Personal Finance,  Wealth and Abundance

8 Ways to Practice the Art of Stealth Wealth

Our current society revels on excess and ostentatious boastfulness. Social media networks such as Facebook, Snapchat, and Instagram is a platform for everyone to show off what they own and what luxury experiences they are having at the moment.

On TV and in movies, we are bombarded with the display of wealth and luxury goods, flashy cars and big McMansions on display. In reality, the person who displays their wealth is often not what they seem.

In the book “The Millionaire Next Door,” Thomas J. Stanley and his team studied the wealthiest households in America and found a very, very interesting observation: “The Art of Stealth Wealth”

“Twenty years ago we began studying how people become wealthy. Initially, we did it just as you might imagine, by surveying people in so-called upscale neighborhoods across the country. In time, we discovered something odd. Many people who live in expensive homes and drive luxury cars do not actually have much wealth. Then, we discovered something even odder: Many people who have a great deal of wealth do not even live in upscale neighborhoods.”

– Thomas J. Stanley. “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy”

The wealthiest households in America do not act like they are wealthy! They practice the “Art of Stealth Wealth!”

The Millionaire Next Door is a highly recommended book to learning how to become affluent and living the art of stealth wealth.

Funny thing is that the ones we think are super-wealthy are actually not-so-wealthy after all. And most are possibly going broke.

Which makes sense since, those who display wealth are often the ones that have something to prove to the world. However, the genuinely wealthy people don’t need to act wealthy, because they just ‘are’.

The 8 advice below is pertinent to people no matter the wealth status. And may serve well those that want to strive to build their wealth mindset and align on the trajectory of greater wealth accumulation.

The reality is that no one except you (perhaps your spouse or significant other) knows how much ‘bank’ you can make. The “Art of Stealth Wealth” is a way of becoming wealthy by following the tried-and-true ways of the genuinely wealthy in America.

Here are 8 ways to the “Art of Stealth Wealth” as learned from the genuinely wealthy.


1. They Live In Modest Neighborhoods.

It is good to refer to the quote above, again from Thomas Stanley’s book “The Millionaire Next Door.” Simply put, the wealthiest people in America do not live in upscale neighborhoods. That’s right. Stanley’s study showed that those mansion owners are often occupied by people who have negative wealth accumulation habits, let’s calls them the faux wealthy. What does that mean?

Warren Buffet’s house. He bough this house in 1958 and he still currently lives here.

The faux wealthy are often people who makes large salaries or who may have inherited their wealth from their parents. However, they have not built up the habits of wealth accumulation, unlike their parents. Instead, they spend like a faux wealthy person, squandering the wealth that they earned or left to them. Surprisingly, for inherited wealth, studies have shown that these do wealth do last long. Often, inherited wealth vanishes after only one generation! Those boastful glitz and glamour spending is only great until the money runs out.

Living in a modest neighborhood is a ‘stealth wealth’ habit. Whether we rent or buy in a modest neighborhood, living with people who make less money than us does one thing: it forces us to spend less of our income. Living in modest neighborhoods means less pressure to keep up with the Joneses (and the Joneses are most likely negative wealth accumulators anyway).

The genuinely wealthy also most often own their own home outright. Imagine if you have zero expense on rent or mortgage! This a great advantage from everybody else as you get to keep more than 80% of your income to either save or invest. This means you will end up accumulating more wealth faster in the long haul.

“Twenty years ago we began studying how people become wealthy. Initially, we did it just as you might imagine, by surveying people in so-called upscale neighborhoods across the country. In time, we discovered something odd. Many people who live in expensive homes and drive luxury cars do not actually have much wealth. Then, we discovered something even odder: Many people who have a great deal of wealth do not even live in upscale neighborhoods.”

– Thomas J. Stanley, The Millionaire Next Door: The Surprising Secrets of America’s Wealthy

A modest neighborhood also has one other advantage: less expense on taxe and less upkeep!

A huge mansion requires a lot of upkeep.

