashing.
To your “always say it’s fake” point. I do this in a slightly subtle way. If someone comments on a luxury item I own that is indeed real (some of them are fake) and inquires about it’s legitimacy I just say, “Well, I used to live in China” and let them infer it’s fake all on their own. That way, I’m not lying and they can just assume!
Financial Samurai says
Secretly strive to be in the 1%, but definitely don’t announce it to the world. It’s like the annoying kid who sits in the front row of every class, always raising their hand to ask questions, disrupting the room for the rest of us. That kid gets beaten up between sessions or after class all the time.
He’ll get his revenge. But when he does, best to keep things hidden again to avoid getting beaten up.
The poorest people spend the most amount of money on flashy junk just like the most insecure people are the loudest on social media!
There’s no point being a target. People who constantly tell everybody how much they earn and share pictures of themselves are losers with serious insecurity issues.
If you are really rich, you don’t need to tell anybody how rich you are. If you are happy and secure, you don’t have to constantly say how great you are.
Nice post. I agree with many of these points. Ideally, I’d have no car. If I lived somewhere where I could live car-free, I would. I have a nicer car than I need; but, then again, a nice car most certainly doesn’t indicate wealth considering that most people don’t own their car outright anyway. A BMW or Audi or even a Benz made within the past 5 years is so common to see nowadays there is almost no point in trying to own one to flaunt one’s wealth. On top of that, vehicles are so well made nowadays that it doesn’t cost a lot to get a “luxury” vehicle from any “consumer” brand like Chevrolet or Honda.
Some of your points are a little un-related.
Coming off as a know-it-all is a bad thing, but I don’t think one should necessarily hide his or her intelligence for the sake of “stealth wealth”. I don’t quite see how that point applies. Arrogance and know-it-all is one thing, but applying intelligence in a helpful manner is smart and beneficial to both parties. Sure, you need to know when to shut up and listen, as in any social situation, but you shouldn’t hide your intelligence for the sake of appearing “normal”.
Praising other’s success is more of a humbling feeling than hiding your own success. I definitely want to see people around me do well and make good decisions. I try to inflict my own values upon others in a non-overbearing way. Most often no one listens to me but if they did they would be much better off sometimes!
Financial Samurai says
The point being that people fear and dislike those who display more of anything, including intelligence. If you clearly know you’re much more intelligent it’s best to dial it down. I’d argue in many cases much higher intelligence is more maddening than much higher wealth.
Here’s a case of NFL bullying from a kid who went to Stanford,
“Nov. 5 (Bloomberg) — A degree from an elite academic school can make a player a magnet for bullying from teammates in the National Football League, according to a former Harvard University linebacker who spent seven seasons in the NFL.
Isaiah Kacyvenski, who last played in the NFL in 2006, said he wasn’t surprised by the alleged harassment that led former Stanford University offensive lineman Jonathan Martin to leave the Miami Dolphins. The Dolphins two days ago suspended fellow lineman Richie Incognito for detrimental conduct as they and the NFL investigate the matter.
“I’m surprised it hasn’t happened sooner,” said Kacyvenski, who holds a master’s degree in business administration from Harvard and now directs sports business at the biomedical technology company MC10 Inc. in Cambridge, Massachusetts. “This is a wakeup call for a lot of people. I was made fun of for a lot of reasons. Only in the NFL can a Harvard degree have negative consequences.””
In order for someone to listen to you, you’ve got to share your story. What’s your background again? Thanks.
What I meant was, at work I’ll often hear of people doing stupid things financially or making poor decisions that I know will hurt them in the long run, so I try to give my own opinion as to what they should do. I may come off as a “know-it-all” to them but I really am just looking out for their best interest. The people I work with are still relatively young is why I even feel the need to give guidance. I haven’t been everywhere and done everything by a long shot, but I can see poor financial decisions a mile away.
