I saw an interesting venn diagram recently comparing google search trends, and how overlapped some were. The interesting ones were "paleo" and "libertarian" which are two movements founded on taking responsibility for yourself and your own actions. I wouldn't be surprised if there was some inherent financial overlap there as well.
Gotta link? sounds cool.
I haved thanked Jacob for running this forum. I do again.
So true, you need to maintain stealth, although people in the know will try to spend your money.
I get occasionally asked when I'm buying the $35k+ minivan. Or, they ask when we're moving to the burbs in a McMansion. I wonder if people want other people to make the sames mistakes as them. The cash would be gone in a flash if we followed their advice.
Getting back to the OP question, many status symbols are covert/only known to a specific socioeconomic target group. E.g. the Birkin bag is known to middle class fashion/celebrity oriented people---and probably only so because of the media. Otherwise wealth displays are often of the "it takes one to know one" variety. It's therefore possible to show off wealth to one group while keeping another group mostly oblivious. The keyword is "understated".
My guess is that the Birkin bag used to serve such a function, that is, impress people who are up or over in socioeconomic class, until it was outed whereas a Gucci bag serves the opposite purpose, that is, to impress people who are below. Incidentally, my understanding of handbag signalling might be completely off. I use a free tote bag that says "eat 5 vegetables per day" as my bag. I do speak wristwatch though ;-P
plantingourpennies wrote:
So, what is the status symbol for the FI/ERE crowd? We obviously need one...
Hm. Sound like its an obtained-for-free tote bag with 'five a day' on it. Perhaps bonus status points for evidence of nifty mending or handmade modification?
jacob wrote:Getting back to the OP question, many status symbols are covert/only known to a specific socioeconomic target group. E.g. the Birkin bag is known to middle class fashion/celebrity oriented people---and probably only so because of the media. Otherwise wealth displays are often of the "it takes one to know one" variety. It's therefore possible to show off wealth to one group while keeping another group mostly oblivious. The keyword is "understated".
My guess is that the Birkin bag used to serve such a function, that is, impress people who are up or over in socioeconomic class, until it was outed whereas a Gucci bag serves the opposite purpose, that is, to impress people who are below. Incidentally, my understanding of handbag signalling might be completely off. I use a free tote bag that says "eat 5 vegetables per day" as my bag. I do speak wristwatch though ;-P
Absolutely.
I use these sorts of signaling at work, and I have changed what I wear, watch yes/no, what car I drive, even how often I shave/get barbered based on different jobs I've had and the socio-economic level of my audience, and in particular, the role of my boss, and most importantly, their boss.
champ0608 wrote:I've worked very hard to make my entire family think I'm just like them.
They think I'm living paycheck to paycheck. They think I work 40 hours a week. I complain about a boss I don't have and tell stories about the co-workers I don't have. They think the little house my wife and I bought is our "starter house." Most importantly, they have no idea that I have a (modest) stockpile of cash.
At first I felt bad living behind a facade, and sometimes its hard to not get caught, but it works much better than everyone in the family calling you lazy for not working and scrooge for not handing out your money. I'm just like them.
I'm basically the same as you. My dad knows how much I have and he always bugs me to spend more money, but he was still working into his 60s.
Most people buy into the consumer society so much, that they are offended if you dont; but almost all seniors will tell you they wish they spent less time working and most working people spend all day talking about what theyre going to do when off work, only the crazy ones are looking forward to taking work home.
So the drawbacks are numerous... Are there any positives?
I suppose you might be able to positively influence people around you... But first they'd have to know you are FI. And [most?] people assume you are not unless you have many vulgar displays of wealth.
I am quite content having people assume I'm poor and not being a targeted for sob story loans, "investment" opportunity pitches, burglary, so on.
Thanks for your replies and interesting stories.
Several of them are confirmations that it is better to keep a low profile with respect to one’s financial achievements. Also, I honestly think that rather than directly giving some friend/family member money it is in their own interest that I help them discerning between essential and non-essential spending, thus teaching them how to SAVE. This is also in line with the Christian perspective: “don’t give fish to a man, better teach him how to fish”.
E.g.: medical treatment is essential spending, a new TV set is not essential; professional tuition is essential, designer clothing is not essential and so on. Come to me if you need financial support in essential issues and don’t bother me for stupid reasons.
Being asked to finance others’ irresponsible behavior is annoying because – just like the user SimpleLife put it - “all the while they just piss away your money having fun, while you are stuck in corporate working to pay for it.”
