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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Join 60,000+ others and subscribe to my free weekly newsletter. Since 2009, the newsletter has helped people achieve financial freedom sooner, rather than later. Embrace stealth wealth and live the life that you want without scrutiny!
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Stu RosenRosen says
You may need to amend this text under “15) 15) Understand pop culture and sports.”……
“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.”
Colin Kaepernick took care of that for us.
In recent years I have been trying live by the “stealth wealth” concept… Not that I would say I was throwing that info out there. But with so much information on the internet, I have trouble with making me less obvious out there on the internet and through public information. Luckily I have a somewhat common name. Do you have advice on removing yourself from Google searches, public info, real estate holdings, etc?
You can rent a specialist or a company specialized in this area. You can start with something simple: try in Google with something like “how to clean my tracks in internet” or “how to remove all info for me in internet” etc.
Have a happy day from faraway friend
And yes, I have lived at different countries and within diverse social classes, and can testify that it is almost always the case that those who are only to keen to show big stashes of cash when paying a bill, wearing big and flashy watches, showing off their smart phones, etc, are far less wealthy than they’d like you to believe. On the other hand, those who appear to be far less well off in life might give you the surprise of your life. A long lasting lesson, should we say.
Middle Class Millionaire says
“…The government goes after you if you make much more than $200,000 a year (medicare tax, AMT, deduction phaseout, credit eliminations, education tax, etc)…”
So true! For the last few years I was no longer able to qualify for the “home office deduction” because my income level was too high, even though I own a home based business and literally use one of my spare bedrooms 100% as a home office. It’s hard for me to understand not allowing a business expense to be tax deductible.
I really liked Ted Cruz’s “10% flat rate income tax plan” that he put on the table during the republican primaries. To me that seemed very fair for everyone. I forget the cut off he proposed, but it was something like exempting the first $36,000 of income that a family makes from income taxes. So the poor are simply not taxed at all… and everyone else has a fair flat tax rate. The rich still pay much more than everyone else, but in proportion everything is fair.
One good thing about Trump’s tax plan is that he proposes that “no business will pay more than 15% in taxes, whether you are a large public company or a home based sole proprietor freelancer.” This certainly would be a good incentive for big companies to stay here in the US since it would be a very competitive corporate tax rate.
At the same time it would convince many people to start their own businesses! Imagine how many people who are currently making $400,000 per year and up (who are currently in the 39.6% tax bracket) who would start their own company so that they could now enjoy just a 15% tax rate! Think how this would stimulate the economy and how many jobs it would potentially create.
Pixel Chi says
I also liked the flat tax concept but we’ll never get rid of the progressive income tax code because it’s primary mission is to shift income from those who the government thinks has income to those the government thinks don’t have enough income. Collection of the taxes is secondary. Such a huge waste of taxpayer time and money trying to keep the government from stealing the results of your work.
Financial Samurai says
The best thing about Trump’s tax plan is earning BUSINESS INCOME. If you slashes that to 15%, it’s going to be HUGE for the economy, since business income from LLCs and and S-corps get taxed at ordinary income.
Fast forward to 2018 and majority of Americans are not happy with the new tax law. The great majority of savings going to the top 1%, as well as the billion dollar corporations, and a huge additional deficit being created.
I think it can be telling to ask yourself if you’d rather look like you have money and be poor, or look like you’re poor but have money. I know where I fall. :)
Hillary's bad dream says
Never let liberals know your wealth. Chances are they are wealthier than you but themselves camouflage their own wealth to legitimize their criticism of other people’s wealth. Liberals don’t think wealth is bad. They just don’t like people other than themselves who have earned wealth to be wealthy. Wealth is an asset to be acquired and managed by an enlightened individual. Liberalism is that enlightenment.
@Hillary’s Bad Dream, wait…..is that you, Paul Ryan? I thought I recognized you!
Just found your blog today. Loved this article. You have new devoted subscriber!
This is a very helpful article. I hope to keep a low profile if I get wealthier. The one point I would disagree with is serving on boards. It might have the benefits you mention of people thinking you are so nice but it has the drawback of possibly leading to media exposure. Then some criminal will see you in the newspaper and decide you would be a great target.
