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Why should you practice Stealth Wealth?

Recently, we were talking to my son’s preschool teacher and she wanted to validate if my wife was an engineer. My wife gave the affirmative and the teacher proceeded to say, “We were not sure whether your son was telling the truth because he told us she was an engineer, but then again he tells stories about going to Germany too”. The reality is we have taken our son to Germany as a tag along to my wife’s business trip, in fact we had done so twice. Yet, to the day care teacher, the thought that a kid that age would travel to a foreign country in Europe was, well, foreign.
We’ve found over the years that even though we live a very frugal lifestyle, our choices in life have netted us experiences of which many other people can only dream. The problem discussing them with our friends as it always leaves me uncomfortable, almost like a braggart. As such, I simply don’t discuss anything about our financial positions or the more exotic aspects of our lifestyle with others. I practice stealth wealth.

I’ve mentioned over the last few months during comments on other blogs that I practice stealth wealth. I’ve gone out of my way not to tell people what we have, either on the blog or elsewhere in life. I have insinuated that I might meet the definition of  FU money, but that is as far as I go. There is a simple reason for that, I don’t want to appear Tone Deaf.

The average American has no money saved for retirement. They can’t even afford $400 dollars for emergencies. The chances are that anyone you talk to about your financial position in your day to day life will not be able to identify with your position if you spend any time managing your finances. Now, if you tell them you have more than a little saved, imagine how it will be perceived.

Examples Where Others Did Not Practice Stealth Wealth

To put things in perspective, I once sat in a meeting at work with a senior leader. This was during the start of the depression in 2008 and the company had decided to cut our pay by 10% to avoid layoffs. Admittedly, this was a tough pill to swallow, but the leader who was elected to tell us attempted to sympathize with the group. The statements came from a leader who was wearing a thousand dollar suit and mentioned delaying a house remodel.  Needless to say this went over like a lead balloon with the crowd. Never mind that the leader did not make these decisions and they lost out on more money than we did. The leader’s problems were perceived to be inconsequential compared to what the standard employee was experiencing. This leader was tone deaf to the situation and it caused a lot of dissension and demotivation in the organization.

How I Talk to Others About Finance?

In the same way this leader talking to the crowd about a pay cut while they make 3x as much as the other people in the room went over poorly, so does someone who has no debt, a decent job, and/or decent savings. The feeling is usually that you don’t have their problems or you had some sort of leg up from a benevolent rich uncle. You couldn’t have possibly had the same problems they have and worked your way out of it. That’s usually where the conversation stops, the person has stopped listening and never hears the advice you may give for improving their financial position.

For this reason I avoid talking about my financial situation both in real life and in detail on this blog. I’ve worked for all I have, I’ve been unemployed, poor, in student debt, made financial mistakes, and everything in between. However, I realize even if I provide solid advice the average person will stop listening due to simple psychology.

Psychology and Others Wealth

The human mind views others’ success as an admittance that someone can do something that you have failed to do so. Thus, in order to protect one’s ego from admitting failure you tell yourself their experience can’t be real. Never mind that if your life’s not complete then you haven’t failed as it is never too late to start good money practices.  Even I myself unconsciously do this about various things, though thankfully not about money.

As such I just don’t mention my experiences in personal conversations. Instead if I give advice at all I simply focus on the person. If I need to reference examples, I use some nebulous financial professional. Ultimately, I go out of my way to avoid my situation or my experiences. Thankfully, here I can write from personal experience because if you’re reading this you’re likely looking for financial change advice from that nebulous financial professional known as Full Time Finance. How ironic if I started using my own blog as that nebulous professional…  No, mom this isn’t my blog 😉

Other Risks of Not Practicing Stealth Wealth

The ability to talk to others about finance is just one justification for practicing Stealth Wealth.  There are a few more:

