You may meet people in your life who are very wealthy and have acquired large fortunes. You may also be in this category right now.
These wealthy people may be your family, friends, or neighbors who have achieved great success but still live a middle-class life.
This happens more than you think. There are approximately 12 million+ millionaire families in the U.S., and that number continues to increase.
You might want to consider it, as more and more people are becoming millionaires.
Table of Contents
What is Stealth Wealth?
Stealth Wealth Examples
Stealth Wealth: The main reasons for its existence
How to Stealth Wealth
Stealth Wealth: Additional Benefits
Financial Invisibility
What is Stealth Wealth?
Stealth Wealth is a simple method of keeping your wealth and fortunes secret from others. This includes friends, family and coworkers. You can live the life you want without the fame of being rich.
Contrary to some athletes and billionaires who flaunt their wealth by dressing in designer clothes, sending lavish gifts to other people, or posting on social media, those who are wealthy stealthily prefer to remain under the radar.
The’stealth’ wealth profile is characterized by individuals who are financially independent and have a high net worth, but are not outwardly wealthy.
The Millionaire Next Door, by Thomas J. Stanley is a book I would highly recommend. It lays the foundations for stealth wealth, and also includes research on millionaires in America.
In one passage of the book, he mentions:
Some people drive expensive cars and live in expensive houses, but they are not wealthy. We then discovered that many people with a lot of wealth don’t even live in wealthy neighborhoods.
Stealth Wealth Examples
Many wealthy people in the public eye will not escape that everyone knows who they are, and can easily check how much money they are worth. Many wealthy people choose to live modestly or not show how much they have.
Stealth Wealth in Action:
Millionaire who drives an old car or truck that is 25 years old and does not buy a new one.
Tech industry founders don’t wear designer clothes or fancy suits, but the same hoodie every day.
High-paid company executive who lives in a modest apartment or home and prefers traditional restaurants to exclusive country clubs.
A person in their late teens, or even early 20s, who has a large trust or inheritance but leads a middle-class life.
Anyone who has started saving and investing can benefit from the stealth wealth strategy.
Even those with a net worth of less than one million dollars may live on less.
Stealth Wealth: The main reasons for its existence
Avoid People
It is difficult for many who do not enjoy financial freedom to understand the position of the wealthy. When people are aware that you’re financially successful, they may treat you differently.
Others may be jealous of you and project negative energies onto you. Some may take advantage of your generosity to create a bond with you before trying to scam money out of you or simply “borrow.”
Many wealthy people hear the same thing over and over: “You’re lucky!”
You may have, but it is often hard work and consistency which has built your wealth. Do you want to tell everyone about your business and how much money it is?
Avoid Identity Theft
Once people learn about your wealth, you become a target for identity fraud and theft. You are more likely to be on criminals’ radar if you disclose your salary or income.
Your money, your identity and your personal accounts on all levels are at risk.
You can protect yourself against fraud by using identity protection software, blocking your credit and being careful about the people you deal with every day.
By practicing stealth wealth it also helps wealthy people to avoid becoming a more attractive target for cyber criminals who want to steal their money or other assets.
Avoid Government
Even if you practice stealth wealth, the government will likely have a better understanding of your income.
You can get into serious trouble if you don’t pay your fair share of taxes, regardless if you agree or disagree with the current rates.
You’ve likely seen stories about a millionaire who got into trouble because of tax fraud or hiding their income. It happens a lot!
There are some legal ways that you can protect and secure your wealth.
The wealthy can avoid the government, as well as certain costs, by using offshore bank accounts, investments that are tax-sheltered, and professional wealth management.
How to Stealth Wealth
Here are some tips to blend in with your family and friends, as well as society.
You can keep people away from you even if they know that you’re wealthy or know your salary.
- Who knows your location?
It is fun to look up other people online and find out what they make or own.
If you reveal your address too much, people may be tempted to look at your house, your taxes, your surroundings, your price, and your payment.
If your address falls into the wrong hands, someone might steal from you. You should be careful about who you tell where you live. Give vague answers to people you don’t know who may ask.
- Never disclose your salary or income
It may not be possible to keep your income secret if you are a well-known public figure or employee. Imagine Elon Musk and Jeff Bezos. They can only hide so much wealth as public figures.
It is not necessary to boast about your income. You may be treated differently or viewed as an enemy by others.
You may find that others are jealous or believe you were lucky to have this income. Just avoid the subject!
- Diversify your assets
You need to protect your wealth and money as they grow. Do not only keep your money safe from those with bad intentions, but also do not put all of your finances in one place.
Create a portfolio that is diversified and move money to different accounts or assets.
You can invest your money in properties, land, gold, silver, banks, LLCs and other entities.
