When Is It OK To Forsake Stealth Wealth And Spend Up?

When is it OK to forsake Stealth Wealth?
Lockheed SR-71 Blackbird – Ultimate Stealth

One of the biggest peculiarities for hard working folks who want to achieve financial freedom is that we often don't know when to stop grinding. In other words, when is it OK to forsake Stealth Wealth and start spending more on a better life? After all, you don't want to die with too much money.

Even if we get to our target net worth amount or passive income figure, we keep on going out of habit. After a lifetime of wealth accumulation, to start drawing down principal feels sinful!

Since first writing about The Rise Of Stealth Wealth, I'm proud to see a strong adoption from successful people who've decided to keep things low key.

Society was angry during the 2008-2009 recession, and Stealth Wealth became a way of life for those who wanted to survive. Now that we're going through another great depression in 2020-2021, it's very important to continue practicing Stealth Wealth.

Recently, however, I've started to get questions from long-time practitioners regarding when it's OK to forsake Stealth Wealth and ball out a little. After all, most Stealth Wealth practitioners have seen their net worths more than triple since 2009.

Here are my thoughts for those of you who want to risk the wrath of a jealous society. As usual, I've set up some stringent conditions so that you'll actually feel OK wasting money when the time comes! 

When It's OK To Forsake Stealth Wealth

Forsaking Stealth Wealth is allowed if you qualify for at least THREE of the following conditions.

1) When you hit age 40.

You're half dead at 40. Anybody who rages against you after you've spent 20 years working is a moron. They either weren't willing to grind as hard as you, don't know how much effort you've put in, or simply like to blame society for all their problems.

It's not a big deal for a 40-year-old guy to drive a Porsche 911, wear a Patek Philippe, and own a beachfront vacation condo. It's not a big deal for a 40-year-old gal to drive a Mercedes SL convertible in $1,000 Manolos, if that's possible. If you can't live it up after the age of 40, when plenty of people die in their 50s, then it's just a crying shame to work all those years for money not spent.

2) When your net worth equals 20X your gross income or more.

You've reached junior financial independence status once your net worth has hit 20X your gross income, e.g. $100,000 household income, $2,000,000 net worth. You've reached senior financial independence status once your net worth is 50X your gross income, e.g. $200,000 household income, $10,000,000 net worth.

If you're still waiting five minutes to save 10 cents a gallon on gas, aren't willing to turn up the heat when it's freezing, or still tipping your minimum wage earning waiter less than 20%, you've got to slap yourself silly for being overly frugal.

For those of you who want to forsake Stealth Wealth because your net worth is equal to 20X or more of your annual expenses, sorry. Keep on grinding because it's better to be safe than struggling when you're too old to work. 

Getting to 20X spending is relatively easy after a while. When people focus on a multiple of spending, they will often “cheat” by trying to spend so little to get to 20X. Instead, if you focus on 20X – 50X your gross income, then you CAN'T cheat in terms of being overly frugal. You've got to focus on building your wealth through income and hustle!

Net Worth Targets By Age, Income, Work Experience Chart

Related: Target Net Worth Amounts By Age, Income, And Work Experience

3) If you've owned property for at least 15 years.

Owning your primary residence is the responsible thing to do because you shouldn't fight inflation. If you're still renting, then it's likely you haven't come up with a 20% downpayment yet, don't know what you want to do with your life, and/or don't know where you want to settle down. That's fine, because all of us go through this “finding out phase.”

But if you're still finding yourself, the last thing you want to do is spend your money on wasteful things. If you don't have a 20% downpayment yet, it's not a good idea to splurge on a $10,000 trip to Europe on your credit cards!

The vast majority of people I know who decided to continue renting since I graduated from college in 1999 are much less wealthy than those who decided to buy. Deny homeownership all you want; there's a reason why the median net worth of a homeowner is ~40X greater than the median net worth of a renter.

After 15 years of property ownership, you've not only increased your equity through appreciation, you've also paid down ~25% of your principal through regular mortgage payments. Such forced savings puts you ahead of the typical consumer because the typical consumer can't save for donuts.

Real Estate Income Is Sticky

Related: Buy Real Estate As Young As You Possibly Can

4) Your house value is at least 20X your car's value. 

Let's say you own a $500,000 home and drive a $20,000 car. You're free to spend more frivolously given your ratio is 25:1. But let's say you only have a $200,000 home, but drive a $55,000 BMW. It's clear to me you're overly focused on projecting status instead of building your wealth to take care of your family.

There's no way in hell you should be spending any more money on things you don't need. You can be more conservative and compare your home equity to car purchase price as well.

The better car buying rule to follow is my 1/10th rule. The 1/10th rule states you shouldn't spend more than 10% of your gross income on a car.

Fiscal Responsibility FS-FR Score

Related: The Fiscal Responsibility Ratio

5) You have multiple sources of income.

If you've only got one source of income, it's going to be much harder to achieve financial independence sooner than the average bloke. But if you can build at least one other income source equal to at least 30% of your day job income, you deserve to treat yourself to some fine shoes.

The person who makes $60,000 a year at her day job and $18,000 a year in freelance work is my hero. She knows that with more time, her freelance brand will continue to grow and so will her revenue.

From experience and discussions with other hustlers, 30% is the tipping point where people really start to believe that they can leave their jobs to pursue their passions. Just be careful though. Once you leave your job, you've got to start the equation all over again.

The other common way to build an additional income source is obviously through investing. It feels great having your money work for you so you eventually don't have to.

The Best Passive Income Investments

Related: Ranking The Best Passive Income Streams

6) You've consistently saved 50% or more of your income for 10 years.

The 50% can include your pre-tax 401k/IRA contributions, your after-tax investment contributions, or a combination of both. After 10 years of saving 50% of your net income, you have 20 years of living expenses in the bank or brokerage account. There's no reason why you can't splurge on that three week Mediterranean cruise with a balcony.

If you successfully save 75% or more of your income for three years, you're also free to splurge. The math is similar to saving 50% of your income for 10 years. Living like a pauper for too long kind of defeats the purpose of money.

Related: How Much Should I Have Saved By Income And Age

7) You have a profitable business that earns at least 2X the median income of your city.

One of the nice things about owning a business is that you can deduct meals, trips, vehicle expenses, and other equipment necessary to run and grow your business. If you can be in a fun business, even better!

Attending a conference in a great location is one example of a nice business expense. You can write off your plane ticket, hotel cost, half your meals, taxi fares, and cellular phone usage among other things. Therefore, your true cost is whatever the original cost is minus your effective tax rate.

But running a profitable business can be hard. Therefore, your business must have operating profits of at least 2X the median income of your city before you to start feeling like it's OK to loosen your wallet a little, e.g. $160,000 in operating profits compared to San Francisco's $76,000 median household income.

You can Forsake Stealth Wealth if you are making side income
Blogging income statement

Related: How To Start A Profitable Website

8) Your kids are independent adults.

If you've managed to raise independent adults who aren't coming to you for a mortgage downpayment, a place to live, a car, laundry, or your yummy meatloaf, then well done!

There are so many young folks out there nowadays who don't give a crap about working hard because they know the Bank of Mom and Dad will simply bail them out.

Say no to raising spoiled children

There are kids in high school and college who brag about their fancy cars, even though their parents made the purchase. No wonder they get beat up all the time. What kind of insensitive idiot rubs their wealth in other kid's faces when nobody has a full-time job?

