Stealth Wealth

Stealth Wealth

Hello folks! I’m excited to share with you a fantastic guest post from Mustard Seed Money. Today he’s sharing his thoughts on Stealth Wealth. I must say, this is a concept that was new to me just a few months ago. Since joining the personal finance blogging community in early 2016, I have heard “stealth wealth” being thrown out here and there. Now having read Mustard Seed’s analysis and view of stealth wealth, I am a huge fan and will definitely continue to embrace it! So without further ado, take it away Mustard Seed!


How easy is it to identify a wealthy millionaire?  Of course there are the ultra high net-worth people that stand out who drive flashy cars and fly on private jets.  What amount of income is really considered “wealthy”?  The IRS says that only 2% of American households make more than $250,000 a year.

I was born in the 80s, but honestly I don’t really remember those years very well.  However, between movies like The Wolf of Wall Street, The Wedding Singer, and reruns of Miami Vice, I have a fairly “accurate” idea of how life was in that time.

In these movies, the 80s are portrayed as a time of excess.  This is when Michael Douglas gave his “Greed is Good” speech, designer denim was in vogue, and showing off one’s wealth was in style.  I mean think about it.  One of the most popular shows was Lifestyles of the Rich and Famous with Robin Leach.

Today, it doesn’t seem as though the rich show off their wealth as extravagantly.  If anything, I believe there is a greater emphasis on the wealthy giving back through charities and seeking to make a more altruistic impact in society.

I’m sure some of you are rolling your eyes and thinking that I clearly have never watched an episode of Keeping Up With the Kardashians.  You are right.  I haven’t 🙂  Please let me know if I am missing out on something beneficial.

“Wealthy” is a pretty subjective though.  Thomas Stanley, in his book Stop Acting Rich, describes three different types of wealthy people.

Glittering Rich

These are the celebrities and other famous influencers that you see and hear about in the news.  I think most people think of this group when they think about the ultra-wealthy. They are hyper-consumers with bottomless bank accounts.

This group makes up 80,000 households in a nation of more than 115,000,000 households.  Which is roughly 0.7% of all U.S. households.  Quick side note: Did you know that the highest concentration of U.S. Glittering Rich people live in the Tri-State metro area of New York?  But Maryland is the #1 state of millionaires with 7.7% or 1 out of 13 households having millionaire status.  Connecticut ranked second, with 7.3% of households achieving millionaire status; Hawaii ranked third, with 7.25%.

Income Sheet Affluent

Typically, these are physicians, attorneys, and executives who have a high income, but low net-worth.  Many are driven to hyper-consume by their need to show off their high social status.  Stanley refers to them as “Big Hats, No Cattle”.

Let’s say your doctor drove a beat-up Honda Civic with duct tape holding the muffler in place, wore old, tattered clothing, and had haggard facial fair.  I think you might have second thoughts on how competent he was.

As I recently wrote in my Dress for Success article, well-groomed men earn $14,000 more than their scruffy counterparts.  Likewise women who are unkempt earn $22,000 less than their well-groomed colleagues.

However, in trying to appear like the Glittering Rich, these households tend to save very little for their future and potentially set their children up for failure.

Studies have shown that children brought up in a high-consumption environment are unlikely to break this upbringing and consider that type of lifestyle normal.  These are the children whose parents drive BMWs and think they are also entitled to a beamer as well.  It is incredibly difficult to break free from this consumption-obsessed lifestyle.

Balance Sheet Affluent

These are most likely to be our Stealth Wealth individuals.  The first time that I was introduced to the term “Stealth Wealth” was in an article written by Sam of Financial Samurai.  While I know others, such as Joshua Kennon, have used it before, I normally credit Sam with my introduction to the term.  These Stealth Wealth individuals more likely to become wealthy by savings and investing.

In Thomas Stanley’s book The Millionaire Mind, Balance Sheet Affluent includes households that exceed twice the amount of net-worth expected for an individual, couple or family by age and income.  Stanley further provides the formula to show how to calculate how you are doing:

  • Desirable Household Net Worth = 10% x Age x Income

  • Household Net Worth for Prodigious Accumulators of Wealth (Balance Sheet Affluent) = 2 x (10% x Age x Income)

For example, if you are 35 and earn $100,000 per year, you should have a net worth of $350,000.  Those who are balance sheet affluent would have a net worth of $700,000 or more.

