Smart Money MD

I went to buy groceries mid week and realized how simple the process was compared to the typical weekend or weeknight days that I typically go. The aisles weren’t crowded, I had my own space to pick through the avocados, and there was no line at checkout!

I wondered what the typical demographic of people are able to conveniently run errands on a weekday morning. Wouldn’t it be nice to be able to hold a job that would allow for flex time? It would even be nicer if I worked on my own time.

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Most of the customers appeared to be mothers with young children. It wasn’t clear where everyone else fell in the spectrum. Entrepreneurs? Funemployed? People like me who took a sick day off? Better yet, perhaps some of these guys are financially independent!

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As I was deciding whether to buy the apple fritter or crueller in the bakery aisle, I recognized one of the emergency room doctors at the local hospital. He was sporting a beaten up t-shirt with a logo sponsoring a local 5k race, jeans, and stained shoes. Had I not known he was a doctor in the high dollar range, I would have assumed that he was one of those funemployed individuals.

In reality, he was practicing stealth wealth whether or not he was aware of it.

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The premise of stealth wealth is simply not looking the part of having a bunch of zeros in your bank account.  This applies whether you’re taking the F train in Brooklyn at 2am or walking into a car dealership with the preying eyes of hungry salesmen tracking your every move. Is it simply a survival strategy? Perhaps, but I can say that I’ve saved a lot of headaches by blending into the crowd.

Sometimes attracting attention is bad for your health (read on).

As doctors, we can’t really hide from anyone. If you are a licensed physician, your credentials are public information. Ever since I obtained my first medical license, I started getting phone calls and mailings from asset management companies, random insurance companies, and ‘wealth accumulators’.

I think these companies knew that most of my colleagues were busy trying to pass our boards too—they invited us to a nice steak dinner while one of their professional advisors gave a talk.

Guess what? I’m guilty of going to these talks too. I still remember that at the last talk I went to, I didn’t understand a darn thing the advisor was talking about. What’s more embarrassing was that I had already gone to a similar talk six months ago.  It felt like one of those Embryology lectures back during first year medical school where you try to follow along but are totally lost when you talk about germ cell layers. He talked about having some “secret” but legal way to fund money into a Roth IRA after I start making real money. I still remember that I was so happy after that talk that I had leftovers to eat another day. I ended up getting GI upset the following day, didn’t associate it with the meal (because what can go wrong with free steak?), ate my leftovers several days later, and got GI upset again and a fever for two days!

I developed a Pavlovian response to these lectures and never attended any more. Sure, I was probably short-sighted to disregard my future earnings.  I also did not have any children at the time who needed to rely on my income.

Had I not gotten the attention of a wealth accumulator service, my future may have been very different. Fortunately, I think that I am able to manage my finances with the help of fellow strangers on the Internet. ?

Stealth wealth as a rebellion against materialism.

One can argue that life is more fulfilling by spending money on experiences rather than objects. It would seem that memories from experiences would sustain happiness much longer than an object like a fancy coffee table.  With memories, we can always look back these experiences and recreate happy thoughts.

I can easily see this corollary in my six-year-old nephew.  He is able to throw the most vicious tantrums in order to get an overpriced model car racetrack. He then becomes the most angelic child after an adult succumbs to his demands but soon requires the expansion pack after several brief days of enjoyment (Hopefully he will outgrow these habits).

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Fortunately for car dealerships, clothing stores, and electronics companies, the majority of the world does not buy into the experiences alone either. I honestly don’t either—I wouldn’t mind having a new Tesla parked in my garage any day of the week.

But buying into the concept of stealth wealth can help us reduce our materialistic tendencies. If you don’t want to be flashy making a grocery run in your Tesla, you keep your ten-year-old Subaru running as long as possible. Likewise, if you opt to wear $20 Timex watch in lieu of a giant Hublot, you’ve effectively saved a perfectly good watch from going to the trash or shoved in a drawer with no hope of future use.

Reduction of material substance will help build your wealth.

Gee, if you have a constrained outward appearance of money (stealth wealth) you actually help your bank account grow by keeping more of it in the bank.  I see many high-income professionals practicing this strategy in various degrees. I see some multi-millionaire construction company owners who put their money in their homes and the $80,000 V12 trucks. However, their clothing consists of budgetary jeans and t-shirts. Their vacations are simply camping trips with minimal recurring costs outside of the initial equipment purchases.

I’ve met other high-income individuals who live in homes that could be purchased with less than a quarter of their earning potential, but enjoy lavish vacations several times a year.  Compare that to my local orthopedic surgeon who lives in a decidedly mid-seven figure house, sends his kids to private schools, and goes on hunting expeditions throughout the world.  He might have an Ace up his sleeve, but he might also have a very long working career.

Stealth wealth can make you happier.

Having a sizable bank account could probably make you a happy person, but I’ve seen plenty of wealthy individuals who are miserable.  As doctors, dentists, lawyers, and other highly-compensated individuals, we actually have a relatively stable hold on the income generation aspect of our finances.  What leaves our wallet is more likely to impact our degree of happiness.  Stealth wealth provides us a framework to determine what is important to us, and direct our expenses towards happiness.

Who knows, that guy at Starbucks in the corner sipping his latte may be an Internet mogul practicing stealth wealth.

What part of your lifestyle do you consider Stealth?