There are college graduates who brag to their friends about their new condo their parents bought for them too. No wonder why they don't get promoted or paid as well at work. Why should they when they've already told all their colleagues they're rich.

Young adults are savvy nowadays. They know how to convince their parents to pay for everything even as adults. If you've been able to instill in your kids the pride of making it on their own, you deserve to live it up. There are just way too many spoiled rich kids ruining it for the rest of us because their parents have no discipline to tell them to make their own fortunes.

Related: Why Millennials Don't Give A Damn About Money

9) You've got a pension that covers all your living costs.

If you've got a pension, count yourself as one of the lucky few who never has to worry about money again. To earn a pension that covers all your living costs comfortably, that must also mean you worked for at least 25-30 years at the same institution. That is an incredibly honorable feat that must be rewarded given everybody is afflicted with the “grass is always greener” syndrome nowadays.

How to calculate the value of your pension chart

Related: How To Calculate The Value Your Pension

10) You got a full-ride to college.

If you've somehow managed to side-step the burden of college tuition through merit, then you deserve to reward yourself for a job well-done. You likely won't be one of those students who believes he deserves an “A lifestyle” while getting C's.

A full-ride is tuition, room, and board 100% paid for by the school or an outside scholarship. Having your parents pay for everything does not count!

11) You've successfully not told anybody how much you truly make for 10 years.

When you're young and insecure, it's very tempting to tell all your friends how much you make, especially if you know it's more than most people. By bragging to your friends, you end up making enemies.

If you've been able to keep your true income and wealth under wraps for at least 10 years, you've been able to overcome your insecurity. Your mindset changes from trying to feel better about yourself, to trying to help others.

Related: Never Tell Anybody How Much You Truly Make

12) You pay more than $100,000 a year in total taxes.

If you're paying almost triple the average household income in the form of taxes, you should be able to splurge on that $100,000 wedding after buying a flawless two carat ring.

Such expenditure might keep you in the rat race for years more, but hey, you deserve it. You're helping subsidize a high percentage of Americans who pay zero income taxes to keep the country humming. Live a little.

Paying massive taxes at $500,000
If you're working 60+ hours a week for the privilege of paying $185,600 a year in city, state, federal, and social security tax, you deserve to live a little once in a while!

Related: Scraping By On $500,000 A Year

Or, you can be like this person who makes $100,000 a year, but pays a more reasonable ~$22,500 in property, state, and federal taxes.

how to pay less taxes from your day job

Related: How To Pay Little To No Taxes For The Rest Of Your Life

13) You're donating at least 15% of your gross income to charity.

Did you know the average percentage of income donated to charity is less than 5%? If you're consistently donating 3X the average, you're doing a splendid job! And hopefully, if you can afford to donate 15% to charity and pay taxes, then you're likely relatively well off.

Forsake Stealth wealth and donate more to charity
Source: IRS Statistics Of Income 2014

14) You got dependents and need to focus on safety.

Before having a baby boy, I cared mostly about convenience when driving a car. My Honda Fit that would neatly park in 25% more spots around San Francisco. It was economical as well at only $234/month charged to my business. But several months before my wife gave birth, I decided to focus on safety.

I could not forgive myself if anything happened to my little one in an accident. I also suddenly started focusing on the need for my wife and I to live for at least 18 more years as well!

Therefore, I decided to trade in my Fit for a Range Rover Sport. With thicker doors, larger buffer zones, more safety features, and a heavier weight, the Range Rover should protect the passengers more than a Fit. I gladly was able to forsake Stealth Wealth for safety.

Forsake Stealth Wealth: My new mid-life crisis car: a Range Rover Sport HSE

Forsake Stealth Wealth Only For A Bit

Despite a lot of uncertainty in the economy, at least we experienced a 12+-year bull market. It's become slightly more acceptable to live a wealthy life now. But the longer the government shutdowns last, the more dangerous it is to spend your hard-earned wealth.

The more mindful you can be about other people's financial situations, the better people will treat you. In fact, I encourage you to be more humble and seem less knowledgeable than you really are to get ahead. The people who are shouting from their rooftops about how rich they are aren't as happy as the people who feel no need to do the same.

Forsake Stealth Wealth by spending some of your savings so you don't have to think to yourself, what's the point of working so hard and saving so much. We've been through some pretty difficult times during the pandemic. I think it's OK to be less frugal and live it up more!

Related posts:

The YOLO Economy Is Here To Stay

It's Revenge Spending Time!

Readers, what are some more examples that will allow people to forsake Stealth Wealth? Do you qualify for two or more of the items above?

114 thoughts on “When Is It OK To Forsake Stealth Wealth And Spend Up?”

  1. Hey Sam, nice Blackbird shot. However, you might want to find a nice F-22 photo instead. The Blackbird was the first aircraft intentionally designed towards a reduced radar signature, but alas was not super-stealthy (reduced radar cross-section, meaning they can see it coming but hopefully not in time to get off an effective missile shot). It’s a mach 5, 100,000-foot operating ceiling rage-beast of an aircraft; when you’re going that high, that fast, you don’t really care if they see you because they can’t hit you anyway. The F-22 on the other hand has actually managed to join formation on Iranian fighters without them even knowing it was there; given the Raptor’s hefty price tag I’d say there’s your stealth wealth mascot right there.

  2. Emily White

    I like how you throw this one up, “When you hit age 40. You’re half dead at 40. Anybody who rages against you after you’ve spent 20 years working is a moron.” Anyway, the society really wants you to fit in. Feed you on what you must have nor have to get, so you couldn’t struggle on your life when you get older enough that you can no longer do a job that youngsters could do. Basically, on this article it shows the average from the present to future amount of money that you must have. On how much your property would value in the future. Seems helpful enough to the readers that wants to be aware on what’s ahead of them. But, i suggest to see a professional person that could explain and give you some important informations regarding on this matter. Good job on making this article. Keep it up!

  3. The best old book I can recommend to younger people working is to read “Financial Passages” by Ben Stein (yes the actor and finance expert) He is very clear on knowing how and when you need to own a home, or stay free of it, having kids, saving, etc. Even though its from the 1980’s!!

    So I’d like to follow up on controlling cost of living. I’ve lived in the Bay Area, owned modest homes on the peninsula when I was married, and knew when I moved away in the 1990s I’d not be able to afford to return. I agree with Ines who had freedom by renting!! For 14 YEARS while I bounced around in and out of California -by choice- I rented and loved all the time saved on not doing chores and fixups all the time ..but I saved quite a bit too because I had no owner cost to repair the place, I invested it, AND I always had the same police, fire and amenities of parks, etc as the couples paying 3x as much for a mortgage right next door to me. I’ve known apartment-living people in silicon valley who bought homes in Colorado and other areas, rented them out for years, then retired there with cheaper cost of living..using those years to build equity. I did choose the lower cost place I wanted to be, bought a home and am satisfied with that decision.There are ways to plan for future costs you know are coming. This is what Stein talks about.

  4. Fiscally Free

    No matter how much money I had, I would still probably practice “stealth wealth.” I’m too concerned with value to spend extravagantly, so I could never flaunt my money with luxury goods.

  5. Financialbloke

    Well thought out post, thanks Sam. It really shows how important setting goals actually is. I think this will help a wide range of people of different ages.

