In movies, the spies are always beautiful, smooth, and very obviously spies. A truly great spy would be someone you’d never expect to be a spy! The middle-aged accountant, the quiet engineering contractor, or the dedicated assistant. Simply by blending in, and not meeting the expectations of a Bond-type spy, they have a huge advantage.
Stealth wealth is like that. And educators have the natural advantage.
In some professions, there is an expectation of conspicuous consumption. Giant houses, luxury cars, vacation homes, expensive vacations. In education, it’s the opposite.
Society holds the expectation that we are poor, struggling to make ends meet, and should be toiling away for passion rather than pay. While that’s problematic for many reasons, it has the benefit of making education perfect for those looking to practice stealth wealth.
The wealth part isn’t easy, but the stealth part? Educators can blend like the perfect spies!
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What Is Stealth Wealth?
Stealth wealth is having money but not appearing to be rich. Substance without flash.
In popular culture we often hear of turning on “stealth mode”, but stealth wealth doesn’t require anything active.
Instead, it’s a refusal to engage in the conspicuous consumerism of our society. Avoiding spending just to appear rich, and focusing your financial choices on actually building wealth.
Simply by not spending excessively, avoiding lifestyle inflation, and refusing to buy more than one needs you are practicing stealth wealth.
Advantages of Stealth Wealth
In a world that celebrates the appearance of being rich, why would someone who actually is wealthy intentionally hide it?
Less Pressure to Consume
Practicing stealth wealth is beneficial to your finances both while you’re building wealth and once you’re “rich.”
First, you are spending less on your lifestyle so you accumulate more quickly. If you aren’t leasing luxury cars or looking to upgrade your house, you’ll save more and grow wealth more quickly.
Once you have achieved wealth and are practicing stealth wealth, others won’t expect you to spend it. There will be no pressure to maintain appearances, lend money to family or acquaintances, or investment sales pitches.
If others don’t realize you have money, they don’t expect the same things from you.
Sadly, if people know you are wealthy they are more likely to sue you, attempt to hack you, or acquire your wealth in other ways. These things may still happen, but your risk increases as your assets increase.
Living in a giant house or driving a $100k car are invitations to some. You may be less of a target if you live in a middle-class neighborhood in a smaller house and drive a reasonable car. No one will pay particular attention to you if you aren’t flashing your wealth.
It’s not guaranteed protection, but in our litigious society, every layer of security helps.
You know who likes the loud obnoxious guy throwing money around? Hangers on and sycophants. Everyone else thinks that person is annoying. It’s always been strange to me how much marketing is centered around a desire to be that person – that no one actually wants to be after the age of 25.
Instead, you can be the person that is quietly, comfortably secure. Helping out those around you, or picking up the check, without making a fuss or drawing attention. Able to make the choices YOU want to make and not defined by expectations of others.
Be solid, not annoying. You’ll be happier.
Why Stealth Wealth Works for Educators
No one expects teachers to be wealthy. Despite books like The Millionaire Next Door and Everyday Millionaires (affiliate links) showing that teachers are well-represented in the ranks of American millionaires, the image of educators in poverty persists.
It’s not a get rich quick profession. For educators, wealth is a slow build. Those who become wealthy do so over time with intentional decisions, use of our pre-tax investing options, and for some, solid pensions.
It’s rare for educators to have lots of excess money to spend on image purchases.
The professional culture also resists conspicuous consumption. In many schools, showing up in a high-end luxury car is considered tacky. In elementary schools, expensive clothes get ruined by dirty hands or art accidents. Middle schoolers aren’t exactly kind to aging teachers trying to keep up with expensive fashion trends.
Educators aren’t expected to have giant houses on a country club golf course, a ski lodge, or island home. A solid house in the community is considered appropriate, but unfortunately in many areas that isn’t even attainable anymore.
In short, educators don’t need to live like doctors and lawyers to appear successful. They can spend on what they need, invest over time, and become wealthy without anyone realizing it.
Stealth mode on!
Where Stealth Wealth Breaks Down
The above isn’t true in one part of the profession – the administrative ranks. While many of the cultural pressures are the same, for some reason administrators often fall into the consumption trap.
New principals almost always buy new cars. Principals and superintendents may entertain staff and community and feel the need to buy the larger beautiful houses.
Administrative wardrobes are supposed to be “professional.” While it’s perfectly acceptable to wear reasonable business attire, some fall into the clothing competition trap. They buy brands instead of quality.
This is why in the segment of the education workforce where one would expect to see the highest levels of wealth, you often just see more consumption. A higher income doesn’t always translate into higher net worth.
Administrators should be able to build wealth easier, but sometimes forget to turn on the stealth and end up failing at both. But it doesn’t have to be that way.
Build Wealth Over Time – Keep It Secret
If you’ve read anything I’ve written, you know I firmly believe that educators can build wealth. I also think we’re the ideal stealth wealth practitioners. The perfect spies in a world concerned about image!
You can achieve your financial goals over time and keep a low profile. Decide if you want to be a teacher or administrator. Make good purchasing decisions, invest in your 403b or 457b, and understand your educator pension.
You may not retire at 30, but you’ll be quietly comfortable well before normal retirement age. Here are some examples of how the math can work out:
- Two teacher financial independence
- A solo administrator (who doesn’t fall into the consumption trap!)
- A single teacher path to FIRE
- Educator on FIOR interviews (real educators)
And, if you’re interested in putting it all together, grab the ebook where I put it all together for you – free!