Yeah, but the key here is the statement, “Only in the NFL can a Harvard degree have negative consequences.” We’re not talking about NFL players, here, though. We’re taking about everyone else and the ability to share knowing in a helpful,
Well, I should have no problems with that last one. I really enjoy fantasy football which requires a certain degree of attention to teams, standings, etc. The stealth wealth really goes hand in hand with some of the frugal concepts. You opt to have quality items that will last, but are not overly flashy or expensive. It also serves the dual purpose of helping one accumulate the wealth a little faster.
Financial Samurai says
You’re right about stealth wealth going hand in hand with frugality. However, the Stealth Wealthy live it up in private for nobody else to see.
Done by Forty says
Hmmm, maybe our transparency is a poor strategy. Good food for thought, Sam. Thank you.
Financial Samurai says
No prob. If you’re not rocking income and displaying net worth much beyond the average, I think it’s OK, b/c most people will have the same financials. But after it starts getting 2X-3X more than your average circle of friends, I’d go DARK.
Justin @ RootofGood says
Other than disclosing all kinds of personal financial data on my site, I’m pretty much a stealthy wealthy millionaire next door. Walking around town in my tennis shoes or my 13 year old beat up honda civic. I don’t even have to lie about the fact that my Folex isn’t a Rolex. If I even wore a watch (who wears those things any more?).
Sometimes I go out to my favorite low-brow store and mingle with the commoners. I walk around and wonder which of these apparent proletarians are also stealthy millionaires in disguise, just like me.
This Life On Purpose says
14) Stop smiling so much
Can’t say I agree with that one, can’t you be happy and smiling if you aren’t mega-rich?? I’m thinking that one was meant to be a little humourous.
Financial Samurai says
You’re not thinking of others here. The point is to not be so happy in front of people who are less happy and who have less money. It takes action to blend in.
Financial Samurai says
Not around people who are always negative and looking to hurt you. It’s better to be neutral to grumpy as well.
Financial Samurai says
It’s interesting to see the negative correlation between wealth and how much one displays. It’s a fun socioeconomic topic!
Stefanie @ The Broke and Beautiful Life says
My parents are part of the 1% but they don’t have any of the fancy gadgets that kids my age in debt are sporting. They spend on what they think is important, education for their children and travel. I was never given a car or an ipad or any of that. They worked for what they achieved and built all their own success, and I think they want the same for me by equipping me with the tools but not the unnecessary extras.
Financial Samurai says
To have a large Bank Of Mom & Dad to back you up is one of the best scenarios in my opinion. You can do whatever you want instead of what pays the most and not worry about starving, because your parents won’t let you starve.
Broke Millennial says
I still am pondering a post on this subject. You’ve mentioned it to me before and I’m debating how I would answer if the backstop of Mom and Dad makes you more of a risk-taker or less.
Financial Samurai says
The answer is definitely more. If you know your parents will never let you starve or be homeless, then you are more inclined to pursue your dreams regardless of how little it may pay. Deep down a child of well to do parents know they will always be taken care of.
@Stefanie @ The Broke and Beautiful Life
I disagree – my parents are all about the stealth wealth, and it hasn’t made me a risk taker at all. I lasted 5 years in big law slavery trying to make my own way. If anything, they taught me to be self-sufficient and too proud to ask for help. It is nice to know I would never starve. But there are other psychological implications that result from being raised by the type of people who are capable of becoming very wealthy but living very austere.
Stefanie @ The Broke and Beautiful Life says
I think it depends. I am one of those who can’t stand asking for help, but I know my parents would NEVER let me be homeless or hungry and perhaps that’s why I felt I could pursue a career in acting. I also have a major support system in NYC since I grew up in the area. Between friends and family, I know I always have somewhere to go.
Financial Samurai says
I think you are right in that it depends. It depends on how rich one’a parents are. We talking super mega millionaire rich, or working class rich?
NYU is like $60,000 a year right? That puts serious pain into working class rich. So if a son or daughter knows this, I would think they’d be very motivated to try and make enough money to pay them back.
