Financial Samurai

I think people don’t mind to reveal their income on an anonymous forum, hence the number of posts and comments on this.

I agree at work it is mostly downside and little upside. A senior colleague who is 15 years older than me and very accomplished technically is making less than me and did not negotiate a bonus. The head of the company told him that none of the senior staff get a bonus but he partially lied because he qualified it as a 13th month bonus.

Instead the company head and I both have a bonus that works out to be 50% of our annual compensation, with 12% of that being fixed and 38% being variable.

I regularly hear the colleague gripe about this since there was a promise made to him more than 1 year ago that he will get a variable bonus. I will not tell him the entire situation because I know it will upset him and perhaps he will be angry at me for keeping it quiet so long and then telling him.

In this case ignorance is truly bliss.

-Mike

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Financial Samurai Reply:
November 6th, 2011 at 9:12 am

Ignorance truly is bliss. I would rather know a range than a specific number, bc even one dollar more or less can cause tension!

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Personally, I think revealing compensation is a really bad idea too. People really don’t need to know your financial life in that kind of detail. My sentiments are that if I don’t ask, then I don’t feel obligated to share. Salary and wealth tend to spark a lot of interest, especially when its the details of people we know. However, like you said, once others know, they make assumptions based on what they think you should do.

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Jon - Free Money Wisdom Reply:
November 6th, 2011 at 6:27 pm

I totally agree with you. It is none of their business. It is sad that Peter would ditch a friendship due to jealousy. I guess if you want to find out who your true friends are reveal your income bracket. ha!

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My dad always gave the same advice (and he was a lumberjack, which is pretty far removed from your line of work). His rationale was that little good can come of it. If it’s higher than the person you’re talking to they will likely feel worse about themselves and many will resent you. If it’s lower, most people won’t give you the same respect as before because so many of us in Western society equate income and material possessions with human worth. He owned his own business and made much more than most people thought. Much like yourself, he always wore “work clothes” (yes, much of the time the stereotypical red plad) and drove used vehicles.

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I agree that there is nothing good that can come in revealing income. I want to go through life just blending in as well. Even online, I don’t think it is a good idea. Percentages and generalized statements about increases and decreases are fine, but exact numbers are taboo in my book.

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I think there is a lot of good that comes from revealing your income, as long as you are talking to reasonable people.

If I make $50k, and other people in my line of work make $80k, then I know to either ask for a raise or apply to a different company. I’d never be mad at the people making more than me, but I might be upset with my employer or other companies and try to fix the situation. If people hadn’t told me their income, I never would have known that I was worth more than I was being paid.

I’m pretty open about my income to the right people (who aren’t the jealous type), and I’ve never had it backfire.

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Financial Samurai Reply:
November 4th, 2011 at 6:56 am

Give it several more years and keep telling everyone. Right now, you are at the beginning of your career, so it’s all upside. After 5-10 years, go ahead and continue asking and telling everyone how much you make above and BELOW you. Let me know how it goes.

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Jannette Fajardo Reply:
August 5th, 2012 at 6:45 pm

Exactly how i think.

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I’m very big on being transparent, but I draw the line at deeply personal stuff like money, I tend to clam up a bit. I’m like Sam, in that I prefer to fly under the radar. My style is low key: no jewelry, not fancy haircut like J$, plain ol’ Honda Accord, etc. I could care less about what offending anyone, or what they think of me. My thing is that I just want to be known for my personality and intangible qualities. Especially being single, and living in such a materially-charged areas as South Florida, it helps weed out not only the gold diggers, but the hangers-on who only want a free ride as well.

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Financial Samurai Reply:
November 4th, 2011 at 9:12 pm

Are there a lot of gold diggers in South Florida? I’ll take your word for it!

How much does one need to make and have to be gold digger worthy in your opinion?

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Eric J. Nisall Reply:
November 4th, 2011 at 9:19 pm

Hell yeah there are! I’m not sure if there really is a floor. There are people (both men and women) that will date someone for the monetary benefits no matter what their income level. But for the purposes of this discussion, I’d probably say $100k makes you eligible to be a sugar daddy. Sound about right?

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Financial Samurai Reply:
November 5th, 2011 at 7:09 am

That sounds about right Eric, especially when one can buy a condo in South Florida for $100,000 now!

Actually, I guess even here in expensive SF, $100,000 can start being classified as a sugar mamma or daddy. But, we still gotta take the bus.

