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Stealth wealth: Why this millionaire hides his riches

Stealth wealth allows people to mask their riches. So we talked to a millionaire who practices it to ask him one question: Why?

Ramit Sethi

Stealth wealth is the practice of keeping your true wealth hidden from others — even friends and family members.

And though the name might bring to mind mystery, espionage, and images of the Monopoly man dressed as a ninja, the practice is anything but that.

Stealth wealth is:

  • The rich techie who wears hoodies instead of suits and forgoes a Ford Mustang for a Ford Fiesta.
  • The millionaire CEO who’d rather drink a cheap beer with her friends while watching a football game than Dom Perignon at a polo match.
  • The college student who commiserates with his buddy’s complaints about student loans — while secretly owning a trust fund himself.

So if you want to know exactly why someone practices stealth wealth, you’re going to have to ask directly.

That’s hard, though, because by definition those who practice stealth wealth aren’t in the business of telling anyone about it.

But this is IWT — and we’re in the business of finding Top Performers and finding out what makes them tick. That’s why we found a Top Performer who practices stealth wealth and got their insights on exactly why they do it (on the condition of anonymity, of course).

Why this millionaire doctor practices stealth wealth

I’d like to introduce you to Dr. Erikson (not his real name).

Our guest at our super secret studio

Dr. Erikson is a millionaire — and he made his money through a combination of smart investing as well as a lucrative career as a medical professional.

He’s wealthy…but instead of driving a flashy sports car he drives a minivan.

A look into his financial situation by-the-numbers give us an even more detailed look into how stealthy his wealth is:

Stealth wealth by-the-numbers

Age: 41

# of kids: 2 boys. Ages 7 and 9

# of cars: 2. 2006 Chevy HHR, 2008 Chrysler Town & Country

# of homes: 2. 4-bedroom house, 2-bedroom lakefront cabin

Net worth: $3 million since early 2017

On the outside, it seems like he lives a typical Midwestern lifestyle: Wife and two kids (both of whom attend public school), four-bedroom house as well as two cars that are both about a decade old…despite the fact that his net worth has recently topped $3 million.

“We embrace stealth wealth by driving average cars, living in a respectable and safe middle-class neighborhood, and doing normal things that normal people do,” Dr. Erikson says. “My wife is in a book club, I’m in a curling league, and our kids attend a great public school. We have neighborhood campfires, watch football, and drink quality craft and homebrewed beer.”

Why does he do this — especially when considering he has enough money to live a high-end lifestyle without having to worry about paying bills or providing for his family?

The social benefits of stealth wealth

As the bard once said:

Be honest with yourself. How often have you thought something to the effect of:

  • He/She is rich so they must be snobby.
  • You have to be cutthroat in order to be wealthy.
  • That person has a trust fund so they must be spoiled.

…without even realizing it? That’s because there are invisible scripts — the assumptions that are so deeply embedded in our society that we don’t even realize they guide our attitudes and behaviors — surrounding wealth.

“There’s an expectation that most people spend up to their income level,” Dr. Erikson says. “When I pull up in my ’06 Chevy, people who know that I’m a doctor probably think something’s not quite right. Personally, I don’t care much what I drive, but apparently, I’m supposed to.”

And even if you got wealthy unexpectedly (like lottery winners or people who inherited money), you’re still faced with the same societal pressures.

“Can you imagine what it’s like for a lottery winner?” Dr. Erikson asks. “You’d feel bad not picking up the tab and helping and supporting family and friends, but when and where does it stop? How do you know who your real friends are? The money would be nice, but you’d be in a very trying place socially.”

People in a place of wealth have the opportunity to leverage these scripts, though. By being aware of them they can mask their finances accordingly through stealth wealth like Dr. Erikson does.

“The more powerful social benefit of stealth wealth for me is approachability,” he says. “I live in a rural area. If I drove a Maserati and lived in a 6,000-square-foot estate, people might see me differently, and not favorably. I think most of the people I hang around respect the fact that I don’t flaunt my wealth — if they even realize I have any.”

For Dr. Erikson, he doesn’t really care if you do want to flash your wealth — though he doesn’t think that necessarily means you’re any better off for it.

“I do my best not to be judgemental,” he says. “Still, it’s hard not to wonder if someone with a similar career who spends four times what I do is four times happier.”

Why practice stealth wealth?

It’s not like our doctor lives a miserly life, tucking his money away under his mattress and picking up every penny he finds.

He says: 

“We’re not the type of people to turn down an invitation because of the cost. We’re not stealthy or stingy when it comes to traveling. We took a family vacation to Paris and Iceland this spring. In November, the four of us will be immersed in the Spanish language, attending a language school in a Spanish-speaking country.”

A few things:

  1. He has the flexibility to spend time with his family.
  2. They frequently travel and enrich their lives with new experiences.
  3. He’s doing exactly what he wants because he’s not tied down to anything.

What does this tell you?

Answer: HE’S LIVING A RICH LIFE.

Because he’s a Top Performer and he worked hard to get his finances in order, he’s now living the life he wants to.

He doesn’t have the fancy cars, the huge homes, and the caviar with every meal because that’s not what a Rich Life means to him.

