Stealth Wealth til Death?

[marko]

Interesting take, but either way there can be consequences to people finding out.

That's the part that I can't wrap my head around.

Everybody knows I'm wealthy. Most people think I'm wealthier than I actually am.

I've never had an uncomfortable, strange or bad experience from it. Maybe I'm just not paying attention.

Maybe it's when people's wealth and their environment become mismatched, the asymmetry becomes dangerous.

 

[Aerides]

Interesting take, but either way there can be consequences to people finding out.

Such as?

If it's friends who view you differently, they aren't really friends. Family who now want to leech? Ugh, they were already people you wanted to avoid.

 

[imjustawarrior]

Such as?

If it's friends who view you differently, they aren't really friends. Family who now want to leech? Ugh, they were already people you wanted to avoid.

I pretty much agree with your comments about family and friends, but I interact with many people who are not my friends or family. I do believe them knowing my NW could have a negative impact. Here are some examples:

1. Haggling with a car salesman. How can I give my sad story if he knows I have $X million.

2. I work with the homeless and indigent people. I am trying to serve them. I try hard to relate to them and have them relate to me. We are on the opposite ends of the economic scales, but I don't want that to be a barrier.

3. I don't know if this is true or not, but I have heard that some trades people charge wealthier people more.

 

[Aerides]

I pretty much agree with your comments about family and friends, but I interact with many people who are not my friends or family. I do believe them knowing my NW could have a negative impact. Here are some examples:

1. Haggling with a car salesman. How can I give my sad story if he knows I have $X million.

2. I work with the homeless and indigent people. I am trying to serve them. I try hard to relate to them and have them relate to me. We are on the opposite ends of the economic scales, but I don't want that to be a barrier.

3. I don't know if this is true or not, but I have heard that some trades people charge wealthier people more.

But no matter your NW, there is no reason to ever disclose it in these circumstances, whether rich or poor. They might know your address, see you drive a nice car, and guess at your NW (in a trade/home repair situation), but beyond that, they don't know. No one is saying to walk into a car dealership and announce the size of your savings.

And even if you do have a super nice house and car, most people are going to assume there's a lot of debt behind those.

 

[imjustawarrior]

But no matter your NW, there is no reason to ever disclose it in these circumstances, whether rich or poor. They might know your address, see you drive a nice car, and guess at your NW (in a trade/home repair situation), but beyond that, they don't know. No one is saying to walk into a car dealership and announce the size of your savings.

And even if you do have a super nice house and car, most people are going to assume there's a lot of debt behind those.

I agree that there is no reason to disclose NW. You asked, "Such as?", so I was answering that.

I probably practice stealth wealth because I don't want it to become an issue with others.

 

[dixonge]

And even if you do have a super nice house and car, most people are going to assume there's a lot of debt behind those.

Which presents a great ‘out’ when you need it.

“OMG you must be rich!”

“You want to trade monthly payments?”

Or something like that…

 

[Dtail]

I agree. I always wonder if there is an element of shame for some. Parts of society look down on the well off and I never understood why.

Mostly plain jealousy.

 

[skyking1]

Disclaimer: We are not wealthy by any means.
That said, my sister was really strange about me retiring before I could get Medicare or SS. That has been the only oddity of our retirement journey.

 

[brett]

We have never given much thought to what busyboddies or relatives thought of our lifestyle or our spending habits. Not a concern to either of us.

Absolutely zero impact on our decisions or our thoughts. Other than perhaps some amusement from time to time.

We live our lives for ourselves.

 

[RxMan]

I once read the following:

• When you’re in your 20s and younger, you care about what others think of you.
• When you get into your 40s, you stop caring about what others think of you.
• And when you reach your 60s, you realize that no one else really cared enough to think about you because they were too busy being focused on their own lives.

I’m only in my early 50s, but I can already relate to all three of those points. I don’t think anyone other than my wife knows our financial situation and we don’t have enough for anyone else to be jealous. I’m just not convinced that our financial status is a topic of conversation for anyone else.

