As you may have noticed, money tends to cause a variety of social tensions. We compare ourselves to each other to see who has more. We lean on those we perceive to be doing “better” and pity those doing “worse.” Yet, as many families have already discovered, there is an answer to many of these challenges. That answer is a practice called stealth wealth.
Today, we’re going to investigate how stealth wealth allows you to become financially invisible and improve your mental health around money without giving up your wealth-building journey.
The Origins of Stealth Wealth
One of the main things we often discuss on this blog is the ongoing process of improving your relationship with money and creating wealth in a repeatable, sustainable way.
As you go through this process, many beautiful things start to happen:
- You feel less stress and fear when thinking about money
- Open and honest conversations about money feel more accessible
- Your financial future feels exciting rather than daunting
- Financial decisions become straightforward when you know your strategy and plan
Yet, at the same time, financial progress brings challenges, particularly social ones. When the people around you begin to perceive you as someone who is on sound financial footing, you may encounter all sorts of uncomfortable situations:
- Others pressuring you to spend money you’d rather not because “you can afford it”
- People framing you as immoral or materialistic for “making everything about money” (when more often, the opposite is true)
- Friends and family asking for monetary gifts, loans, and other financial support
- Invitations to join MLMs or invest in other murky get-rich-quick “business opportunities”
Social challenges like these have led many financially savvy individuals and families to ask, “what if I could keep up the pursuit of becoming wealthy, but without the downsides of everyone around me thinking I’m some kind of billionaire?”
This question is what brought about the rise of stealth wealth.
What Is Stealth Wealth?
Stealth wealth is the practice of making positive progress on your finances while drawing as little attention to that progress as possible.
More and more financially conscious households are finding that this lifestyle affords sizable benefits to their relationships and mental health without sacrificing their financial goals.
Stealth wealth is more a sense of privacy and discretion than international-spy-level secrecy. It doesn’t preclude having open, honest conversations about how you handle your money or what goals you’d like to accomplish. It primarily comes down to not bringing up the numbers or details of your current situation, save for with a few trusted loved ones.
The motivation behind stealth wealth is typically to avoid some of the uncomfortable situations and interpersonal tension that can arise when the people around you view you as “wealthy,” or at least wealthier than them.
There are countless people already practicing this lifestyle, and if today is the first time you’re hearing of it, that may be a sign that it’s working.
The Secret Millionaires Next Door
In 1996, Tom Stanley changed the conversation around wealth forever. The work that would become one of the best personal finance books of all time started with a simple question:
What is a typical American millionaire actually like?
Is it true that they all wear stovepipe hats and monocles? How did they get rich? How many houses do they own? Do their dozens of servants set the banquet table in the American style or traditional English?
In the most extensive study of its kind ever conducted at the time, Stanley discovered that we were way wrong about the lifestyles of everyday millionaires. He documented these findings in his masterpiece, The Millionaire Next Door.
It turns out that most high-net-worth families live in modest homes. They own pickup trucks and used sedans. They spend their money carefully and save diligently. Most have achieved financial independence and are free to retire whenever they choose. But, most importantly, a majority of them fly under the radar, rarely giving off the appearance of wealth.
Thanks to stealth wealth, there are people all around us living peaceful, quiet, affluent lives. They may not look rich to some, but they never have to worry about covering their bills. They have the freedom and flexibility to shape their lives the way they want. Most importantly, they don’t carry the myriad burdens of a life that looks wealthy from the outside.
Advantages of Stealth Wealth
Stealth wealth is more of a personal decision than a financial one. Of course, it can impact your ability to build wealth and achieve financial freedom, but that’s not the primary motivation. Instead, it shields you from many discomforts that the journey to become wealthy can bring.
Privacy around financial progress protects you from countless uncomfortable social pressures, situations, and decisions. Moreover, it puts the power of your financial choices fully back in your hands.
Getting Out of the Comparison Game
Everyone wants to feel that their life is meaningful and valid and that our time here matters. Unfortunately, we have the somewhat ugly tendency to seek this validation by stacking ourselves up against others at the expense of everyone involved.
Money is a particularly nefarious area of the comparison game. Capitalist culture conditions us to confuse numbers with personal merit and worth, weighing ourselves against one another to see who is “doing better.” Unfortunately, this endless pursuit of hollow validation never truly satisfies us.
Stealth wealth both requires and facilitates stepping out of this comparison game. When you don’t bring up your finances constantly, you don’t feel like this is where you gain your worth as a person.
At the same time, others around you will feel less on edge and less negative being around you when they don’t feel like you’re challenging their financial status. A bit of stealth can go a long way to de-escalate the arms race. It’s basically the opposite of the cold war.
