The other week Sam from Financial Samurai stopped by my blog and left a comment in response to me selling those sites for $50k last month. He probably never thought it would inspire an entire blog post out of it, but I couldn’t get it out of my head as I found it somewhat intriguing :)
Here’s what he said:
“Baller. Nice to have $50K in hidden wealth. I totally subscribe to stealth wealth so nobody knows how big the iceberg really is haha.”
The nice “baller” compliment aside (though I won’t disagree with him ;)), it was that term of “stealth wealth” that really caused me to pause for a few to marinate. Stealth wealth… Was I hiding money this whole time from myself? Was I hiding it from you? Should it have been in my Net Worth all these years? If so, what *else* am I hiding from everyone right now?? Haha…
Now obviously I’d never intentionally hide any money on this site considering it’s the entire purpose – and soul – of this blog and why we’re all here, BUT the fact is there *are* indeed lots of things currently not being included in our net worth statements right now. And probably yours too! Does that really mean that they *should* be, though?
Here’s a list of everything I could think of that’s currently being omitted from our net worth:
- My blogs — Budgets Are Sexy and Rockstar Finance, and all others present and in the future
- All house stuff — Our TVs, furniture, artwork, lights, decorations, pots, pans, food, rugs, drugs (legal ones), stereos, computers, cups, santa paintings, etc ;)
- Our jewelry – $7,000+ engagement ring, My $800 diamond earings (ballin’!), my Bulova watch…
- All garage stuff — Tools, lawn mower, chain saws, shovels, rakes…
Our cars— Oops, those we’re tracking ;)
- My coin collection! Which includes not only hundreds of years old valuable coins, but ALSO those made of silver and gold bullion that could easily be turned into cash on any given day…
- My baseball/basketball card collection — Which includes some Mickey Mantles, O.J. Simpsons (hah!), and old Michael Jordans. Along with a plethora of other somewhat-valuable cards from back in the day (you might remember me blogging about these before)
- All our clothes (and makeup, says the wife) — All of which would net us a pretty penny if we ended up hawking one day. Or at least the wife’s stuff since I’m down to only a handful of stuff right now (though you’d be happy to hear I went on a TJ Maxx run last weekend and picked up 3 new shirts and 1 new hoodie! Woohoo!)
And probably a lot more that I can’t think of at the moment… But as you can see, there’s a LOT that is currently not being included in our net worths. And probably rightfully so. I don’t like putting “things” on there because it’s mostly stuff we need to survive on a regular basis and won’t ever sell anyways, and most other stuff is either too hard to reasonably value/sell too, or it just doesn’t feel “right.” Like a blog or makeup collection. And if you do happen to sell any of it, well, then it filters nicely right into your next month’s worth update anyways! Which is exactly how I like it…
So yes, selling those sites of mine WAS technically “stealth”, as Sam so smartly pointed out, however its all stuff that I don’t feel belongs in a net worth valuation anyways. At least my own. You can certainly make the case that a “business” has assets and thus value so it SHOULD be included, just like our cars or even homes for that matter (which some people also don’t believe should go in there since you need one to live in), but for me it’s just too unstable to be accounted for on an ongoing basis. I prefer the nice surprise of an influx of cash when beautiful days like that happen anyways ;) Better to be more conservative than not when it comes to money in my mind…
As for purposely hiding wealth from people? Yes – I definitely do that outside of this blog :) As much as I love talking about money and helping others, when it comes to the “real world” I often find it’s smarter to lay low and live your lives more modestly than spout out your good fortunes all over. No pun intended. The second someone perceives you as being rich (or poor) or anything else that will affect how they act around you, it all turns into a big pile of mess and it’s *very* hard to undue.
In fact, there are some people probably reading this blog right now that I wish I hadn’t let slip years ago that I now can’t ever take back… My guess/hope is that they’ve long forgotten about it altogether – or better yet, got BORED with it! Haha… cuz Lord knows “normal” people don’t enjoy reading about money :) – but the fact is I just don’t know and now it bugs me whenever I stop and think about it.
The point to all this today?
- Not everything needs to be included in your net worth except for stuff you WANT, or FEEL, needs to be in there. There’s technically an answer to what “net worth” is: assets minus liabilities, but really what matters is how YOU want to use it in order to stay on track or motivated. It doesn’t help anyone else but you, so track all the stuff that you feel makes sense in your given situation.
