Personal Finance 

Taboo of Divulging Income

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Most personal finance bloggers will write about their net worth, their assets, their debts, what car they drive, the house own, and almost every single bit of their financial life except their income. Is it because it’s a cultural taboo? Yes, in part, but the reason I don’t ever mention my income is because I don’t think it’s relevant and at times can be a distraction. There is a lot more than money involved whenever you discuss income and a lot of that has to do with how some tightly couple their sense of self-worth with their income.

People do do that with their net worth or their assets or their credit card debt, it appears to only happen with income. When you take a pay cut, you don’t think of it in terms of how many junior bacon cheeseburgers you can’t eat this pay period, you think of it in terms of how your employer values you less than before. That inherent connection between income and self-worth makes discussions of personal finance more cluttered.

When you find out how much someone makes, no matter who it is, what is the first thing you do? You compare that person with yourself. Think about that co-worker who seems to always be on the phone arguing to his wife about taxes, or buying a flat-screen TV from some guys in Brooklyn, or buying his sixth rental house? What if you found out that not only does he make more than you but that he got a raise that year despite doing less work than you did?

Income is merely a number and mostly a distraction, that’s why I never talk about it. I think bringing up income only draws attention to it and there’s no added value in doing so. As they say, it’s not what you earn, it’s what you keep.

{ 14 comments, please add your thoughts now! }

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14 Responses to “Taboo of Divulging Income”

  1. Anonymous says:

    While I completely agree that income can be a distraction, I disagree with your claim that it’s not relevant.

    For example, Person A and Person B may both be saving $1000 a month, but A could be making $30,000 a year while B could be making $130,000 a year. It takes a completely different lifestyle and strategy for A and B to accomplish the same thing. It would be crazy to say income is not relevant.

    I think many people who read personal finance blogs hope to find an example they could follow. But seeing someone’s net worth increase by $2000 a month (again, an example) means very little without knowing how much he earned that month. A balance sheet will never reveal more than half the story, unfortunately.

    I don’t fault you (or any blogger) for not sharing your income. I absolutely understand the reason and I would not do it myself. In fact, I enjoy your blog a lot and find it to be an amazing resource. I just want to say that income is the elephant in the room when it comes to personal finance, and it’s too bad our society doesn’t discuss it more openly.

  2. Matt says:

    $86,000/yr at my “day” job, plus a highly variable amount from the business. (Last year it was a pretty massive net-loss, thanks to all the money I had to spend wooing a would-be client who ended up not signing. Most years the business clears about $30,000, after the expenses of serving current clients and before the costs of my many forays into soliciting new ones. With a small amount of luck and a massive amount of hard work, in sometime less than 5 years I’ll be making more from the business than I do from my W2 job, and will be able to “retire”.)

    So there. 😛

    I can understand not discussing income with acquaintances…acquaintances cast lots of judgments based on what you tell them, and there’s just about no way that revealing your income to one would come out well. But on the blogosphere, we’re all simultaneously both friends (less judgmental) and total strangers (unable to have significant direct impact on one another’s lives), so I’d think the incentives against discussing income wouldn’t apply.

    I guess it’s habit, for some folks, though.

  3. TADollar says:

    Hi, I have to agree with the anonymous comment above. I posted a similar example about how income is important in charting one’s progress.

  4. RS says:

    I do think that it can be important to some discussions, but I also think that it is a tough thing to put out there. I have never put my income out there because a blog is not totally annonymous. At mine for instance, there are a few of us Young Professionals that all work together and are friends and none of us know the others income. Also, other family and friends read the blog and I don’t particularly want them knowing what I make.

    Also, I don’t think that income is the most important factor to consider in many of our financial discussions. I know some people that make less than me and are great and saving and investing and I know some that make way more and save less than me. Your financial saviness is all about how you make due with what you have. Sure it should be easier to save more if oyu make more, but in general, the more you make, the more you tend to spend.