Love this article. Where I live (South Florida), it’s all about the bling. So many people rent their showy lives here and I’m pretty sure they have massive debt to go along with it. It is completely normal to see the average person driving a (leased) luxury vehicle. As Dave Ramsey would say, big hat, no cattle. Meanwhile, the owner of the company I work for has a net worth probably somewhere north of $20MM and drives a 10-year-old Toyota. I also drive a 10-year-old car, bought used and paid for in cash. One of your points in this article is a good reminder that when he sees me in the parking garage, he won’t be thinking that he’s paying me too much!
I appreciate that Dave Ramsey ism as well. My dad was a doctor and always drove the crummiest car to buy better cars (in cash) for his wife and daughters. He had several dozen sticky notes from management warning to tow his car if he didn’t stop parking in a doctor’s parking spot. Dave Ramsey has a model of a truck in his office in his live shows. He told a caller that it was the exact truck that Sam Walton drove throughout his lifetime.
Financial Samurai says
Exactly. And if you do have a car 2X-3X nicer than him, HE WILL not want to pay you as much, b/c it is even more of a ridiculous situation given his wealth and your wealth.
Don’t one up your boss folks!
A small point – I disagree with your assumption about fancy cars get pulled over more because actually they don’t. Statistically they actually get pulled over less because there is an unspoken generalization about the importance of the person in such a car, traveling at such a speed.
This is an area where the well to do get the benefit of the doubt and yet another way that such ‘favors’ are quietly meted out. The well to do are treated differently, it just is.
By the way, I live next to Greenwich, Ct. I see this all the time.
BY A MILLION MILES you are better off in a modest car. Regardless of how often one or the other gets pulled over. If you want to awake the envy within your “friends”, people in general as well as (believe it or not) some of your own family members, then go ahead and start driving expensive cars. You see, in life you wanna appear as poor as possible, that will save you from so many headaches and sorrows. On a personal note let me share this with you, some direct family members of mine have pretty much stopped talking to me simply because they wanna keep on messing around, working as little as possible and wasting pretty much everything they ear, and then expect me to foot the bills for their lifestyles, while I, on the other hand, do pretty much the opposite to them.
I would second this. For me SUVs have always gotten pulled over more, in fact a jeep grand cherokee.
There may be some of the cops wanting to pull over Ferraris speeding and such, but I think in SoCal you are less likely to get pulled over in any of the “mid range” luxury cars like BMW, Benz, Tesla, etc as opposed to regular cars.
The cops think you are just going about yor business, but if the car looks frumpy they think you are up to something. And specifically Black people are even more better off in luxury cars as far as not getting pulled over. Cops are racist, but way more so againt lower income Black people.
But who needs a car anyway with uber (especially now with flat fares) been over a year no car for me, and its easier! Plus you can work on the go.
Financial Samurai says
Interesting perspective and very good about people getting pulled over more in BEATERS! That totally makes sense actually, especially beaters that have smoke billowing out the exhaust with broken taillights. Something may be up if you don’t feel responsible enough to fix. Or, perhaps the driver is just poor.
Related: The 1/10th Rule For Car Buying Everyone Should Follow
In life, the general rule of the “thinning of the herd” is best. In other words, the pack gets shaved from all sides, so stand in the middle to be safest. The dirty, ratty, suspicious car is going to get pulled over just like the flashy, speeding lambo is.
That said, living in the middle, gets you the middle. So only use this rule when safety is the priority. Investors who prioritized safety over growth generally have poor returns, or at least not as great returns as those who take the leap.
Financial Samurai says
There’s a great saying, “Fit in, STAND OUT.” But, that’s an American saying. In China, you stand out, and you get decapitated. So many of the China’s Richest list have gotten thrown in jail or persecuted since the 1990s. Why? B/c they stand so far out of the median. This always happens in every society.
May be true but we have to take a person’s skin color into account. It’s a statistical fact that Black people get pulled over at a much higher rate. Also, if they happen to be driving a luxury vehicle, it’s even worse.
“14) Stop smiling so much.”
sounds kind of wrong, don’t you think?
Financial Samurai says
When you look miserable, nobody will mess with you. If you are happy, that’s when they start hating you! Be happy inside :)
Absolutely true!!! I am saying that from personal experience…. the happier you seem, the more some people will try to break your spirit, make you feel ashamed for this and that about yourself, will certainly try to damage your self esteem, self confidence, positive self imagine and self positive concept. You see, weak (envious and jealous people) will certainly attempt to bring you down instead of them trying to drawn on inspiration from you for them to go higher and become better, wiser, stronger and happier. That my friend, is the truth.