Stealth Wealth Households

Some of the most common characteristics of these households are they pay less than $300,000 for their homes, pay off their mortgage early, and avoid debt.  It is well-known that Warren Buffett lives in the same house in Omaha, Nebraska, that he bought in 1958 for $31,500.

Not surprising, where you choose to live, the type of house house you buy, and the neighborhood that you live in will have the biggest impacts on your balance sheet.  More than anything, the research has shown that your choice of home will have the greatest impact on your spending – either a lot or not so much.  When you think about it though, it makes sense.  If you live in a McMansion, you are probably going to want to fill it up with a bunch of things.  If you have a small, modest house, you simply wouldn’t have the room to buy excessive amounts of furniture or gadgets.

Rich People Drive Toyotas

In the book Stop Acting Rich, Stanley says that Toyota is the most made car.  According to his research, more than 1 in 10 millionaires drive Toyotas.  What’s even crazier is that among millionaire engineers, it’s 1 in 4!

That shouldn’t be surprising since according to Consumer Reports, Toyota was the top manufacturer with the fewest problems per vehicle after 5 years.  Now contrast that with a vehicle that was manufactured by BMW or Mercedes Benz, and these cars were nearly twice as likely to have problems compared to those manufactured by Toyota.

But here’s another really interesting stat done by Experian Automotive.  Only 39% of households that make over $250,000 buy luxury brand vehicles.  You know what that means– 61% of people who earn $250,000 or more don’t buy luxury brands. They’re buying Toyotas, Hondas, and Fords like the rest of us.

How the Rich Become Rich

According to this survey by Fidelity, nearly 8 in 10 millionaires became so without the help of a trust fund.  Worldwide, about half the world’s millionaires own their own businesses, and a scant 16% inherited their cash according to the Economist.  Of these self-made millionaires, 30% told Fidelity that they struggled financially in their early days.

So how do they get there?  On average, the typical millionaire saves and invests 20% of their income, while the average American saves less than 5%.  The typical millionaire is debt-free and has no mortgage or automobile notes.  In an analysis of 401(k) savers who made less than $150,000 a year and still had more than $1 million in their plans, Fidelity found that those millionaires saved 14% a year on average.

Revenue Streams

“The really rich never depend on one flow of income but instead create a number of revenue streams,” writes Grant Cardone, author of The 10X Rule.  More specifically, author Tom Corley found that around 65% of wealthy people have three or more streams of income.  He says, “Revenue streams include real estate rentals, stock market investments, annuities, private equity investments, part ownership in side businesses, ancillary products, or services, and royalties.”

Financial Independence

Thomas Stanley believes financial independence is one of the strongest driving forces for most millionaires.  Even more so than their ability to consume to their heart’s content.  For many rich people, it’s not about the material stuff as much as the freedom and ability to do whatever they want with their time and resources.

So, do you subscribe to stealth wealth?  Are you surprised to learn that most millionaires don’t flaunt their wealth like most would assume?  Share your comments below.

 – Mustard Seed Money





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  1. I think that I somewhat subscribe to stealth wealth interns of savings, net worth, habits, income streams and the drive towards financial independence. On the other hand, my view on debt is a little bit off as I tend to have more as time goes by. Also, owning a house that’s less that $300,000, probably not very feasible in the area that I live in. $300K is not even enough to buy a one bedroom condo.

  2. I’d say that except for our house, we subscribe to the stealth wealth philosophy. Sure our house is in the McMansion category, but it is what it is and we definitely don’t try to fill it up with stuff. It is funny seeing our neighbors all driving luxury cars and $60k trucks and we have a Jetta and a Mazda. Our new nieghbors moved in across the street and within 3 months bought a new Audi SUV. Yep, keeping up with the Joneses is real.

    It was a little intimidating when we first moved there, as I felt similar pressures, but thankfully that was short lived. Now, I love our location, our quiet street and can’t wait until we move away in a few more years to our next FI step in life.