My suspicion is that on average we tend to overestimate how much others care about our lives including our finances. In truth, everyone is too busy living their own lives to worry about me and my personal net worth.

 

[Lstansbury]

/rantalert! I think I am an outlier on this thread. I wish talking about money wasn't such a taboo.

So many younger people don't see that living below your means is a good thing -- that guy next door who is fixing his own lawn mower is actually a wealthy person and not a "cheapskate DIYer". My friend who buys her t-shirts from Costco is a millionaire... and not spending money on clothes is how she stays that way. But no one else knows about her money, just me and a few friends. I always wondered if our being so secretive about money is one reason why we are such a messed up consumer society wrapping our egos into ostentatious wealth instead of valuing the frugalness, hardwork and discipline traits we used to uphold. They just think driving a BMW means we have money. Little do they know it's probably a leased car!

Just my .02. But I share my rags to riches story to students of personal finance who are interested in hearing how to dig out and start again -- like I did -- starting over at age 42. So that they believe me, I sometimes have to reveal my networth dashboard to them from Personal Capital.

Frankly, I only made it out with the help of a lot of books, authors, people on forums like this so I want to pay it back. Back in the early 2000s, it was hard to learn about money on your own. I would ask successful friends about money topics and they would just change the subject. I finally found a friend in real life - not just anonymous on the internet- who will discuss money with me. She's an 88 year old former stock broker, living in a gorgeous home in HNW neighborhood, who spends time educating her family members ever chance she gets. I love learning from her, but keep in mind -- she doesn't equate how much she has with her value as a person. Or anyone else's value -- a poor person may be someone she loves and hangs out with. It doesn't matter to her. She knows the good in people isn't about how much money they have.

At the same time, I am conflicted and agree with the posters here. I have lost friends over money conversations. I get concerned that they are never going to be able to retire and I hear their worries during our get togethers -- and they will ask for advice! And I will give it! But you can imagine. It seldom goes well. So I'm just not sure how much to say and how much to not say.

 

[street]

I once read the following:

• When you’re in your 20s and younger, you care about what others think of you.
• When you get into your 40s, you stop caring about what others think of you.
• And when you reach your 60s, you realize that no one else really cared enough to think about you because they were too busy being focused on their own lives.

I’m only in my early 50s, but I can already relate to all three of those points. I don’t think anyone other than my wife knows our financial situation and we don’t have enough for anyone else to be jealous. I’m just not convinced that our financial status is a topic of conversation for anyone else.

My suspicion is that on average we tend to overestimate how much others care about our lives including our finances. In truth, everyone is too busy living their own lives to worry about me and my personal net worth.

Who every you quoted on those events are spot on. I'm in the four quarter in life and have lived those stages and is very true.

 

[Koolau]

Why would someone else care ? They don’t.

Some do. Trust me on this one.

 

[Out of Steam]

A corollary adage I heard and took to heart decades ago. 'The richer your friends, the more it will cost you.' I'm not sure you can hide your wealth if you surround yourself with wealthy friends. Fortunately it so happens we've never been interested in pursuing wealthy friends. We did start up a friendship years ago where it quickly became apparent they were big spenders. We slowly withdrew from them entirely for a variety of reasons but their spending was a very significant factor.

Over the years, I've had a couple of hiking partners who are relatively wealthy. While it hasn't been a problem, the extra cost of traveling with them is quite noticeable.

 

[Out of Steam]

For some reason, I've always thought that people had more wealth than I gave them credit for since Americans live in a wealthy nation. I've further looked into it, and most Americans don't even have $100k saved for retirement or even $1,000.00 for an emergency!

My wife and I are living in a more economically mixed region than we did in the Washington, DC suburbs. My impression is that under half of the people around us are financially solvent at all.

 

[COcheesehead]

My Dad died with $40,000 to his name. Had two cars, a paid up house. Donated most of his SS and pension because he couldn’t travel anymore. Outwardly he probably seemed comfortable, but the last three months on this earth were pretty expensive due to medical care. There can be stealth poor too.