World of Finance Reply:
November 6th, 2011 at 4:42 pm

I live in S. FL as well and agree that it is a very materialistic culture. I’m not originally from here, so it was a huge culture shock in the beginning. As Eric and Sam, I like to keep it low key as well. As Sam has had Moose for many, many years, I have had Little Red. She gets me from point A to B and that’s what matters. I don’t want someone to like me only for the car I drive. Nice article Sam. :)

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The upsides don’t appear to outweigh the downsides. I see little reason to every tell anyone unless, of course, unless you make money by telling people how much money you make. LOL

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I’m with JT and everyone else on the downside far outweighing the upside. I never reveal my salary, and quite frankly, if I wasn’t job hunting, I would never remember the exact figure. All I know is what my TARGET is.

I reveal my blogging income on the blog because it is entirely relevant to the blog. Unless my blog can pay me $10K per month then it will never be the main source of my income, thus I have no problem revealing my blogging income per month.

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Financial Samurai Reply:
November 4th, 2011 at 9:13 pm

Damn, you make $10,000 a month from your day job! That’s quite a pretty penny! Just make sure the BF doesn’t take it all!

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Sandy @ yesiamcheap Reply:
November 5th, 2011 at 5:25 am

I WISH my day job paid me that much. I did the math and for the blog to pay the equivalent of my day job it would need to make that much. Keep in mind that I would have to pay taxes, get my own healthcare, retirement accounts, etc.

:)

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Financial Samurai Reply:
November 5th, 2011 at 7:06 am

Hmmm… fuzzy math?! Cuz if it takes $10,000 to pay the equivalent of your day job, then $10,000 is what you make at your day job! lol

Unless you are doing apples of gross pay vs. oranges of net after tax pay.

Either way, big buck! But, I will still buy you a beer when we meet up in NYC!

Sometimes I discuss finances in general terms with friends to try to figure out how to get mine in better shape, but we don’t talk specific numbers. One company I worked for actually had it in its policies that you were not to discuss the details of your compensation at all. I can’t imagine getting into the details of my compensation with any of my coworkers. That’s just crazy and asking for trouble.

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Luckily no one has ever asked me straight out to reveal what I make. I’ve had some discussions with colleagues about bonuses, but never in actual dollar terms. Money is such a touchy subject! I’m sorry to hear your friend put you in that position and is being a total idiot now. That’s not cool and him not getting the job is so not your fault. I haven’t even told my parents what I make because it just feels weird and I don’t want them to feel uncomfortable because I make more than them, nor do I want them to get greedy and start expecting me to support them on everything financially. Granted I’m happy to help them out and send them money on occasion when they really need (especially for health related stuff) it but it’s never a good feeling when others start expecting you to pay for them.

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Financial Samurai Reply:
November 17th, 2011 at 3:08 pm

I made the mistake of telling my parents one time. So far, they haven’t treated me differently. Let’s hope it stays that way! :)

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You left out “lie”. Not saying I suggest that, but if you’ve got a hefty income you can always lie to the downside, haha.

‘You will be judged by everything you spend and don’t spend your money on i.e. “You only donate that little to charity?”’ – How true is that? The same day Steve Jobs died I read multiple stories complaining about how much money he donated to charity. Seriously? You have no idea how much the guy donated anonymously, and no idea how his wife thinks or his will is structured. True charity is anonymous anyway.

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Financial Samurai Reply:
November 4th, 2011 at 9:09 pm

Yep, lie like the wind if you know you make much more and don’t want to piss anybody off. When my story, I figured he need to know the exact figures to make a better decision in his negotiation process. Mistake.

True charity is anonymous indeed.

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You can find out median pay for your profession on the internet. There is no need for anyone to pressure someone else for a specific number. I never reveal my income to anyone except my family.
You can say something like – Oh.. I’m in the 31% tax bracket. :)

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Financial Samurai Reply:
November 4th, 2011 at 9:08 pm

I’ve found the internet figures to be WAY off. But I guess, if you are in a very structured industry such as IT, government, teaching, etc.. sure. However, if you are in industries where the skies the limit in terms of how much you can make, then the internet doesn’t capture hardly anything.

There’s no such thing as a 31% tax bracket Joe!

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I don’t reveal my income, except to close friends or family. I don’t make very much money so it can only be a positive thing. haha! There is a difference between online and offline. I can make more money by revealing how much money I make online (that’s my theory at least, along with many other bloggers who share their income).

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Financial Samurai Reply:
November 4th, 2011 at 9:07 pm

Only upside baby! It’s OK to reveal if you’re scraping the bottom of the barrel. Just don’t when you start making much more than them.

Yes, showing income on your blog to make money is a good strategy for making more money. It’s just not my cup of tea.

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20's Finances Reply:
November 6th, 2011 at 4:59 am

That’s fair. I can respect that.