    From just getting into the game, starting my own blog, and reading more blogs than I ever have my whole life, it’s really comes down to a few fundamentals that can have a huge impact to ones wealth.
    1. Home ownership
    2. Passsive income
    3. Save save save
    4. A diversified investment portfolio
    5. Don’t splurge until you reach your goals

    Thanks and goodnight

  6. We feel grateful for your kind words of advice. In fact, we inherited our house, and used some of our savings in our late thirties to add more rooms.

    We started saving religiously from 2004 onwards. Before that one of us had been denied salary for 20 months while the other didn’t even have a job and we already had our first baby. In India, we must pay for medical insurance and the social security benefits are practically non existent. The number of aspirants seeking quality education far outnumber the opportunities available too. Therefore we must fend for ourselves. Our aim has been to pay for the education of our boys without burdening them with educational loans.

    When the cash flow resumed in 2004, we found that we had been spending 40% of our pre-tax income. Since we had already taken a firm decision to become financially independent, we started cutting down on all needless expenditure and to begin with we chose Dr. Thomas A. Stanley and Robert Kiyosaki as our guides.

    For the next three years we averaged 70% savings but since 2008, it has been consistently 75%. Over the years our expenditure has grown 5 times while our income has grown 8 times. We keep 50% in equities and 50% in bank deposits. We have been compounding our savings at 29% with equities growing at 40%. Our savings comes to 14 times our average pre-tax monthly income (both our salaries + interest income) during the last 13 years.

    Our car is 12 years old and we are thinking of replacing it as our children have far outgrown our small Suzuki hatchback. This year one of our private investments will be sold off and we are planning to use 25% of the net profit to pay for a premium hatchback. This is the splurge we have been thinking about.

    We greatly appreciate your guidance and direction and wish to empower ourselves through your insights.

    Many thanks,

  7. Our average age is 45. For the past ten years we have been saving 74% of our income and paying 10% for charity. We have been living in our home since 1975 and it costs 20 times more than the cost of our car. Our passive income (equity both private and listed and bank deposits) is 50% more than our annual income and we have no debts or mortgage to pay off. We need to fund the education of our boys who are just 15 & 10. When we retire our pensions will adequately cover our living expenses. But, since our net worth is only 11 times our annual gross income, would it be better if we wait until it doubles before we begin to splurge?

    1. You’ve met at least 3 conditions. Splurge away, but responsibly! At age 45 and a 74% savings rate, you have fiscal responsibility EMBEDDED in your DNA! I don’t see you permanently falling off the bandwagon.

      Great job. However, if you’ve owned your home for since 1975, how did you manage to buy it at age 3? Is there also a nice inheritance behind?

  8. Income is a terrible way to measure anything. Expenses are the correct metric. Many financial bloggers make this mistake by focusing on income instead of expenses, but you take it a step further. You actually preach AGAINST using expenses to measure how you are doing. That is very strange to me. I don’t need to replace my income in retirement, I will need to replace my expenses.

    Using income, every time I get a raise, I’m now doing WORSE meeting my savings goals, according to you. When my wife quit her job, suddenly we were doing MUCH better financially even though we just lost half our income. That doesn’t make any sense at all.

    Focusing on expenses, neither of those two events made any difference at all when calculating how we are doing. If our expenses are $50,000 a year, and we have a million saved, we’re already in good shape. If I get a big raise, I’m in BETTER shape (since I can save more), not WORSE shape as your calculations would show.

      1. I submit that you haven’t learned the lesson of having “enough” yet. Some people may indeed think they always need “more”, but money alone is not the goal for most of us. The goal is freedom. Raising your expenses every time your income goes up can be a recipe for never getting off the hamster wheel.

        In any case, using a net worth to income ratio as a formula for splurging doesn’t make sense. If I get a big raise, I CAN’T splurge because my ratio goes down? And likewise, if my wife loses her job, and we lose half our income, now we CAN splurge? It’s ridiculous. Base it on expenses instead.

        1. I definitely have NOT achieved enlightenment or monk like status yet, that’s for sure. This post is about helping those of us who’ve been frugal all our lives to live a little since life is finite.

          I’m curious to know though, if you’ve achieved “enough,” why are you still working? Or have you stopped working? Share with me more your background. I left my well-paying job in 2012 at age 34 because I had enough at the time.

          I’m always looking to get more insights from early retirees and other people who passed on earning a good income/opportunity because they are enough. How did you overcome the fear of giving up that income?

          Here’s to finding that balance!


  9. Great article Sam – these benchmarks you came up with are very helpful. I squeeze in on at least one or two of them. But if anything now I’m motivated to qualify via even more items on your list. Thanks again for the insightful financial perspective!

  10. I love reading your posts and batting zero Sam. haha
    Generally I do much better but I am relatively young, so I have good goals to aim for.

    I think about this often as well, day dreaming of Rolexes while I wear my perfectly beautiful Movado.
    Last year I lavished myself in material purchases and vacations. While it was truly enjoyable – I find myself wanting to live on less. I splurged on an expensive Virtual Reality headset that I can show off to friends, and I never use it.

    My new definition of dropping my stealth wealth is going to be getting a NYC street cart chocolate croissant every morning that I have $1.25 in my pocket. We can all go at any time, gotta enjoy the simple things!

  11. Crocodile Larry

    I’m reading down the list nodding my head. Over 75% savings for over 3 years, cars less than 20:1, and pay lots of taxes. 3/12. Not so bad my man….

    ….and then I read your ring and wedding comment. Spit out my coffee and I wasn’t even drinking any! Being naive a few years ago I bought my wife a 2 carat ring and our city wedding last year ended up closer to 6 figures than I’d like to admit.

    We generally are stealth wealth and big savers. Both of those definitely got out of hand though. Wedding money is the worst spent money. Around -60% ROI, conservatively. I wish we had eloped somewhere cool and saved a down payment. I actually get embarassed now when people make comments on her ring. I try to point out the flaws to them. I wish I could swap it out for something reasonable when she’s in the shower, but I think it’s forever now, like my hs prom tattoo.

    Live and learn. Can’t beat yourself up over the past. Hopefully those are my biggest L’s and it’s up and up from here on out

    1. But at least you have memories that will last a lifetime! Do you live in a big city like New York city? They say the minimum, or is it average, ring size there is two carats. So that’s the case, then you guys should blend right in!

      And if your wife is happy, that’s all that really matters right? Just make sure to get insurance on the thing. I think my wedding cost less than $2000 because it was on the beach. I custom designed the ring and got it made in New York city. Thank goodness for small fingers.

      1. Crocodile Larry

        Chicago, so close enough. I insure it at least. 2 carats maybe average in Gold Coast/Lincoln Park, but def not the city.

        Jealous of your small beach wedding. The wedding really was a blast though. Just need to watch our wedding video 2000 more times to get our return

  12. in honor of your post, I splurged tonight instead of eating at home.

    I had a hot dog and soda at Costco for $1.50…..

    Maybe I might feel extra splurgy tomorrow and get a mcdonald’s cup of coffee for a buck….

  13. > If you tip your minimum wage earning waiter 20%, you’ve got to slap yourself silly for being overly frugal.

    Wait, how much should I be tipping my waiter? Is 20% not considered a good tip anymore? I thought tipping anything more than 15% was pretty good…

  14. I totally fail at number 4, but it says something more about my house than my car. I live in a low to medium COL area. The $500,000 in your example would get me way more house than I’d want, I’m perfectly good with my 4 year old, less than $300,000 moderate sized house.