Remember Mike Tyson the boxer? He went from $400 million net worth to bankruptcy. He squandered his wealth by living in a huge mansion that required close to $1.2 million of upkeep a year! That is crazy. More about Mike Tyson’s plight on this NY Times article.

The genuinely wealthy knows this and therefore they play the greatest amount of defense in their largest expense area. Your home is your largest expense. The “Art of Stealth Wealth” means practicing modest living and reducing the cost of your largest expense.

If this doesn’t convince you — listen to Warren Buffet’s story. Warren Buffet is the second richest person in the world and still lives in a modest home he bought in 1958. And he has $80,000,000,000 net worth. Yes, that’s $80 billion dollars net worth. (See a picture of his home above).

So, if you want to practice the art of stealth wealth, be like Warren Buffet!

“It’s easier to accumulate wealth if you don’t live in a high-status neighborhood.”

– Thomas J. Stanley, The Millionaire Next Door: The Surprising Secrets of Americas Wealthy



2. They Drive Used Cars.

Faux wealthy accessory.

“Although some CEOs drive around in multimillion-dollar cars, you’ll likely find Buffett driving something much more modest. In a BBC documentary, his daughter said he bought cars that he could get at reduced prices, like those that were hail-damaged. The cars were fixed and didn’t look hail-damaged and became a regular part of the Buffett lifestyle. “You’ve got to understand, he keeps cars until I tell him, ‘This is getting embarrassing — time for a new car,’” said his daughter in the documentary.” – NY Times.

Talk about stealth wealth. The genuinely wealthy has a habit of buying used cars, not new. Why? Because the moment you drive off with that new car, it becomes used! It depreciates by as much as 19% of off its price the moment you leave the dealership. That means a brand new $20,000 car is now worth $16,200 because you drove it off the lawn. That’s crazy!

The average annual rate of return for the S&P 500 Index is 7%. Losing 19% of your money just by buying a new car is a pretty bad investment. You don’t have to be an adept practitioner of stealth wealth to know that that’s not great.

The rule of thumb for buying a car is as follows:

  1. Buy used.
  2. Don’t overpay and negotiate the price to the lowest interest rate.
  3. Never do more than 3 years of car loan (if you can’t, it may means you’re buying a car you cannot afford).
  4. If you can put down cash, buy the car outright!
  5. Keep your car for more than 10+ years (while starting to save money towards your next car).


 3. They Never Flaunt Their Salary or Net Worth.

The simple stealth wealth living.

In order to practice the art of stealth wealth, play poker. In the game of poker, one never divulges all the cards at hand. Even if you have the royal flush, only reveal two cards and keep them guessing! Why?

I recently read this story about Hezekiah from a blog. This story comes from the Bible. Hezekiah was so boastful of his riches that he told everyone about it. Not just how much his wealth is worth, but also where everything was stored. Here is the story:

“2 Hezekiah received the envoys gladly and showed them what was in his storehouses—the silver, the gold, the spices, the fine olive oil—his entire armory and everything found among his treasures. There was nothing in his palace or in all his kingdom that Hezekiah did not show them.

3 Then Isaiah the prophet went to King Hezekiah and asked, “What did those men say, and where did they come from?”

“From a distant land,” Hezekiah replied. “They came to me from Babylon.”

4 The prophet asked, “What did they see in your palace?”

“They saw everything in my palace,” Hezekiah said. “There is nothing among my treasures that I did not show them.”

5 Then Isaiah said to Hezekiah, “Hear the word of the Lord Almighty:

6 The time will surely come when everything in your palace, and all that your predecessors have stored up until this day, will be carried off to Babylon. Nothing will be left, says the Lord.”

-Isiah (39:2-6). Holy Bible

The prophet Isiah was right, Hezekiah gladly told everyone what was in his storehouse, and so they ended up robbing him of everything he’s got. His boastfulness cost him to lose it all.

Never reveal everything that is in your storehouse. It is your business and only yours. By becoming modest and becoming less boastful, you gain more.

Your salary and your net worth is a number only personal to you. Never tell anyone how much you really earn, especially if you are earning a lot. And where you are accumulating your wealth. This is none of their business. If you must reveal, downplay your wealth as much as you can.