If that’s what it means to you, great! We have systems to get you there. But for this millionaire, all he needs is his time to spend with his family and financial stability.

How do I get started with stealth wealth?

If you want to flaunt your wealth, flaunt the hell out of it. But if you want to start living a little bit more modestly for any reason (like you’re pursuing financial independence or want to avoid the societal pressures), Dr. Erikson has a few good suggestions for you:

“It’s best not to live a flashy lifestyle in the first place. If you haven’t started displaying the trappings of your wealth, great! Keep doing what you’re doing, and upgrade slowly and prudently.

If you’re living the high life and want to hop off that rollercoaster, you may need a fresh start. When you change jobs, and especially when you move to a new location, it’s pretty easy to reinvent yourself.

Decide why you want to live a more stealth wealth lifestyle — define some financial goals — and start living like your neighborhood accountant, school teacher, middle manager, or stealthy physician. Drive a Chevy or a Honda. Buy or rent in a place that’s nice but not ostentatious. Belly up for a burger and a beer.

The stealth part is easy. The wealth part takes more work.”

And the best part of stealth wealth? You’re not committing yourself to a damn thing.

If you see a nice pair of shoes you really want, you can buy them. Maybe those first-class airline tickets to Paris are calling your name. What if you want to buy an honest-to-god helicopter and have enough money? Go for it!

“It’s always OK to take the stealth from your wealth,” Dr. Erikson says. “You don’t need my permission or anyone else’s — it’s your life.”

He continues, “You may find that major upgrades that showcase your wealth can introduce you to different social circles. The result could be quite positive, particularly if exposure to an upper crust clientele would be good for your career or business in some way.”

What do you think about stealth wealth?

Dr. Erikson’s case isn’t entirely unique. In fact, you might know a few people practicing stealth wealth in your own lives and just don’t even know it.

Or perhaps, you do stealth wealth yourself. In either case, leave a comment below.

What do you think of stealth wealth? Is it a little bit too deceptive for your liking? Would you feel betrayed if you found out someone in your life was secretly rich?

If you do practice it, why? Do you ever find yourself wanting to go back to a flashier, wealth-forward lifestyle?

I’d love to hear your answers.

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8 Comments

 
  1. Physician on FIRE

    It's funny. Stealth wealth wasn't a concept I was really familiar with until a few years ago when I started reading forums and blog posts on the subject and realized I was reading about me. For most, the stealth wealth lifestyle is not an intentional deception, but a way of life that comes naturally when one values some relative frugality and has never gotten much of a rise out of luxury.

    I like this Dr. Erikson fellow (I see what you did there — clever!). He's got an interesting take on money and living off-script, not to mention he sure is one handsome devil.

    Cheers!
    -PoF

    • Mike in NH

      The HHR gave it away before you did haha

  2. Doug

    Ramit, thank you for the excellent post.

    A great book 'The Millionaire Next Door' provides a detailed analysis of this topic.

    I'm sure you're aware of the book, but it bears mentioning for those unfamiliar with the quiet wealth accumulators.

  3. Dorothy

    I practice Stealth Wealth, although I’ve never given it a name. I drive a Chevy Cruze, live in a very modest home, and avoid expensive clothing and flashy jewelry.

    I don’t care about “stuff” much. And practicing Stealth Wealth is one reason I HAVE financial security.

    Most friends and family members know I’m secure — although I think they’d be surprised at my net worth — and they know I retired at age 54. I just don’t have a reason to talk about my money with others. I offer advice if asked but learned long ago most folks would rather gripe about their financial situations than actually take steps to make things better!

  4. PF

    We’ve got a net worth approaching 5 million. We have a condo in San Francisco so there is that but we drive a 7 year old Mini and I ride my bike to work. People know I’m an investor and I help people in that way but I don’t think anyone really knows.

    We like to go on a couple of overseas vacations a year, and we also throw a lot of parties.

    For me, having money isn’t about stuff. It’s about having options and freedom. The ability to take risks. The ability to not care what anyone else thinks about me. The freedom to work or not as I please.

  5. senta

    Comments are mostly humble brags. Its a thin line between stealth wealth and scrooge mcduck.

  6. Elizabeth

    The thing is, you can't tell who has wealth and who doesn't based on their lifestyle. This may have been easier in prior generations, but times have changed. CEOs can wear hoodies and people on welfare may own designer handbags. The guy with the Rolex ordering $15 cocktails could have 6 figures in debt and few assets. The guy with the truck in dirty overalls could have a million dollar business.

    In my experience many if not most millionaires fly under the radar. This is especially true outside of large cities where many fewer people (regardless of wealth) have or need things like luxury cars and designer clothing. Land and labor are cheap so a big house doesn't mean as much either. I'm a private banker and have originated loans for hundreds of people in the last few years. I see all their financial details, and I can confirm that plenty of wealthy people don't look it. And plenty of the people who drive up on luxury cars, dress well and have high paying jobs (doctor, lawyer, etc) barely have a positive net worth and aren't saving much.

  7. Malcom

    Nice post, very interesting, thank you, but glen is right: <a href="http://stockmarkets.science">http://stockmarkets.science</a> has great stuff about how to invest in stocks too… but your style is definitely better!

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