  15. Delivery Boy


    You know I love your stuff . . . and I hate to do this . . . but I am going to be a contrarian (I can do that after 30 years investing and after experiencing 50% market declines twice!). It is articles like this that mean we are at a top (equities and real estate). Your instincts were right going into 2016, so you were just a little early. You remember the old saying? The market can be wrong a lot longer than you can be solvent. Be careful out there people.

    1. You very well could be right! But, I’ve already written about the coastal real estate market declining since late 2015, I’ve been buying bonds in November and December 2016, shifting my allocation to at most 50% equities for 2017 to get defensive, and paying down mortgage debt methodically per my Investment Tracker Spreadsheet.

      I’m preparing for slower times ahead, but I’m hoping for the best by investing in private deals and working on my business.

      Let’s say you’ve got a $5 million net worth equal to 25X your $250,000 gross salary, a $80,000 side income stream, and you’re over 40. 3 criteria met! I think you’ll be OK paying cash for a $50,000 mid-life crisis car. Gotta live a little.

      1. Delivery Boy

        Absolutely! Regardless of where things are heading in the markets, don’t be a frugalist and deny you/your family. Enjoy the ride too. Life really goes too fast. The most difficult (or reflective) time for my wife and I was at the bottom in 2009. Not because we had lost so much, but because it was “damn, we haven’t done anything fun yet!” after earning so much and doing everything right.

        If you are saving and investing, up or down, everything will turn out ok. Keep maximizing all of your accounts. The charts for your investments are mostly up and to the right. I got way more than 3 criteria met. I am on my second Porsche. I was kinda embarrassed the first time around. Not so for the second!

        Sam, I can tell by your posts there is a kid on the way for you. You will be a changed dude because of it. I can’t wait to read the posts of yours when you are a dad!! Private message me because I have the next book idea for you!!!

  16. Very interesting and some pretty valid points. All the hard work and making money ‘work’ for us in the end you do this because you aim for a lifestyle that makes you happy. So why wait?

    This story reminds me of my late grandfather who always worked hard and when he was old had so many regrets of not doing (or buying) things, like taking vacations, go out more and experience all kinds of things. This made me organize my life in balance: saving and spending should be in such a balance that you can be happy in whatever stage of life you are.

    And a small victory, we can cross #4: Your house value is at least 20X your car’s value. But our car is only worth a 1000 euro, so that’s not that difficult.

  17. I feel this is really one of your best posts Sam. It’s lit a match under me and I’m definitely going to use it as a tracker! Although disappointed that as a 33yo going on 34 I meet 2/11 as #7 & 8 don’t apply, this post is a nice summary of the benchmarks I should be setting.

  18. “Use your money to find love. It will make you happier.” is easier said than done.
    I’ve HAD IT with dating, particularly online dating. In fact, should I put together all my typed notes, it would make a sick comedy. Being stood up. Eventually meeting The One who thinks spending $300 on a Psychic is Logical!
    She blew my mind with that, and that was the last I saw her.
    Better off Alone than with one of Them!

    “Then use your money to donate to a cause you believe in.” is also easier said than done. I believe in causes but virtually all charities I’ve researched range from shady to scams. A lot of money is being pocketed by suits in luxury cars and little, if any, actually goes to the causes.

    It all comes down to not being able to trust humans…

    I could splurge any time I wanted to, but nothing makes me happy.
    Furthermore my medical condition limits me on sugar and weight-gain, so I can no longer pig-out.

    1. No problem. Volunteer your time in a cause you believe in. No downside risk when it comes to money.

      Yes, relationship comedy is always welcome here if you’d like to write a guest post about money and relationships!

  19. An interesting post. I probably qualify on a few of these items. I wouldn’t say I am cheap by any means. However, others think we are. We do like to eat out at a very expensive restaurant twice a year. I was excoriated on another site for that. Of course, I forgot to mention that we covered half the cost with a gift card from using the business AMEX for my wife’s business.

    I recently ran some numbers for what I consider to be 3 items of major leakage for many people:

    1. Memberships to fitness clubs
    2. Designer Coffee
    3. Smoking

    For 1 and 2, I don’t advocate stopping. I suggest being smart. Join Planet Fitness for $12 a month and forgo the $35 to $50 a month others charge. Don’t drink the $3 coffee. Buy the K cups (I use Wegman’s) and pay 36 to 59 cents per cup.

    Don’t smoke! $7 a pack and increased medical and life insurance costs not to mention all the additional medicines needed to treat smoking related illnesses. Over a 10 year period, the savings on these items assuming a conservative 5% rate of return is approximately $38,000! For 20 years, $150,000! If you are young enough to benefit from the 20 years of savings, I suggest making that a goal and rewarding yourself with spending 25% on something fun you want – maybe that expensive trip to Hawaii. For the 10 years, take 40% and do the same albeit your aspiration needs to be less lofty.

    Most humans need a reward at the end of the journey. It is just in the wiring for most. Saving just to save, sadly doesn’t register for people. Even for goals like retirement and education funding. People need to be brought into much differently than the approach taken by the financial community for the last century.

    1. Hmmm, interesting belief about 1,2,3. I don’t drink coffee or smoke, but I am a member of a private tennis club that has a gym. Although it cost $10,000 to join at the time and ~$250/month on average, it’s been one of the best expenses ever. The people I’ve met and the fun I’ve had are priceless.

      The $14,000 free week’s stay in Paris for the French Open last year was due to a friend at the club. And there are lots more examples!

      1. Sam

        I am referring to the typical person – not you! You are atypical and that is a compliment.

  20. It’d be fun to know what frivolous purchases people made? I tend to find if I have huge stock gains or won some $ at poker I treat myself more than if it were money from my job.

    I used to be big into basketball shoes, had to get the latest Air Jordans, Nike Shox.., $200 and up back in the day. when you are a student it’s big bucks!

    I never went wild with watches or a sports car. That’s what guys tend to get, the Porsche or Ferrari when they hit a big windfall.

  21. I love stealth wealth so much though. I meet none of your criteria, yet. A big goal this year is to increase my streams of income. I think it is reasonable to believe that this year my side business could pay me 10% of my salary and that the unrelated product I am creating can pay me 5% of my salary. This will be the first run on my product, but I have the vision for many iterations that should create some nice streams of passive income after they exist.

  22. Why did you choose a net worth of 20-50 times your annual salary? I thought that you’ve reached financial independence whenever you don’t need to work to cover your living expenses.

    Also, although I agree that there are many entitled millennials who get free cars and houses, you have to realize that there are MANY motivated millennials who use that to get further ahead. To be honest, I probably fall in the more entitled range of millennials, (parents paying for car, etc.).

    However, this doesn’t cause me to work less, as a matter of fact it motivates me to work harder because I have more to gain from doing so (compound interest is quite possibly the most powerful force on earth)!

    1. It’s important to have a cushion for life is ever-changing events.

      What are some of the reasons why you don’t buy your own car? Wouldn’t be better to let your parents enjoy their money in their older age?

      1. There’s no reason I can’t buy my own car, and to be honest, I’m torn as to whether or not its better to let my parents enjoy their money in their old age.

