Personal Finance – Are you “Stealth Wealth” or “Fake Rich”?

Lets dig into these concepts. What is “Stealth Wealth” and “Fake Rich” and why would you want to be either of these within your personal finance?

Today, we are investigating the subject of wealth – Would you rather be quietly rich or loud and show-off your wealth externally? Let’s explore the concepts of Stealth Wealth and Fake Rich.

“Stealth Wealth”

The first topic we are going to tackle is the term we call “stealth wealth” – Another way to state this topic is the quiet, humble side of wealth. This method is demonstrating self control in a way to stay as low-key as possible within your lifestyle even though you have the ability to live an extravagant lifestyle.

What “Stealth Wealth” means is being comfortable with who you are – analyzing spending, planning and investing for the future, waiting for deals on purchases, being gracious in spirit and taking helping your loved ones and other people with your wealth.

Personal Finance Experiment

To know what type of lifestyle a “low-key” one is, we must learn a new term that is not common in everday language – Frugality – or “the quality of being economical with money or food; thriftiness”. The key to this definition is being economical.

Therefore, if you make an income in excess of $10M a year, your spending will be much higher than an individual or household making $60k a year. However, what frugality doesn’t mean you should be excessively cheap and cut all spending despite being wealthy.

As with everything there is a balance.

Photo by Breakingpic on

The best part of stealth wealth is those individuals or families that have amassed wealth and are comfortable living “simply” and using their wealth to take care of their own families while supporting notable charitable causes.

This is something that we can aspire to once we have amassed enough wealth to take care of ourselves and our loved ones.

Some detailed characteristics of Stealth Wealth are found within the popular book “Millionaire Next Door” – The Millionaire Next Door – Wikipedia– We are discussing those classified as PAW (Prodigious Accumulators of Wealth) – Living within middle class communities, driving common cars, wearing comfortable but not excessive clothing.

Some key aspects of “Stealth Wealth” Individuals are:

  • Focus on Making a Good Salary (Career)
  • Making Saving Money a Priority
  • Investing Their Money
  • Planning for the Future
  • Spending less than you Earn
  • Patience when purchasing items
  • Modest housing
  • Paying off debt First

Some examples of wealthy people living frugally or below their means within modern life are:

  • Ingvar Kamprad – Ikea Founder – He lived a simple life, utilized frugal habits, drove a cheap car and flew coach on flights – Source CNBC article
  • Dave Grohl – Foo Fighters – Saves his money, drives a reasonable car and lives in a reasonable house – Source CNBC article

“Fake Rich”

For our definition of fake rich, we are focusing on those individuals that exhibit this trait that are most often looking for external validation – The approval and acceptance from others. This can be individuals or families that have actual wealth and are constantly showing off OR those individuals who pretend to have wealth and show off as if they were extravagantly wealthy.

What “fake rich” means is excessive spending far beyond income made, looking for external validation and hyper focused on accumulation of possessions to the detriment of all else, being poor in spirit and taking advantage of people to get wealthy.

Personal Finance Experiment

This hyper focus on being rich, while simultaneously needing external validation on social media (likes, tweets, thumbs up) unfortunately can impact self-esteem directly and can lead to serious psychological problems if this is the only way an individual can derive self-worth from. See “The Trap of External Validation for Self Esteem”

Some characteristics of Fake Rich are found within the popular book “Millionaire Next Door” – The Millionaire Next Door – Wikipedia– We are discussing those classified as UAW (Under Accumulators of Wealth) – Those individuals or families that are barely holding onto their $1-2M homes with standard salaries, driving the latest new cars (leased every 3 years), posting online wearing expensive clothing and jewelry (financed through credit cards and home equity).

Note all these things mentioned above within themselves are not wrong in their own right, but pretending to have multi-millions in the bank while financing or leasing to obtain everything is a very dangerous game to play in the long run. One misstep in income or missed payment and it all comes crashing down.

Photo by Pixabay on

Some key aspects of “Fake Rich” Individuals are:

  • Average Salaries with extensive spending
  • Little or No Savings in Accounts
  • Spending Their Money
  • Living only for today (YOLO)
  • Borrowing to spend far more than you Earn
  • Impulse purchases
  • Extravagant housing
  • No regard to debt accumulation

Some examples of wealthy people living beyond even their means within modern life are:

  • Nicolas Cage – Actor – He spent money on everything: $150M on a dinosaur skull, 15 different houses, a small island in Bahamas, pet octopus – Source CNBC article
  • Johnny Depp – Actor – He spent money on private jets, 14 different homes, a village in France, an entire chain of islands in Bahamas – Source CNBC article


There are quite a few pitfalls on the way to gathering and keeping wealth. The key to success is to live within your means today, while saving and planning for tomorrow. This way you can enjoy the little things today, purchase luxury without regret, all while planning for a successful retirement and lifestyle.

Stay safe out there and take care of those who matter to you. Until we talk again.

The Lab Manager.

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