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I never reveal how much I make to anyone except my wife. I include net worth and investments as private too. I will talk about about investments in general, but no specific details.

I taught a career class at my last school (high school). I brought speakers such as medical residents, engineers, business owners and psychologists. Some of my students would ask them how much they earned. I explained to my students that this personal information. A better question would be how much someone who performs that job earns to start or after 5 years. The information does nothing for the person asking the question because they cannot evaluate the other person’s perfomance or skills. It creates envy and bad feelings.

If someone asked me how much I earned (in my previous career), I would ask them why they want to know. I might even joke about the question and ask if they are writing a book. I would try to answer the question in general terms. For example, a CFO at a company of x size earns between A and B.

Maybe I am old fashioned, but your story illustrates the negative results.

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Financial Samurai Reply:
November 4th, 2011 at 9:05 pm

Yes, my story’s purpose was to illustrate the negative results indeed.

Providing a range sounds good, and a range after a certain amount of years worked.

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I think that I have to agree with this sam – My fiancee knows my income, and that’s about it. After I started a new job, I didnt tell anyone, even though it is public info (I’m a gov employee). I dont want anyone to think that I make more than them and to be frank, it’s none of their business.
I see where kevin is coming from, but I still think there may be other ways to find out that information, a lot of people feel like it’s personal (it is) and then they’ll always pressure you to do things, like go out for dinner/drinks more or whatever because they know you make a lot of money.

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Financial Samurai Reply:
November 4th, 2011 at 9:03 pm

Government employee job income numbers are easy to find out. It’s so structured! :)

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We had a similar experience some time back. One of my Dad’s best friend was urging him to make a property purchase because the property market is pretty strong where we are. He prodded and prodded, so Dad finally told him I already bought a new condo. He didn’t call Dad for weeks after the exchange.

We figured out that he only pushed Dad to invest because he thought Dad didn’t have the means to, quite forgetting Dad’s daughters were doing pretty well. He was probably using Dad to feel better about himself, since they have similar backgrounds.

Personally, I like to be open about my financial situation if I am asked, but I do take extra care if I know the person asking comes from a lower income level than me. Otherwise, I don’t volunteer, except online. I am anonymous, so it doesn’t make a difference.

I would actually like to ask the question to those who do ask me for my financial status in real life. Why do you want to know? To make yourself feel better if I am worse off? To get feedback on peer averages? To be inspired?

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Financial Samurai Reply:
November 4th, 2011 at 9:03 pm

Sounds like good questions to ask, next time someone asks about our incomes! Glad you and your sister(s) are doing well!

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Haven’t you been busting my chops about sharing my info over at my site? Was that a test…

Sharing income is never a good way to strengthen a friendship.

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Financial Samurai Reply:
November 4th, 2011 at 9:02 pm

It wasn’t a test. If you are going to do net worth and income reports, you might as well just come clean with the actual numbers. Saying you are up 5%, when the reader has zero context of what the amount is doesn’t provide much insight. What if your net worth was $1 million? What if your net worth was $80,000? There’s a big difference. There just needs to be more context if you are going that route. Otherwise, I’d just avoid it altogether b/c the reader can’t understand how you got there.

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It’s terrible that this appears to have cost your friendship, even though it seems liek this is due to a flaw in his character ond no fault of your own.

I would only reveal this under special circumstances. I would need to know why, and fully flesh out through dialugue how that information was to be used. Overall I would have to agree, that this figure in isolation is not beneficially shared.

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Financial Samurai Reply:
November 17th, 2011 at 3:09 pm

It’ a shame indeed. I think I’m just going to lie next time.

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I want to smack Peter. He put you in a terrible position, and then acted like a fool with the information he received. Unless you do the exact same job in the exact same company, you can never compare compensation accurately.

A few people know what I make, but nobody knows what we make as a family. Nothing good can come of it as far as I can tell.

How would you have handled the question Peter posed knowing what you know now? Would you still have shared your income, or would you have danced around it?

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Financial Samurai Reply:
November 4th, 2011 at 9:14 pm

I would have lied and told him something that was only about 10-20% higher than what he made. We had a decent relationship, which is now non existant. Relationships are important to me…. way more important than money. This is where money is so evil.

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Kris @ Everyday Tips Reply:
November 7th, 2011 at 11:32 am

It sounds like you miss your friendship with Peter- would you ever consider giving him a call?

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Financial Samurai Reply:
November 7th, 2011 at 11:45 am

I should. Maybe when he makes huge money and finds a wife. He’s still too angry of a person now without more success.