        I want my parents to be comfortable, but at the same time I have a lot to gain by saving on vehicle expenses and learning how to invest the money that I save.

        But to be honest, I can’t actually give you a good answer, because I honestly don’t know. What I can tell you is that having that opportunity pushes me to make the most of it.

  23. Let’s see:

    1) When you hit age 40 – Yes
    2) When your net worth equals 20X your gross income or more: No, 3x at the moment.
    3) If you’ve owned property for at least 15 years: Yes
    4) Your house value is at least 20X your car’s value: Yes
    5) You have at least one additional income source equal to at least 30% of your day job income: No – 5%
    6) You’ve consistently saved 50% or more of your income for 10 years: No
    7) You have a profitable business that earns at least 2X the median income of your city: No
    8) Your kids are independent adults: No
    9) You’ve got a pension that covers all your living costs: Yes
    10) You got a full-ride to college: Wife did. Paid cash for mine.
    11) You’ve successfully not told anybody how much you truly make for 10 years: Yes
    12) You pay more than $150,000 a year in total taxes: No
    13) You’re donating at least 15% of your gross income to charity: No

    5.5/13 – Battling lifestyle inflation hard, which is a form of balling out I guess. Tastes definitely change over time. Still struggling to save after tax income outside of mortgage principal.

  24. Being in tech with not enough money to buy a house or investment property in the Bay Area. The best use of my time/money is probably in honing in my skills so I can make more earning a living. On the side, I’ll continue to build my brand and blog/consult.

  25. Looks like 3/13

    #1 – Nope – 5 years to go
    #2 – Nope – not even close to 20x as my income has gone up too fast to keep pace with savings
    #3 – Nope – Similar to #1 – 4 years to go
    #4 – Yes –
    #5 – Nope – rental income is small potatoes at this point to day job
    #6 – Nope – this will be first year I’ve hit 50%
    #7 – Nope – work for a $6B corporation
    #8 – Effectively Yes – no kids and won’t be any
    #9 – Nope – no pension in my future
    #10 – Yes – Got my employer to pay the ~$100k for my T10 MBA program (paid maybe $20k for undergrad with own money/student loans)
    #11 – People have a general idea given my job title / career but only my family (parents, wife) and financial advisor know the amount.
    #12 – Nope – Pay roughly $75k/year in taxes which will climb to around $105k in 2018 once my first bonus and stock comp at my new level hits. Don’t see paying $150k in taxes anytime soon unless I make it to SVP or CFO. Helps my property taxes are very cheap.
    #13 – Nope – don’t donate much to charities (think most are not needed or effective)

  26. Passive Investor

    Timely article for me. The biggest concern I have about living it up, especially with physical possessions like cars and bigger home, is what it will do to my relationships. People tend to judge the wealthy instead of respect the hard work and sacrifice it took to get there. Some of the wealthiest people I know give more money away every year than the average family makes in a lifetime, yet I hear them get constantly judged for having a Lexus, big house, and an airplane. I guess there’s a reason rich people tend to have rich friends.

    I recently just read a quote that reportedly came from the Dalai Lama. It’s something I’ve been pondering the last week to keep things in perspective and priorities in the right place.

    “Man surprised me most about humanity. Because he sacrifices his health in order to make money. Then he sacrifices his money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future. He lives as if he will never die, and then dies having never truly lived.”

    1. Judging the wealthy in a negative light is just the way the world is today given the massive inequality of wealth that has resulted from technology.

      It’s sad though, b/c the quality of life as a whole has improved DRASTICALLY for everyone. Yet, people are still unhappy b/c they see others with so much more.

      Fantastic Dalai Lama quote. Thank you for sharing!

  27. Danielle@wenthere8this.com

    Love this list. I meet 4 criteria, but would like to meet at least 6 before I become less stealthy. With exception of my partner and my mom, I don’t share my income with the people in my life. However, I do believe I may have shared my net worth on a couple comments on some financial blogs. Oh well. I have a few years to go until 40, my additional “side” income is only about 10% of my gross and my net worth is only about 4x my income. Looks like I’ll just keep grinding!

    I’ll definitely be bookmarking this list and coming back to it in a couple years to see where I stand :-)

  28. Fantastic post. Most of us financially inclined folks get so caught up in the accumulation of assets that we forget to spend! I have no problem with people rewarding themselves with their riches but giving to others, such as charities, seems like a much more fulfilling use of your money.

    I like to think of money in the terms of blood flowing throughout our body. If we hoard money while others need help, you’re going to be harming the body (society) in two ways.

    And I had to google Patek Phillipe. My goodness that’s a lot of money for a timepiece.

    1. “You never actually own a Patek, you merely take care of it for the next generation!”

      You are true frugal if you’ve never heard of Patek Philipe. Well done not getting caught up in one of man’s great desires: luxury watches.

  29. Jim @ Route To Retire

    I almost fell over laughing with “Anybody who rages against you after you’ve spent 20 years working is a moron.” Very true.

    When you started discussing net worth being equal to 20x your income, I was thinking “well, wait a minute – aren’t expenses more important?” Then you addressed it. Not sure if I agree with the “No exceptions!” part though.

    I’m thinking of myself, of course, but when I call it quits, I’ll likely be about 30x my expenses. However, I’ll have some other income-producing assets like a handful of rental properties, which can kind of skew the numbers a bit. Other than that, I’ll probably be able to say “yes” to about 5 of your criteria.

    Well thought out post, Sam… love it!!

    — Jim

    1. Yes to 5 is great. I was originally thinking of putting the hurdle at 2, but I figured there would be a lot of go getters out there who would easily check off 2.

      To debate on you on the 20X of expenses:

      Getting to 20X spending is relatively easy after a while. When people focus on a multiple of spending, they will often “cheat” by trying to spend so little to get to 20X. Instead, if you focus on 20X – 50X your gross income, then you CAN’T cheat in terms of being overly frugal. You’ve got to focus on building your wealth through income and hustle!

      1. Ok, I’ll concede on that :-) – I could see how people might try to “cheat” by spending less. But, if they make spending less a lifestyle change and not just a way to get the numbers where they want, do you think that makes a difference?

        — Jim

  30. Nice list. As with all things its normally about changing your daily habits as apposed to all of a sudden changing your way of life..
    We increase our cost of living expenses on splurges by 10% annually. So as an a example vacations were 15k 5 years ago now its 25k. Slow and simple. Tbis way it sneaks up on us and we dont show too much to everybody around us.

  31. Physician On FIRE

    I meet five criteria, but I’m content with my stealth wealth. By the way, this is a hot topic on the Bogleheads forum: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=202967 Your original post is linked on the fifth page of comments.

    The following apply:
    1) I’m a year over 40
    4) My home is worth nearly 100x my car. That says more about my cheap car than my home.
    6) Consistently saved more than half my after-tax income. Yes.
    10) Full tuition, Byrd scholarship, and others left me with money in the bank after 4 years
    13) Donated $100,000 to our donor advised fund last year. Which is $38,000 more than we spent on everything else (taxes excluded).

    I’ll continue with my stealthy ways, which will be a little less stealthy when I share my net worth in an upcoming guest post on an incredibly popular website.


  32. I recently retired after 31 yrs with a Megacorp. Fortunate enough to have a pension that covers the majority of my expenses (Trial period–I’m only 6 months into this).