    1. Hi Mr. SSC,
      Keeping up with the Joneses is so real. It takes a lot of self-control to not get swept into that madness. Props to you for sticking with your Jetta and Mazda! I drive a Jetta too 🙂
      -Mustard Seed Money

  3. I used to think “millionaire in a jet with gold and diamonds” was the definition of wealthy, but it’s not. I attended a seminar in college where we had a personal finance guest speaker. He said anyone can be wealthy as long as they live within their means–if you don’t have debt and have a positive cash flow, you’re wealthy, regardless of actual income level. So in theory a couple earning $40,000/year could be wealthier than a “millionaire” with millions in debt.

    1. Hi Mrs. Picky Pincher,
      What that PF guest speaker said is really interesting. There really is a skewed image of “millionaire” and “wealthy” out there. Thanks for the feedback!
      -Mustard Seed Money

  4. Great post! Yes, we subscribe to stealth wealth in most ways (though we aren’t millionaires – yet). Our house is not a McMansion (it was in the $300k range), but it’s not a tiny house either. We drive Ford and Hyundai. We garden and do our own car and house maintenance. But we do live in a neighborhood with a few McMansions – and one of our neighbors drives a Bentley.

    “For many rich people, it’s not about the material stuff as much as the freedom and ability to do whatever they want with their time and resources.” This is right on the money! The key factor for us has been to make the decision to value our freedom over “stuff”.

    1. Hey Amanda,
      Thanks so much for the feedback! Financial freedom is definitely what it’s all about and not getting sucked into the cycle of accumulating expensive “stuff”.
      -Mustard Seed Money

  5. Fantastic post, Mustard! I think my introduction to this was Millionaire Next Door – similar concepts. The whole idea just resonates with me.

    I’ve not heard of The Millionaire Mind but I’m going to look it up today!

    And we’ll done avoiding the Kardashians – I can honestly say I’ve never once watched that show.

  6. Hi Ty,
    Haha, thank you. I guess it’s no small feat to have avoided the Kardashians after all this time. Hope I’m not missing out on too much 🙂 Thanks for your feedback!
    -Mustard Seed Money

  7. The Millionaire Next Door is one of my favorite books. I always recommend it when someone asked for a good financial book. Stealth wealth is the basic principal of the book. Live below your means and build wealth. A pretty simple concept that many fail to master.

    1. Hi Brian,

      The Millionaire Next Door is such a classic book that holds up so well. It’s amazing how such a simple concept like living below your means can build wealth but people constantly ignore such sage advice.

  8. Hmm, based on this formula I have a lot to work on my net worth… But I’m actually wondering how it should be applied. Let’s say I’m 30 and I earn 100k. If my salary stays flat, my net worth should grow the same amount from 30 to 60 as it did between 0 to 30?! Or am I missing something?

  9. I think if you salary stays flat that theoretically you should go from a net worth at 30 of $600k to $1.2m by 60. So if you made an income of $100k from 0 to 30 you would go from $0 to $600k. Does that help?

  10. So many interesting statistics in here, thanks MSM!

    I am pleased to report that I am Balance Sheet Affluent and I drive a Honda (which is pretty much a Toyota). My house OTOH completely fails the criteria set out here. I don’t think it qualifies as a McMansion based on swuare footage (just shy of 2000 sq ft), but it certainly qualifies as one based on cost.

  11. Fantastic post MSN! Really enjoyed reading it!

    Currently I don’t have any stealth wealth but I believe I do have the right mindset! Even if my earnings were to increase substantially in the future, I would still go for practical items rather than the brand names. Because well… If it works for me, it’s good enough for me!

    1. I think that’s the most important thing. Spending money on things that you actually value as opposed to what you think your friends and society think are important. I’m sure in no time that you’ll be able to be in full stealth wealth mode.

  12. ” I don’t have any stealth wealth but I believe I do have the right mindset!”

    I hope to say the same about myself – 2017 looks to be an exciting year!

  13. Awesome post, Mustard Seed Money.

    I try to hide my wealth from my friends, but I’m pretty open with my family.

    Still working out some kinks to hiding my wealth by going for practical items instead of luxury items.

    1. I’m a big fan of spending money on things that you actually value. While a BMW may not do it for me, a trip to Iceland definitely would be something for me to splurge on. I must admit that since I’m not a huge facebook user that it’s easier to stay stealthy on these type of trips 🙂

  14. That’s awesome to hear Mrs. BITA!!! It’s always interesting to hear how others are doing and how the criteria applies to different people across the country.