Forget income – never reveal you work at a job that gets you perks people want…

I work for a very sought after boutique hotel company, and everything was fine till I started telling people I get a great hotel deal. Soon, everyone and their mom wanted me to get them the deal…I did it for a few relatives and close friends at first, and then it exploded.

Everyone wants me to get them a deal, all over the country, whenever they travel. From that point on, I always tell people there is a big convention in town, and the hotel is booked!

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Financial Samurai Reply:
November 4th, 2011 at 9:16 pm

Yikes! Well, hopefully you can hook me up at the Four Seasons or The St. Regis one of these days. Thanks in advance! j/k

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I never got angry at people who earn more, it makes me work more for my money and have bigger plans ;)

When I had a regular job we kinda knew our salaries, since most made the same money. After we parted and now I’m working as a web designer at my small firm, I don’t like to disclose too much about my money, since now I earn 4-8 times more than most my colleagues and they are not gonna be too happy about it.

So, I think that now, as I am getting ‘older’, I start valuing my privacy some more.

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Financial Samurai Reply:
November 6th, 2011 at 9:11 am

That’s a good attitude to have man! I wish everybody had that attitude.

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Hi Sam – this one was right on the money. I have recently doubled my income and am trying to shut up about it. My girlfriend needs money for cigarettes (I don’t smoke) going out to coffee (I go sit on the Riva, but once or twice a week max). In short – YIKES! I have been keeping things vague and now I know to continue doing so. The vaguer, the better. Thanks for a great read.

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Financial Samurai Reply:
November 5th, 2011 at 7:08 am

Congrats for doubling your income! That must be great feeling yah?!

If your gf knows you now make double, at least you know she’ll never leave you! lol

Enjoy your new wealth, share a little, and definitely don’t tell a soul Anastasia!

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I try to be mysterious when it comes to money/income. I thank my father for this trait. Growing up, if I asked him for $20 he would gasp as if it was the last $20 he had. It really taught me to value what I was getting.

It wasn’t until recently that he opened up his investments to myself and my siblings. We were astonished when we saw he was a millionaire many times over.

Had I known this growing up, I’m sure I would’ve acted differently.

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Financial Samurai Reply:
November 17th, 2011 at 3:09 pm

Smart father! Mysterious is a good way to go when it comes to money!

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I agree that discussing salary is a bad idea. I always offer this advice to my staff members. It can certainly lead to moral issues and productivity levels within a department if staff members are more concerned with what the next guy makes.

Even when people have the equal job sometimes experience, education differences may affect the salary they earn.

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Financial Samurai Reply:
November 17th, 2011 at 3:10 pm

Salaries are NEVER fair bc someone always thinks they deserve more! It’s inevitable!

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I complete agree – telling someone what you earn only sets things up for comparisons. Regardless of how “ok” you or the other party seems with it, issues always crop up and can lead to resentment over one thing or another.

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I think income, like everything else, is relative. I can discuss wages with my coworkers because we all make the exact same amount regardless of experience or length of time with the agency. I typically don’t, because there’s no point, but it wouldn’t really matter in my case.

I don’t mind telling close friends or family what I make because my income is pathetic. If I had a decent or high salary, I’d be more likely to keep it to myself. I don’t have to worry about anyone being jealous right now though!

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Financial Samurai Reply:
November 17th, 2011 at 3:11 pm

Always looking on the brightside! I like it!

So how much do you make?

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Andrea @SoOverDebt Reply:
November 17th, 2011 at 3:28 pm

$36k a year before I changed jobs. If I had to estimate my annual income based off the last 7 pay periods, it would be less than minimum wage.

See? No one is jealous. No one is upset. Because I don’t make squat. :)

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Financial Samurai Reply:
November 17th, 2011 at 6:03 pm

Cool! That means incremental blog income can make a big difference for you! Which should motivate you more than others who make more. You are in a very fortunate position!

Discussing finances with any one can be a volatile situation. And Income salaries is something I think should be never revealed unless you FULLY trust the person. For me, I only trust my immediate family members and maybe some close friends with that type of information.

I think you caved too easily to give out your income, you need to wait until you have a 3 ft putt and say “If I make this putt you stop bugging me about it!” Get yo game face on!! LOL

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Financial Samurai Reply:
November 17th, 2011 at 3:12 pm

Hahaha, yep, caved too soon! I’ve known him for years though. I donno man, but yeah, shoulda done it differently that’s for sure!

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Hey Sam, everyone assumes Docs make money to burn. Of course in the current health care environment many financial and tech jobs bring in a lot more. And there is very little growth in our industry. You make what you make frequently for years.