- Be conscious of whom you share stuff with. Not everything needs to be on display 24/7 like we’re so used to these days with Facebook and Twitter and Pinterest (read this post by Donna Freedman if you ever get a chance: Living in the quieter spots of life), because once stuff is out there it’s hard to take back. It’s possible, but hard.
So thanks again Sam for sparking my juices today (why does that sound so dirty???)! And hopefully the rest of you got some good takeaways from this brain dump too :) Feel free to leave your own thoughts on what you feel does – or does not – belong in your net worth down below. And if you monitor your transparency around others in the “real world” too?
Thanks for reading :)
Photo cred: 12me // Tweaked by J$
PS: If you’re just getting started in your journey, here are a few good resources to help track your money. Doesn’t matter which route you go, just that it ends up sticking!
- The "Budget/Net Worth" spreadsheet - the colorful Excel template I personally use.
- The "Money Snapshot" spreadsheet - a simple Excel template I created for my former $$$ clients
If you're not a spreadsheet guy like me and prefer something more automated (which is fine, whatever gets you to take action!), you can try your hand with a free Personal Capital account instead.
Personal Capital is a cool tool that connects with your bank & investment accounts to give you an automated way to track your net worth. You'll get a crystal clear picture of how your spending and investments affect your financial goals (early retirement?), and it's super easy to use.
It only takes a couple minutes to set up and you can grab your free account here. They also do a lot of other cool stuff as well which my early retired friend Justin covers in our full review of Personal Capital - check it out here: Why I Use Personal Capital Almost Every Single Day.
(There's also Mint.com too btw which is also free and automated, but its more focused on day-to-day budgeting rather than long-term net worth building)
Get blog posts automatically emailed to you!
I love that term! You’re obviously doing a lot of things right.
I started on eBay by selling video games that I owned but didn’t play anymore, creating “stealth wealth.” Ignore the fact that I lost money on them compared to their purchase price… I did get to play the games over the 10+ years of owning them. Still extra $$$ that I was able to put in the Roth!
Yeah doggy! Roth = sexier than video games for sure. Though not by much ;)
Sam’s “Stealth Wealth” series is one of my current favorites.
I do agree with keeping wealth under wraps, especially depending on age. It’s amazing to me what people feel entitled to if you tell them about money.
Recently, I made the mistake of telling a friend (and co-worker) how much I made in a side hustle, after she asked. Her response, “Well, you have to take me to lunch then!”
She didn’t help me with my side hustle. She makes easily $10k more than I do at work. But because I made a little extra money, I’m supposed to take her to lunch…? Engaging stealth wealth shield from here on out.
lol people are ridiculous.
Ha! Nice. Well I expect J to buy us all beers too with his newfound 50k. That’s like 7,000 beers in Manhattan or 60,000 beers in Milwakee he can afford to buy us! :)
Haha… we’ve got some comedians in here today!
And had no idea this was a series of yours, Sam – very cool! And here I thought I was just super special, *tear*…
Don’t worry. My “series” is a grand total of two posts:
“The Rise Of Stealth Wealth”
“The Stealth Wealth Compendium Of Useful Phrases”
Chimays for everyone!
Rise up Stealth Wealth Movement!
Haha, I’ll drink to that!
All about the stealth wealth here! Most of mates think I don’t have a pot to p**s in I am sure because I don’t go out and but ridiculous expensive junk all the time. Ah well.
I used to gamble quite heavily and learned quickly to conceal any big wins if I could. “Beers are on you then” was the common phrase…. Ermmm hang on a minute I don’t remember anyone buying me a beer last week when I list a packet?!
People are ridiculous indeed! :)
Apologies for the terrible spelling. Damn phone!
*buy ridiculous junk
*lost a packet
haha…. next time we hang out, beers on you! ;)
Stealth Wealth what a great phrase that somebody should coin asap. Yeah I don’t know why regular folks do not like reading about money or all the faboulous PF blogs out there. I can’t imagine what they waste their time doing. Yes I struggle with sharing my net worth on my blog because all my family and friends read my blog. I didn’t see you mention the wife’s diamond ring in the mix, for some people like Kim K. thats a big chunk of change. For regular folks it is about 2 months of salary.
Hah! I literally JUST went back to edit the post and add that in :) Totally forgot until I saw my diamond earring in my ear this morning! Haha… so good call :)
Couldn’t agree more.