By not revealing all your cards, you do not boast or place yourselves on top of everyone and you do not invite envy, jealousy and other forms of negativity.

Your money is an energy store for yourself and your loved ones only. It is not something used for boastfulness.

 4. They Kill Unnecessary Expenses. – Stealth wealth means play great money defense.

The genuine wealth accumulators have a laser-like focus for killing any unnecessary expenses. They are ruthless in auditing their expenses every chance they get. The faux wealthy though love to accumulate expenses for bragging and posing and often don’t pay as much attention to where their money is going.

Whether it is the Starbucks coffee you buy every day or the number of fees you accumulate on the ATM, these expenses count.

When we are mindful of the little expenses, we become trained to be very good in handling the bigger expenses.

Suze Orman’s dash of hard truth. Can you really afford it? The Money Class: How to Stand in Your Truth and Create the Future You Deserve

The stealth wealth habit is to be mindful of all of your expenses. The more we are aware of our expenses and where our hard-earned money is going, the more we can control it.

“Great offense and poor defense translate into under accumulation of wealth.”

– Thomas J. Stanley, The Millionaire Next Door: The Surprising Secrets of Americas Wealthy


 5. They Bargain Shop (Never Pay Retail Prices).

I recently encountered an article from the NY Times called “What the Rich Won’t Tell You” in which a journalist interviewed affluent families in New York. The quote below is appropriate:

The people I talked with never bragged about the price of something because it was high; instead, they enthusiastically recounted snagging bargains on baby strollers, buying clothes at Target and driving old cars. They critiqued other wealthy people’s expenditures, especially ostentatious ones such as giant McMansions or pricey resort vacations where workers, in one man’s sarcastic words, “massage your toes.”

Neiman Marcus, Lord & Taylor, and Barneys are popular destinations for some, they do not venture to shop there as often as say a faux wealthy individual or the middle class. The wealthy love to bargain shop, often finding the best deals for things.

In Thomas J. Stanley’s book, “The Millionaire Next Door,” his team documented the purchases of the real wealthy and how much they spent per item. They further broke it down between the self-made millionaire vs. people who inherited their wealth. People who are self-made millionaires are aggressive bargain shoppers compared to people who inherited their wealth. For example, a self-made millionaire paid on average about $360 for a suit, while the inherited millionaire paid as much as $600.

The key takeaway here is, to hold and create wealth, become focused on saving money and when you do have to spend, bargain shop to get the most of your hard-earned money.

“I am not impressed with what people own. But I’m impressed with what they achieve. I’m proud to be a physician. Always strive to be the best in your field…. Don’t chase money. If you are the best in your field, money will find you.”

Thomas J. Stanley, The Millionaire Next Door: The Surprising Secrets of Americas Wealthy



6. They Buy Very High Quality Goods (And Keep It Forever).

There is one big thing about the genuine rich vs. the faux rich that is different when it comes to spending money on things. The genuine rich, with its love for bargain shopping also knows the value of payin for high quality items and keeping it for a very very long time.

Whereas the middle class and poor and often the faux rich would spend money on things that could be disposable, the genuine rich often ensures that what they have purchased produces the most ‘bang-for-the-buck’ when it comes to value.

Often, instead of buying a cheaper item that they have to replace a couple of years down, they tend to buy one very high quality item and keep it for life. This idea is known as “BIFL” or “Buy It For Life”. In fact, there is a sub-reddit devoted primarily for it here:

These could be such items as winter jackets and coats, suits, luggage, home appliances, boots and shoes, and so on. The genuine rich often rely on very high-quality brands that are often very expensive but because they are very well-made, they can last a very very long time.

One example of such brands that the genuine rich often buy is Patagonia. Patagonia is often known for having stringent quality control and use the best quality materials on their clothes. They are often more expensive than you run-of-the-mill jackets, but they also last a very long time.

When it comes to making purchases on ‘things,’ the genuine rich strives to keep pieces that are made of very high quality material and lasts very long.