    One thing that has been an eye opener for me is I’m also grateful to have retiree medical at a low rate ($17 a month). Medical is a big deal at 56 yrs old. Some of my friends pay ~$600 a month each with ACA subsidy (no kidding).

    If my retiree medical goes away that will be a big impact on my expenses. Just thought I would throw that out there sense I didn’t see medical expenses on the list of 13.

    Good point about taxes. I’m trying hard to minimize that element moving forward.

      1. Thanks for the reply. I can definitely see why folks retiree “early”. Going to the gym more and also re-started Yoga. Not commuting in Seattle WA traffic (4th worst in the country) is also a plus.

        I’m still adjusting to free time after M-F corporate world for those 31 yrs. I’m considering doing some PT contract work downtown SEA. Amazon, Starbucks, Nordstrom, etc are all within 5 miles of my home. Not sure how I would adjust to completely jumping back in the game so to speak.

        It would mostly for social interaction and WAM money (walk around $). I’m not wealthy but feeling better about being *retired*. Full disclosure—they retired me with a severance pkg. I recently paid off my house to give me a piece of mind. My 401K is $700K and house value is $565K. Single, no kids.

  33. An old Jewish friend told me once – “you don’t have to flash your money until you reach age of 35”.

    I agree that the only way to splurge is once you reach that splurgable age. As a young buck, 24 year old accountant here, I see no need to spend money on things besides:
    1- work clothes because I spend on average 50-60 hours a week in the office
    2- food because well I have to eat
    3- supplements because working out is my hobby and it makes me happy
    4- car repairs because it’s just necessary when you commute 50 miles each day
    5- travel because I am a millenial and it is one thing that truly makes me happy nowadays. I also do I very smart and very planned with a strict budget.

    THATS IT. What else could you possibly waste your hard earned dollars on?
    Oh yeah- women. Guess what papi, if you got game and at least half decent looking, you don’t need to spend more than 20 bucks per date on them and still score at the end of the night. Get real haters. Sammy knows what he is talking about

    1. Hah! To be 24 again. It’s funny, b/c as a 24 yo, you’re probably in better shape and look better than most men my age. Therefore, to spend lots of money on women isn’t as necessary. It’s us older farts who need to spend more to make up for our guts!

  34. Very interesting thought exercise, Sam. Thanks for posting.

    I will say, I fail most of them. But I am comfortable where I am. I did splurge last month on a certified pre owned Model S that will arrive sometime in February. Not the wisest financial move if you look at pure numbers, but meh.. there’s more to life. My dad died young and I have grown up a tightwad, so I think it’s high time I spent some money on something that I’ve wanted for a very long time because life is short, dammit.

    Might be counterintuitive but since making the purchase order I have been motivated to hustle even more. I’ve been a tad complacent lately since the house and car are paid off. Now that I’ve kind of “upped the ante” so to speak, I’ve found myself grinding more and looking for new opportunities. Yet I still FEEL like I’m “retired” because I just love real estate so much. I could be in a much worse spot.

    I’m pretty conservative but when compared to your list, my move seems risky. But it is a move I am comfortable with, so it’s really just a subjective decision.

    1. Fancy! How much was that?

      Spending a lot of money definitely motivates me to make more money as well. When I bought my SF condo in 2003, my motivation to work shot through the roof too.

      1. Tiffany Alexy

        It was $55K. 2014 Model S 60 without autopilot. I don’t really need autopilot and with it, the CPO price jumps to $75K.

        Meeting your SO also helps boost motivation. Nothing like keeping each other accountable and knowing you have to make short term sacrifices for long term gain. He’s on board with the Tesla though. :)

  35. A man has only truly earned that which has already eaten and that which he is wearing. Everything else is hit or miss.

  36. Gold Medal Finance

    Great post.

    Here is how I stack up:

    1) When you hit age 40: Nope – very early 30s
    2) When your net worth equals 20X your gross income or more: Nope, 3x at the moment.
    3) If you’ve owned property for at least 15 years: Nope again, 5 years
    4) Your house value is at least 20X your car’s value: Yes, I don’t own a car
    5) You have at least one additional income source equal to at least 30% of your day job income: nope – 10%
    6) You’ve consistently saved 50% or more of your income for 10 years: Nope – 4 years
    7) You have a profitable business that earns at least 2X the median income of your city: my wife does, does that count?
    8) Your kids are independent adults: no kids
    9) You’ve got a pension that covers all your living costs: no, too young
    10) You got a full-ride to college: yes, full academic scholarship
    11) You’ve successfully not told anybody how much you truly make for 10 years: fail, only the past 2
    12) You pay more than $150,000 a year in total taxes: I would if I lived in a high tax jurisdiction, but fortunately I don’t
    13) You’re donating at least 15% of your gross income to charity: no, not even close, still accumulating I’ll donate when I’m dead.

    2/13 = still on stealth wealth for me. I’ll stick to this until I hit 40 at least.

  37. Great list of frameworks and benchmarks. We are 50 years old, early retired last year, and are pretty well off – I think we can check the box on almost every one of your screens. That said, on your second one where you compare net worth to income, shouldn’t you be comparing net worth to spending? If we are spending less than our means – it is spending that matters, not income. See my point?

    1. It’s up to you, but I want a greater challenge for myself, and for my readers. Getting to 20X spending is relatively easy after 20 years. To me, people “cheat” by trying to spend so little to get to 20X. Instead, if you focus on 20X – 50X your gross income, then you CAN’T cheat in terms of being overly frugal.

      You’ve got to focus on building your wealth through income and hustle!

  38. We don’t live a life of deprivation along the path to FIRE, and so I don’t foresee us suddenly needing to burst out from behind a curtain of stealth wealth on to the stage waggling jazz hands furiously proclaiming how wealthy we are. We already spend on the things that matter to us, and we will continue to do so. The one thing that I will definitely start to conspicuously show off to all my friends and neighbours will be the enormous amount of time that I have that is mine to do as I please with. I’m not saving for a fancy car or a diamond ring. I am saving for oodles and oodles of fantastic, priceless time. That I look forward to flaunting.

  39. I just turned 34th, high 7 figure net worth and I’ve given up stealth wealth for a couple of reasons.

    1) Life is too short (I’ve had some health scares last year), I’m gonna live it up as much as I want with cash flow from my business and investments. We have no kids and our families are taken care of.

    2) I don’t have that many friends anyways, if they wanna hate oh well. They know we goto maldives 3-4 times a year and fly business/first most of the time.

    3) With that said, I actually don’t own a vehicle and don’t own any flashy jewelry or high end watches. I find enjoyment in traveling and 5 start resorts. I look like a typical college student (thank you asian genes)

    Lastly in a real dick sort of way, many people didn’t think I would amount to much when I was growing up. I like showing these people that I am successful beyond their wildest dreams. It feels so damn good when they are speechless. Stealth Wealth doesn’t provide for that.

  40. Jack Catchem

    Hey Sam,
    Generally no splurging, but I am willing to make exceptions for things that are likely to be more durable if they are quality. For example with home improvement, I’m willing to pay 5-10% more for the well reviewed licensed contractor who will get the job permitted and inspected. Better to have it done once and done right instead of a patch job that will cost more time and energy later!

    1. Yes, I agree. Paying up for quality is worth it. However, for some reason, no matter how much you pay up for a quality contractor, things always go wrong. A friend just spent 8 figures building his house w/ the “best” contractor, who still screwed up.