But salary is only a small part of the equation. There are a lot of broke folks who make a great salary. Just look at pro athletes to see what little result income has on net worth.

Most are broke less than 5 years after they leave the pro ranks.

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Financial Samurai Reply:
November 17th, 2011 at 3:15 pm

Doc, i just assume you are ROLLING in dough after 25 years in the business!

I can’t wait for our lobster tail + steak dinner!

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I recently built an online business that’s making me 10 times more than I made at my former day job. I’m also writing a book about how to do the same thing. I that book, I announced that my business is making over $30,000/month. I hesitated doing so, but I think it’s necessary for me to say this so people will take me seriously and can see what’s possible in their business. (Although I don’t disclose how much of that money actually gets to me personally. But it doesn’t take much to support my family. We only own what we can fit in our carry-on suitcases, for example.)

It’s true that wealth really is relative. If you think that making $2,000/month is bottom of the barrel, try talking to someone in Latin America making $500/month or someone in Africa making less than $10/month. Chances are, you’re filthy stinking rich!

I suppose not disclosing your income makes it easier for others not to be jealous, but it’s their choice is they want to be jealous or not. Of course it’s not nice to go up to someone you know is struggling to make $100/month and out of the blue tell them you make $2,000 — it can be rude to rub it in people’s faces or put yourself on a pedestal. But it depends on the person, their desires, and your motives for telling them. Personally, I was always inspired when I learned how much money people made to support their lifestyles — it encouraged me to work harder to get there myself.

If people know you have money, they may expect you to pay more for things or give more to others. And giving is wonderful! But you can’t give to everybody no matter how much you have. Learning when to give and when not to give is part of having money, and shouldn’t be an embarrassment. If you’re upset that I don’t give some of my “excess” money to you, ask yourself why you don’t give some of your “excess” money to someone who makes less than you, that you don’t know. Let’s stop judging each other, and just enjoy the money we work for, giving where we can to help each other.

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Financial Samurai Reply:
November 6th, 2011 at 5:58 am

$30,000 a month is sweet income. You’ve gotta share what the URL address is! Yes, in your case, might as well chronicle the amount in the book, and help people believe they can make more.

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The truth is that privacy is golden. People can get so emotional and messed up over money that they forget all common sense. Such things are best left unmentioned.

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Financial Samurai Reply:
November 17th, 2011 at 6:04 pm

No arguments here. I cherish my privacy so much and don’t like to be bothered really.

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I feel the same way. Almost nothing good can come from revealing your income. I tell people what I make on my website, because it’s really not that much money (yet), but I never tell anyone what I make at my day-time job. Like you said, their attitude will change either one way or the other. It’s best to say nothing and continue as usual with your friendship.

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Financial Samurai Reply:
November 6th, 2011 at 9:06 am

The question is, what happens when you do make a lot of money online. Is there a point where you stop?

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Derek@LifeAndMyFinances Reply:
November 6th, 2011 at 11:26 am

That is a good point. If I’m making enough to quit my day job, then I think I might stop revealing my income.

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Financial Samurai Reply:
November 6th, 2011 at 11:30 am

Sounds like a logical progression! I hope you get there! However, once you stop, we’ll all know based on your last report how much you make at your day job! lol

Your ex-friend had the problem. i don’t believe you did anything wrong. Definitely all his fault.

I know it’s not polite to ask about salary. I have a couple good friends who live a good lifestyle and I’m SO curious to know how much they make. I’ve never asked though because I know I shouldn’t.

I don’t tell people what I make from my real job either. Depends on who they are though. They’d have to be a close friend. It’s a reasonable amount so that’s why I don’t mind. Now if I was making over a million a year, I’d be more hesitant to tell people that, even close friends.

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Financial Samurai Reply:
November 6th, 2011 at 9:08 am

I donno Benny, even your close close friends, I think best not to tell them a specific number. Close friends are even more precious to risk losing!

Speak in ranges.

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Thanks for this post. It’s not how much you make that matters anyways, it’s what you do with your money and how much you have left over.

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I never reveal my salary to anyone, especially the exact amount. When I’m in a situation where I do feel forced to, I usually give them a range. You’re absolutely right though, people always identify you based on how much money you make. I even have that tendency myself unto others sometimes.

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This is especially tricky at work, given what will happen if you find out someone makes more for the same job, or perhaps even a lesser job. This is why managers don’t encourage it, but sooner or later, I think it eventually does come out.

As for talking with strangers or friends that are not super-close, I agree that it’s not the best idea to let them know exactly, for the reasons you mentioned.

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Financial Samurai Reply:
November 6th, 2011 at 9:10 am

With strangers and not close friends, maybe it’s safer Yo reveal if one is so compelled, bc the downside is who cares, you dont know then well. The opposite is for close friends, ironically.

