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. This widening gap is why I’m a big proponent of practicing Stealth Wealth.
Most recently, the investor class crushed it in 2020 and 2021. Both the stock market and housing market boomed, making millions of investors much richer. However, a bear market hit in 2022, and many people with inappropriate asset allocations got crushed.
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.
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. Finally, hundreds of millions of Americans know what losing freedom is like due to months of shelter-in-place to combat the coronavirus pandemic since early 2020.
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.
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 if Biden becomes 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. Most people would be arrested by now. But if you donate aggressively to powerful people and institutions, you can be more stealth.
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 Personal Capital’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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It’ll be the best personal finance book you will ever read. You can buy a copy on Amazon today. The richest people in the world are always reading and always learning new things.
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[…] as they were not willing to change. They just saw me as the bank, and I will warn you that this is the risk you run when doing well for yourself. It’s sad that the only time I hear from most of my family is when they need something from me […]
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[…] Publishers/Bloggers: Bloggers making over $380,000 a year are everywhere, you probably just don’t realize it. Here are some that make the list: Heather Armstrong (Dooce), Darren Rowe (Pro Blogger), Michael Arrington (Tech Crunch), Pete Cashmore (Mashable), John Chow (John Chow), J. Shoemoney (Shoemoney), Perez Hilton (Perez Hilton), Ben Huh (Cheezeburger Network), Peter Rojas (Gizmodo), Leo Babauta (Zen Habits), and many top personal finance bloggers. There are hundreds more that we’ve never heard of. Who knows, maybe even yours truly makes over $380,000 a year from my various online media properties. I’ll never say given I’m a big proponent of stealth wealth. […]
I don’t like this post much. I’m not wealthy, but I’m young and am working to be eventually so that I can raise a family the way that I was raised and to be able to pay to educate my future kids…However, I really dislike the entire tone of this article. It’s so cynical and really encourages people to be ashamed of themselves for doing well. All it really should say is don’t flaunt your wealth and keep perspective, knowing that not everyone has what you have. I think your advice is sensible enough, but there’s an air of plain dishonesty to it. Now, with that said it’s a great blog, had to say it.
How young is young? I’m giving you the perspective from being poor, to slaving away, to having money, to not making nearly as much anymore.
Everybody is pro big government and free services as a student and while not paying taxes. Once they have to work a lot and pay a lot of taxes, their attitudes change. And once they are retired, their attitudes change once again.
I would love for you to check back on this post in 10 years and see if you still feel the same way.
Welcome to my site!
I agree about the tone. It sounds like you were maybe hurt or feeling frustrated when you wrote it. While I agree with a lot of what is written the tenor comes across as I have to hide or change who I am in order lessen the negativity. There is a difference between being private and downplaying your success in order to be humble vs. outright lying on purpose to protect yourself from being hurt.
While I’ve not yet accumulated my riches, it did take us 7.5 years to pay off all non mortgage debt. When we tell people we have no debt and only $120k left on the mortgage, I do get derogatory attitudes sometimes.
Now, I don’t run around telling everyone of our success. But those that are proud of me tend to share and exclaim how proud they are of me to others. When I see a negative reaction I immediately focus on the negative so they don’t feel worse about themselves. Then I move along. It takes time to surround yourself with positive people. I choose to feel grateful that the negative person displayed their hand by being negative. It lets me know they are not in a place right now to want help or to share in someone else’s happiness. So I consciously stay away from personal talk with these people. I guess I just see the negativity as my cue to stay away. It helps to know where you stand with people In order to build up a good network of people.
I’ve never felt I needed to hide or change myself. They need to change! Not me! If your child was experiencing such negativity would you really expect them to appear to change who they are by pretending to not like studying and focus on the bad in front of the naysayers? Or would you tell them to focus on finding better friends? Friends with whom they can freely be themselves? I completely disregard the naysayers because I don’t care what their attitude is. Having enough positive people in my life allows me to be understanding enough to know the naysayers are just insecure because they feel hopeless or overwhelmed, etc.
