Why Bitcoin Millionaires Often Live Modestly

Many Bitcoin millionaires live modestly because the attitude that made them rich is the same one that holds back expensive consumption: they forgo today for more tomorrow. On top of that come three reasons that only exist in this form with Bitcoin. The wealth swings so much that a lifestyle set at the peak becomes a burden in the next bear market. Every sale can trigger taxes and feels like betraying your own conviction. And anyone who shows what they have makes themselves a target. The pattern isn't new: back in 1996 two researchers found that most millionaires in the US live inconspicuously.

What "The Millionaire Next Door" found

In 1996 the US researchers Thomas J. Stanley and William D. Danko published "The Millionaire Next Door". Over many years they had surveyed households with a net worth of at least one million dollars. The result contradicted the picture of wealth painted by advertising and films.

The typical millionaire in their data:

• had built the wealth themselves. The large majority were the first generation of their family with wealth, not heirs.
• was often self-employed, with an unspectacular business: a trade, wholesale, consulting.
• lived below their means. Many had lived in the same house for decades, drove older cars they had bought used and kept a household budget.
• invested a large share of their income, year after year, instead of spending it.

Conversely, the authors found many households with high income, an expensive house and an expensive car, but little wealth. For them they quote a Texan saying: "Big hat, no cattle." Those who look rich often aren't, and those who are rich often don't look it.

The reason is simple: every euro you spend on visible wealth is missing from the invisible kind. The author Morgan Housel summed it up in 2020 in "The Psychology of Money": wealth is what you don't see. The car outside only shows that money was spent.

The formula: are you building wealth or consuming income?

Stanley and Danko gave their readers a rule of thumb. It compares your actual wealth with what would be expected for your age and income.

• Expected wealth = age × annual income ÷ 10
• If you own at least twice that, you are a "Prodigious Accumulator of Wealth".
• If you own at most half, you are an "Under Accumulator of Wealth": you consume what you earn.

Low time preference: the same attitude, a different tool

Economists call the difference between Anna and Tobias time preference. Someone with high time preference wants the good things now. Someone with low time preference can wait and accepts that in exchange for more later. The Austrian School of economics coined the term, and in Bitcoin culture it has become a watchword. Saifedean Ammous put it at the centre of "The Bitcoin Standard" in 2018.

The millionaires next door had low time preference long before Bitcoin existed. They saved in shares, property and their own business. For many holders today, Bitcoin is simply the tool for the same attitude: they buy regularly, hold through several cycles and rarely sell.

Bitcoin has so far rewarded this attitude strongly, and it makes the cost of consumption especially visible. The best-known example: on 22 May 2010 the programmer Laszlo Hanyecz paid 10’000 BTC for two pizzas, the first known purchase of goods with Bitcoin. At the price of 7 November 2026 that would be about $759 million. Anyone with that kind of calculation in mind thinks twice about selling for a new car.

How the Austrian School thinks about money and time is explained in The Austrian School and Bitcoin.

Rich on paper: why Bitcoin wealth isn't liquid

A salary arrives every month; Bitcoin wealth is a number on a screen that is different every day. That makes Bitcoin millionaires cautious, and rightly so.

The same holding was worth almost $600’000 less within 13 months. Anyone who felt like a millionaire at the peak and planned accordingly was no longer one in November 2026. In every major bear market Bitcoin fell 77 to 93 %. A holding worth $1’500’000 at the peak would thus be worth about $105’000 to $345’000 at the bottom.

On top of that, every sale costs something:

• In Austria, gains on bitcoin bought after 28 February 2021 are taxed at 27.5 %, however long you hold them. Selling for €100’000 with an €80’000 gain means €22’000 in tax.
• In Germany, gains are tax-free after a holding period of one year. Hold for less, and you pay your personal income tax rate.
• In Switzerland, private capital gains are tax-free, but the holding counts towards taxable wealth every year. A large Bitcoin holding therefore costs wealth tax even if you sell nothing.

The details are in Bitcoin Taxes in Germany and the articles for Austria and Switzerland.

A lifestyle set at the peak becomes a burden at the bottom

Psychologists call it hedonic adaptation: you quickly get used to a higher standard of living, and then it feels normal. In 1978 Philip Brickman and colleagues showed that lottery winners were hardly happier a year after their win than people without a win. The new prosperity had become the new normal.

For a Bitcoin holder this is doubly dangerous, because the wealth fluctuates but the spending doesn't. An example with the 12 BTC from above:

• At the peak, the holder decides to spend 4 % of his wealth every year: 4 % of $1’496’076 is about $59’800 a year.
• He gets used to this lifestyle: a bigger flat, a new car, lease payments.
• In November 2026 the same $59’800 is already 6.6 % of his wealth. If Bitcoin falls further, it becomes 10 % or more.

Living like this forces you to sell in a bear market, exactly when prices are lowest. The modest holders don't have this problem: their spending is set by the low, not the high. What a withdrawal that survives a crash looks like is shown in The 4 Percent Rule with Bitcoin.

Discretion: what nobody sees, nobody demands

The millionaires next door were inconspicuous because they didn't spend their money on visible things. Bitcoin holders have another reason: Bitcoin wealth can be extracted by force. Whoever gets someone to hand over their seed phrase or confirm a transfer has the money in minutes, and it can't be reversed.

The Bitcoin developer Jameson Lopp has for years kept a public list of known physical attacks on Bitcoin owners. It grows with the price. In 2025 kidnappings of crypto entrepreneurs and their relatives multiplied in France. An expensive car, photos from a luxury holiday or stories at the pub make you visible.

For Bitcoin holders, outward modesty is therefore more than a question of style. How to protect yourself in practice, with an everyday wallet, a passphrase and multisig across several places, is in Discretion and Physical Security for Bitcoin Holders.

Conviction makes people quiet

One last reason is less rational, but widespread. Many long-term holders don't see Bitcoin as one investment among many, but as the better money. Thinking that way, a sale for consumption doesn't feel like spending but like swapping good money for bad. That makes selling hard, often harder than it should be.

This conviction keeps the wealth together, but it can also go too far. Anyone who never sells, not even for what they saved for, confuses the means with the end. At 80, people rarely regret having bought too little, more often not having done things. How to make this trade-off deliberately is described in Regret Minimization.

Living modestly therefore doesn't mean spending nothing. It means that spending follows a plan, not the price.

What you can take from modest millionaires

1. Work out your formula. Age × annual income ÷ 10. If you are below it, the problem is usually spending, not income.
2. Plan with the low, not the high. For every spending plan, value your Bitcoin holding at a cautious price, such as the Power Law floor. Where it is today is shown on the Power Law page.
3. Never raise fixed spending because of a price high. One-off spending from a partial sale is fine, a new lease contract isn't.
4. Keep your wealth to yourself. Those who know about it should be those who need to: partner, heirs, tax adviser.
5. Give your wealth a goal. What are you saving for? A concrete goal in euros or francs protects against both: the lifestyle set at the peak and endless hoarding. You can record it in My Goal.