We live in a very artificial society. It’s possible that some of the people flashing their bling, fancy rides, and clothing are putting on a show—- do you know how easy it is to RENT any of these things, even for a short time? Are you privy to people’s credit card debt? Americans tend to ASSUME things and make judgements on superficial appearances. Thank you for your article which spells out in reverse how to use that information to your advantage by appearing to live below your means. There also becomes a time in life when having too much ‘stuff’ just is such a burden. I’d much rather be financially free to travel and live a life full of experiences instead of a life surrounded by ‘stuff’.
First of all, great article! We have been doing these things for a long time and didn’t realize there is a name for it. “Stealth Wealth” has a nice ring to it!
I’d wager that the *majority* of “bling flashing” people are putting on a show. I wonder if there is any data anywhere to support this claim.
As you mentioned, this is basically an article about living below your means. If you do that, most of the items the article discusses come naturally.
Along those lines, I once knew a family who would rent a nicer car than they owned to go to family reunions. Their own car was acceptable, I thought. I guess their relatives were the showy type.
Great article! I agree with most of them and live by most of the rules.
I do like nice things with good quality and under the radar with no logos. I wish I was not. I would be able to save a lot more. It’s very conflicting feeling I have to say.
Rather importantly: never advertise your wealth to women. Investigate the term “hypergamy” and all of its ramifications. Do not shy away from your friend’s stories of how the divorce destroyed his life. Look at Johnny Carson, Robin Williams, and all the other successful men who wound up paying millions of dollars to women for NOT being their spouses.
Choose a mate that is not materialistic or someone of the same economic status as yourself.
Coming from a woman who achieved substantial net worth as a youngish, single, software developer, don’t tell men you’re dating how much you make/are worth either. They start asking for loans or become children when expected to go Dutch on the more frugal restaurant choice you insisted upon.
Sometimes it’s not an us vs them thing, sometimes people are people. And some people are jerks, regardless of what hangs or doesn’t hang between their legs.
Puts “First World Problems” in whole new context.
An intriguing article. I live in SoCal where there are a lot of wealthy people. Some are truly vain and cant think of anything better than to flash their cash, while many others adopt the stealth mode. Each to their own, but your observations are spot on. It is such a shame that envy and jealousy play a part in how we treat each other. Success should be celebrated and encouraged, after all there has been a lot of sacrifice and discipline to get there.
Absolutely one of the best articles I’ve read on this subject. I think the older you are, the more you realize how little ‘stuff’ matters and how much people do. Money can and does do wonderful things but it can also turn family and former friends against you even though you did everything right. The awareness up front of the effect people knowing your net worth can have is key to avoiding many of the mistakes you point out. Unfortunately, many who accumulate wealth learn it the hard way as we have. Great job!
Financial Samurai says
Thanks for reading! You will enjoy this post as well: https://www.financialsamurai.com/rich-or-free/
Good article. Had I read this years ago I may not have understood but I certainly get it now. I am building wealth but was careful, obviously not careful enough. If there was anything I really wanted was a nice house and doing that was the tip off. Unfortunately although my family is happy about my success I found that even them knowing isn’t good. When my mother became ill and we needed around the clock care they all looked at me to pay, not one offered money to contribute, not a dime. I’m not wealthy but trying to build enough passive cash flow so we can take care of ourselves when we can no longer work.
So yes, it is best to stay low profile. It’s as if people think you have a printing machine.
Financial Samurai says
How are things going now? Yes, the nice house and the fancy car are the key tipoffs. I’m facing this now as my great aunts and uncles are getting into their 70s and 80s with health problems. They are looking around to see who will take care of them. The logical answer should be their kids or nephews nieces, but they inquired with me too b/c I worked in finance. The thing is, I don’t know them well at all.
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Just to clarify, the comment above is ridiculous. The article on here is great in my opinion. Keep up the awesome job with your website!
Great Article. I first read about millionaires not showing their wealth in ‘the millionaire next door’ and that was a real eye opener. I like how you’ve gone a step further and written about the benefits that stealth wealth presents for the wealthy!
Sounds like my dad. If you saw him you wouldnt know he is a millionare. My mom drives a minivan, he drives a two year old truck, i drive a two year old car. But he pulls down almost 400k a year. He is building a 1.3 million dollar house and buying another one close to one million, and some of the people who work for him and clearly make less money are driving around nicer cars.
Financial Samurai says
Nice! What does your dad do to earn $400k?
He build and flips houses, the houses i mentioned were projects he is working on right now