There is a history in the world of financial independence of people plodding along incognito, meanwhile amassing a healthy nest egg. Their coworkers, friends and even some family have no idea that many of these people are millionaires or can afford to never work again. In the terms of building your FIRE engine, it’s the equivalent of adding an invisibility cloak to your engine (cue Harry Potter references).
Why keep it a secret?
I see a stealthy approach to financial independence as having two main benefits. Firstly, by deciding not to indulge in the things people consider part of being rich (enormous houses in expensive areas, flash cars, five star holidays etc) and instead opting for more simple and practical options, you can spend much less and shave years off of your journey to FIRE. This is from the compound factors of increased savings and investment potential, and a less expensive lifestyle to have to fund post-FIRE.
The second reason is that being stealthy in your approach to FIRE means you’ll have fewer people trying to part you and your money. Here’s an example. When I was in college before university, I worked part time selling electronics. When talking to customers about products, lets say a television, I would try to work out their needs and wants. As it was a higher-end department store many of the customers were (or at least acted) wealthy, which whether I meant to or not would affect the product recommendations I gave. I know colleagues who recommended more expensive products just because they’d seen the brand on customers’ car keys! So whether you like it or not, the image you portray to the world affects how the people around you act, and can have an effect on your wallet.
How to achieve stealth wealth
I’ve mentioned a couple of ideas above as to how you can go about becoming wealthy while remaining incognito. Here I’ve summarised some of the core points:
- Housing – find somewhere that meets your needs and not more, in a cheaper location than your coworkers on similar incomes live.
- Car – if you need one (REALLY need, that is), buy used, economical, and maintain it until you run it into the ground. At that point, re-evaluate if you actually need another car.
- Holidays – try low-key trips away, like camping or self-catering in an airBnB instead of all inclusive hotels
- Clothes – opt for simple and long-lasting clothes, even make your own capsule wardrobe. Try charity shops for quality clothing at low prices
- Socialising – be proactive and suggest activities that don’t cost lots (think hiking, potluck dinner, board game/film night) before others suggest expensive dinners and drinks out.
It’s hard to talk about an undercover approach to financial independence without giving a nod to the classic book The Millionaire Next Door(affiliate link). Originally published in 1995, this book depicts the results of a study into America’s rich, (spoiler: many of the people who were genuinely wealthy don’t look it!). I originally read this book four years the lessons are still relevant twenty years on, and it’s also been updated since the original publication.
Can you do it?
So do you think you’re up to the challenge of becoming stealthily wealthy? I’d love to hear how you manage your finances in relation to those around you!