The stealth wealth revolution is back!
As a lifelong New Yorker, Iâve seen distinct changes in the ways residents and even tourists present themselves. Although tourists will always be recognizable.
Living below your means and not showing off is not only a guaranteed way to seem more friendly and approachable, but it makes your personal and professional life easier as well.
Lately, Iâve noticed thereâs been a massive upgrade in personality, style, habits, and even walking routes my fellow New Yorkers have adopted which I must applaud them for.
It is no easy task to tell yourself to be presented as worth less (monetary amount), not worthless than you really are, attempt to not stand out, have your wealth and status be unrecognizable, and not impress anyone except yourself. Most people live for others, not themselves.
This is impossible for most as far too many Americans buy things they donât need with money they donât have to impress people they donât know! What a sad reality we are living in yet this classic aesthetic over-the-top lifestyle is becoming harder to follow especially in coastal cities across the country that are seeing rising rents, inflation soaring, offices filling up (slowly but surely), and luxury real estate selling hot.
Now there are officially more millionaires in the Empire State than in California, despite lower average home prices. Whatâs considered an above-average income or priced home in the Sunbelt Midwestern states will barely get one by in either Cali or NY. Inflation is helping fuel the stealth wealth revolution and keeping residentsâ egos in check otherwise they cannot afford to stay here!
To Show or Not Show Off
Beyond your mental sanity, the reason for not showing off is simple.
I would say it is mainly for your privacy, reputation, network strength, and personality. Growing up in an immigrant household, my family has always lived below our means. Thereâs no other choice and it allows us to not only be more appreciative of what we have not what the Joneses upgrade to, but it puts us in a more secure place financially. No wonder majority of the wealthiest homebuyers in the U.S. are foreigners or immigrants. They are true masters of saving more than spending and focusing on education not looks. Plus they tend to own businesses, not rely on W2 income pay-check to pay-check.
Once you start pretending you are someone you are not, it gets into dangerous territory. Thereâs nothing wrong per se with faking it till you make it as long as you stay humble, self-deprecating, and realistic in the process. Your reputation is all you got. Once itâs tarnished, it is very difficult to get it back.
Oneâs primary residence is one of the best indicators in revealing how much they are TRULY worth. With the median home price in NYC currently at $779,000, according to Zillow, itâs fascinating to see the differences in wealth reflected on the streets versus in the high rises. Since coastal cities have the highest real estate listings and they are selling fast, someone must be living in them but it isnât evident on the street that there are more top 1% residents here.
Although they may not live in NYC all year round as most do not anyways, they still need to have proof of funds to be able to afford such a luxury. Real estate numbers donât lie although anything can become unaffordable for anyone who spends more than they make. Thereâs no doubt wealthy clients still take out a mortgage and donât pay outright in cash but compared to 08 and 09 during the Housing Crisis when everyone was able to borrow more than they could swallow, today there are stricter lending rules, credit background report checks, and income proof required to ban irresponsible buyers and lenders.
Since the pandemic began, the hot housing market mixed with low inventory and delayed shipping and construction costs caused many buyers to be priced out of the market. Especially in cities where the wealth distribution is drastically uneven leading to higher rates of income inequality, many renters and future New Yorkers who planned on staying or coming to the city needed to scrap their plans as the top 10% have pushed out the bottom 90%. As I walk around New York, itâs disastrous to witness more people below the poverty line and the homeless living around the corner to Billionaireâs Row.
Compared to the rest of the U.S., L.A., and Miami also have the highest gender, racial, wealth inequality out of the nation. L.A. has the highest homeless population and it is truly devastating to see how many billionaires reside on the hilltops refusing to pay taxes while a few minutes downtown people rely on food stamps and can barely survive.
Iâm afraid it will get worse before it gets better. The wealth tax for those in the 37% marginal tax bracket or on unrealized gains wonât solve this tax loophole dilemma.
Keeping Up With No One
The top 10%âs wealth is highly concentrated within real estate, investments, and in their businesses earning them the most tax-efficient and passive income. Collectively they own more than half of the overall wealth in this country.Â
Although their wealth has skyrocketed during the pandemic reliant on WFH, roaring asset prices, monetary stimulus, and alternative investments, from the outside in distinct areas in the city, their image and allure havenât always kept up besides their properties. In less populated dense areas, people seem to try too hard to stand out as opposed to in cities, they have enough to worry about in terms of paying bills that strangersâ opinions arenât top of mind.
Although oneâs zip code, location, and even state of residence can provide a decent estimate on how much someone is worth, it has become harder to pinpoint city dwellersâ as the taboo on money has come back for better or for worse. With WFH, Silicon Valley hoodie and EV style, and minimalist living, more residents have found a sanctuary for living the basic life they want to enjoy for themselves, not for anyone else.
