Hidden Richness: Millionaires and Billionaires Who Live Modestly
Surprisingly, there are examples of high-net-worth individuals who, in many ways, resemble ordinary people. They hide their wealth and choose to live modestly, driven by values and priorities that differ from those of ‘new money’ elites. This article explores a few such individuals and examines why they make these choices, providing insights for those who wish to manage their wealth in a different manner.
Flaunting Wealth vs. Concealing Wealth
Old money, as it is often referred to, frequently keeps a low profile regarding their financial standing. This is in stark contrast to new money, which is more likely to display its wealth ostentatiously. The motive behind flaunting wealth often stems from a deep psychological need to prove one’s success and worth to others, including themselves. This can be particularly evident in those who have recently achieved financial prosperity. On the other hand, those with long-standing wealth might choose not to indulge in overt displays of affluence, valuing simplicity, security, and contentment over material possessions.
Real-life Examples of Hidden Millionaires
The decision to live a more modest lifestyle can span all levels of wealth, from millionaires to billionaires. Here are some real-life examples of individuals who have managed to keep their wealth largely hidden while living moderately.
Example 1: A Mid-Century Millionaire
My parents, whom I consider middle-class millionaires (given they had a couple million in cash and assets), exemplify the modest lifestyle that comes with hidden wealth. Though they owned a century-old house, they drove newer but used cars. Their spending priorities revolved around cultural activities and travel, rather than material possessions. This approach allowed them to enjoy their wealth without attracting undue attention.
Example 2: A Tech-Frontier Millionaire
I know a man in his 40s who, along with two partners, sold his tech company for a low eight figures. Despite his wealth, he continues to lead a modest life. He lives in a 2,000-square-foot suburban home worth approximately $250,000 with his wife and five children. He works every day and takes his lunch to work almost daily. His attire is typically cargo pants and work shirts, and he often opts for camping trips, even in good weather, rather than staying in hotels. He claims the reason for these choices is his love for the outdoors, but it could be that he genuinely wants to avoid being seen as flashy.
Financial Management and Mindset
The difference between this individual and many others who are wealthy lies in his financial mindset. Unlike those who worry constantly about whether they have enough money, he obsesses about managing and tracking every penny he spends. He meticulously documents every expense, including taking pictures of gas receipts to file later. However, he does not worry about having money; he worries about having enough.
While he does not live conspicuously, his house is paid off, and he has a clear asset portfolio. He has about half a million in IRAs, six figures in 529 accounts for his children, and seven figures in other investments. When he buys something for frequent use, he chooses quality options. For example, his camping tent is a 500D ultra-light backpacking tent, and he wears a 700 Garmin fitness tracker. His backyard grill is a $2,000 ceramic model, though to the untrained eye, he might appear to be an average person.
In this individual’s view, the secret to being a millionaire is not to live like one. He believes his modest lifestyle allows him to manage his wealth effectively without the psychological burden of flaunting it.
Why Choose a Modest Lifestyle?
Living a modest lifestyle as a hidden millionaire allows for several benefits. Firstly, it provides peace of mind. Constantly worrying about money is exhausting and can interfere with one's overall happiness. Secondly, it fosters a sense of gratitude and contentment. By not prioritizing material possessions, one can enjoy the wealth without the stress of keeping up with the Joneses.
Thirdly, it aligns with personal values and goals. For many, modest living signifies a commitment to simplicity, sustainability, and social responsibility. It can also serve as a form of self-sufficiency and resilience, as demonstrated by the ability to travel and camp without the need for luxury accommodations.
To conclude, while many tend to flaunt their wealth, there are millionaires and billionaires who choose a different path. They live modestly, value simplicity, and prioritize their personal and professional growth over material possessions. These individuals provide a powerful reminder that true wealth goes beyond the figures in one's bank account.