Why Billionaires Pretend to Be Normal (It’s Not Just Weird, It’s a Strategy)
Hey there, traveler! You ever notice how some incredibly rich folks go out of their way to act like they’re just regular Joes? It’s kinda strange, right? Well, turns out it’s super important to them that you think they are. So much so, that some are shelling out millions of dollars every year to PR agencies just to spread this message: “Yep, I’m just a regular person, drive a regular car, eat at regular restaurants, live in a regular home.”
But in this world of showing off everything, why are these guys working so hard to seem… well, normal? Why not buy a fancy Lamborghini? “I didn’t have any particular need for one,” one guy might say. “Okay, but what’s with the Honda?” you ask. “This is a perfectly good car!” they insist.
Maybe they bought a house for only **45k.” Yeah, they know it’s small. They might even say, “I could buy any house in the world and I don’t want any other house than the one I’m in.” And that house? Probably in a middle-class neighborhood. They’re happy in khakis and a sweater, don’t need fancy clothes or food. “Do you have an iPad?” “I do not.” “iPhone?” “No.”
Let’s talk about Sam Bankman-Fried, the now-convicted guy. He once had billions of dollars of customer funds at his fingertips for a fancy life in the Bahamas. Early on at FTX, he and his partners were reportedly cruising in those expensive sports cars you’d expect from “Crypto Bros.”
But here’s the twist. According to trial evidence, SPF later sold the cars. He even told other executives at FTX and Alameda to do the same. Why? Because it didn’t fit the image they wanted for the company to show customers and investors.
That infamous “shitty Toyota Corolla” that paid influencers made a huge deal about? Yeah, that car, his haircut, even the wrinkled shirt – they were all more carefully managed than customer funds. It was about as real as FTX’s internal accounting department. The group did this because they knew the image of a “boy genius” who didn’t care about luxuries or power would look honest and appealing to people wanting a safe place for their money.
SPF and his crew? Total frauds. But putting a ton of effort into looking like a folksy, down-to-earth person is something most big business leaders do. And there are three simple reasons why. Honestly, if you know these strategies, you’ll see through what’s mostly just fancy personal marketing.
Reason 1: It Gets Them What They Want (It’s Not Stealth Wealth, It’s “Poverty Peacocking”)
First off, even if they aren’t running a scam, acting like an “everyman” still helps these rich folks get what they want.
You might have heard of Stealth Wealth. That’s when rich people buy really high-quality stuff that doesn’t shout “I’m loaded!” They do this because they don’t want the attention and headaches that come with everyone knowing how rich they are.
But that’s NOT what we’re talking about here. Billionaires giving interviews to places like Bloomberg or Nass Daily, specifically showing off their basic car and maybe a geeky wardrobe? That’s different. Instead of hiding their money situation, they are trying to show off, loudly, that they either don’t care about their money, or that their money hasn’t changed them. That’s not stealth wealth at all.
Let’s call it Poverty Peacocking. And it’s a fantastic move for their own brand and any companies they represent.
Humble CEOs are the new cool thing. The heads of the world’s biggest companies often wear things like hoodies and turtlenecks instead of expensive tailored suits. Other business leaders are totally copying this because investors actually like it.
When a business leader publicly gives up flashy stuff, it sends a message: “I’m going to be frugal running the business, too.” And guess what? Data actually supports this.
The Data on Frugality and Business Behavior
- A study by the National Bureau of Economic Research in 2012 looked into this.
- It found that CEOs and CFOs who weren’t frugal in their personal spending were more likely to have instances of insiders committing fraud.
- They were also more likely to push for incentives tied to the company’s stock (equity-based) to boost their own income.
- How did the study tell who was frugal vs. flashy? They looked for personal purchases like:
- A personal car worth over $75,000.
- A boat over 25 feet long.
Here’s the kicker: billionaires and executives often didn’t actually want to give up their luxuries. So, they just started lying about it.
Public Image vs. Reality
- Buffett might own an old car, but he’s usually chauffeured around in a fleet of Suburbans with a security team.
- Zuckerberg wears the same gray shirt every day, but they’re custom-made by a fancy brand called Brunello Cucinelli.
- Musk does rent a tiny home near the SpaceX factory, but the Wall Street Journal pointed out he spends most of his time in an 8,000 square foot, $1 million mansion.
- And all these guys? They fly private. Every single one of them.
Look, they earned the money, they’re welcome to these luxuries. It’s their cash. But there are still two more big reasons why they work so hard to pretend these luxuries don’t exist.
So, to figure out why billionaires spend millions trying to convince us they spend nothing, it’s time to learn How Money Works.
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Reason 2: It’s an Effective Sales Tactic
The second major reason why really rich people go way out of their way to look normal? It simply helps them sell stuff.
If you’ve made millions or even billions, here’s good news: Unless you started a huge, well-known company or are a celebrity, it’s pretty easy to live a life where almost nobody knows who you are besides your family, close friends, and employees.
- According to Forbes, there were 2,640 billionaires in the world in 2023.
- That’s actually down a bit from 2,668 in 2022.
- Forbes also admits they can’t even count them all accurately because it’s tough to get data on private fortunes.
Even if you’re super into knowing who’s rich, you probably know maybe 50 names at most. The rest just look like people in suits.
The point is, any other rich person you do know about is only known because they want to be. So why would they give up an easy, private life to be in the spotlight? Because their success is one of the best ways to sell things.