 

[athena53]

I'd find it unconscionable that parents would hide their wealth from their children, hitting them with a huge surprise at the reading of the will.

There's a balance to be had. When Dad entered LTC after a stroke in mid-2020, I asked my brothers, who were managing his finances, if it was sustainable. They said yes. Years ago, Dad had asked me to show him how to calculate internal rates of return in Excel. I noticed at that point his net worth was bout $500,000. That number stuck with me and when he died in October, 2021, I was stunned to find that he had assets of $1.4 million. It was split equally among the 5 children, but still far more than I expected.

But Dad (and Mom) had done their work by teaching and by good examples. From what I can tell of my siblings (we don't really discuss dollars), we were all well-established, had investments of our own and didn't need the money. So far about 50% of what I inherited has gone into the grandchildren's 529s, another 25% to charity, the rest for taxes on IRA withdrawals, some fun family travel and $15K to remodel my bathroom.

DS, my only child, knows my bottom line and I'm not concerned- he and DDIL are very frugal. He understands investments but has little interest in investing (to me, it's a hobby) but I've preached the ETF allocation method so I hope that's what he does.

My Aunt, OTOH, is over 90 now, living in a very nice facility with plenty of assets. She has two children- my cousin S and her brother M. S is sweet, devoted to her mother and she and her husband are fine financially. M never really found his way, has struggled with substance abuse, and Aunt has propped him up many times. When Aunt went into the facility, M was sniffing around to see if her house was up for sale (likely hoping for a share of the proceeds). It wasn't- S's son is living there and paying rent. S tells me that Mom's will quantifies the amounts she's paid over the years to prop up her son (yeah, she kept tabs) and he'll get $100,000. S will get the rest. The attorney who drew up the will suggested that amount because it was enough that M would take it and run rather than contest the will.

 

[marko]

We did start up a friendship years ago where it quickly became apparent they were big spenders. We slowly withdrew from them entirely for a variety of reasons but their spending was a very significant factor.

I suppose this illustrates the overall issue. The asymmetry of wealth goes both ways.

Rich people pretending to be poor creates the same interpersonal difficulties as rich people hanging out with much, much richer people.

Best to stay in your lane!

 

[deserat]

Reading this thread with interest....wealth has a subjective definition to me. I devoured Millionaire Next Door, Tightwad Gazette, Your Money or Your Life, You Can Retire at 35, etc, many years ago. They helped adjust my mindset to one of LYBM and investing the rest - but also balancing out that which I want to spend my money/time on versus not. Your Money or Your Life clearly articulated that with examples of people living the lives they wished once they became FI. Many of them spent on items/values I did not. That was the difference for me - drive down the costs of those things I didn't value as much to be able to buy/have those things I did value. Of course there were trade-offs. Nevertheless, as I age I believe I am happier for making those choices that are aligned with my values. As I look back, much of it did not require extreme wealth.

I have friends that have been friends for decades - sometimes we don't see each other or interact for years, but when we get together we pick right back up where we left off. I quasi care what they think - but quasi not. Only I am responsible for the choices I made in my life.

I have also found that looks can be deceiving with regard to net worth. Flashing about leads me to think there is an underlying insecurity, especially if it is across many domains (think fashion, house, car, travel, food, jewelry, etc). Very few people have the means to splash out on everything. I've also found that if one becomes a connoisseur of some aspect of life, they usually know the true costs and many times have connections that enable them to get things below market value.

Who you run with also has an impact. I travel a lot and in many ways - DIY, tours, with friends, alone, etc. I have some groups and common hobby friends that I travel with and it is not cheap. I have others where it's back packs and trail mix. The diversity keeps me interested I just limit the high-end trips to one or two per year as I've found it is not as interesting (get tired of "American" prices in non-western countries - ie, being treated like a fat whale for them - plus the experiences becomes similar - the high end hotels are very similar and sometimes it wouldn't matter what country you were in - they homogenize the experience across the world).

