Money has many ironies. Here’s an important one: Wealth is what you don’t see.

My time as a valet was in the mid-2000s in Los Angeles, when material appearance took precedence over everything but oxygen.

If you see a Ferrari driving around, you might intuitively assume the owner of the car is rich—even if you’re not paying much attention to them. But as I got to know some of these people I realized that wasn’t always the case. Many were mediocre successes who spent a huge percentage of their paycheck on a car.

I remember a fellow we’ll call Roger. He was about my age. I had no idea what Roger did. But he drove a Porsche, which was enough for people to draw assumptions.

Then one day Roger arrived in an old Honda. Same the next week, and the next.

“What happened to your Porsche?” I asked. It was repossessed after defaulting on his car loan, he said. There was not a morsel of shame. He responded like he was telling the next play in the game. Every assumption you might have had about him was wrong. Los Angeles is full of Rogers.

Someone driving a $100,000 car might be wealthy. But the only data point you have about their wealth is that they have $100,000 less than they did before they bought the car (or $100,000 more in debt). That’s all you know about them.

We tend to judge wealth by what we see, because that’s the information we have in front of us. We can’t see people’s bank accounts or brokerage statements. So we rely on outward appearances to gauge financial success. Cars. Homes. Instagram photos.

Modern capitalism makes helping people fake it until they make it a cherished industry.

But the truth is that wealth is what you don’t see.

Wealth is the nice cars not purchased. The diamonds not bought. The watches not worn, the clothes forgone and the first-class upgrade declined. Wealth is financial assets that haven’t yet been converted into the stuff you see.

That’s not how we think about wealth, because you can’t contextualize what you can’t see.

Singer Rihanna nearly went bankrupt after overspending and sued her financial advisor. The advisor responded: “Was it really necessary to tell her that if you spend money on things, you will end up with the things and not the money?”³⁰

You can laugh, and please do. But the answer is, yes, people do need to be told that. When most people say they want to be a millionaire, what they might actually mean is “I’d like to spend a million dollars.” And that is literally the opposite of being a millionaire.

Investor Bill Mann once wrote: “There is no faster way to feel rich than to spend lots of money on really nice things. But the way to be rich is to spend money you have, and to not spend money you don’t have. It’s really that simple.”³¹

It is excellent advice, but it may not go far enough. The only way to be wealthy is to not spend the money that you do have. It’s not just the only way to accumulate wealth; it’s the very definition of wealth.

We should be careful to define the difference between wealthy and rich. It is more than semantics. Not knowing the difference is a source of countless poor money decisions.

Rich is a current income. Someone driving a $100,000 car is almost certainly rich, because even if they purchased the car with debt you need a certain level of income to afford the monthly payment. Same with those who live in big homes. It’s not hard to spot rich people. They often go out of their way to make themselves known.

But wealth is hidden. It’s income not spent. Wealth is an option not yet taken to buy something later. Its value lies in offering you options, flexibility, and growth to one day purchase more stuff than you could right now.

Diet and exercise offer a useful analogy. Losing weight is notoriously hard, even among those putting in the work of vigorous exercise. In his book The Body, Bill Bryson explains why:

One study in America found that people overestimate the number of calories they burned in a workout by a factor of four. They also then consumed, on average, about twice as many calories as they had just burned off … the fact is, you can quickly undo a lot of exercise by eating a lot of food, and most of us do.

Exercise is like being rich. You think, “I did the work and I now deserve to treat myself to a big meal.” Wealth is turning down that treat meal and actually burning net calories. It’s hard, and requires self-control. But it creates a gap between what you could do and what you choose to do that accrues to you over time.

The problem for many of us is that it is easy to find rich role models. It’s harder to find wealthy ones because by definition their success is more hidden.

There are, of course, wealthy people who also spend a lot of money on stuff. But even in those cases what we see is their richness, not their wealth. We see the cars they chose to buy and perhaps the school they choose to send their kids to. We don’t see the savings, retirement accounts, or investment portfolios. We see the homes they bought, not the homes they could have bought had they stretched themselves thin.

The danger here is that I think most people, deep down, want to be wealthy. They want freedom and flexibility, which is what financial assets not yet spent can give you. But it is so ingrained in us that to have money is to spend money that we don’t get to see the restraint it takes to actually be wealthy. And since we can’t see it, it’s hard to learn about it.

People are good at learning by imitation. But the hidden nature of wealth makes it hard to imitate others and learn from their ways. After he died, Ronald Read became many people’s financial role model. He was lionized in the media and cherished on social media. But he was nobody’s financial role model while he was living because every penny of his wealth was hidden, even to those who knew him.

Imagine how hard it would be to learn how to write if you couldn’t read the works of great authors. Who would be your inspiration? Who would you admire? Whose nuanced tricks and tips would you follow? It would make something that is already hard even harder. It’s difficult to learn from what you can’t see. Which helps explain why it’s so hard for many to build wealth.

The world is filled with people who look modest but are actually wealthy and people who look rich who live at the razor’s edge of insolvency. Keep this in mind when quickly judging others’ success and setting your own goals.

If wealth is what you don’t spend, what good is it? Well, let me convince you to save money.