Lifestyle

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Stealth Wealth – How to Live Free

Posted on by David
Stealthy Wealthy

I’m sure you’ve heard stories of people who lived a simple frugal life then after their death it’s discovered that they’ve managed to save millions of dollars. In 2018 there was a story published about Alan Naiman, a state social worker who had lived a very frugal life. He bought his clothes at the grocery store and patched up his shoes with duct tape. But when he died at the age of 63 his family was shocked to discover that he had left $11 million to various children’s charities. Alan Naiman practiced stealth wealth and it made him rich.

Stealth wealth is the practice of hiding your wealth from friends and family. You probably have met people who are quite wealthy and you had no idea. They’re the kind of people who drive normal cars, live in average sized houses, and whose clothes you wouldn’t give a second glance. Though it seems counterintuitive, most people who drive luxury cars aren’t rich. They look rich because of how they parade around, but their lifestyle often doesn’t coincide with the amount of money they have. In many cases that’s the reason they aren’t rich. On the other hand, many people who have a great deal of wealth drive average cars and live in middle class neighborhoods. While celebrities like to flaunt their wealth by buying million dollar mansions and super cars, savvy rich folks keep the majority of the fortunes a secret. This allows them to fly under the radar and live the lifestyle they prefer.

Examples of Stealth Wealth

  • The 50 year old who drives a 20 year old Camry to work everyday, but has a million dollars in his 401(k).
  • The family who has lived in the same house for the past 30 years even though they could afford to move into a bigger one.
  • The wife who shops at Goodwill even though she can afford Old Navy.

Why do people flaunt their wealth?

Everyone buys things that they think will make them happy, but a lot of big purchases are made to show off. That new house, that new car, those new clothes or jewelry, while maybe not intentionally, often times are purchased in an attempt to get others to think highly of them. People buy a new car and they imagine their coworkers and peers seeing them drive up to work in it. Or they may buy new clothes hoping to get complimented on how they look. They want people’s approval and respect, and they think this is an easy way to get it.

The problem with this isn’t that making a big purchases is wrong, it’s that impressing others has no long-term value. Seeking validation from others isn’t a worthwhile pursuit because it doesn’t benefit you beyond some temporary satisfaction. Living your life based off of what you hope other people think will lead to a roller coaster of a life, where your feelings are constantly in the hands of another. Don’t give that kind of power to anyone!

We buy things we don’t need with money we don’t have to impress people we don’t like.

Dave Ramsey

Instead of buying things to impress people, buy with purpose. You don’t need to hoard money or never spend it on something that will make you happy, but don’t live in order to show off. Living your life in order seek the approval of other is burdensome. It’s super freeing to live without the fear of what other may think.

Good Reasons for Practicing Stealth Wealth

I think it is morally good to not be a braggart. Keeping our wealth to yourself keeps you humble, because no one is thinking too highly of you or treating you special just because you’re rich. Driving an old, reliable car and wearing last season’s clothing are good ways to make sure you keep things that way.

The best reason to be stealthy about how much money you have is that you are free. You don’t have to keep up with the Joneses. If you practice stealth wealth, you are free to avoid keeping up with the Joneses. When no one knows you are wealthy, there’s no pressure to behave like a wealthy person. There are so many celebrities who spend like crazy and live lavish lifestyles only because it is expected of them. You don’t have to buy a nice car. If you want to eat frozen meals for dinner you can. Being able to be normal is freeing!

A 1993 Camry is a great way to practice stealth wealth.
We had a 1994 Camry that lasted 23 years. It was great.

Stealth wealth also makes you rich. Aside from being super manly, concealing your wealth makes you richer. Like Alan Naiman, being frugal when you don’t have to be allows you to keep saving. He could easily afford new shoes, but he kept fixing his old ones in order to save money. He could have bought fancy clothes, but he didn’t. Not caring what others thought of him allowed him to amass a fortune of $11 million dollars which he donated to charity.

Bad Reasons to Practice Stealth Wealth

Don’t hide your wealth just so you don’t have to help other people. Be a decent human being. That’s it, that’s all I have.

Don’t let lifestyle creep get the best of you

When our salaries rise it’s natural to splurge more often. It seems reasonable to buy higher quality things. To an extent that’s good. After you finish college and get a real job, you can stop eating ramen noodles and instead buy better groceries. But that doesn’t mean you should start going out to eat every night. Even if you make a good wage, you can still buy good quality off-brand groceries. Maybe you want to upgrade from your neighbor’s hand-me-downs. You can still buy clothes at Target instead of the GAP. Living below your means, which is a core principle of stealth wealth, is going to be best for you in the long run.

What do you think? Do you practice stealth wealth? Let us know in the comments below!

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Why Do People Go to the Gym?

Posted on by David
Gary works out!

In 2019 (when people could actually go to gyms) 64.2 million Americans (20%) belonged to a health or fitness club (source). The average monthly cost of a gym membership was $37.71, which of course doesn’t include initiation and enrollment fees (which are stupidly expensive). $35 billion was spent on gym memberships in 2019 alone! That’s more than twice (2.43) the amount spent on the last 4 presidential elections combined! so why do people go to the gym?

When surveyed, members usually give seven reasons for joining a fitness club:

  1. Improve Health
  2. Lose Weight
  3. Look Better
  4. Feel Better
  5. Get/Stay in Shape
  6. Tone Up
  7. Socialize

All of those are good goals to strive for. Losing weight and getting healthier are paramount for high quality of life. I read an article in JAMA once that said:

In this cohort study of 122 007 consecutive patients undergoing exercise treadmill testing, cardiorespiratory fitness was inversely associated with all-cause mortality without an observed upper limit of benefit.