Success and Relatability as Sales Tools
- Think about Musk promising that “full self-driving” is just around the corner.
- Or Trump slapping his brand name on everything imaginable.
- Or Kevin O’Leary playing the businessman role to pitch that doomed FTX.
People buy success. But you know what else people buy? Relatability.
So, the smart billionaires who want to use their image to boost their companies will make sure people see them living lives that regular folks can both relate to and maybe aspire to at the same time.
Remember that recent story in the New York Post about Warren Buffett’s wife? She was supposedly overheard complaining about a $4 cup of coffee at the annual Allen & Company Sun Valley Conference, which everyone calls the “summer camp for billionaires.” This story even got picked up by big outlets like Business Insider, who ran it with a headline like, “Warren Buffett just became even more relatable for a billionaire.”
Let me burst that bubble for you if it wasn’t obvious: absolutely nobody at that conference would just happen to pass along that kind of personal chatter to the press. You’re reading about it because they want you to read about it.
Buffett’s frugality is a big part of the story behind his investment company’s success. So, he’s selling that image just as much as Trump sells his name or O’Leary sells his… wacky pants? For Buffett, the $4 coffee story is way better than “a bunch of billionaires got together to talk privately about… who the heck knows?” Honestly, the only stuff that seems to “leak” from these events is about how expensive the coffee is.
Relatability is also key for people selling Get-Rich-Quick courses. A big part of any scheme like that is making people believe someone has become wealthy and that they can do it too. So, these sellers often talk about their “humble beginnings” while standing right in front of a rented Lamborghini. This leads to a strange situation where many people promoting courses on YouTube are actually poor people pretending to be rich people pretending to be poor people. Wild, right?
How This Hurts Regular People’s Finances
That billionaires and get-rich-quick salespeople show a different image to the world than who they really are behind closed doors probably isn’t a huge shocker. But here’s where it really matters: this setup is actually hurting the personal finances of regular folks in two main ways.
Financial Harm from Following Blindly
The first way is the direct financial harm that can happen if people blindly follow the advice of a relatable millionaire or billionaire image.
It’s fine if successful people tell regular people to cut down on luxuries to get their finances in order. That’s good advice. But it’s obviously bad – and tragically happens all the time – if they tell people to cut back on luxuries just so they can spend that money on a course instead of, say, saving or paying down debt or working a side hustle for actual income.
It’s way easier for someone selling something to tell you to cut down on optional spending if they’ve already built up their own personal brand around driving a cheap car or living in a tiny house, even after they’re supposedly rich. Plus, being a “frugal millionaire” is much easier to fake if someone ever questions whether their success is real.
Sure, grifters building fake images to sell bad investments or overpriced courses are going to cause serious financial damage to the people they trick. But even the legit billionaires paying their PR teams for positive media coverage about how relatable they are are still causing damage to a lot of people’s personal finances. How? By reinforcing a common, and often damaging, idea in personal finance: that everybody’s financial problems are caused only by them spending too much.
When extremely wealthy people lie about their humble cars, basic homes, and average lifestyles, it makes it easy to make people feel guilty for enjoying small luxuries. The logic is, “If Warren Buffett drives an old car, why do you need a new one?”
Now, this doesn’t excuse reckless spending – lots of people are indeed guilty of that. But this narrative takes the focus away from something equally, if not more, important for many people: their income. After a certain point, people can’t fix their financial situation just by being more frugal. They need to increase their income.
And that brings us to the third reason…
Reason 3: Keeping Workers in Line
Yes, billionaires spend big bucks trying to look poor because it helps them keep their employees in line.
The accounting firm Ernst & Young (EY) estimated in a report that the number of family offices around the world doubled between 2001 and 2016.
What’s a family office? Think of them as investment firms dedicated only to managing the wealth of a single, very rich family. Where you or I might have some shares on Robinhood or Schwab, the ultra-rich keep their money here.
An article by Barron’s pointed out that one of the fastest-growing expenses for these family offices was public relations (PR).
Many of these family offices have become so massive that they now have as much power and influence as big private equity firms. And with influence comes scrutiny.
Private equity firms are widely disliked financial institutions because they have a history of buying companies, sometimes running them into the ground or loading them with debt, laying off thousands of workers, all just to try and make a slightly better profit. As one person put it, “what we’ve seen… in industry after industry… where private equity buys up businesses is that they’re really responsible for some of the worst most abusive business practices in the country.”
The scrutiny has been tough on private equity, but the anger is usually directed at the managing partners of those firms. When a family office does the same kind of stuff – say, massive job cuts – the public outrage would be aimed right at the family itself. And that’s where a good PR team comes in handy.
It’s much easier for workers to demand better wages from a company owner who’s photographed lounging on a super yacht. On the flip side, it’s much easier for that owner to push back against worker demands when their whole public image is about how they try to save every single cent they can for the business’s sake.
As the author of that Barron’s article neatly summed it up, “Corporations became people as people too became corporations,” and every corporation these days needs a media relations department.
Billionaires have gotten incredibly good at this act. But there’s one guy who really stands out.
To find out how Rupert Murdoch went from being a card-carrying socialist to a billionaire by turning conservative news into entertainment, go watch my latest video over on How History Works.
And hey, for more solid reports that you won’t find on YouTube, written by some really smart finance creators (and myself!), make sure to subscribe to the totally free email newsletter called Compounded Daily. You can find the link in the video description. Keep on learning how money works!
(Video URL: https://www.youtube.com/watch?v=JukGECU6mnI)