I do love your writing. I was reading personal capital articles and thought how well written they were and looked and the ones I liked were written by you and Justin. I just think there is a more honest and happier way to approach the issue. Sorry I rambled a bit at the end.
Sam
Here is one more to the list. Never reveal where you go for vacation. I pick up my son from school everyday. Couple of years back one of his classmates mom asked me if we were planning for a vacation somewhere… I said Switzerland and Austria and her jaws dropped. Since i mostly shop at target/ross and drive a toyota corolla, she never expected that from me. The next question was where I lived. I was somewhat vague, but she figured it out. From then on, if someone asks me about vacation I just say “Lake tahoe” or “Disneyland” or something closeby…
Sunil
Love it! I’ll say, “My back yard!” But then they might say in San Francisco, “You have a back yard??!”
https://www.bbc.com/news/blogs-news-from-elsewhere-27142969
this guy is doing 3) Always say it’s fake. clearly, great minds think alike! :)
Nice. I bet he bought a knock off right before the demonstration to break it in front of the cameras and kept the real stuff in a vault :)
We are stealth wealth and want to stay that way. (The only outward indication of wealth is our house — although it is sparsely and cheaply furnished.)
This article helped me realize that an issue I am grappling with is that of maintaining our status as stealth wealth.
So far I’ve been keeping tabs on finances at home via Quicken, but I want to use a program that combines information so I can do more-complete portfolio analysis. I can’t find anything that will do this analysis offline on my computer. We don’t trade often, so I don’t need a site that goes to each bank to get updates (and therefore I had ought to be able to bypass the worry of putting account and password information online.) But even Morningstar’s portfolio manager requires stock purchase history. We am very reluctant to let anything online know the details of our wealth . It just feels wrong to us as both a security risk and opening us up to marketing aimed at those who might spend big money.
Are our worries justified?
Hi Leslie,
I think your worries are justified, but they are also not because any company who violates your privacy will quickly get crushed.
I asked Personal Capital (who does the portfolio analysis for free in their Investment tab) about privacy, and they said they have this massive encryption software that protects information, and nobody in the office can pull a client’s information if they are not an advisor. I’m in their office 2-3 times a week currently advising on their blog buildout, and will ask for you. But I’m pretty sure nobody but an approved advisor can see all my details.
Thanks for your quick reply and offer to make inquiries at Personal Capital. I want to clarify your first sentence. You wrote “I think your worries are justified, but they are also not because any company who violates your privacy will quickly get crushed.”
does this mean:
Worries justified, but also not justified because any … crushed.
I hadn’t thought that if our privacy is violated, almost certainly so would others’, and the person doing the violating wouldn’t know just how the wealth = power equation might affect him / the company. (Because we live like “the common man”, and he usually has few to no resources to go after a big company.)
Working my way through your archives of articles and thought this one was exceptionally good. One thing the current administration is very good at is creating class warfare. It has promoted class envy and hatred especially directed at wealthy and conservative people. It really pays to keep your mouth shut about what and how much you have. Wannabe rich people would do well to read “The Millionaire Next Door” to learn about how people with genuine wealth act. My mom and step-father were true millionaires due to a vast number of rental properties yet they lived like paupers in a rickety old house that he was born in. No one would ever believe they had the amount of money they had. I wouldn’t advocate living like paupers but living like the middle class might be more reasonable.
Right on.
You will enjoy this post about middle class!
https://www.financialsamurai.com/definitions-of-a-middle-class-income-do-you-consider-yourself-middle-class/
“I’m at the corner of Jackson and Teller”
Jackson Teller? Are you a fan of SOA?
Ah, you caught a clue in the article. Well done!
Sam,
I think it is important to also figure out how to work smarter as well. I have watched people work 70 hours a week and not get very far because they focus on everything that does not matter and ignore the few things that do matter.