Kyle Mandsager, MD; Serge Harb, MD; Paul Cremer, MD

According to the Journal of the American Medical Association there is no limit to the health benefits of exercising. If you want to live longer and enjoy a better quality of life, you need to exercise.

So are those good reasons to join a gym?

No! I don’t think those are good reasons to join a gym. Look at this picture of the Fitness Connection parking lot. Notice something strange? It’s full of cars. These people got in their car, drove 15 minutes to the gym to exercise for a half-hour, then they drove 15 minutes to go home.

A fitness center parking lot full of cars
So many cars!

They could have saved time by biking 15 minutes to the gym then immediately biking home. More importantly they would also save $40/month. Exercise is great. Everyone should exercise. But you don’t need a gym membership to exercise. Look again at the reasons given for joining a gym:

  1. Improve Health
  2. Lose Weight
  3. Look Better
  4. Feel Better
  5. Get/Stay in Shape
  6. Tone Up
  7. Socialize

All these (with the possible exception of number seven) can be done at home or on a bike trail. The majority of fitness equipment are treadmills, ellipticals, exercise bikes, or weights. None of these require going to a fitness center. Treadmills are just fake walking and walking is free. Ellipticals are just fake running or climbing stairs. Pretty much everyone has access to stairs, either in their homes or around their city. Exercise bikes are just fake bicycles, literally. New bikes are stupidly expensive, but you can find a good bicycle on Craigslist for like $50. Weights are just fake hauling rocks. Rocks are free, but if you want to be more refined then home dumbbells are pretty cheap.

Instead of driving to a fitness center to work out indoors with a bunch of other smelly people, go outside and exercise. The scenery is nicer, the air is fresher, and the Vitamin D is free and plentiful. Walking or biking along a scenic bike trail is much more fun than walking on a treadmill or using an exercise bike in a gym. It’s also better for your physical and mental health.

Most people stop by the gym for an hour before or after work. Instead of that you could save time by biking to work. That way you kill three birds with one stone. You get your exercise in for the day, you don’t have to pay for a gym membership, and you save money on gas! During an internship I biked to work every day, and it helped me feel great for the rest of the day. When I was in grad school I biked to campus so Courtney could have the car. This allowed us to only need one car when were first married, which was a great cost savings on top of the health benefits. Sadly my current job is right off the highway so riding a bicycle would be pretty dangerous. (Though that doesn’t stop some of my coworkers.)

Just save time by biking to the gym then immediately bike home.

The only partially valid reason given is also the least important to those surveyed. Less than 1% of respondents surveyed said socializing was the reason they joined a gym. To me that seems like the best reason to join a gym. The ability to work out with another person makes it much more fun and gives you that extra push to meet your goals. Having another person keeping you accountable may be the motivation you need to get to the gym regularly or to lose a few extra pounds. But even that can be done outside of a fitness center. Call up a friend and make a schedule to go running together.

Courtney and I make an effort to get out and walk along our bike trail several days a week. It’s a fun thing we can do together that helps us stay in shape. We used to go biking together but since having a baby we haven’t gotten to do that. We do however get out the stroller and take him for walks. It’s just nice to get fresh air.

What is a good reason pay for gym membership?

I’m not trying to say that all gyms are dumb and you never pay to exercise. Sometimes joining a gym is the right move for you. I already mentioned the social aspect of gym memberships. A gym can be a community of people working together and encouraging each other in their fitness journey. Don’t underestimate the power that community brings. But if your typical fitness center experience is simply to walk on a treadmill with earbuds in, then you’re better off walking for free outside.

Another good reason for joining a gym is if it gives you something you can’t do otherwise. For example if you enjoy racquetball you may want to join a racquetball gym. Free racquetball courts aren’t necessarily easy to come by, and that way you’ll always have somewhere to play and someone to play with. You may have outgrown the dumbbells you have at home, and may not have space for all the expensive equipment that’s the next step. My wife and I go to a rock climbing gym near our house. I enjoy rock climbing and there’s no natural alternative for it in Kansas. We don’t have much for mountains in the Midwest. The membership is stupidly expensive so instead we opt to get punch passes whenever they go on sale, but the point is we do this because it’s fun, getting ripped and swole is just an added bonus.

There are good reasons to join a gym, but if your reason is just to “improve health” there are several better and cheaper ways to do that. Go for a morning jog, bike to work, eat a salad for lunch. These are just a few better options for getting/staying in shape, but I think the problem runs deeper than just a bad fix for your health. This is endemic of American’s flawed thinking that the best way to solve a problem is to throw money at it.

How to solve a math problem? Throw money at it.
Works for Congress!

This is the same issue I have with Fitbits or Slim4Life or other consumer products that purport to help you get in shape if you buy them. For some people these can be great tools to help, but that’s all they are: tools. For most people out there it’s just companies exploiting that thought that if I only buy this thing I’ll get healthier. If I sign up for this gym I’ll get in shape. If I throw money at this problem it’ll go away.

FIRE is about taking control of your finances so that you don’t have to be a sucker in a job for the rest of your life, but the philosophy spills over into other parts of life as well. Instead of becoming a sucker for some big corporation, take your health into your own hands and just work towards a healthier life. And as a bonus it’ll make you richer too.

Shia Labeouf - Just Do It!

What do you think? Do you belong to a gym, or is the great outdoors your fitness center? Let us know in the comments below!