Stealth wealth has been gaining popularity in recent years. As the name implies, it’s the opposite of flaunting wealth (or pretending to be wealthy like the $30,000 millionaire). Wealth is what you don’t see and people who practice living a stealth wealth lifestyle are extra proud of their hidden ability.
In this day in age, it’s customary for people to show off their wealth and success. There are songs about living rich. TV shows glamorize wealth, such as Million Dollar Listing, anything on Bravo, and MTV Cribs. Apparently MTV Cribs is still going strong…you learn something new every day.
Scroll through Instagram and you won’t go two minutes before seeing a friend posting photos of their new house, new car, new pool, home reno, fancy vacation, or something along those lines.
Remember, people who spend money on things end up with things and not as much money. Of course, there’s a balance. You can’t deprive yourself of all joy. Get the latte at Starbucks. Starbucks isn’t killing your finances.
And there’s a sliding scale, as well. Someone with a net worth in the billions can afford to buy more stuff than someone with a net worth in the millions (or even more so than someone with a negative net worth like many new attending physicians).
There are many benefits to hiding your wealth and blending in with the crowd. I’m talking about living like the Millionaire Next Door in a modest home, driving an average car, wearing Levi’s jeans and a plain t-shirt. Drinking Budweiser from a can. Going to Applebee’s on a date night like Walker Hayes. You have money, but don’t exude wealth. Nobody realizes how much money you actually have.
Benefits of Stealth Wealth
1. Keep more of what you make. If you’re flaunting your wealth, you have expectations to live up to! The expectations may be all in your own head, as nobody really cares as much as you do about how rich you are. By keeping more of what you make, you can achieve financial independence sooner (maybe even fatFIRE).
You’ll have more flexibility to cover unexpected expenses or invest when opportunities arise. It’s good to live below your means so you have a cushion if things don’t go exactly as you hope.
2. Expectations are lower. Tiger Woods is notoriously cheap. The only reason he is considered cheap though is because he’s Tiger Woods, the almost-billionaire superstar athlete/celebrity.
There are stories out there, especially earlier in his career, of him inviting non-millionaire friends out for a meal and splitting the bill. If you and I were to go out for a meal and split the bill, that would be completely normal. But when one of the most famous people in the world, who was making nine figures a year in his heyday goes to dinner with a group of friends, there’s a bit of an expectation that he picks up the tab.
At one of the golf courses where a regular tournament was held annually, it was customary for the players to tip the gentleman who held the door to the clubhouse open for them as they walked in. Tiger wouldn’t tip the guy.
Have you ever tipped someone for holding the door open for you? In normal society, a polite smile and thank you is sufficient. If you’ve ever held a door open for someone, I doubt you expected anything monetary in return. But someone holding the door open for Tiger Woods at an exclusive country club, well that’s a different story.
If you practice stealth wealth, splitting the bill is normal. Nobody expects you to pick up the tab. You won’t feel embarrassed if you run into someone you know while eating at Olive Garden. You’re not expected to fly first class. You can stay in a 3-star hotel without being judged by your friends. Driving an old car with a dent in the bumper is perfectly OK.
3. Fewer people will ask you for money and you won’t look like a jerk for saying “no.” If people know you have money, they’ll ask you for money. You’ll get invited to all the charitable fundraisers. Friends, colleagues, and acquaintances will ask you to donate to their causes. You’ll get called on when your kids’ school is trying to raise money. The T-Ball team will ask you or your business to sponsor the team (ie, pay for all the uniforms). All the Girl Scouts in the neighborhood will find you come cookie season.
Even worse, if people know you have money and you say “no,” you’ll look like a stingy jerk.
If you’re living a stealth wealth lifestyle, saying no is OK because people don’t expect a lot from you. You don’t have to buy 30 boxes of Girl Scout cookies – two boxes is perfectly acceptable.
You can turn down invitations to fundraisers. If people ask you to donate anyway, but you don’t want to, you can say something like, “It sounds like a great cause, but I already have a few organizations I’m supporting at the moment. Maybe next year.”
4. You know who your real friends are. One of the challenging things for wealthy people is knowing who their true friends are. Do these people actually like you and care about you, or do they just hang around you because you have money and pay for stuff? Hard to say. If you’ve never given off the appearance of wealth, its easier to assess if your friends like you for who you are rather than your money.
5. You’re less likely to get ripped off. Getting work done on your house? Contractors are smart – they know how much houses cost in your neighborhood (you can look up what someone paid for a house online) and what others in your neighborhood paid for similar projects. Odds are, they were referred to you by a neighbor. They’ll quote twice as much to homeowners in the “rich neighborhoods” for the same work they do for homeowners in more middle-class neighborhoods.
High-end car dealers don’t negotiate. The price is set. If you’ve ever tried to buy a new Tesla and haggle, you’re familiar with this. Go to a used car lot and it’s like a game of limbo – how low can you go?
Some people might prefer the fixed price with no negotiation. It definitely makes purchasing cars easier and more pleasant. But you pay for that convenience.
6. Avoiding the rat race. The easiest way to feel rich is to go to a poor country. People measure their wellbeing relative to those around them. If you’re constantly trying to keep up with the Jones’s, it can get exhausting. Someone will always appear to be doing “better” than you.
However, if you make it a priority to live below your means and adopt a more middle-class lifestyle the majority of the time, you’ll feel pretty darn good about your socioeconomic status. Most of the people in your neighborhood are stretching themselves thin, while you’re quite content.
You know you can afford more than the people around you and that’s comforting. That may sound snobby, but it’s true. You compare yourself to those around you whether you care to admit it or not – it’s human nature. If you feel like you’re better off than the people you associate with most frequently, you’ll be happier.
It’s one thing to live in a more modest neighborhood than you can afford. It’s a different story when you’re mingling with your peers at work and they’re talking about all the highlights of their life – nice vacations, new car, home, etc. Just remind yourself, they’re spending their money on stuff while you’re growing your bank account. So you’re winning at that game. Just don’t tell them 🤫.
On one hand, I believe it’s important for people to be more transparent and have more open discussions about money. Part of the lack of financial knowledge in society is that money is such a taboo topic. If money was more commonly discussed, we would all likely make smarter financial decisions.
On the other hand, you probably shouldn’t lay all your cards on the table, so you don’t offend anyone or get taken advantage of.
That’s why living a stealth wealth lifestyle can be so beneficial. You’re not keeping up with the Jones’s. Instead, you appear more relatable to more people. It’s easier to fit in and make friends that way. You’re also more likely to save and invest an adequate amount of money so you can become financially independent one day, sooner rather than later.
Avoid the rat race that too many people get caught up in and instead practice stealth wealth and work on being content with what you have.