I always seem late to this blog. Sorry, just so busy. 6 years ago, I would have laughed at this post. That is no longer the case. The points made are excellent. Much of my net worth, ironically, has been built over the last 5 years. I am bit older than the average reader here (I am 47) and I know the world of poverty because I lived it once upon a time.
It seems as though the American dream that you can make it no matter where your starting point begins is dying. Not because people can’t make it but because they are being conditioned to believe that. When I was 26, I had a child, GF (who I would later marry) and lived in an apartment in a high crime area. I was underemployed but worked various part time jobs to pay my $465 per month in rent. I probably could have qualified for a gov program or 2 but I would have rather slit my wrist than ever apply for that. I delivered pizza, was an inspector for those annoying circulars that get thrown on your lawn and I shoveled snow. All this with a college degree.
In October of 1992, I looked at my checking account – I had $2.92 left but fortunately had a strong week of pizza delivery and my GF just got paid. We had $520 to put it so we could afford the rent and some food. I drove a 1983 Corolla and my wife had a 78 Dodge Diplomat which was a nightmare.
Finally, I got a job that could be considered a career builder in November of 92. I was immature and thought I deserved a lot more than what I was being paid which was $23,000 a year. I struggled through 4 years and made a little more but gained a ton of maturity. Since I was a 3rd party contractor, I was at the mercy of a contract renewal. After 4 years, the contract wasn’t renewed. I actually had a contract that gave me 3 months of severance (I was making $26,000 at the time). I collected UE for 6 weeks and hated every minute of it. I had begun my studies for a CFP and took a job actually making less than what my starting salary was 4 years earlier. My wife thought I was insane. However, I was determined. I did every hard job no one else wanted to touch and everyone thought would lead to failure. I always find a way, through sheer determination, to make it work. After 10 years, I received a big break and landed a job with the potential to make very good money. Even then, I had to create my own opportunities since this was not a market we were in previously.
To make a long story short, after spending numerous hours in airports, having hundreds of meetings that led to nothing, being away from my growing family for long stretches, things broke and I began to make real money. Today, I am proud of what I accomplished but am careful about showing it.
I drive a BMW 328 XI and actually get ribbed about that. My lease is up next November and I am going to downgrade to a Sonota. I have had a relative tell me that I should feel fortunate to be where I am. Fortunate? I earned it with sweat equity over a long period of time. We give a ton to charity yet I have been accused of being a “fat cat”. I don’t wear expensive watches, I get my shoes re-soled, I use coupons all the time and I generally watch what I spend. I was called a fat cat because my wife mentioned to one of my cousins how much we enjoyed a dinner at a fancy steakhouse.
By the way, my efforts ultimately led to 20 people being hired. So, others have benefited as well. Still, that no longer seems to matter. It is clear that we are the enemy now and need to go even further underground. It is frustrating to say the least. My wife has also achieved success and now has a thriving accounting practice of her own.
We have now become a country where success is frowned upon and relying on the government is thought of as a “right”. It is sad to see how far the country has fallen. I don’t think we have seen the bottom yet.
Thanks for sharing your perspective!
Do you often wonder why folks just don’t just try harder if they want to get ahead? Instead of waking up at 7:30am, why not get up at 4:30am and work for a full 3 hours before anybody? 3 hours a day more is 90 more hours of extra time a week to get something done!
Hard work is hard by definition, but there’s a great correlation with hard work and progress on America!
Yes I agree with everything you said to stay under the radar. But the blogs who have a ton of visitors are the ones who show their net worth, budgets, and incomes from ever compounding dividends, do you think they are making a mistake or sharing too much? I have never fogotten the time I went to a comedy club and a young man was asked, What do you do for work? He said he doesn’t work and that his grandma left him a bunch of stocks. THe comedian immediatlely called him a spoiled trust fund baby brat. I bet he later regretted saying the truth.