Thatâs the beauty of NYC. Everyone is too occupied with their own plan and doesnât have time to worry about othersâ assumptions which allows them to save more. Plus even with a higher ratio of millionaire households in cities, who knows if someoneâs net-worth is actually tied to their luxury loft in Tribeca or not or if they are even earning at all given an inheritance. Making assumptions is a common practice by all but many of those estimates are hard to justify in cities and not worth the time or effort. More and more are blending in, in a financially prudent way!
Disperse and Retreat
In the midst of the pandemic during the dark days in spring of 2020, New York felt haunted.
Times Square was practically empty and only certain New Yorkers were found in the city that actually slept this time.
Those that stayed included:
-Those who didnât want to go back to their childhood home in the suburbs
-Families who couldnât afford a L.I. getaway/weekend retreat
-People who couldnât WFH such as essential workers
-Those who could WFH
-Those who believed covid would be over in a flash
The rest fled and boy was that a lot of NYC! Not only did traffic disappear, but sidewalks were empty, wildlife came out, and most small shops were closed. Many of the small businesses such as coffee shops and clothing store boutiques closed since they couldnât afford to pay their staff and didnât have as many sales as pre-pandemic. Even the more upscale small quaint shops couldnât all stay in businesses since the majority of their customers were wealthy local New Yorkers or tourists who had no other choice than to pay for overpriced lattes and European desserts nearby.
A few months into 2020, select New Yorkers who already owned cars brought them back home from their vacation homes in the Hamptons. They had enough with grass and backyards and needed to see people. They got bored with their work from home second office setup and decided to not only splurge on more real estate in the city but cause traffic jams.
Once the vaccines rolled out, there was massive pent-up demand and a yearning to go back to normal crowded noisy city life. Before we knew it, New York felt like L.A. More cars than ever before! New Yorkers and outsiders alike drove more sales to real estate and bidding wars sprang about as well. By spring of 2021, New York became itself again, not sleeping at night. But this time around, although many wealthy New Yorkers did come back already, they werenât as prominent as before. Park Avenue was still empty, offices were vacant, and Florida and Colorado tickets were booked.
Since 2020, dozens of firms and wealthy individuals have had the luxury to move their offices and homes to sunny side Florida and or Texas, the most popular destinations NYC residents flock to for a tax break. Florida is most attractive to those who earn high incomes with zero personal income tax in place which incentivizes even more business opportunities.
Wealthy New Yorkers have seemed to be traveling more than ever during the pandemic, back and forth to their several estates and to negotiate on business opportunities. Not working harder during the pandemic wouldâve been a waste of time. With excess liquidity in the markets, record IPOs and SPAC dealings, low-interest rates, more time at home, and an abundance of technological innovations to be able to meet with anyone, anywhere, more Americans report being in a better financial situation than pre-pandemic.
This lead to the birth of more millionaires, billionaires, and city real estate to be sold despite the unfavorable tax treatment here in NYC and L.A.
Hidden Treasure
As a 21-year-old, my goal is to take every opportunity I can get and capitalize on whatever comes my way. This entails putting my best foot forward with 110% effort into as many things as possible. This world is highly competitive and students couldnât be under more pressure, mainly from themselves. As a type-A student, it dawned on me how much internal stress I put on myself to be able to be known, found, and connect with more people.
Funny enough, once I stopped trying to impress people, those I did and didnât know, I started becoming more open, honest, and attracting more honest friendships, projects, and connections that have fueled my success even more.
But this is a tricky balance. You want to show you are competent and your loudest cheerleader, but not overdo it especially on the streets.
If you havenât noticed, the streets of Manhattan are a fascinating place. Iâve only been to California once, San Francisco and even though it is one of the most expensive cities in the world, in New York Iâve found it is much more difficult to assess how much one is worth, if you do care which most donât pay attention to anyways as it doesnât matter.
It all crosses our minds because looks are deceiving. More Americans look better off than they really are but in New York, it is a perplexing scenario since although the island is large and there are more affordable places in certain areas than in others, you canât tell who is from where anymore especially in the winter all bundled up.
Since the industrial age, there has been a massive cultural shift in the way people present themselves. Iâm seeing a more diverse and approachable city today. Showing off doesnât help anyone, especially yourself, and I find New Yorkers have quickly learned that. Not only your identity and possessions are safer this way, but your mentality as well.
At the end of the day, we are more alike than different. Focusing on someoneâs net worth is a trap and not necessary to know. Focus on their character, personality, curiosity, and work ethic instead. It matters more than talent after all. It is a small world and our earnings donât indicate who we are. Iâm sure youâve met more welcoming people with less. Although we might fantasize about meeting a celebrity in a fancy restaurant in the city or desperately seek to find one in the park, they are hidden for a reason.
Not all well-known people are like this but those who are humble and invest in themselves, not in materialistic depreciable goods, truly understand the power of where their time and energy should go to which starts with family and the basic necessities in life: comfort, support, safety, love, and bliss.
So the next time you head into the Big Apple, please be authentically you. PLEASE. People love you for who you are not your bank account or penthouse. Thatâs what cities are for. Thereâs no better place to be you and donât change a thing. Donât strive to draw attention to yourself because it can haunt you later on.