  5. Income can matter if it is too low for someone to make any progress with. But what happens is that many people with moderate or high incomes end up applying that income improperly and they end up with a low or even negative net worth. I think it’s ok to not disclose income on a site like this, because what matters most isn’t the income, it’s what is *done* with that income.

  6. Anonymous says:

    My base salary has been fairly stable over the past several years. However, I had a period of unemployment a couple of years ago. Plus, I’ve had bonuses and overtime that have varied considerably depending on the projects coming in. Add to that my investment income which is anything but predictable. I’m happy to say that I’ve been in the black every year recently except 2001. I took a beating in the market and I’m still writing off the last of those capital losses.

    My point in all this is that I can state my income for last year or any year prior to that if I go look it up. But it isn’t as simple as it was when I was just a kid starting out. My income isn’t equal to my salary. It is almost always more, occasionally a lot more. I’m looking forward to the year that my investments return more than my annual salary. Since I reinvest all of that these days, that will be a huge boon to my net worth.

    However, even in my worst year recently my net worth grew. In 2001, I was laid off by one employer. Because I found another job quickly, I invested my entire severance package. It has slowly disappeared into retirement accounts because it has allowed me to keep my contributions to those maxed out every year since then.

    So, I’ve posted this anonymously. I’ve divulged several things, none of which is an exact number for either my income or my net worth. I have a much clearer idea of what my net worth is right now than what my income will be for this year. The key point that changed my life was when I realized that I was playing the financial game for growth in net worth. As far as I’m concerned, my income has to cover the expenses of my lifestyle and funding growth in my savings and investments. I look at any extra income first in terms of whether I can use it to either pay down debt or increase my investments.

  7. Anonymous says:

    Could you or some other blogger get arround this problem by describing PF strategies for the following groups:
    Low income: 100k/y

    Perhaps this would be a fun carnival topic/theme.

  8. jim says:

    Anon – I don’t really understand…

  9. Stephanie says:

    I recently posted about this on my blog (not strictly a PF blog) and my thoughts on sharing hard #s, especially income, is weird because there’s an equality of information going on. I could say I make $xx,xxx and then everyone who happens upon my blog (friends and total strangers) would know exactly how much I make, but I would have no idea who knows that about me and I would know nothing about them.

    I agree that income is related to a sense of self-worth. I think because your income is money which is tangible and very easy to value and relate to. The fact that I’m a good hearted person (or not!) is not something that can easily be quantified the way a paycheck can be. It’s easy to get caught up with a sense of worth tied to finances. However, is a starving artist who produces incredible works of art any more valuable than someone who does accounting? Their contribution to society is so hard to place a value on, so people just look at the bottom line.

    If I had a completely anonymous blog, I’d probably put all my #s on it, including income, but since it’s not, I don’t. I’ve thought about starting a totally separate blog just to deal with that, and maybe I will.

  10. Jim, thanks for the mention! Sorry so late, but I have an excuse…I didn’t know what was doing back in March…okay, I still don’t…but thank you!

  11. reiner says:

    I don’t think anyone should post their income earnings online because it might leads to frauds…it seems too risky for me.

    i have a question that is somehow related to this post: in what category of types of income are included money gained from ads and banners on a blog? I can’t understand how are these declared for tax purposes.

  12. Lisa says:

    I made a big faux-pas. I divulged my spouse’s income to my brother and sister in law while we were having conversation of jobs and incomes in general how much an engineer, a GP should make etc, then named examples and so I went ahead and devulged my spouse’s income, He wasn’t with us, so later on while I was relating to him about our convesation, he was enraged that i told them his income ( presently about 1/2 of what he used to make due to many things). I really didn’t know and don’t understand why he was very angry and that I did something so horrible. We are having issues now and really it is incomprehensible to me. Can anyone help me understand why it’s so taboo?

    • saladdin says:

      Violation of trust and Pride come to mind. Especially if he is making less then them.

      How men and women think we are made to live together amazes me.


      • Lisa says:

        saladdin. you seem to have it right from the male perspective. I beleive income doesn’t relate at all to someone’s self-worth however he apparently does. we are at an impass on this one – too bad.

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