The other thing about the genuine rich is that they often do not like to buy things with extravagant or ostentatious logos. Often leaning towards the stealthy minimalist logo and branding of items bought.

“I am not impressed with what people own. But I’m impressed with what they achieve. I’m proud to be a physician. Always strive to be the best in your field…. Don’t chase money. If you are the best in your field, money will find you.”

– Thomas J. Stanley, The Millionaire Next Door: The Surprising Secrets of Americas Wealthy

 7. They Work On Their Finance Fitness (And Never Tell Anyone).

Have you ever seen pictures of very healthy and good looking models posing and eating junk foods? You often wonder: “You didn’t eat that!” Similar to this instagram The actual reality is that they didn’t eat that! And if they did, they probably don’t usually eat that when no one is looking.

The genuine rich is similar to this analogy, the reason why the genuine rich is affluent is that they didn’t really spend that! In fact, the genuine rich know exactly how much they earned and how much they spent each and every day. They do their best to practice financial fitness as often as they can, which is why they earn a lot and save a lot of money.

Batman stealth mode.

The faux rich often spends a lot and have no idea how much they have earned or saved. They go with the flow, they wing it. The genuine rich keeps tabs of everything. They are always on the defense when it comes to spending money and they play heavy offense when it comes to making more money, they just don’t talk about it.

The genuine rich have multiple streams of income and invests a lot of the money they get from those income vehicles, which in turn let their money work for them. The faux rich could care less, they spend away and hope that more money will flow in from their inheritance or their high-paying jobs.

Working on our finance fitness is a habit. We must play a high stakes game of offense (making money through multiple streams of income) and defense (saving money, investing, cutting expenses). This is a lesson we can all learn from the genuine rich.

“Whatever your income, always live below your means.”

“Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self-discipline.”

“The foundation stone of wealth accumulation is defense, and this defense should be anchored by budgeting and planning.”

– Thomas J. Stanley, The Millionaire Next Door: The Surprising Secrets of Americas Wealthy


8. Aim For Freedom (Not Luxury) and Live a Stealth Wealth Existence.

The last lesson that I think we can learn from the authentically wealthy people of America is that they work hard, they value true integrity, and they aim for true freedom not luxury. You will not see an authentically wealthy person luxuriating in a jet-set lifestyle and boasting about it via their Facebook or Instagram feed.

Instead, the authentically true wealthy folks are living a normal existence. They shop in Target and Walmart, they bargain shop for a used car, they negotiate their interest rates in every credit card, and they save, save, save, and invest, invest, invest.

They don’t need to be doing what the populace thinks wealthy people should behave. They stealthily blend-in with the middle class.

They also give charitable contributions, often anonymously. And they don’t believe that money will bring you happiness. To them, money is a means to an end. Money is a tool.

They do not need to do anything to please anyone. They work hard to gain the freedom to not work for money. They let their money do the work for them.

“We define wealthy differently. We do not define wealthy, affluent, or rich in terms of material possessions. Many people who display a high-consumption lifestyle have little or no investments, appreciable assets, income-producing assets, common stocks, bonds, private businesses, oil/gas rights, or timberland. Conversely, those people whom we define as being wealthy get much more pleasure from owning substantial amounts of appreciable assets than from displaying a high-consumption lifestyle.”

– Thomas J. Stanley

Check out this write-up about Thomas J. Stanley’s book in the NY Times.

Wealth is not defined based on what ‘stuff’ you own. It is defined by the number of days that you do not have to work to maintain your current lifestyle. This is a very interesting paradigm shift because the key point is not about luxury good but freedom. The freedom to not work for money if you don’t want to.

The authentically affluent can choose not to work for a couple of decades and maintain their lifestyle without earning another penny. The faux affluent cannot, they will simply run out of money because they do not have enough assets or investment that will continually replenish what they spent. Therefore, they are not truly free.

The biggest lesson we can all learn from the silent, and stealthy affluent, the real wealthy people in America is that it is more important to build wealth with the goal of freedom and humble consumption.


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