  15. Great writing! I read about the concept of stealth wealth before, but defining ‘wealth’ in three different types is somewhat new 🙂

    I think we’re a bit in the middle as it comes to stealth wealth, yes we drive a cheap car and live below our means. But we also have a huge debt in the terms of a mortgage. We’re paying it off following a 30-year plan, but we’re not paying off more than necessary. At least not yet.

    I’m one of those who think having debt doesn’t have to be a bad thing. As it all comes down to how it fits in your personal situation.

    1. I am a big fan of whatever helps you sleep at night. Personally I couldn’t stand debt and felt like it was an anchor weighing me down. So we paid off our mortgage as quickly as possible. For others it makes sense for them to allocate their resources into other avenues and I totally get that.

  16. Great post- I love Dr Thomas Stanley’s books. They destroy the misconceptions many people have about millionaires, how they act, and what they buy. So many people think “wealth” is about the things you have-a boat, second home, fancy cars, an expensive watch, and so on. Instead it’s about living below your means and steadily investing over the long term. If you haven’t read the books I strongly recommend them.

    1. Dr. Stanley really opened up my eyes when I was first introduced to him. He’s definitely someone I enjoyed reading and I’m sorry to hear that he passed away a couple of years ago.

      I think society thinks millionaires are the Kardashians that they don’t realize that this is really the 0.1% and not what the typical millionaire looks like.

  17. Like you, MSM, I’ve read more Thomas Stanley books than I’ve watched shows about Kardashians.

    In most ways, I’m pretty stealthy with my wealth, but writing about it online takes away much of the stealthiness. At least, it does for a select few who know about my online persona.

    As I’ve said elsewhere, Stealth Wealth is pretty much the opposite of the “all hat, no cattle” guy who’s got no money but looks the part. It’s “all cattle, no hat.” If you’ve got the cattle, feel free to wear any hat you like, but having cattle shouldn’t demand that you wear a proper 10-gallon hat.


  18. I have been practicing Stealth Wealth for a long time, avoiding excesses in most cases. The only area that I splurge on is travel. I may fly coach but I stay in really nice hotels. I agree with some of the others about the $300,000 homes. In the San Francisco area, you can’t even buy a dump for $500,000 or $600,000.

    1. That’s where we splurge as well. Fortunately my wife works in the hotel industry and can get us some discounts. That helps save us quite a bit!

      Thanks for the comment, Fred!

  19. Stealth wealth is the way I want to be wealth. No need here to showcase or wealth by driving a big fancy car or having house extension after house extension. I prefer to be wealthy so I can do the things I want, job and travel wise, without having to worry about money.

    We are not under pressure from the Jonses… At least not those that display their wealth. Most of the people we hang out with seem to be stealth wealth people, judging from the working flexibility and travel they do. Off course, I have no view on there net worth…

    1. That’s awesome to hear Amber tree!!! It’s a great feeling when you’re not competing against people and living the life that you want to live instead of the pressure filled life that society tries to instill upon you.

  20. “I’m a millionaire. Been investing in mutual funds for 40 years. Never made more then $70,000. Paid cash for everything. Still have an allowance of $100.00 a week. That is for gas and if I want something new. I’ve been debt free for 15 years. I often sit back and ask how I did this, and then remember my mom who at 16 worked in the ship yards during WW2, never graduated from HS, but gave me a book called Your Last Dollar. I still live off of $40,000 a year and no longer work, outside of a part time job as a coach as I love high school kids.”

    Look at that! An average guy making average money with not-so-average results. And people say it’s hard to become a millionaire, pssh…. you just need a simple plan and some time 😉

    Let’s go over all 11 tips he dropped in this jam-packed paragraph – did you catch them?

    #1) Invest for the long haul! Not for two or three or even ten years, but for decades. Mark did this successfully for over 40 years (longer than most of us have been alive- hah!) and he kept going through all the booms and busts and utter nonsense. You need this long term mentality so you don’t trick yourself into chasing the quick wins and get off track. It’s all about harnessing time!