Sealing up the Woodwork
One of the primary motivations for many families who practice stealth wealth is to avoid the otherwise inevitable effect that occurs when people think of you as someone who “has money.”
When you don’t regularly advertise the strengths of your financial situation, people are less likely to think of you as someone who can cover their debts, help pay for their vacation, or get their business off the ground floor.
You see this regularly with lottery winners and young celebrities who become rich overnight and lose it all just as quickly.
Of course, there is nothing wrong whatsoever with offering gifts or financial support to a loved one in need. On the contrary, generosity like this is one of the noblest and most rewarding motivations for building wealth in the first place.
The difference is that stealth wealth empowers you to make each assessment and decision at your discretion, rather than having to field every elevator pitch for a timeshare from a distant cousin who isn’t really in your life.
Expectations and Pressure
Those who try to cash in on your financial success for themselves are not the only risk. There will likely also be those who pressure you to spend more on yourself. This pressure may not cause as much emotional friction, but it can inflict at least as much damage to your finances and emotional wellbeing in the long term.
Lifestyle creep, the endless cycle of spending more money on yourself, doesn’t contribute to happiness in any meaningful way. Instead, all it achieves, in the long run, is a life with higher bills and less financial stability.
A leading cause of lifestyle creep is the people around us egging us on, encouraging us that we’re “worth it.” This type of peer pressure, like all peer pressure, is more a means for our peers to validate their own decisions than it is advice in our best interest.
The more confidence others have in your finances, the more pressure you are likely to see to spend more, travel farther, and buy fancier things. In a stealth wealth lifestyle, you are free to decide which luxuries are most meaningful to you and which are unnecessary lifestyle creep that will divert you from becoming rich.
Downsides of Stealth Wealth
While you’d be hard-pressed to find anyone who regrets their decision to go stealth wealth, some challenges can come with it.
It May Feel Dishonest
The most common doubt for those new to the idea of stealth wealth is, “isn’t that a little dishonest?”
The concern makes sense. After all, we’ve talked about how transparent, trusting conversations are essential to solid relationships, and that’s equally true regarding financial health.
The critical distinction to make with stealth wealth is between dishonesty and privacy.
You probably want to steer clear of constantly outright lying about your finances. But when it comes to keeping specific details of your household situation private and out of view, there’s no harm in that.
Privacy Isn’t Always an Option
Another challenge many people run into with stealth wealth is that keeping things on the down-low isn’t always possible.
For instance, if you work in a career that people associate with a high income, there’s little you can do to stop people from thinking you’re swimming in cash. Even if you’re not swimming in cash, a culture that routinely equates income directly to getting rich will always assume you’re doing pretty well.
Consider the case with doctors. Despite being the most common off-hand example of a high-paying career, many doctors live paycheck to paycheck. When everyone in your orbit associates you with wealth just because of your job, the social pressures, expectations, and requests for support can eat through even a large paycheck pretty quickly.
In cases like these, a limited degree of stealth wealth is still possible. It primarily comes down to avoiding flashy purchases and the appearance of a “wealthy lifestyle.”
How to Practice Stealth Wealth
Practicing a stealth wealth lifestyle can be challenging, but it’s not necessarily complicated. There’s no need for fancy espionage tactics or going off the grid; it’s a mindset shift. Here are a few simple tips you can use to start testing it out:
- Be honest but private. When money conversations arise, feel free to share your financial hopes and fears and how you go about things. But it’s best to do what you can to withhold on specific numbers and milestones except among closely trusted company.
- Live simply. Stealth wealth is not just about your words but your actions. Every high-end purchase or lifestyle upgrade sends signals to others that you have money to burn, which can lead to complications later. Steering away from lifestyle upgrades is also a great benefit to your finances and happiness down the line, anyway.
- Talk about process, not product. Perhaps the biggest challenge of stealth wealth is that when you’re improving your financial life, you’re excited to talk about it! Soothe this craving by talking to others about things like financial habits, how your views about money are changing, and the type of lifestyle you are building, rather than boasting about having X dollar amount in Y account.
The biggest challenge in this process is keeping to yourself something that you so badly want to share with everyone you care about. Fortunately, there are plenty of ways to share and be transparent without advertising your wealth in a way that brings everyone down.
Living for Quiet Abundance
As is always the case here at Smarter and Harder, simplicity is the goal. When you take something with the potential to supercharge your life experience, and distill out all the junk that would take away from it, you set yourself up for something astounding.
When it comes to money, much of that junk cluttering up the process is the undue influence of other people. A beautiful and peaceful life awaits those who decide to be more intentional with their money. Much of that intention comes down to how you present your financial life to others. A drop of discretion can go a long way.