When you cutting a check to your sister after another great portfolio performance in October?! :)
So long as the boyfriend is paying, all is good!
She will eventually find out about your close to 7 figure stock portfolio. Be prepared to share at least $100,000 with her! It’s the right thing to do!
It definitely looks better to keep your assets and your income to yourself. You never know who is really after you for your money and who is true to you. It’s always a bad thing to find yourself in a position where you are getting screwed over by revealing too much about yourself.
All good stuff and tactics I regularly apply, yet not always. I don’t feel the need to downplay in all occasions and I’m not flaunting it and yes I can afford it, I just happen to enjoy motorsports, so my primary car is a German sports sedan, understated for sure, unless you know what it is. When I first bought it, I felt awkward driving it, my wife too, like people were staring at me, 29 years old, who the heck is this guy? That lasted about a week, now I don’t care what they say, but at work I still hide it, I work in small office. Here’s another work scenario, I recently booked another trip to HI (2nd in 2 years), I live in NYC, going to the 4S’s again, but I told everyone, I got last min. airfare deal, and my father in-law had a timeshare he needed to use or lose before 2014. Point is, I largely believe it depends on the situation. In CA, the cops may pull over the nice cars, here I think they actually avoid them, A.) Because the guy inside could sue or have your job in some cases AND B.) Because here they aren’t looking to just write a ticket, and who’s more likely to have drugs or a gun? The guy in the Merc? Or the guy with 2 blown out windows and some taillights hanging off? Just saying . . .
Interesting viewpoint on cops avoiding the nice cars! Which island you going to? I’m there 11/19 for maybe a month in Oahu.
We’ll be on the Big Island 12/7-14 – We did Maui last year and loved it. Being on the East Coast it’s tough to justify HI, but when we did a comparison between HI and the Caribbean, it actually came out to be about the same price b/c of some Luxury taxes (10%) in the islands, they called it a “value added tax” it pretty well offset the increased airfare.
Oh also it was a matter of survival, blending in, where I grew up. In Asia, I found people loved flaunting wealth. Maybe because they had chauffeurs. Since I took public transport and grew up middle class and studied at a Jesuit school (Live simply so others may simply live), I learned to never wear expensive jewelry or nice bags. Otherwise, I would get mugged or worse.
The chauffeur with you riding in the rear of a S Class Black Mercedes. Ah the fond memories!
Loved the post. My boss wears shirts from Costco, eats McDonald’s for breakfast, and drives an old Toyota SUV. He lives in a nondescript neighborhood that is well off the beach but still gets the clean air (important in LA). He works hard. What he does do with his money is take nice vacations with his kids and invest in off the wall securities and opportunities, and save it up for his kids. I aspire to live like him. You’ve probably read Seneca. He did exactly what you advocate – live well beneath your means. I have Nassim Taleb for introducing me to him. BTW, Nassim also advocates the same. When he got a windfall, he bought a brand new Swatch, and a new Mini. Saved the rest. That was it.
Good stuff. Although, I’d like to eat a little healthier than McDonald’s! Gimme fresh fruits, organic produce, sushi, and the freshest juices around.
Sam,
You probably already read this:
While some of this is (hopefully) in jest, there is a kernel of truth to it.
A disturbingly large percentage of humans hate to see anyone succeed, and will do whatever they can to pull a successful person down to their level. It can overt, or covert, but it happens all the time.
In nature, the best protection available is camouflage. This is financial camouflage, and a wise course of action in most circumstances.
Also known as schadenfreude!
Good stuff. As much as some people think you’re living a lie, you’re really just protecting yourself from people who could take advantage of you. Another commenter said that your true friends won’t care, but it’s not about protecting yourself from your true friends. It’s about protecting yourself from all the leeches and freeloaders. Just look at any professional athlete and you’ll find a crowd of leeches following him around wherever he goes.
Correct, and those who want to harm you. It’s hard to understand until you are in someone’s shoes.