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Invest It Wisely Reply:
November 6th, 2011 at 3:56 pm

Yeah that makes sense too, actually. I think it really depends on the person. I’ve discussed this with a close friend at work, while with another close friend who I know can be somewhat competitive, I only stick to vague estimates. If he says “Oh I make around $40,000″ then I say “yeah, I make something like that, too.”.

You’re right about needing to be sensitive to the feelings of the other person — it’s not the money that’s evil but rather our feelings of jealously and envy, but that’s human nature.

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Financial Samurai Reply:
November 17th, 2011 at 3:17 pm

Cut that $40k figure down by 30%!

I usually tell people I’m just over 6 figures. Many of my friends are in or about that mark. I was accused of bragging one to many times after telling people my true income after they asked. So, I tell them numbers they can relate too.

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Financial Samurai Reply:
November 8th, 2011 at 6:10 am

Even in SF or NYC I wouldn’t tell people I’m just over 6 figures. I would tell them, “I’m just trying to survive.”

Try it sometimes.

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YFS Reply:
November 8th, 2011 at 9:17 am

Will do :-)

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One downside of telling your friends how much you make is you end up forking up up the bill more often every time you go out. =(

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Financial Samurai Reply:
November 8th, 2011 at 6:10 am

Indeed. Robin, I expect you to hook me up with some Korean BBQ in LA since I know what you make. Thanks buddy!

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I totally agree, and I got the same advice from my father when I was young. Nothing good will ever come of it. I say this to people about a lot of things these days, like starting a fight over something that doesn’t matter, gossiping, etc. Sure, bad can come of these things, but there’s never any benefit – so why bother?

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Financial Samurai Reply:
November 8th, 2011 at 6:11 am

What about blog income though? As we mesh our off line and online lives into one with these conferences.

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Darwin's Money Reply:
November 8th, 2011 at 6:18 pm

I don’t really view the online thing as a big deal. For one, very few people even know I blog. None of my co-workers and very few friends and family. Of the ones that DO know, there are only a handful that have looked at it more than once. So, of the perhaps 1-2 people that actually know me that have seen an income update, what I make there isn’t a significant amount of money, it’s just “side-money” so I don’t think people would judge me much the way knowing a full-time salary could lead to problems.

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Great post. Bad ex-friend. Talking money with people is always a little tricky. Too much is placed on what you earn and what you have. If two friends have the same mindset and are secure in themselves, even if the money gap is huge, the friendship should not feel a strain.

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Financial Samurai Reply:
November 8th, 2011 at 6:11 am

It might be one thing if we are the same age, he went to the same schools, got the same grades, and worked at the same place. But he doesn’t.

Yes, disappointing ex-friend indeed.

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Well, no. Money isn’t evil – in ANY regard. The problem was that your “friend” wasn’t a friend, and while I never think it’s a wise idea to disclose your income in anything more than the most general terms, this particular situation only highlighted what ALREADY existed.

Many companies consider it a firing offense to discuss salaries with other employees. I think that similar restraint is a good idea for friends as well.

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Financial Samurai Reply:
November 8th, 2011 at 6:12 am

As someone said, disclose your income, and see who your friends really are!

Money is evil. I’m reminded of this every day. That’s why we have protesters on the streets!

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Dang, that sucks that your friend is no longer wanting to hang out. It’s true that metrics help us evaluate where we are in life, only if we want to measure up to others, but in general it’s usually a bad idea to compare yourself to other people.

I like to compare acheivements because it helps me push myself to my personal best, but I would never begrudge someone what they have accomplished. For example, I know a blogger that started out about the same time as me and based on their posted stats they are doing better, but that just pushes me to work harder. I’m not going to pout and give up.

I like to see Derek’s goals updates because I’m secretly competing, I like to see Crystal’s income updates because I’m secretly competing. But getting mad at them because they are doing well does nothing to help me get to where I want to be.

Thanks for sharing this because I will defintely think twice before talking about salary. (P.S. If this comes up again, you should direct them to GlassdoorDOTcom. That site is perfect for salary negotiation information.

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Financial Samurai Reply:
November 8th, 2011 at 6:13 am

I’ll check out Glassdoor, however, I don’t really care about other people’s incomes so much ,as I’m not looking to move. Besides, headhunters tell me straight up what the competition is making.

Glad you don’t begrudge anybody and get motivated!

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You ex-friend needs to focus his attention on getting a better job/continued job search instead of stop being friends with you. If he is so insecure/competitive that he cannot stand anyone how makes significantly more than him, then he’s got a big problem.