- Don’t be flashy in everything you do
Buy new cars, designer clothing, expensive jewelry and more.
You can treat yourself to whatever you want, but this could also attract unwanted attention.
Avoid being flashy on social networks as this could attract thieves and criminals. It can also create an image that you don’t want to portray. Do you want to be the person who has to show off how rich they are every day?
- Purchase things that you enjoy or with a purpose.
You should not be concerned about impressing others or showing off your possessions.
You will not benefit from seeking validation from strangers or others.
Purchase things that you enjoy for yourself and not to impress others.
I don’t believe people should hoard their money or never buy things they want or need. Keep it for yourself, show it to trusted family members or friends — but only that!
- Empathy and humility are important.
In an ideal universe, everyone would show humility and empathy. These two words are also important in your strategy for stealth wealth.
You shouldn’t be arrogant or condescending just because you are wealthy. Your attitude and snobbish views are noticed by others.
Avoid bragging and instead start by praising the success of others. This will divert attention from you and make people less curious about your assets or income.
Empathy is also important because it allows you to relate with others and understand what they are feeling. You are not being sympathetic if you tell them to work harder or devote more time.
- Create trusts and Wills
It’s crucial to create trusts and wills as your family and wealth grow. You don’t want your family to fight over your money after you die.
You know that if you’re a more public figure these things could end up in the media and bring unwanted attention and drama to you and your family.
It also helps you to create a financial legacy that will hopefully last for many years.
- Talking about money is not a good idea
It’s good to have an open dialogue about money with your family and friends, but you need to be careful who you tell.
Your stealthy wealth cover can be blown if word gets out about your assets or income.
Be careful how much you reveal about money, or you may find that people start to contact you or ask more questions. While it’s fine to offer financial advice or help others, make sure you have other topics of conversation.
You can learn to guide conversations or use more caution when the subject of money is raised.
- Maintain your spending at a similar level
You can spend more money if you have more wealth, but it is still important to set a basic budget.
You don’t want to start spending your money just because there is more available! It’s best to maintain a similar cost of living.
My spending habits or cost of living did not change dramatically when I received a raise, or got a job that paid more. I was able to invest and save a large portion.
It’s your money, so you can spend it however you like. You’ll be fine as long as you have a healthy balance.
You may want to hide your purchases if you start to upgrade your lifestyle. You can claim that you have been saving for a long time, bought something at a huge discount or it is a fake or generic version.
Stealth Wealth: Additional Benefits
The benefits of a stealth strategy go beyond the three reasons listed above. While this strategy is often used by high-net worth individuals, anyone can benefit from it!
Build more meaningful relationships
You will not be treated differently if people do not know your net worth. You won’t worry that people will avoid you because they want to get your money.
I can’t imagine having to question the intentions of everyone you meet, just because they know your wealth or who you are.
It also relieves the pressure of having to buy expensive gifts and pay for each restaurant meal. If you don’t pay for every meal, people may begin to expect more from you or believe you are cheap.
There is less pressure to always “impress”
When you are wealthy, there is an expectation that you will have the latest gadgets and expensive clothes, the largest home, the nicest vehicle, etc.
You can accumulate more wealth by avoiding these things from the beginning and live a more moderate life.
You will feel less pressure to keep up with the wealthy. Spending less money is less stressful and you spend less time buying things.
People Hassle You Less About Opportunities
You’ll discover that as you become richer and people learn about it, others will have “the next big idea.” They may be looking for a loan to pay off a debt, or capital to start their own business.
You may be inundated by requests, even though investing in new business ventures is a great idea. You may receive many requests from people that you do not know, or who haven’t put much work into their business ideas.
You’ll also be targeted by new investment services or salespeople posing as wealth advisors looking to manage your money. You may also be approached by new investment services, or by salespeople who pose as wealth advisers and want to manage your money.
These inquiries will drop to almost zero or even less if people do not think that you have any money. Stop asking friends and family for a loan.
The outreach may not be completely stopped, but it will be reduced.
Become financially invisible
You should consider practicing stealth wealth, whether you have a large nest egg, are a millionaire or you’re working to build your wealth.
You can be invisible financially to the majority of people in the world. It also helps you focus on what really matters in life.
Some people may not be able to create a lifestyle of stealth wealth. It is difficult to blend in as a celebrity, Fortune 500 executive, athlete or other public figure.
If you can keep your head down, you’ll be much better off financially and happier as well!
You can use these tools to help you build your Stealth Wealth
Try using Personal Capital or Blooom to better manage your hidden wealth. These tools allow you to manage your investments and your net worth without leaving your couch.
Personal Capital monitors your net worth, investment, spending and more. Wealth management services are also available.
Blooom helps you track your 401ks or IRAs. Free recommendations, hidden fees and more.