  41. We qualify for 6 of those conditions. At this point, I’m not quite ready to spend frivolously yet. I don’t consider occasional splurging to be frivolous, though. When we go on vacation, we’re less frugal and I think that’s perfectly acceptable. At home, we’re still pretty cheap…
    Maybe when our net worth reach 40x expense, we’ll feel more comfortable spending. Kid is a big factor too. We’re not sure how much college will cost and we’re saving for that. Once he’s done, then we’d be more open to splurging more often.

  42. Compose Your Investments

    Although I personally will likely not end up meeting many of your conditions, the principle is sound. I watched a relative of mine pass away after a lifetime of saving/investing/spending very little with nearly $10M in the bank! His widow has smartly learned from their mistakes and is now making up for lost time with relatives and traveling the world.

    On the flipside, another of my relatives skates by with less than $50k in income, saves little to nothing, yet is always upgrading his car or buying the next new electronic gadget. He could definitely learn from your lessons!

    My goal is to split the difference — make enough money to support my family and retire at a reasonable age, while still enjoying life along the way. After all, you only get one shot at this life!

    1. Sorry to hear about your relative, but how did you know s/he had $10M in the bank? Does this mean you got some too?

      That $10M should help your other relative who is hanging on!

      1. Compose Your Investments

        Thank you. Sorry for keeping things vague… my family is very private and even what I wrote is a bit of a stretch for what they’re comfortable with. No, none of that would come to my wife or I (many layers in-between). And yes, she’s definitely using the money wisely to enjoy the life she has left to the fullest, traveling and visiting those that she wished she’d spent more time with over the years.

  43. I am definitely not ready to forsake my stealth wealth yet. I am still gearing up trying to accumulate my nut. I think even when I can afford to be flashy that outside of a Mediterranean cruise on the balcony I’d probably pass all on all those things. I would rather travel the world in style and create memories than wear flashy clothes and cars.

  44. Smart Provisions

    I don’t quality for any (yet), but a few more years (without any mishaps) and that’ll be it!

    I’m not really fearing anything yet, but it’s always interesting to hear what my friends and family are saying when I show up in hand-me-down clothes, an old car, an old phone, or even other things I don’t think are worth upgrading to a new one for.

    One thing I’ll splurge on for sure once I reach FI will be sashimi. I love myself some delicious sashimi… although I’ll most likely just head to a All-You-Can-Eat Sushi Buffet for around $12-20.

    1. Jack Catchem

      Have you tried “Poke Bowls”? It’s all the sushi you love, but served with a traditional American flair for complete lack of style! Once you take out the artistic tradition, there is still wonderful flavor.

      It won’t replace the sashimi need, but maybe it can displace it for a week or so.

      1. Smart Provisions

        I have!

        Poke bowls are all over the place where I live and travel to. It definitely sates my desire for sashimi and miso soup for a while and is definitely and interesting and artistic take on sashimi.

    2. Just had sashimi yesterday actually in the form of chirashi. I guess I take sushi for granted, b/c I happily pay up for really good sashimi all the time. The best, of course, is toro.

      The funny thing is, you will get SICK of it if you eat it all the time. That’s why you got to rotate your sashimi with 28 day dry aged rib-eye, lobster, curry crab, handmade pasta, chicken shalik bhuna, soup dumplings, and many other awesome dishes!

      1. Smart Provisions


        I’m probably one of the only people who love to eat the same thing everyday. Back in college, I had porridge with tomatoes and eggs everyday for almost a year.

        My favorite thing with sashimi is definitely the wasabi. I have this undying love for wasabi, especially if I mix it with soy sauce (apparently not the right way to eat it) and dip the fish into it.

  45. Nice list. When I was younger I worried about being perceived as a show off for getting nice car and house etc. once I turned 45 or so, (46 now) I simply don’t care what people think and enjoy my life. I never put it in anyone’s face and am very nice to others. I never discuss what I make although I made that mistake when I was 33-34 and was making 1m per year on Wall Street. You’re right it made jealous enemies instead of friends. Lesson learned.

  46. OlderAndWiser

    I qualify for 7 of the conditions. That settles it. Time to splurge! I’m buying popcorn next time I go to the movies.

  47. The Green Swan

    Does sharing your income (or net worth) with the internet considered sharing like #11? If so we all fail I believe. Just kidding, I’d much rather share in this setting with others who can only support and give insight to help us all. I am still in the stealth wealth mindset and not ready to splurge, but I like this list of reasons why it will be ok someday. Great post!

    1. Yes, if you share 100% of your income and net worth, that’s a fail. But if you only share parts of it, then that is still Stealth.

      Good thing there are 12 other criteria to choose from!

  48. Apathy Ends

    No splurge for me. Probably not for awhile either. I would opt for fishing trips and vacations over a Porsche – to each their own!

    I’m sure you have written about this – but why do you prefer to use income over average spending for your multiples? Is it an additional safety net?

    1. Average spending is a much lower denominator, and therefore, much easier to achieve 20X. When things are easy, people get in trouble. Better to have too much, than too little. A challenge is always the reward!

  49. Go Finance Yourself!

    I don’t qualify to splurge just yet. I’m still in grinding mode. One of my biggest fears is I won’t be able to stop grinding once I reach FI and will fall into the one more year trap. I like seeing my principal grow too much!

    1. Permian Buyer

      I have the same fear, as does my wife. She keeps telling me I’ll just change my goals when I meet the ones before us like I always do.

      Fantastic article!!!!

  50. Very interesting post!

    I would just like to give you another view on number 3 and the importance you attribute to owning your primary residence. I do not fully agree with that, I believe the flexibility of renting actually gives you opportunities to save. You can share a room or rent a small studio if you live alone and want to save, and then easily change to a bigger apartment/house if you have a family.

    Renting also enables you to be opened to job opportunities in the whole world, because you are not attached to any property or loan.

    Since I have lived in many different countries and cities, my approach is to buy real estate as an investment and rent it, but never as my primary residence. I feel it would narrow my opportunities and it would not allow me the flexibility to adapt to different working or family conditions!

    Apart from number 3, I fully agree with all the other conditions!

    1. Where did you end up buying property?

      For some reason, there’s this misbelief that owning a property gives you less flexibility. If you buy right, you can always rent out your property for at least cash flow break even, to cash flow positive. There are TONS of rental property services now to choose from. And of course there’s Airbnb, Homeaway, VRBO, etc for short term rentals.

      I regret not buying more property in 2000-2001. Coulda bought a 2/2 1,300 sqft apartment with two balconies and a view of the Chrysler building in Manhattan for ~$799,000 or so. Worth probably $2.5M now!

      1. My reasoning is that if you buy property with the sole purpose of investing you make a much more rational decision than if you buy it to live. You are not at all emotionally attached. But, most importantly, not owning my primary residence allowed me the flexibility to live in many different places, to take the risk and be able to fully take advantage of higher paying job opportunities very easily.

        I bought my first property in my home country (I am Portuguese) because I am more familiar with the market and the laws, but I currently live in Germany. The money I will make renting the a studio in AirBnb my home country will generate a stable passive income that would allow me to pay for a similar studio here in Germany, which is a much more expensive country to live in. I think this reasoning makes sense if you plan to move around a lot. If you do, then clearly it pays off to buy your primary residence.