When I see the stats on net worth and where one is in the world rankings, I sometimes don't believe it because I don't consider myself 'wealthy' in that sense. FI, yes,..wealthy in my health, my mobility, my family, my friends, my experiences, and my education. As for what others think - doesn't matter. They don't live my life nor have to take the measure upon my death.

 

[RetiredHappy]

I suppose this illustrates the overall issue. The asymmetry of wealth goes both ways.

Rich people hanging out with poor people creates the same interpersonal difficulties as rich people hanging out with much richer people.

Best to stay in your lane!

We travel for about 12 weeks a year, split over several trips, and almost always in a 2BR Lockoff villa and invite friends to join us - free accommodation for them. The ones who spend like us keep travelling with us, the ones who are at about our economic bracket as us but too cheap (beyond frugal) never get invited back. The ones who are crazy spenders also never get invited back. These folks would keep dropping hints that they would want join us again.

 

[Aerides]

I have lost friends over money conversations. I get concerned that they are never going to be able to retire and I hear their worries during our get togethers -- and they will ask for advice! And I will give it! But you can imagine. It seldom goes well. So I'm just not sure how much to say and how much to not say.

Say far, far less. No one is really asking for advice, not really, they are most likely just making conversation when the topic if money comes up. If they wanted it, they'd do research and figure it out, like most of us did.

Stop talking about money with friends, period. Steer any discussion of money to the weather, or something lighter. Have a few "redirect" topics and intro lines ready. Try it for 6 months.

 

[street]

I know many many wealthy people but I have no desire to know them anymore then to visit with them when we see each other.

They may not want to pursue any more then that with me because I might appear as a pauper.

My closest friends live day to day and most likely die with nothing. I help in non-conspicuous ways when it is appropriate.

 

[brett]

Odd.

Generally a fair amount of chatter in the general public arena about comparing net worth, income, spending in retirement, new vehicles, vacations, etc. Seems to me it is all about ego and for some about the Jones'

Never a peep about people comparing their levels of consumer debt,mortgage debt, or car loans or amount of savings/saving for retirement.

 

[CO-guy]

Such as?

If it's friends who view you differently, they aren't really friends. Family who now want to leech? Ugh, they were already people you wanted to avoid.

In our married lives, my better-half and I have supported five different family members as children. Several have lived with us for various periods of time, one in particular for several years when their own parents were unable to care for them. For all of them, we started college savings funds for them to reduce (if not eliminate) the financial barrier of a college education. In all cases, we've put their own parents in charge of the funds and made it clear that there are no strings attached. So far, that approach has resulted in 3 undergraduate degrees; one who would have succeeded either way and two where our support dramatically reduced their student loan debt.

Several years ago, one young family member showed me an expensive gaming device on a retail site and said that his birthday was just a few months away if I wanted to get him a present. It was easy to point out that my birthday had recently passed and he didn't even get me a card, so he can't expect much in return. However, when I asked why he thought I could afford such a lavish gift he said, "Because mom says you're rich!"

Anyway, I pointed out that his parents drive more expensive and newer cars than the one old car we have, that their house is bigger and fancier than ours when they come to visit us, and that, unlike their parents, we don't go on weekend-long shopping trips every few months for new clothes and household goods. It didn't take long for him to reason that we're not really rich. Rather, we value his education more than buying a new car or a nicer house. Oh, and I didn't discuss the incident with "mom." We just pretended like it never happened and nothing more has come of it.

 

[CO-guy]

I suppose this illustrates the overall issue. The asymmetry of wealth goes both ways.

Rich people pretending to be poor creates the same interpersonal difficulties as rich people hanging out with much, much richer people.

Best to stay in your lane!

Not sure I agree. Or I guess I should say that it depends. My friends run the full economic spectrum, from zero net worth to the "3 comma" club. In all cases, our friendships are built on shared interests and an enjoyment of each other's company.

My VHNW friends don't invite me to fundraising galas and I don't pester them about my local charitable organizations. But, just like my zero NW friends, they'll ask me to go fishing or invite me to their kid's performances or games.