  1. It could undermine my ability to negotiate for pay raises. Studies show that married men make more than single men. I can theorize that this is because bosses expect that married individuals are both more stable and need the money more to support their families. It shouldn’t be that way but I’d bet there is some semblance of reality there.  Everyone wants to help the underdog, it’s not necessarily a good thing to be the foregone conclusion.
  2.  It could change how my friends or family see me, potentially leading to judgement as Mr. 1500 days covered a few weeks ago. They could make an assumption that someone better off in our family favored us with gifts. Friends could hit us up for a loan because we “can afford it”. Family could judge us as cheap because we don’t spend money on “X” or give “Y” gift.
  3.  Someone I am purchasing something from could evaluate my ability to pay as higher because of my financial position, thus choosing to negotiate a sale or service at a higher price. Admittedly, I would say this has a low likelihood, but you never know.
  4. My employer could take umbrance with something I’ve said, or worse want to take ownership of it. While technically not their style and probably not contractually legal, I have heard of companies trying to take ownership of what their employers create regardless of whether they are on the clock. I’ve also heard of people losing their jobs for saying something counter from a companies position.

Do you talk to people about your financial position? How do you handle conversations with others about financial independence?  How do you give financial advice to a friend?

22 Comments

  1. Chris
    Chris December 12, 2016

    I love hearing about financial topics in conversation or reading. I personally don’t get envious of others successes, instead I use it as motivation. I think we are somewhat stealthy and lead a humble if not as frugal life as I read about (we have cable and a cell phone !!!). I expect that while most of our peers know we have more money because our jobs are more professional, and my wife only works part time, but I am certain they have no idea how much we have socked away. If they did it would lead to many of the items you listed above….loan requests being the most obvious.

    • fulltimefinance@fulltimefinance.com
      fulltimefinance@fulltimefinance.com December 12, 2016

      When I sat down and read your comment all I could think about is a rapper walking around with his entourage soaking up his earnings. It’s a bit of a cliche, but its also not far off the mark.

  2. Arrgo
    Arrgo December 12, 2016

    I agree with practicing stealth wealth, especially these days. There is really no benefit to telling other people what you got. Like you mention, people will look to you for loans and to bail them out for their poor decisions in life. And for work opportunities/ raises, I think there will definitely be some bias there as well and they will give it to the other guy cause “he needs it” – even though you are the one who worked hard and deserve it the most. When you go out with friends etc, they will more than not expect you to pay or pick up the tab. Its a matter of principle. I’m not perfect, but I gave up some things and had self-discipline to put me where I am now. Its no one else’s business. I think I have some good advice I could give, but generally dont unless the situation is right. Many people just like to do what they do and you cant tell them anything so i just dont waste my time and focus on keeping myself on track.

    • fulltimefinance@fulltimefinance.com
      fulltimefinance@fulltimefinance.com December 12, 2016

      Very true, you can only help those who want help.

  3. S
    S December 12, 2016

    My husband I have been talking about this recently as our friends are all in the buy more phase of life while we are looking to “retire” in the next 2 years. We are looked at like we must have done something illegal as how can you retire early in this day and age? We’ve learned just to keep our mouths shut, but it’s hard not having others who share the same values.

    • fulltimefinance@fulltimefinance.com
      fulltimefinance@fulltimefinance.com December 12, 2016

      It is so hard not to try and help. It’s just part of human nature. Thanks for the comment.

  4. Mustard Seed Money
    Mustard Seed Money December 12, 2016

    I have shared with some co-workers where I am in life as an encouragement and a road map to follow. While I don’t broadcast, I do from time to time share with individuals some of my goals and how I paid down debt to get to where we are today.

    For some people with no financial acumen I watch as if a light bulb went off and have seen some people really make some life altering decisions.

    So in many ways if you don’t get to know me you would think I was basically a regular joe like everyone else. But for those that I am close with they have seen some of the inner workings.

    But I totally understand where you are coming from as I have had some friends that have rejected what I’ve shared.

    • fulltimefinance@fulltimefinance.com
      fulltimefinance@fulltimefinance.com December 12, 2016

      I seem to recall from previous comments you are doing something these days with your community and financial counseling. How do you handle it during those discussions?