But if the $250,000 is a drop in the bucket to the parents, maybe the son or daughter doesn’t feel bad, or a duty to pay back. Thoughts?
On that point, my parents paid for all our education, including law school for 2 of us (ironically one sibling went to NYU law school) and flight school for the third. There’s no way they would ever expect to be paid back. But to ask them for money to pay rent or a bill would be extremely difficult – I can’t see any of us ever doing it, no matter how bad things got. They would be unbearably disappointed. So to start a business and fail – wouldn’t ask them for help. I’d rather be homeless on the streets (which is easy to say from a position of privilege).
I love posts like this. You honestly state how people think but wouldn’t openly admit, although I don’t know if I agree with #14. One attribute I’ve noticed in folks who hide their wealth is they avoid associating too much with openly wealthy folks. The only people I know who show off their “wealth” have friends who do the same.
Financial Samurai says
That’s true. It’s why there are a lot of private clubs where wealthy folks can talk about their vacations, their homes, their toys and not feel discriminated against. They are talking naturally, but to others, they are being arrogant. You can’t win, which is why the wealthy close themselves off to others.
We’re clearly not rich, but we do tend to do better than others. Just as you said, keeping a low profile and not bragging with how much you earn is always better.
We are not rich at all, but we have a friend who thinks that we are extremely poor. He has even gone out of his way to offer to pay things for us (we have never said yes to him). I find it funny because he makes almost no money and yet he thinks that we are really struggling!
Financial Samurai says
That is pretty funny considering your weekly income reports. You’ve got a great friend. Does s/he not read your blog? If not, do you think they’d be taken aback if you haven’t been offering to pay?
As I got a little bit older I realized that my friends were all playing a social game of keep up. We moved into a more socioeconomically diverse neighborhood. Life is better there. There will always be a lot of people I can’t keep up with financially and I am sad to see some of my friends overextend themselves trying to create a certain appearance… Plus, it’s funny when they ask me if my neighborhood is safe.
Biggest pet peeve of mine: people believing cops only make 50k a year. My husband is a cop and this year he is well over 120k in salary. Yes, he works overtime to get that high, but his base is significantly higher than 50-60k. Cops make a lot more than people think. People feel sorry for me sometimes that my husband is ” just” a cop, when he is the smartest mambo know, highly educated, and does not “have an agenda” to write tickets all day. Financially we do better than most people I know who are our age (30’s).
Financial Samurai says
I think $50,000-$60,000 is just the average. Cops and firefighters with experience much so much more than people think as a result. In fact, I highlight being a cop or firefighter as one of the key ways to make six figures a year!
You should feel good people feel sorry for you. That is the goal of the Stealth Wealth Movement so you don’t become a target!
Smart people know cops can make good money. I have friends that rake it in doing O.T. . One of them was over 250K. The salaries were listed in the paper.
Marie should re-read the article. Isn’t it one of the main points of the article to have everyone believe you make/have less than you really do? If everyone thinks cops make only 50K, then she has it made. Why the need to spoil that and tell everyone? Which is exactly contrary to what the article suggests.
Stop smiling so much. – Hahaha. I disagree. Happy people will smile no matter if they’re poor or rich. Why frown when you can smile?
Financial Samurai says
I agree happy people will smile. It takes effort not to smile because you don’t want to annoy someone who doesn’t smile as often or isn’t as happy. It’s fun for people with little money to say “money doesn’t buy you happiness.” If you have money, you know that’s not the case and it’s the honorable thing to do to pretend like they are right.
It’s been proven that smiling can have a positive impact on your health. Also, it can help brighten up your spirit at any given moment. To suggest that someone should smile less just doesn’t make sense–regardless of a stated rationale.
There is definitely something to be said for being humble. I’m in the camp where I honestly do not care what other people’s opinion of me or what I do with my time or money is…but that being said: 1) I don’t put a title on my business card 2) I don’t bring people over to my home unless they are a close friend 3) I drive my 10 year old truck to work & not the nice car 4) I golf at public courses instead of joining the country club a mile from my house. 5) I do buy nice shoes though…that I think surprisingly gets noticed by a lot of women believe it or not. 6) you would have to be a watch guy to “notice” what I was wearing on my wrist, always subtle and understated.