The pro athlete is an excellent example of what happens when you suddenly have wealth and people know it. ESPN Mag has a great profile of Rolando McLain, ex Alabama star and Raiders linebacker who said he cut $600,000 worth of checks just to get people of his back. He couldn’t take it anymore so he quit the NFL at age 24!
Actually, fame is more of the issue with this anecdote.
Your more typical millionaire (?) is usually a very ordinary person, living in middle class neighborhoods. Typically, small business people, union worker, teacher (nearing retirement), etc.
These are people whom blend well because they are part of the lower income culture (or at least close to it). This is what marketing people call the “mass affluent.” Camouflage, is just less of issue for this type of wealth. It’s naturally hidden! I believe that at least for most of America, stealth wealth is actually the norm.
Anyway, thanks Sam….. This was a very interesting post. I actually spent considerable time thinking about this (after the initial chuckle ;)).
And one more thing; where I live, imported German automobiles are a “dime a dozen”. I don’t see anybody paying particular attention to them. Everywhere I go, parking lots are full them.
My point is: If you parked your $100,000 Audi in my middle class neighborhood, no one would really notice. Of course, you would be parking next to my 17 year old Honda! LOL!
At times, this post reads like satire. I must be a different sort of American, because I’m far from wealthy and quite like to see other people enjoy nice things. I nearly break my neck when I see a Ferrari and love to watch shows about well-designed, very expensive homes. Though I’m also quite aware that wealth, though nice, seems to often have an inverse relationship to happiness.
It is the middle class displays of wealth that I find troubling– the person driving an Audi Q7 who is leveraged to the hilt with debt, etc.
It may read as satire b/c it is so comical how showy American society is!
I break my neck too when a beautiful rumble rolls by.
Enjoyed this post so much. I grew up in a wealthy family and witnessed so much of this. Happy to live a much simpler lifestyle than my parents.
Sam,
When we had solar installed at our house one of the installers was a guy I knew when we were kids. He commented on how well I was doing and I was trying to downplay it. The garage door opens and my wife’s Mercedes is sitting there, bad timing. When we have kids I’m gonna make her trade it in for a Toyota 4 runner.
I wonder if your solar panel bill was higher than it should as a result?
I love the old T4RUnners. Not so much the new ones. Get a Range Rover 2014 instead!
I don’t agree with this post. You are encouraging people to be disingenuous. People should be able to be themselves. Also, it sounds like you look down on poor people. Watching “The Real Housewives of Whatever,” isn’t necessarily something poor people do and it is even more ridiculous that you would read up on these shows to fit in with a conversation about them.
Not at all. Be rich, but act poor is the mantra. Don’t take offense if you enjoy watching The Real Housewives of Wherever. You actually are ahead of the game if you know the cast of characters!
If you have never experienced discrimination, or are yourself someone who likes to show off your wealth, then this post is hard to digest. But those of us who want to do well or who have done well and don’t want to be harassed or bullied any longer, this post’s message is absolutely vital for long term sustainability and health.
Just check out the fellow comments.
Would you use these strategies to try to make friends or just to deal with acquaintances? True friends will respect and like you regardless of your financial position. You should be able to talk about things that you actually have in common and not need to make up interests to fit in. Also, I feel like your approach will only get you so far. Eventually you will be found at as a phony.
“Yes, I love watching the Jersey Shore. That Snoopy sure does tan a lot…” Busted! Okay, perhaps you didn’t get that joke but living a lie will catch up with you.
If you feel like you need to use these strategies for dealing with acquaintances, I suppose you could get away with it but real relationships require honesty.
I just don’t think you are getting the message. This is not so much about making friends and acquaintances, but about survival. Protecting you and your family from first verbal abuse and then more serious hate crimes.
Your response is exactly why wealthy people close inwards on themselves because they will be considered a phony or arrogant no matter what they say. What do you want from them Virginia? I hope you have it in your heart to treat the wealthy equally. What did the wealthy ever do to harm you? I would love to hear more of your story.