I never tell others how much I make. If someone wanted to ask me how much to expect in my field, I’d give them a range but never my personal income. I think people who make relatively more than their peers have more reasons to hide their income than those who make a similar or lower salary than their group. I’ve personally learned how fast the green-eyed monster can come out of people as soon as they even have an inkling that I may make more than them – even if I worked really really hard to get to my current position, and the person I’m talking to would never do my job as they consider it too boring/office-y etc.

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Financial Samurai Reply:
November 8th, 2011 at 6:17 am

Green-eyed monster indeed! So sad……. so annoying!

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for me it’s very much “situational”. i have revealed in the past when i’ve felt that was the right thing to do but have held my ground for the most part. generally i agree the downsides are far greater and one must not if there is no genuine need / objective to.

i think it is ok for people that make a living online, especially when much of it comes from product / affiliate sales. in fact in many cases it is an expectation. for example, i blog about expedited wealth building or passive income, then i better be able to show how i am applying what i am preaching and whether it works. a reader will always aks – what qualifies me to talk about what i do and why should they listen and follow. proof works and nothing contradicts that.

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Financial Samurai Reply:
November 8th, 2011 at 6:18 am

Do people start wondering online though, “Is this the only way you are making money is by buying stuff from me to make money?”

Does it not feel a slight bit off?

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I don’t reveal my income to my friends. Family yes. But friends tend to borrow money if they know you make more than them. They tend to judge you based on how much you make and how much you spend. I’d rather lie and name a much lesser figure for my own peace of mind.

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Financial Samurai Reply:
November 8th, 2011 at 6:19 am

Sounds good. I would even hide it from family, unless you are the most giving person ever or make a very low amount.

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Had to change the link on my comment above. It still points out to my old site. Didn’t mean to spam your comment thread. :)

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Great post Financial Samurai! This is so true, some people freak out when they realize how much you make especially when they make less. The same is true for net worth. I never disclose that amount to family or friends.

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Financial Samurai Reply:
November 8th, 2011 at 6:19 am

Net worth is even more touchy. People will start blowing holes into your calculations!

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When I bought a house, I hesitated to tell my friends. None of them owned a home, and I didn’t want to come across as wealthier than them. I seriously contemplated acting like I was renting my house.

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Financial Samurai Reply:
November 8th, 2011 at 6:20 am

I made the same mistake and told friends I bought a rental. Never again. I could say it without any underlying meaning, it it will just come across as boasting.

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While I don’t think you should ever need to reveal your exact income, I actually think it’s really important to talk about the general range of what’s acceptable. We had to pass the Lilly Ledbetter Fair Pay Act for a reason. I actually won’t take a job with a company that makes discussing compensation a disciplinary offense, because it enables them to get away with pay discrimination.
I happen to know exactly what every person in my department makes because I do the budget; it’s my job. However, my company is also pretty transparent in its pay grades, so it’s easy to give people the range of pay, and also tell them that midpoint is generally our target starting salary, and then they can use that information as they see fit.
I have also learned what friends of mine make (not that I remember, because I honestly don’t care) when I’ve helped them set up budgets. I had one friend, who when negotiating her latest new position, was given two offers, higher base salary vs higher commissions. She called me and I ran the break even for her. Do I remember any of the numbers? No. Is she making significantly more than me? Yes. Do I care? No. She’s a few years older and has tons of experience in her field. She’s still probably making less than she’s actually worth.
But part of my attitude about money might be because my group of friends is, for the most part, still people I met in undergrad. We’ve been friends for 15+ years now. Some people are bank tellers and some people are lawyers, some work in manufacturing and others are game designers. We all know there are huge income gaps, and we also all know that that doesn’t mean much when it comes to individual (our couple) financial health. Saying “that’s not in the budget” or “we can’t afford that” is an option whether you make just over minimum wage or just over 6 figures.

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Financial Samurai Reply:
November 17th, 2011 at 3:21 pm

What if yor friend was the same age and made much more?

Pretty neat you get to see everybody’s comp!

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shanendoah@The Dog Ate My Wallet Reply:
November 17th, 2011 at 3:52 pm

My friend is only about 5 years older than I am, and does make much more than I do. But she’s now a VP of Sales and she’s very good at her job. The fact that she makes so much more than I do doesn’t change the fact the she and her husband are struggling financially (more so than we are), due to other circumstances. There’s also the fact that I wouldn’t want her work schedule. There are trade offs everywhere.
Now, if we were on the same career path and about the same level in our careers, it would make me consider my current position carefully and figure out if I really wanted to stay there, but it wouldn’t change the fact that she’s my friend and I know that she’s worked for what she has.