Everyone has their own opinion of what should/shouldn’t fall into the wealth category. I get emails all of the time regarding my net worth updates and why it should/shouldn’t include everything from my personal electronics to my home.
One of my goals is to develop some stealth wealth over the next 15 years where I could surprise the hell out of family and friends at a moments notice for whatever reason. Vegas trip paid for 10 friends -> BOOM, stealth wealth just paid for this awesome trip. Nice used card for my son who didn’t expect it at his 16th birthday -> BOOM, stealth wealth paid for it. I want to do good deeds because 1) I can and 2) it won’t hurt my underlying wealth big time. That is what I hope to do with stealth wealth someday…..(working towards that someday)
HAH! YES! Love that… Now I’ll have to start working on inching my way into your circle of trust 10 friends there, haha… I love me some Vegas!!
I don’t include any household stuff in our net worth either. It’s just too much work to keep track of.
I just check stealthwealth.com and it’s already taken.. :(
Haha… good thinking though ;)
Interesting thoughts, J! I’ve been thinking a lot about what other bloggers put on their site about income and net worth, etc. and how much info I should offer (since I’m writing as me rather an with a pseudonym). I’ll have to let that marinate a little, now :)
That does make a lot of difference. And the #1 reason I’m still pretty anonymous here. Which is why I can’t stand when blogger “gurus” talk about how it’s bad being anonymous cuz we’re not “real” or being transparent – HAH! I’m sorry, who has their financials plastered across their site and who doesn’t? Drives me bonkers….
So what do you say when people ask you what you do or about your blog? I mean, it’s easy to be anonymous online, but harder when you’re talking to friends and family and stuff in the real world.
I tell them I’m a blogger and either they smile and nod because they have no idea (or care) what that means, or they ask and I just tell them it’s about money and usually they leave it at that. If they ask for specifics, I just tell them I blog at TheWealthGospel.com :) Haha… j/k. I just tell them it’s anonymous.
Lately I’ve been telling people I’m a “consultant” and that does pretty much exactly the same thing – get smiles and nods.
haha the ol’ smile and nod. I’m starting to get that too. It’s like, “So you aren’t man enough to have a real side business, huh?” But we’ll see who’s laughing a few years from now when I’m working at home in my underwear.
And hey, I’m good with you sending people my way :)
It’s often not enough just to keep quiet about your financial situation, but to really LIVE to shadow your financial situation. My husband and I very deliberately live WAY below our means, and I think it helps keep us humble and financially “stealth.”
Love this post!
You left your wife off your list! That PhD-in-progress is definitely stealth wealth IMO.
Hahaha… that is true actually, huh? Would have never thought about that one :)
I love your two takeaways J! I agree there are more than enough things that could go on your net worth, but not everything is going to be so easy to valuate to put on there anyway. With the second point, I am firmly in the shielding camp. Wealth can be so relative in many instances and I’d much rather keep a friend as opposed to messing it up with throwing money into the mix.
I don’t typically consider my “stuff” when calculating my networth either. Though recently I’ve taken to ebay to sell some of it and it’s great having that “surprise” cash roll in.
Good stuff J. Thanks for highlighting. $50k is a large absolute amount and percentage of your NW too, so that is definitely once stealth wealth.
I have a feeling most of us have a good portion of stealth wealth somewhere that we either consciously keep hidden or inadvertently. The government therefore has no idea the true measure of wealth either, which means we collectively have MUCH MORE wealth than anybody will ever know!
For this reason I’m bullish on the US economy.
Oooh yes! Good point! Never thought of it that way but you’re totally right. Especially if you take into consideration all the wealth people are actually TRYING to hide on purpose from the gov’t :)
People who flaunt their wealth are only asking for trouble. Better to fly under the radar and not make a target of yourself.
I have the opposite problem — people assume we’re rolling in cash because we’re attorneys. So, it’s usually not too long before they find out we have six figures in student loan debt. That explains why we don’t go out bar-hopping!
Interesting… I always assume the same thing myself too. I guess in the *beginning* it’s not the case, but after a while it *does* become the case generally speaking, yeah? So we have to consider the person’s age first? :)
I think there is a big difference between public stealth wealth, like not including something in your net worth calculation, and private stealth wealth where you don’t even realize the wealth you have. An obvious example is your collection of sites. There is clearly a “cash” value for your sites, yet it is unrealized and uncalculated by you (nothing wrong with that).