With that being said, you have to have balance in your life & live a little…there are no luggage racks on the top of a Hurst, so think of money as units & how you can use those units to get the best experience possible out of life. Whether that is by having financial independence (my 1st recommended priority) or enjoying a hobby that you are passionate about (traveling, family, snowboarding, wakeboarding, classic cars, photography, playing jarts, etc…) don’t turn into a grumpy old miser that never has fun! Do what is important to you!
“You know those movies where a girl falls in love with an ordinary guy she meets at a park, but he turns out to be a prince instead?” How did you know about me? :) I kid, I kid…
But seriously, in today’s America where the battle between the have and have nots is getting louder, more prevalent, and just down right scary, the stealth wealth option is the way to go. While sure I reveal the size of a couple of portfolio’s of mine on my blog, I have no delusions that my net worth and actual income will remain as something I don’t disclose. Being a target isn’t desirable, and I don’t envy those who make themselves one or are ones by the nature of their line of work.
Financial Samurai says
I always appreciate commenters who pick out some subtle points in my posts. Thanks.
It’s fascinating to understand why some people want to be targets, unless they are so insecure with themselves that they are just seeking attention b/c nobody loves em?
Haha it’s because some of us are actually reading what you write! :)
I agree, I think some people struggle with insecurity to the point they need to be recognized for anything, even if it is ultimately harmful to them. I know I struggled with this a bit after moving around as a kid and not feeling like I fit in at a new school. As I aged (read: took till college) before I really completely understood the benefits of standing back and forcing anything to “fit in”.
My parents live like this, or rather lived like this and accumulated their wealth by it, I think. My dad’s only a few years from retirement, and although I don’t have exact numbers, I’m quite sure my dad is worth a good deal of money. Only this year have they started to plan a vacation to Europe, and about dam time, too. My dad’s worked too hard not to be able to enjoy his money some.
Serious question, though: there’s a show I watched on Netflix called Extreme Cheapskates, and some of the stuff they do to save a buck is pretty insane. There was one guy who brought 11 people to a buffet dinner and only paid for three plates (that is, for three people to eat), and expected his family to share off three plates. He also refused to buy any furniture for his family, preferring to find things for free–and he’s laughing the whole time about how much money he’s saved while his family is clearly annoyed. So my question is this: why do some people hoard money with no goals in mind, even to the point of refusing to make life for his family more comfortable?
There’s obviously nothing wrong with secondhand or free furniture, but setting a TV on the floor because you’re too cheap to buy a table or entertainment stand (thereby forcing your family to sit on the floor to watch) seems wrong to me. If modest comfort isn’t even a priority for a person, what’s the point of having money at all? And even if a person like this does have awesome amounts of money, he’ll be too tight-fisted to enjoy it by the time retirement hits.
Thoughts? My husband and I were puzzling over this yesterday, so I thought I’d ask.
Financial Samurai says
Glad you asked. I’ve got a big post in the queue on Curing Financial Hoarding and understanding the people who do. Stay tuned.
Julie G says
Extreme Chepskates sounds like a fun show. Maybe I can get some ideas :D
Bryce @ Save and Conquer says
I just saw a preview that showed a family of three all using the same bathwater, one after the other. Yuck. I’m not interested in watching that.
If modest comfort isn’t even a priority for a person, what’s the point of having money at all? And even if a person like this does have awesome amounts of money, he’ll be too tight-fisted to enjoy it by the time retirement hits.
Reminds me of something I saw on the mrmoneymustache blog. He says the people who say “what good is money if you don’t spend it” are really in trouble. The correct view is to say “what good is money if all you do is spend it”
You can’t take it with you my friend. Life is short!
More important….. Do what you love!