        1. I think owning a primary reaidencr as investment property qualifies as long as you aren’t double counting it as an investment. It serves the purpose of potentially stabilizing your housing situation either via transfer or living there in retirement if you had to.

          I think people get very literal when you talk about rent vs own, when in fact the recommendation is really to make use you are financially stable specifically related to your housing.

  51. These are always fun to read, here’s my breakdown:

    #1-Turning 40 in less than a month / Check
    #2-No way that’s happening unless I work until retirement age, we’re a high income household / Fail
    #3-We paid off our mortgage last year, I consider that a pass / Check
    #4-Shouldn’t this be household car value vs. house value? Many households have 2 cars at least. What about leased cars? I’m assuming we’re at a 10x factor / Fail
    #5-We do side hustle, but income is low / Fail
    #6-We’ve been over 50% for past 10 years and at 73% past 3 years / Check
    #7-My career is my profitable business / Fail
    #8-Only Have small kids / Not Applicable
    #9-No Pension / Fail
    #10-I put myself through college back in the day / Not Applicable
    #11-Practiced good Stealth Wealth, anonymous blogging notwithstanding / Check
    #12-We pay $100k a year so not close enough / Fail
    #13-We’re at the average / Fail

    What’s interesting is that as good as we think we may be doing, and with a relatively healthy net worth at least compared to the general population, we still managed only 4 Checks.

    By definition of your rules, we can splurge, although it still feels dirty to do it. We’ve got a big splurge coming this summer (2 month vacation), I guess I’ll see if I can stomach it after so many years of saving.

    1. Awesome going through the list! The 2 month vacation will be wonderful. You will NOT regret it. It sounds like a sabbatical to me? Paid time off? What’s your occupation to allow for so much non stop vacation?

      I wish I was able to take a sabbatical. But, company culture did not allow.

      1. During my last promotion I negotiated a flexible working schedule since they didn’t give me a raise that matched the level of responsibility. This now allows me to work remotely during the summer, and since I hold a global role I plan on changing the location each summer to a different region, company is not paying a dime. First chosen region is Europe since it’s more familiar and easy to pull off. I have a month’s worth of vacation I will take throughout the summer (mostly Thursdays and Fridays, with occasional week off). My wife will take unpaid leave, which she also negotiated during a recent company switch. It’s technically not a non stop vacation (at least for me), but close enough. I’m a global director at a large manufacturing company in the energy industry.

  52. Actually I tip the waitress 15% (did it ever occur to you that that’s deserved for the meager service?), and I keep that oil-leaching furnace close to 60 degrees on cold days. I just put on an extra layer of clothing.
    I should be slapped silly for being overly frugal.

    That’s the trap I’m in, you see: I’ve spent a lifetime being frugal and Efficient not Wasteful. Now my networth is huge–but I can’t spend money. I’ve gotten used to the voluntary simplicity lifestyle. Even if I wanted and purchased The Best in things–I’ve no one left to show them off to. Thus they are pointless to me (as well as being wastes of money). Furthermore, the last thing I want to do is join the pretentious prick clan of my McMansion living neighbors. I don’t want them to think that I’m “seeking their approval” and finally deciding to join and play their one-upmanship game of prestige! That’s not who and what I am and it’s the last thing I ever want to do.

    And I’m over 50. But I’m in excellent health more or less so I expect to live to a ripe old age–and I don’t want to end up broke by then, like so many others. So you see, this is a trap I’m in. I fear that should I somehow overcome the frugality trap that I’ll spend…and spend and spend and spend…to no end.
    This is why I have a phobia of Addictions of all sorts. The best way to get around them is simply Never To Start.

    Perhaps I also saved my ass by dispatching my last girlfriend who didn’t know jack about saving money. Had I kept her I might be approaching the poor house today.

    Now if you want to give me some helpful advice you can tell me who or what to will my money to when I croak. And don’t say “me!”

    1. Supporting those that Do

      Passing the money on is interesting. I don’t want to spend it all but I don’t want to give it to those aren’t willing to work to make things better. Of course those folks don’t need it. – – I am leaning toward ESOP type projects to build folks in to owners. Also I am working to support non-college education – breaking the accreditation mob will help young people that are willing to the work so that gets my support as well.

    2. Achernaer..like you I have been frugal, raised by a mom who survived WWII raising two hungry teen sons. People resent you for NOT worrying or stressing over money, most think I am another person living on SS. And I NEVER made a ton of money (well a few years in the early silicon valley days, but that salary base is chicken feed now!) So I saved, invested, time truly is our friend..and while I don’t have a million even, I bought an old cottage in a quiet N. CA coastal own for $79K in 99, have 1/3 acre of privacy and beauty in the redwoods, and enjoy the freedom from worry over money. So I can replace the roof, or redo a bath as I go along, I do not need $5,000 hardwood entryway, or $100K remodel on this place (you’d still have an OLD house anyway). I NEVER worry about money, or having enough, I now donate to several charities. I finally found a couple excellent ones (use charitynavigator.com to sort out their values, CEO compensation etc) I WILL NOT give money to charities, or humans that waste money. I dislike the constant fundraising, if I never see another set of mail labels or calendars I’d be happy, but that seems to work to guilt people. I’d rather CONTINUING to live in a cheap place, spend the $100K on travel and let the ‘estate handler. sell the place when I croak.

  53. Great read. Always important to strike the right balance between saving for your future and enjoying the present.

    I am sure I could save more by moving to a smaller house or a less desirable town, or by never traveling or by never going out. But I’d be unhappy.

    I’m sure I could have more short term happiness by taking more vacations, having a new luxury car etc but I’d be kicking myself when I’m still working in corporate America into my 60s/70s.

    1. Take more vacations. It’s worth it. I slowly started experimenting with more vacations starting in 2009. I took 6 weeks off to see if I could do it, and the world kept turning. Then I took another 6 weeks off in 2010, then 7 weeks off in 2011, despite being in the hectic world of finance. The world kept turning. Then I left in 2012. to take 52 weeks off since.

      We aren’t as important as we think we are. There’s plenty of people who are willing to cover for you to try and get ahead. My biggest regret is not taking 10 more vacations a YEAR for 10 years. Do it!

  54. Sam,

    This is a great list and a nice post. What about adding if you are expecting an inheritance to come within the next 2-3 years (it’s tied up in probate, for example)?


  55. Ironic you should ask as my response to your last question indicated in cool with still having my corvette because I save 50 percent of my income. Frankly I meet a large number of your qualifications. Still it’s interesting. Some people perceive the corvette as more expensive then it was and assume I’m rich. Others assume I’m in debt up to my eyeballs. However those who see the rest of our lives and or talk to me perceive me as a bit of a tightwad. I generally don’t give enough indication of which is reality. My real worry about splurging at this stage is sustained splurging or lifestyle inflation can still knock you off the list. I don’t fit that definition thankfully.

  56. Another Reader

    Consumption, particularly conspicuous consumption, does not make you happy. Your values, how you implement your values, and your relationships with your family and friends determine your happiness.

  57. Interesting post Sam.

    Saving hard and investing sensibly is a great idea for anyone, but they need to remember to have some fun along the way!

    I think all your rules tie back to recognising when we have “enough”. That is very much a subjective call about what we each want out of life and what that is going to cost us to sustain long term.

    Once we’ve made it to that point, it is about balancing enjoying our lives today versus making our wealth go the distance.

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