In the end, you are absolutely right in that the calculation of net worth is personal, and is something that each one of us must do in a manner that makes sense to us.
Also… baller status achieved. Nice work J.
Haha, thanks :) And I agree – some wealth is left off on purpose, and others by accident. But as long as we’re tracking *the important stuff* all is a-okay!
Here’s my rough opinion of stealth wealth. Let it be known this is coming from a finance industry guy who frequently has to review financial statements of both people and companies:
If you own it and it has value, you should probably include it in your net worth.
Now, I get the whole not including certain types of property. Furniture and stuff like that is hard to ascribe a value when you’re just a homeowner. If it belong to a business though, it would be accounted for and depreciated over a certain period of time. But for the sake of personal finance, yeah, leave it out!
With regards for your business though, I think that sort of wealth should never be stealth. That is a major part of your net worth today. Budgets are Sexy is a large website with an active following. If you were to sell it today, as JD Roth sold Get Rich slowly, you may be a millionaire. Another way to look at it is this: you gave your house a kind of worst case scenario valuation. It may be more fair to your personal balance sheet to do the same for your business. That said, you don’t need to share that with us. Just make sure you have a number in mind for yourself :)
Just my two cents!
Yeah, I guess I could just come up with a value I think is fair for B.A.S. (which is hard to do btw when you’re emotionally invested!) and then keep it to myself. But I probably won’t just because I like being super conservative and then getting a nice surprise later if/when I ever sell out. Which btw is why I formed RockstarFinance.com – to be my long term site whenever budgets are sexy and I part ways. Or rather, *if* we ever do (no plans on selling it for a million dollars anytime soon, but of course I’d consider the offer, hint hint ;)).
J Money, I’m picking up what you’re laying down buddy….
My husband and I calculate our net worth using our homes, bank accounts, and investment accounts (401k’s and personally managed accounts) only. Everything else (the things) are usually given away once we tire of them anyway (cars included), so for us it would be a waste of time to itemize the contents of our home. Our pensions–which we currently collect in addition to wages earned from ongoing employment–could be considered “stealth wealth”…..some financial experts believe pensions should be part of your net worth and some do not.
Huh… never thought about where pensions would fit in. Probably because I don’t know anyone my age who will ever get one ;)
See I’m learning all this good stuff about net worth, even though I blogged about how it wasn’t important to me today. =O When I calculated mine after your last post I did add in 1k for household items, but didn’t add in my engagement ring, etc. I should probably not add in any of it and just stick to the cold hard numbers. :)
That’s the easiest, most conservative way to do it. And also if you don’t want to deal with haters emailing you when you post it up on your site, haha… It does make things more interesting though ;)
I’m a big believer in not sharing things fully just for safety reasons too. I know you don’t share your home location online but I’m always a bit paranoid that a really determined person could figure out where I am. I don’t have anything worth stealing regardless but it’s always important to use restraint when disclosing wealth.
Agreed. Especially when things like kids start becoming involved too. Gets weird/scary.
I’d throw your online enterprises onto your net worth statement. Discount them to something reasonable, and put them on the balance sheet. You have proved that you can build a valuable enterprise and then offload it for a five figure chunk o’ change.
I personally skip listing all the rest of the “stuff” we own – clothes, tools, collections, household furnishings, and electronics. Its value is mostly to us alone, and it can be hard to get anything approaching retail value out of any of the stuff. Not to mention the hundreds of man-hours required to offload all that junk. I have way better things to do with my precious time like drink beer, change dirty diapers, hunt dust bunnies, shoot some hoops, or lay around in the lakeside hammock in my backyard.
Mmmmmm… you had me at dust bunnies! Just kidding – change dirty diapers (yum!)
Those things don’t change themselves unfortunately.
I’m a pretty private by nature so unless it’s someone close or immediate family I don’t like to talk about it. No one needs to know every detail of my life! On FB I try not to post anything too private. I just don’t like splashing my life out there. My sister on the either hand is full on status updates every single day. She has different definitions of FB than I do. EG I don’t tell people on Fb that I’m leaving town, she does. Hmm which reminds me I need to have a convo with her about my privacy!
YES! Geez!!! Remember that site “please rob me.com” or something like that? Freaky!