  5. SomeRandomGuyOnline
    SomeRandomGuyOnline December 12, 2016

    I’m a fan of practicing stealth wealth as well. For me, that also entails not letting people know that I’m a physician. Because somehow being a doctor equals being rich or having a lot of money. I try to stay vague and say something like “I work in healthcare” and hope that it ends there. I don’t really talk to others about my financial position, and that stuff doesn’t really come up with my really good friends anyways. I also find that most people aren’t that interested in personal finance to begin with.

    • fulltimefinance@fulltimefinance.com
      fulltimefinance@fulltimefinance.com December 12, 2016

      You mean not all physicians are rich? 😉 In all seriousness its easy to forget in the world of personal finance blogging that the average person does not know and does not care about finances. Thanks for stopping by.

    • Joe E
      Joe E December 21, 2016

      Your post reminds me of a Cosby Show episode (Say Hello to a Good Buy) where Heathcliff talks to his son about stealth wealth tactics when going to the car lot. He refuses to tell the salesman that he is a doctor in fear of getting a worse deal.

      • fulltimefinance@fulltimefinance.com
        fulltimefinance@fulltimefinance.com December 22, 2016

        I think I remember seeing that one as a kid…

  6. Andrew
    Andrew December 13, 2016

    I think a degree of stealth wealth should be warranted in everyone’s life. I typically don’t tell friends how much I make because (1) I think it would be a little weird (to be honest) and (2) I don’t want anyone ‘taking advantage of me’ if I made more money than them. I think sometimes it’s just better off not knowing.

  7. Mr Defined Sight
    Mr Defined Sight December 13, 2016

    I try to keep things to myself as much as possible, it’s just the way I was brought up I guess. Certainly not above giving advice if someone is looking for it though. It always makes me wonder about the people that I live around. I’m sure some of them are doing quite well but you would never guess it by the cars they drive or the clothes that they wear. Just hard working folks that have worked and most likely saved for many years.

    • fulltimefinance@fulltimefinance.com
      fulltimefinance@fulltimefinance.com December 13, 2016

      I definitely still give advice if someone is looking for it. Interesting that you mentioned how you were raised. It definitely seems that in the older generations financial discussions are almost taboo. I wonder if the general state of people’s finances is related.

  8. Jim @ Route To Retire
    Jim @ Route To Retire December 13, 2016

    I struggle with this… I try to make money an open topic with close friends and family with the intent of helping others to grow.

    However, I’ve already run into situations similar to yours where people don’t get it. They either think I make boatloads of money or that I’m doing something shady.

    So lately I’m aiming to be a little more stealthy about the wealth as well.

    — Jim

    • fulltimefinance@fulltimefinance.com
      fulltimefinance@fulltimefinance.com December 13, 2016

      It’s a natural inclination to want to help. Thanks for adding your thoughts.

  9. Paul
    Paul December 14, 2016

    Great post and so true. Also quite often the big spenders within a group are not the ones who are financially wealthy. Unfortunately it is for show or instant gratification and entitlement. I love the fact that a lot of people that I know do not flaunt their wealth. They are unassuming. I have seen how people act and change their behavior when they know someone has wealth. People mostly see the riches, but never the story and hardships behind the success.

    • fulltimefinance@fulltimefinance.com
      fulltimefinance@fulltimefinance.com December 14, 2016

      It really is interesting to wonder whom in your circle truly is wealthy and whom is flaunting a lie. I agree it is likely not the person we expect.

  10. Joe
    Joe January 13, 2017

    But what is your net worth, really? 😉

    Just between us…

    • fulltimefinance@fulltimefinance.com
      fulltimefinance@fulltimefinance.com January 14, 2017

      Alright because you asked so nicely I’ll give you a range, it’s north of 0 and less then Warren Buffet….

  11. Leo T. Ly @ isaved5k.com
    Leo T. Ly @ isaved5k.com January 18, 2017

    I am very open in terms of my finance and have no issue when it come to sharing. However, I don’t share my blog with people at work because I want to keep my personal and professional lives separate. If they happened to stumble upon my blog, then they can follow me if they want. In terms of family and friends, I only talk about finance if they asked or if they want to know what I am up to. Lastly, I don’t resent family and friends that do better than me. I actually feel happy for them if they had done well. I would be motivated to do well to as I know that it’s possible and use it as a motivation.

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