Money is the lubricant for other things in life. The trick is to keep the conveyor belt running. When the money machine stops, life changes quickly.
Maybe that’s obsessive compulsive disorder. I remember reading that a long time ago Warren Buffett walked during snow in NYC only to save his taxi fare.
….what is this TV thing you speak of?
I very much agree that it is important to NOT go overboard with wealth display. At minimum, for your security!
For myself, this is not normally an issue. I’m rather naturally frugal and, I actually do shop at Target! :)
Thibault Kuten says
Ace, I would totally agree. I remember when my whole town found out I was a millionaire, I was forced to move half way across the country to avoid making fake friendships and basically everything stated in this article!
This article really do resonate with me!
Greetings from Europe!
Big Obama says
I think you’re right that it’s important to demonstrate humility and be more low profile with increasing wealth inequality and a bigger government. America is still much more humble than emerging markets where the new wealth just flash their money all over the place.
Everybody knows America is the wealthiest nation in the world. The people who flash wealth in America look to be the poorest people in the most debt.
Stealth wealth is rather common in the Bay Area and in Silicon Valley. Sure there are some rich people who like to be flashy, but a lot of others blend in and look like plain Janes and Joes. Some even look like college students with their jeans, sweatshirts, and laptop bags. The tech influence is big here which has a lot to do with it. Funny and true tips in this post!
I’m sure you’re right. People make so much money there. My brother makes pretty good money, but he is barely middle class there.
You can almost always tell by their cars though. Californian likes their luxury cars.
I can’t tell if it’s so much BA/SV residents exercising stealth wealth as it is trying to keep up with rising cost of living in the area. I’m hearing that rent for a Mountain View apartment near Castro Street is closing in on SF SOMA prices, which I find ludicrous. I think you’re right, most people are just maintaining middle class at best in the bay.
Financial Samurai says
It can’t be closing in because SF SOMA prices are also rocketing higher!
You’ve got to make a lot to pay a lot. And there’s a huge line of people willing to pay these prices which means they are doing far better than maintaining.
The SF Bay Area is leading the way in the Stealth Wealth Movement I believe. We aren’t suit types. We’re track pants and hoodies types.
This is a good article. I earn a lot more than 200k. For most of my life, I made less. But u are right after 200K money did not mean much. I drive a Honda Civic. That tells u my relationship with money. I fly my family first class to Hawaii. Why? I want my grandchildren to learn there is more to life than a coach ticket. I want them to learn they like first class. I tell them the price for a ticket so they know it costs real money and their grandparents make the money through education and work. Show a child the power of money and I think the rest will take of its self. They don’t go if school grades are low. Their school work is their money for the trip.
The latest Honda Civics are really sweet.
Point taken, it’s not closing, but rising along side.
Though likely not a majority, the people I know who are willing to pay SF SOMA prices are those who just want to experience living in the city for a few years. They’re willing to push their budgets and savings temporarily for an experience. Plus, experts are really clamoring on about how spending on experiences is what leads to happiness. That’s enough justification right?
Didn’t expect you to comment on my first post. Btw, big fan here. Great content here.
People in the Bay Area typically have crazy long commutes. When I was living out there, my commute was 70 miles one way. And the traffic tends to be heavy (especially on the Bay Bridge).
That’s a tremendous amount stress, day in, day out (and wear & tear on your automobile). I can see where purchasing a home in the city would really help out. Even if you have to really stretch your finances to do so. And perhaps the banking industry is starting to open up again?
It’s one of those things. Pay more for a short commute (or no commute), or spend three hours a day in your car!
Financial Samurai says
Not sure who you are talking about.
My commute was 10-15 minutes by bus, just 3 miles away in SF.
Thise who live in Palo Alto, Hillsborough, Atherton, Burlingame,
Etc have short commutes in Silicon Valley.
If your commute was 70 miles one way, you are living in the boondocks or Sacramento and commuting down. Save the trees Ace!
In Northern California, the best places to live are all inland. Blue skies and warmth, almost every day. And much better housing costs!