I don’t think my site is worth anything until someone makes an offer on it. So wouldn’t consider that stealth wealth, actually the only thing in your list I would add is the coin collection, at its weight in gold or silver price. Often a coin is not worth much more than this but you can always sell it as scrap gold.
okay, I’m making you an offer for your site now: $500,000 :) BAM! Your net worth just exploded! Haha…
(and I might agree w/ the coin stuff too – initially I had it in my net worth for a cple months but then decided to take it out. gotta finish my spreadsheet that tracks all the bullion value straight up outside of coin value.)
I keep my net worth kind of mixed – things like cloths and furniture aren’t on it, but electronics and musical instruments are, because I know that in a pinch if I hocked them, I could get approximately an amount that’s easy to find online. So I agree with the people urging to you add your coin collection. Possibly the sports card one too if any of those cards are worth a pretty penny
As for the whole privacy thing, I’d never thought about it too much (I think partially because I never really thought anyone would read my blog), but I felt like part of my responsibility if I was going to blog about what I was doing with my money was to provide a quantitative result. A bunch of people I’d never really met before or might only meet a conference someday full of other people who post their net worth and nitpick the downfalls of penny stocks and virtues of Roth vs Traditional IRAs and how to save money making your own soap, etc… not a big deal. Then I found out my brother reads my website and was surprised as how weird that felt… a little like I regressed to being 12 and wanted to yell at him to get out of my room and stop reading my diary.
Hah! He ready your diary??? Naughty boy! :)
I guess the only wealth I am hiding (I don’t accumulate things so there is no garage full of stuff to sell on eBay, there is not garage, I live in an apt) are the stories in my head. Some of them are written down on paper but I have no idea how to get them to people to make money. I read over a 100 books a year and my stuff can’t be any worse than some of the mediocre ones I’ve read.
Wowwwww….. so if I ever were to read a book, I could confidently count on at least one sale? ;)
Thanks man! The characters do argue over money in it. But come to some resolution!
My ultimate stealth wealth, love from my wife. Priceless.
I include our (mortgaged) house and flat, but at a 5% discount on lowest comparable and (no loan) cars at 15% disc. on avg private sale value. But no jewellery, furnishings electrical etc – and next year’s unbooked travel as a liability but not the returnable value of the air tickets (5k+) as a credit. Who am I trying to fool – I’m clearly just as arbitrary as the next!
PS: bored of you – how could they :-) You were my first (pf b) and inspired me to read, so far, 40+ archived blogs over on saving advice.
Keep talking, I’m getting turned on!
Whether or not you include your personal and household items in your net worth depends on the purpose of the calculation. If you measure your net worth to determine how much you’re worth to your heirs then it should definitely be included. If it’s to determine whether you’re solvent (think bankruptcy) then it should be included as well. If you calculate your net worth for retirement planning then don’t include them. In any case, I wouldn’t include your wife’s diamond! She’s taking it to the grave, my friend!
Great post, J! And everything one owns definitely doesn’t need to be added to one’s net worth. Telling people about one’s wealth is a big no-no for me too; mostly because of changes in their attitudes and in the way they perceive you. It can be annoying. And I didn’t know you were into numismatics! What kind of coins do you collect? Any particular preference?
Yeah man! The old stuff (1800s) is my fave, but I like all kinds of coins and currency really :) Why – you want to send any to me for my birthday? Haha…
Stealth wealth is the way to go. I love surprising people around the cocktail table when the topic of investing comes up. I have learned to take there comments as compliments. “Dang I had know idea you no so much about investing! You drive an old rustly Honda.” Apparently investing IQ was exclusive to non-Honda drives.
Haha… sounds about right :)
Love the “Stealth Wealth” idea. One that I was recently thinking about (trying to decide if I should add to net worth or not) was my HSA account and my Dependent care FSA account as I typically allow them to accumulate as much as possible. My Dependent care FSA I typically clear out at year end….but until that happens, it’s like a stealth savings account for myself. On the HSA front, that account continually grows and I disregard it when tracking net worth.
Still have a hard time trying to figure out the 529 savings plan and whether to include that in my wealth or not, I haven’t to this point so I figure I’ll leave it until I see good reasoning to include it in my financial picture.
Interesting ones for sure!! And really there’s no “right” answer so I’d say you’re doing things just fine as better to be overly conservative than not ;) for the 529s we figure it’s really not our money anymore as we’ll be giving it to our kids (hopefully!), and if for some reason it comes back to us, well, we’ll just add it back in *then*. That’s the nice part about all this stealth wealth – it can always be incorporated in at a later date when it makes more sense!