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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?

36 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
      [email protected] 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
      [email protected] 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
      [email protected] 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
      [email protected] 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
      [email protected] 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
        [email protected] 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
      [email protected] 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
      [email protected] 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
      [email protected] 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
      [email protected] 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.

  12. FinancePatriot
    FinancePatriot March 24, 2017

    I hired a career coach once, and I have to say it won’t effect your ability to get raises. You need to write down your accomplishments and quantify them to your boss. He doesn’t care if you have $500 or $5M to your name. Most execs can afford to retire, so money doesn’t phase them, nor do they shortchange you for it. Most high performers command good compensation.

    The key is documenting accomplishments in a quantifiable fashion.

    A side note, I never even told our baby sitter anything about us having money, yet she once asked me on FB if I would co sign for her boyfriend’s loan. NO WAY was my answer. It was ridiculous (we have a nice house, but she lives with her mom, and they have a nice house too),

    • fulltimefinance@fulltimefinance.com
      [email protected] March 24, 2017

      Wow, that’s crazy that your baby sitter asked you for money.

      You are correct performance comes first. I actually wrote a post about steps for getting a raise here: http://www.fulltimefinance.com/getting-a-raise/. Still I can see this coming into play when you are on a relatively equal footing with a co-employee. At most large companies annual raises are a zero sum game. Psychologically humans are wired to favor the poor person over the guy who “doesn’t need it” all else equal.

  13. @Guyon_FIRE
    @Guyon_FIRE March 26, 2017

    Great read. I am a firm believer of stealth wealth. I do not buy many material things. My job requires me to wear a suit, which I hate. Everyone assumes you have money if you are wearing a suit. I drive a car that is almost 20 years old and over 200,000 miles. Other than the occasional splurge on travel, optically my life is very stealth wealth (and I don’t typically tell people of my travel plans).

    • fulltimefinance@fulltimefinance.com
      [email protected] March 26, 2017

      Even on the blog I find it best to keep my travel plans to myself until they are complete. Too many people get robbed from sharing their travel plans before hand. After the fact I generally only share them if asked. Thanks for adding to the conversation.

  14. DivHut
    DivHut April 7, 2017

    Bottom line… living under the financial radar of most is a great way to ensure personal peace and receive less angst from others. Great read.

    • fulltimefinance@fulltimefinance.com
      [email protected] April 7, 2017

      Thanks div hut. I’m doing my best to keep a low profile.

  15. Ten Factorial Rocks (TFR)
    Ten Factorial Rocks (TFR) April 18, 2017

    I struggle with this subject, FTF. While it seems to be ‘open kimono’ season in PF blogosphere with many bloggers sharing their net worth openly, I side with your thinking about keeping relative perspective among the broader society in mind. Some of my blogger friends like ERN and POF have been very open in their NW data sharing but I am still holding off on it. Maybe there is no harm in sharing but I can’t help but think about the same points you have articulated here in this post.

    What good does it do for readers to know what’s your actual, precise net worth? In fact, what’s more relevant is your NW/Living Expenses Ratio. A person with $1 m in NW but needs only $30K to live on is more financially independent than one who has $2 m but needs $75K to live on.

    In my case, I deliberately chose a net worth target in my name to indicate a sizable financial goal and also to be in line with my objective to be a coach to others to reach FI/RE without excessive frugality. But personal finance also has to be PERSONAL, isn’t it? Sure, it may be motivating for some readers to know how precisely a PF blogger’s finances are improving month-after-month, but those are few and far between among the vast exposure of the negative kind that internet provides. I have adequately shared that I am FI in my posts/comments so anyone curious to know will figure out that the genuine content is coming from a real person who’s “been there and done that” in the FI journey, but beyond that, what’s the purpose of actual figures, I wonder?

    • fulltimefinance@fulltimefinance.com
      [email protected] April 19, 2017

      Agreed, especially on the expense ratio. I can think of a few already financially independent bloggers with less then 1M. The determinant being their expenses. I can also think of some where the number is 2.5M… and so on and so forth. It’s all relative.

  16. Kevin drevik
    Kevin drevik April 26, 2017

    Interesting post. I’m just getting started with my blog, and thought to give regular status updates, similar to some other financial bloggers (1500 days, etc.). Now you’ve got me wondering…..

    • fulltimefinance@fulltimefinance.com
      [email protected] April 26, 2017

      I tend to skim those networth posts in search of helpful advice or interesting life strategies. The actual numbers don’t do much for me.

  17. Emmy
    Emmy May 30, 2017

    There is no way we ever tell anyone what we have. If they want to presume we have debt, we don’t care. Too much entitlement among certain family and step-family members who like to “borrow” (read that as “take and never pay back”) from the middle-class parents and step-parents on one side, if they had any clue we had even a little money the whining would commence. These are able-bodied people, just completely lazy. Can’t support that.

    Where is the aviation museum in the top pic? Our son is a huge airplane kid, would love to take him there.

    • fulltimefinance@fulltimefinance.com
      [email protected] May 31, 2017

      Hi Emmy,
      That is the Udar National Air and Space Museum Lobby in Washington D.C. It is the new second air and space museum the Smithsonian opened near Dulles airport.

  18. Sarah.
    Sarah. July 24, 2017

    For the past 12 years, we have wintered for 4 months at our second home in Mexico. Currently, my husband is in the process of retiring and I’m a homemaker. We have two young kids.

    No one has ever asked me how much we have, although they do ask “How do you do it?”. But, only a few have really been looking for an answer. I do provide them with high level numbers and details but wouldn’t give them exact numbers. I’m not sure why exactly. I think that I give too much power to money and wonder if sharing would change that. Until I’m convinced, I’m going to remain stealth.

    I wish that I had a “Finance Friend”. I have friends that save a good portion of their income but they don’t want to talk about the details as much as I do.

    • fulltimefinance
      fulltimefinance July 27, 2017

      I’ve yet to find a real life friend with a similar financial approach to ourselves. Each time I peel back the onion with someone close I find out any similarities are superficial. It would be nice in real life to have someone to bounce ideas off. But, for now blogging tends to be the best outlet I have to do so.

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