“Wearing success on your sleeve”. That is an interesting phrase. My close friend Chris told me a story about when he was a teenager. When he was 16, he had a job working at Burger King. With his first paycheck, he bought a 14-ct gold bracelet. When his dad saw the bracelet, he asked Chris why he wanted to “wear his success on his sleeve”. Chris was just a teenager and wanted to be cool.
Chris’s dad is a highly successful personal injury lawyer. He earns over $400,000 per year, but you would never know it. He drives a 5-year old Toyota Camry and lives in a modest house that was built in the 1960’s. He suggested to Chris that it is not wise to display your wealth for others to see. He said that it just stirs up economic envy in people. In other words, don’t make yourself a target. There are people who find it easier to rob you than to work to buy their own stuff.
Over the past year, I have read a few articles on Stealth Wealth. There is a great post on The Retirement Manifesto as well as Financial Samurai about this topic. Both articles provide some tips as to why you should not wear your success on your sleeve. Below are the reasons why I feel that it is smart to be stealthy when it comes to your success:
In my opinion, it is not classy to talk about how much money you have or to put it on display. It is like talking about religion or politics with other people. It is polarizing. Even if you have a college education and a professional career, it will not make you more popular at work, with friends, or relatives for them to know that you can afford to buy fancy stuff. It will just make others feel envious while you pump up your ego.
Are You Wealthy
To be considered wealthy, you need to have zero debt and have 25 years of living expenses in savings. Yes, you might have a good job and a large salary. Don’t confuse a healthy income statement for a healthy balance sheet. If you do not have 25 years of living expenses in savings, you should be focusing on acquiring wealth and stop pretending to be something that you are not.
It is None of Their Business
I am a private person. I have a few close friends and relatives who I chat with often. I have learned that they do not need to know my business. It is fine if they know that I am passionate about personal finance and ask me for financial advice, but they do not need to know the details of my situation. Maya Angelou wrote that “only equals make friends”. If they know that we are in similar income brackets, but I have more money than they do, it could only hurt the relationship. I value these relationships too much to put them at risk over something like that.
I do not want to be robbed. Big houses, fancy cars, and other forms of bling will draw attention to you. As a fisherman, I know that shiny lures attract predator species of fish. Humans are not different. Shiny objects attract predator species of people.
By driving a modest car and living in a modest house, you are more likely to not be detected by criminals. You and I might know that people who lease European luxury cars and live in upscale housing developments tend to not be wealthy. They just appear to be wealthy due to their financed success.
Odds are, most criminals do not read personal finance blogs or books. They do not know who the true millionaires are. They just see people with fancy stuff and want to take it. A criminal would be much more interested in jacking the BMW X5 that my neighbor drives than my Subaru with 130,000 miles on the odometer.
There’s an Accounting Coming
I am a big fan of the TV Show Fargo. In episode-4 of season-3, there was an exchange of dialog between the antagonist V.M. Varga and the victim Emmit Stussy that captures the importance of stealth wealth in a way that is based in both fantasy and reality:
V.M. Varga: You see it, don’t you? Millions of people bought houses they couldn’t afford, and now they’re living on the streets. Eighty-five percent of the world’s wealth is controlled by one percent of the population. What do you think is going to happen when those people wake up and realize you’ve got all their money?
Emmit Stussy: Hey, I just charge for parkin’!
V.M. Varga: You think they’re going to ask question when they come with their pitchforks and their torches? You live in a mansion. You drive a $90,000 car.
Emmit Stussy: It’s a lease, through the company!
V.M. Varga: Look at me. Look at me. This is a $200 Suit. I’s wearing a second-hand tie. I fly coach. Not because I can’t afford first – because I’m smart. So, look at you, look at me, and tell me who’s the richer?
Emmit Stussy: Well, I-I feel like this is a trick question.
V.M. Varga: There’s an accounting coming, Mr. Stussy, and you know I’m right. Mongol hordes descending. Now what are you doing to insulate yourself and your family? You think you’re rich. You’ve no idea what “rich” means. “Rich” is a fleet of private planes filled with decoys to mask your scent. It’s a banker in Wyoming and another in Gstaad. So that’s action item one, the accumulation of wealth, and I mean wealth, not money.
Emmit Stussy: What’s action item number two?
V.M. Varga: To use that wealth to become invisible.
Does life imitate art or does art imitate life? I think that it is a little bit of both. The Mongol hordes are not the second coming of the Bolsheviks. These hordes are already here. Some might be closer to you than your realize. They are people who want to take what you have. They are the ones who confuse your effort, sacrifice, and intelligence for luck. They feel entitled to judge your financial success and see it as a negative.
No, the author of The Financial Journeyman has not become an extremist. I am as moderate and apolitical as ever. My goal is to reach financial independence and to help you do the same. To reach that goal, we must make both smart and safe decisions along the way.
I do, however, love the great dialog that the Coen brothers produced in Fargo. The above dialog from Fargo is meant to drive home a point. That point is to focus on building wealth, protect yourself, and don’t buy things that will draw negative attention your way.
Wearing success on your sleeve is not a good idea. It can alienate you from the people who truly matter to you. It also draws attention from undesirables.
Instead of wearing your success on your sleeve, practice stealth wealth. The best way to do that is to assimilate into your community. Always try to blend in. Be unassuming. It is better when people do not give you a second look.
It is also helpful if people like you. Gain popularity by being humble. Show empathy for others. Develop a positive reputation by volunteering, being charitable, and by being a good neighbor.
You had to be prudent to build your wealth. You also have to be prudent to keep it.
Please share how you practice stealth wealth in the comment section.