Does Stealth Wealth Work?
Stealth Wealth Didn’t Work For Me
What is Stealth Wealth? Stealth wealth is avoiding the appearance of looking like you have money. It means not buying the latest Mercedes, not drenching yourself in diamonds and all the flashy symbols of wealth…even if you can afford it. Stealth wealth means avoiding any financial conversations that might reveal your comfort level and simply blending in with the paycheck-to-paycheck masses.
In my regular life, I live what I believe to be stealth wealth. I don’t drive a flashy car or dress flashy and I work like all of my bills are past due. The things I love to do are all free and I let people know that free is what I prefer.
Neither Borrower Nor Lender Be
So, you must understand my complete surprise when someone recently called to borrow money. The person is someone that I hadn’t spoken to in a really long time and someone that always seemed to have it together financially. I’ll just say this person was very pretentious back in the day. So, learning they were about to lose their home to taxes and desperately needed to borrow money was a total shock. They expressed how humbling an experience it was and that they couldn’t believe they were in this position. It seems they were just as shocked as I was.
Did I Loan The Money?
Yes, I loaned the money! And I loaned the money because I could. And it was done without a moment’s hesitation. All it took was imagining myself in the position of the borrower. I wouldn’t want to explain myself or jump through hoops for what I needed. I loaned the money and I loaned it quickly. How much did I loan? I’ll just say it was north of $3,000. Will I ever be paid back? I honestly don’t know. But what I can say for sure is that it doesn’t matter because I’m not expecting to be paid back. If I am, it’ll be a very pleasant surprise.
To Stealth or not to Stealth?
Back to the subject of stealth wealth. It seems I have two ways of looking at this experience. The first, stealth wealth doesn’t work so what’s the point? Studies show people can look at you and tell if you have money depending on where the lines show up in your face. Second, perhaps if I didn’t practice stealth wealth someone asking to borrow money would be the norm in my life and not the out-of-the-blue exception that seriously, shocked me. For now, I’ll stick with the latter and continue my stealthy ways.
My best advice: Don’t loan money you can’t afford to never get back. And stay extremely humble because life has a way of humbling us all.
If you’re wondering whether that impromptu loan impacted my net worth, the answer is no. That’s because I used an account that I don’t include in my net worth to make the loan. It’s not a shady, secret account but it does function as a slush fund for me. It operates in the background of my finances as a shadow account, never seeing the light of Personal Capital. I dump money into it every month and I use it to pay unexpected home repairs, my end-of-year taxes and more recently, to loan (for other people’s emergencies).
All jokes aside, this account has proven to be invaluable. I’ve done impromptu things for myself out of this account and my net worth was none the wiser. The truth is, if this account didn’t exist I probably would NOT have loaned the money. Having an account “not on my books” removes any anxiety around not being paid back or simply overspending, which I don’t do very often.
Okay, time for the July net worth update…
$91,910.00 to reach $300K
Checking $ 500.00 (no change)
Savings $ 6,030.00 (+$30)
Business $ 33,100.00 (+$100)
MM/E Fund $ 32,018.00 (+$615)
Taxable Investment Accounts
Ally Brokerage $ 39,280.00 (+$595)
Investing MM $ 100.00 (+$100)
Vanguard $ 4,759.00 (+$259)
Acorns $ 2,682.00 (+$82)
SEP IRA $16,643.00 (+553)
Bonds $ 21,580.00 (+$191)
Traditional IRA $ 51,398.00 (+$1,678)
Liabilities: Credit Cards: $0.00
- Credit Card: I gave the credit cards a break this month and will continue to do so over the next few months.
- Checking: This account had a significant overflow because I round up all of my bills. So, I moved it to savings to keep the buffer at an even $500.
- Savings (P to P): The only money that went into this account was the automatic monthly deposit. Trying to keep my hoarding under control.
- Traditional IRA: I got busy and didn’t take the time to add a new holding but I did add to a few of my current holdings.
- Business Account: I moved money into my brokerage accounts this month. Again, I’m working on creating a better investing plan for this money.
- The E/Fund: Continues to grow but I need to invest a portion of it before the new year.
- Ally (taxable)brokerage: Almost at $40K; next stop, $50K
Remember, it is a fight to build wealth no matter where you are in the process. Everything around us conspires to take money out of our hands. But you must fight the good fight. Continue to save, invest, and grow your net worth even when it seems impossible. Save your pennies (copper) until they become dollars (cotton).