Just another example popped into my mind – this time it is about consequences of disclosing too much financial information about yourself at work.
I was 23 years old, working at my first job after graduating university. We were 3 female accountants + our boss in a small accounting practice. All of us had quite low salaries, partly because the firm was a start-up and partly because of the twisted mindset of our boss (who was also the owner of the firm).
One of these 3 colleagues was married to a guy with a high position in a bank. One day she asks our boss for a salary increase and she hears the following astounding answer: “you don’t really need any increase since your husband makes enough money as bank manager.”
Similarly, the other colleague also “did not need any higher salary because she had some after-work gigs.” As for me, I also “did not need salary increases since I was still living with my parents, i.e. not paying rent.”
Obviously me and my colleagues considered that salaries should be set with reference to labour market and not whatever our private arrangements might have been and we soon looked for other jobs. My boss pretended that she did not understand why no employee made it to at least 2 years with her firm – actually she said that we were “ungrateful”.
At all workplaces that followed I used to let my boss and colleagues that I paid outrageous rent and utilities and my boyfriend is low paid, and we cannot save anything, poor me, poor him.
@JohnnyH - There aren't many positives, but one is that people will invite you to join alternative investments. Venture capital. Start-ups. Loans to small businesses (for example, someone owns a fishing trawler). Apartment buildings. Such things tend to pay much higher return rates that publicly traded investments.
Another one is that if people know you're looking to buy a boat and they also know someone who is selling a $20k boat yet will only take cash, they'll make the connection.
Melanzanisalat wrote:
Obviously me and my colleagues considered that salaries should be set with reference to labour market and not whatever our private arrangements might have been and we soon looked for other jobs. My boss pretended that she did not understand why no employee made it to at least 2 years with her firm – actually she said that we were “ungrateful”.
Sounds like a good reason to start a competing practice and hire all your old co-workers
By the way, the proverb "Give a man a fish and he will eat for a day. Teach him how to fish and he will eat for a
lifetime" is not from the Bible, it is a Chinese proverb.
jacob wrote:@JohnnyH - There aren't many positives, but one is that people will invite you to join alternative investments. Venture capital. Start-ups. Loans to small businesses (for example, someone owns a fishing trawler). Apartment buildings. Such things tend to pay much higher return rates that publicly traded investments.
Another one is that if people know you're looking to buy a boat and they also know someone who is selling a $20k boat yet will only take cash, they'll make the connection.
+1
It's like anything else, if you're intentional you can get a ROIC here. Signaling the right thing, to the right crowd, can have way more upside than downside.
The key is not to become addicted to the stuff you are using for this, or to buy it on credit.
Seneca wrote: Pretty much a summary of Millionaire Next Door, and the other books of Tom Stanley.
Note that hiding wealth within the context of that article or Tom Stanley is very different than what most people here would consider it to be!
What do you mean?
In our discussion of how much money it takes to rank among the top 1% of wealth in the United States, we uncovered the fact that roughly 80 out of every 100 members of the “new elite” in the United States – those with at least $5 million to $10 million in liquid net worth and / or generating $380,000+ in annual income ($31,700+ per month) from dividends, interest, and rents – practice what is known as stealth wealth....What is stealth wealth?... Most prefer to live in nice, ordinary houses and drive nice, ordinary cars. For some, this looks like a small bungalow with a Ford in the driveway. For others, it appears as a nice 5,000+ square foot house in the suburbs with a Mercedes or two in the driveway. The common denominator is all are capable of living out “champagne wishes and caviar dreams” if desired.
This sounds more like Bogleheads than ERE. I'm not arguing it violates ERE principles, just that most people here aren't after $380k/yr in dividends!
Basically the article (and Tom Stanley) are talking about people who are middle class outwardly but have investments that make them quite rich. The Tom Stanley book that studies the traits/habits of people with 1%'er investment incomes is actually Millionaire Mind, not Millionaire Next Door.
What's interesting to me about all these is it shows how much it actually costs to afford the middle class lifestyle rather than finance it as you go.
Seneca wrote:
What's interesting to me about all these is it shows how much it actually costs to afford the middle class lifestyle rather than finance it as you go.
For sure! Just to live off $30,000/year post-tax "risk-free" you'd need a million in assets put into treasuries. Yet the average household spends $50,000/year with $68,828 in total assets (including their home).