    #2) Funds get the job done. Yes you can try your hand at stocks and get your research/luck on and pray you hit the jackpot, but let’s face it – not even “professionals” get it right. For most people, sticking with mutual funds (or my personal preference – index funds – since the costs are much cheaper) are a safer bet. You won’t “beat the market” and have bragging rights amongst your friends, but matching it is better than underperforming it. And it’s one area I don’t mind being average.

    #3) It doesn’t matter how much you make – you can still save! While $70,000 is surely a lot of money for most of us/the world, keep in mind it’s not the case when you’re nearing retirement. And even so, it probably took Mark 10-20 years to make it up to that level, so for decades he was making substantially less. Regardless, putting money aside every paycheck no matter how much you make WILL add up over time and especially over 40 years. Do the best you can with what you’ve got, and then up it every time you get a bonus or raise or any other types of promotions. Mark is proof that any of us can become millionaires over time.

    #4) Pay cash for everything. Imagine never going into debt again? How much time, money, stress that would save? Using cash is surely one way to ensure that. You may not reap as many c/c rewards that way (and in full transparency – I’m a credit card budgeter myself! Where I put everything I can on cards and then pay them off in full each month!), but for the general public cash is the safest way to go. And plus, the research always shows that you spend less using cash than plastic anyways.

    #5) Give yourself a weekly allowance. This is one of my all-time favorite budgeting tips. Not only do you give yourself some fun BLOW MONEY to do as you please, but you also free yourself from having to track every last penny and burn yourself out. Another nice side effect is tricking all your friends that you’re a “normal” person just like them, when deep down you’re as financially nerdy as it gets 😉

    #6) Become totally debt free. He didn’t outright say, but I’m assuming that “being debt free for 15 years” means Mark doesn’t have any mortgages either. Which of course can never steer you wrong, whether you could make more money investing or not. I only know one person who regrets paying off their house, and I shake my head every time I’m reminded…

    #7) Appreciate how fortunate we are to live in today’s world! Where we reap the benefits of those who fought and died before us, and which the life expectancy is much higher than it’s ever been before. Not to mention how 9/10ths of our problems really are 1st world issues, and that we can live off a lot less and still – shockingly enough – be just as happy.

    #8) Read about money. You’re obviously already doing this or else you’re on the wrong site right now – hah! – but books and blogs can REALLY make an impact with how you think and act with your money. Especially when you find the ones that click. (Shameless plug – check out our list of favorite blogs here, as well as my favorite money books!). I tried to find this book that Mark’s mom gave him so I could check it out (I’d never heard of it before?) but didn’t have much luck. Although there is a “Your Last Dollar and How to Keep it” by Edgar T. Isaacs and Richard S. Lindner from 1976 which could possibly be it. If you want to take a gamble, it’s currently a whopping $3.40 right now on Amazon 🙂

    #9) Live off the same amount of money as time goes on! You know when you get a raise or new job and all of a sudden you’re earning more money than you ever have in your entire life? And so you go out and buy new stuff and are now all of a sudden spending the same amount of money as you’re earning? That’s called lifestyle inflation and it’s one tricky bastard. Catch it early on and get used to spending roughly the same every month and your pile of cash to save/invest drastically goes up over time. You don’t have to save every last penny of it of course (you still want to live a little, yeah?), but getting into this habit now will help you reach financial freedom a lot sooner – I can promise you that. Because remember: the less you need to live on, the less you need to retire!

    #10) Do stuff you love for money. Even though Mark has enough money to live off right now, he still does stuff he enjoys that also happens to pay. Imagine if everything you worked on brought you joy like that? It’s a great position to be in, and there’s nothing saying you have to stop earning once you give up your 9-5. Figure out what you’re good at and enjoy, and then see if there’s any cross pollination you can land on and start working it on the side. Many of the side hustles we share here were born out of specific interests that turned out to be pretty profitable – the perfect combination 🙂

    And lastly, #11) The boring stuff works. You’ll notice there wasn’t anything new or sexy going on with our friend’s plan here at all. He just kept his expenses in check, funneled away as much as he could over the years, and then let the magic that is compounding do the rest. It’s not always easy, but it’s do-able! And I reckon Mark would say that any of you could become a millionaire too by copying.

  21. What can really help. Just think about cost…One job you like, one house and one wife. That’s one way to be a millionaire. 38 years in same house and wife, Only had 2 jobs.

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