Hey Reader,

I almost bought a $15,000 watch 3 years ago.

Not because I needed it. Not even because I really wanted it.

But because some part of me thought: "Isn't this what you're supposed to do when you have some money?"

Then I remembered why I wanted to build wealth in the first place.

It wasn't to impress anyone. It was for freedom.

There are two ways to be rich, and most people are chasing the wrong one.

The wrong way? It's what you see on Instagram - the fancy cars, the $250 white t-shirt, the $1,000 flip flops (yeah, those exist). It's all about proving to the world that you've made it.

The right way is actually... kind of boring. It's shopping at Costco. Driving a normal car. Getting excited for deals - except knowing you’re financially secure.

Today, I want to talk about stealth wealth and why keeping your net worth close to your chest is a smart financial strategy, no matter how much you make.

Stealth Wealth

Stealth wealth simply means being wealthy without showing it off.

One of my favorite books, The Millionaire Next Door, argues that a modest lifestyle is actually a big reason why people get rich in the first place.

After studying hundreds of high earners, the authors concluded there are 2 categories of people: Under Accumulators of Wealth (UAW) and Prodigious Accumulators of Wealth (PAW).

UAWs spend most or even more than what they earn, no matter their income. The more they earn, the more they spend. But when the money slows down, they can’t seem to turn the faucet off. That’s why a lot of music stars and professional athletes eventually file for bankruptcy.

AWs save and invest a big portion of what they earn, no matter how much money they’re making. That’s why so many millionaires look like your next door neighbor.

The beauty of living below your means is that you save yourself from a lot of stress down the line. If you spend on luxury assets, like a huge house or a fancy car, you’re also buying the endless upkeep that comes with them. Just imagine how much it’d cost to maintain a 15 bedroom house vs a 3 bedroom one.

A modest lifestyle will help you build wealth, no matter how much you have in your bank account right now. It’s all about chasing invisible wealth ($ in the bank and freedom) instead of just visible wealth (fancy, material things).

Invisible wealth is usually the kind that feels the best anyway because it’s rooted in what actually matters to you, not in what looks impressive to others.

When I started seeing my net worth increase, I had a very short “treat yourself” phase.

I grew up being conscious of every single penny and saying no to little “luxuries”, like ordering appetizers and soda at a restaurant.

So when I finally could, I bought myself a new iPhone, PS5, and a fancy speaker system.

And yeah, it felt great… for a bit.

But material things lose their magic fast. You’re thrilled for a week after getting the newest iPhone, but before long, you’re already thinking about the next one.

There’s a reason 60–75% of all luxury purchases are made by everyday people, not the super wealthy. Brands call them “aspirational buyers,” people who believe showing wealth is the way to climb. But it’s a trap. You end up always feeling like you need to buy more.

I’ve realized that l’d rather spend on experiences, the people I love, and my health. Taking a nice vacation with my girlfriend (without posting 1,000 pictures on Instagram), treating my parents to nice meals, or getting a great mattress are things that make me 10x happier than a luxury watch ever could.

The best part of invisible wealth is that I can rest easy at night knowing I am building freedom and choices that will allow me to remain wealthy for years to come. My money can grow for me in the stock market and real estate while I shop at Costco and find gems at the thrift store. Sounds like a win to me.

And that’s a secret I will happily keep to myself (and share with you).

To making smarter money moves,

Vincent Chan

Cool things from this week

• Smart money tip of the week: 5 little known places you can get things for free​
• Move over 30-year mortgages, 50-year mortgages might be a thing soon. Here’s what that means for home buyers.
• I watched 2 episodes of Pluribus this weekend and I’m kinda hooked. It reminded me of the hive mind episode from Rick and Morty (PS: I LOVE Rick and Morty) but a very interesting twist. It’s by the creator of Breaking Bad and Better Call Saul so you know it’s a solid show. If you like Sci-Fi, I highly recommend you give it a try.