Snooki has done a great job getting in shape post baby. She seems to be maturing and following the path of Nicole Ritchie.
We seem to be talking past each other. I suppose I understand a little bit better if you are trying to protect yourself against abuse and hate crimes. That is an unfortunate scenario to be in.
I used the term “phony” because you were suggesting that people should act like something they are not (i.e. not show true happiness or pretend to have interest in sports or tv shows that don’t really interest them). I didn’t mean to imply that all wealthy people are phony or arrogant.
Instead of reading up on pop culture that doesn’t really interest you, I would suggest that you try to find a topic of conversation that you and the person you are talking to are both really interested in. You could try talking about the latest news story (“wasn’t that last shooting horrible!”), or relationships (“my in-laws never think my house is clean enough!”), or if all else fails, the weather. There are many topics of conversation that are interesting to people of all financial backgrounds.
Imagine a world where we all spoke what we really though.
We’d have World War III tomorrow!
Getting to know someone and make them trust you and feel comfortable takes skill. We can try and assimilate or we can segregate and stick to our own kind.
I know that I appear less affluent than I am with my aging cars ( formerly 2 17 old cars) and (relatively) modest home. It is less of an issue when your friends are similar in wealth though! Although there are differences in net worth of my close friends, we have similar values. Surprising in southern California where showy wealth symbols are rampant. It is one of the benefits of being older.
I have come to learn that people who have all these fancy toys are usually pretty bad off financially. They pay for the toys with financing and other tools that get them in plenty of debt. Not only will playing wealth ninja help you avoid trouble it will keep you wealthy!
I’ve got the stealth wealth thing going on. I pull in a nice income, but you couldn’t tell it from my modest apartment, Methuselah car, or lack of expensive brand name clothing or jewelry. If someone spent a bit of effort and thought about my education and job title, they could probably figure out how much I make. But most people won’t do that.
The downside of stealth wealth is in dating. You aren’t going to be taken seriously if people have already pre-judged you as not being rich enough (as indicated by your expenses). The idea that someone could have a rapidly increasing six-figure investment portfolio is totally alien to most people.
Ah, wealth and dating. A favorite subject. Here’s a good post if you haven’t read it yet:
https://www.financialsamurai.com/2013/08/03/how-can-you-tell-if-a-guy-is-rich-no-display-of-wealth/
I have to disagree with the point above that, “The downside of stealth wealth is in dating.”
I actually think it’s the opposite. You don’t want to attract a mate that’s focused on your money. This should help weed out, upfront and before it’s too late, potential partners that don’t have the same financial principles as you do.
Like others, much of your post had me thinking of the book, The Millionaire Next Door. Flaunting wealth is not something most high earners/savers do.
Somehow, I’m not seeing this as a big problem….. If you live in a normal house and drive a more common automobile, no one will know your actual wealth.
Millionaires are very common. I would bet about 35% of the customers walking into Starbucks every morning, are “networth” millionaires.
You’re probably right that everybody is a millionaire at Starbucks, but millionaires are still outnumbered 15:1 in America, so you have to be careful.
Well….. My point is that it is very easy to behave as a lower income person. And this is what you seem to be suggesting.
This post suggests a kind of paranoia which you tend to see in less socioeconomically diverse communities. I’m seeing it as a rather unhealthy symptom.
I like this kind of post, Sam, not only because of the solid advice, but it also helps focus us on why we really should be pursuing wealth!
It’s not about impressing other people with how much money we have or what luxury items we can buy, it’s about doing what we’re passionate about really well and producing something that other want to buy! Creating wealth.
Thanks Sam!
Wait, wait wait! People spend $100,000 a year on a country club membership?! WHAA??
But for real, I like this idea. it reminds me of The Millionaire Next Door a bit. Why flaunt it if it only creates criticism. And flaunting is usually a compensation for something…