As for seeing everyone’s comp, I’ve been in a position to see that for almost 7 years, so I don’t even think about it most times. It also means I know about layoffs way before they are announced, re-orgs and all that sort of thing because of the need to to financial planning around it. Sometimes it really sucks to know these things and ethically not be able to speak about it.

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Even thought I don’t make that much, I still don’t give the number I make in absolute terms. If you don’t, people learn not to ask you. That said, I have childhood friends like you and I actually occasionally write about them. The too don’t want to bring undo attention upon themselves…

Funny, but I think it’s best to live closet rich, especially if most of your family and friend grew up making much less than you do. By family I mean cousin and maybe even direct siblings…

Sorry about you losing a good friend, perhaps he’ll wise up and realize that you didn’t do anything wrong and can help him in his career in addition to gaining your friendship back…

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Financial Samurai Reply:
November 17th, 2011 at 3:23 pm

Yes sir Don! Closet rich indeed! It’s so fun and housing draw any undue attention on yourself.

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I think knowing your peer group salary can be very useful. That’s why I’m glad for websites like Glassdoor – you can see what others make in your job, so it gives you a good point of reference.

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I reveal my exact income every month since I do make it online, my readers got me there and seem inspired by knowing, and it keeps me going – like a kick in the pants to do even better. Would keeping my mouth shut be simpler? Yeah, but as long as my audience sees it as a positive rather than a negative, I’m blowing off the naysayers. ;-)

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I also reveal my exact income from my day job and my online business on my blog. And I’ll do it in real life too… if someone ask for it. I would never come to my friends and family and tell them upfront how much I make… This would be seen as arrogance.

However, I share my income with one of my friend as a source of motivation and because we always feel happy for him when he gets a raise, and vice-versa. So it’s not viewed as competition but more as encouragement when we talk about our income.

There are plenty of people like Peter and I don’t think I want any of them to be my friend. If this guy was really your friend, he would not reconsider his friendship over a dollar sign. This has showed you how he values friendship.

I like to know other’s people income as I am curious to know how people make their living. What great ideas they had. How they have built a successful company.

Being jealous of someone because he is making more than you is just stupid. You just have to do what he does (e.g. all his sacrifices!) and you will be making the same income. It is as simple :-)

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Financial Samurai Reply:
November 13th, 2011 at 5:18 pm

Is there an income level where you wouldn’t share your income though? What if you made $500,000 or $1 million, would you still reveal?

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I don’t mind telling people how much I earn, probably because it is very average. I might be a little bit above average for my blue-collar profession, but less than average as compared to my white-collar counterparts.
One of the early posts on my money blog talked talked precisely about my specific income. I figured folks out there might be curious about the income level of an average trucker.
When my income increases though, due to investments and other ventures, I can definitely see the benefits to keeping it secret. Great post here and great advice!

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So did your buddy buy a Maserati or an Aston Martin? In either case you guys must be making a lot of money because both cars are well over $100K!

I generally agree with your thoughts, but that is probably because I have the sort of income that would mark me for death at an OWS encampment. Conspicuous consumption is frowned upon and it is nice to be able to fly under the radar as much as possible.

In the overall discussion of personal finance there are one or two close friends that I do share income figures with when discussing goals and planning, if they are really your friends it should not be an issue.

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Financial Samurai Reply:
November 19th, 2011 at 3:17 pm

He bought a one year old Aston Martin DB9 convertible. I don’t know how much he spent, but it definitely not cheap!

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In the finance world everyone’s bonus (which represents >>50% of compensation in most cases) is usually public knowledge about 20 minutes after they find out what it is. Some people tell/brag/complain. Some people ask. Management leaks. A couple weeks before bonuses are decided is “campaign season” anyways so everyone’s been talking about it.

It can definitely cause problems even though the industry is mostly thick skinned people and radical differences in compensation are the norm.

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Financial Samurai Reply:
January 5th, 2012 at 2:00 pm

Are you in the finance world mate?

How is it looking for the 2011 comp.

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W-at-Off-Road-Finance Reply:
January 8th, 2012 at 11:50 am

Sort of on the periphery – I’m not employed by a finance firm. I actually work for an engineering firm, but I’m involved in the industry.

Everything I’ve heard is that 2011 was pretty bad except for people associated with T-bond primary desks (MF Global excluded of course).

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Sorry to put down your friend (I’m not, really), but this guy is an idiot. And worrying about what kind of information you share based on the actions of an idiot is also foolish.

I’m not saying it’s a good idea to broadcast your earnings but worrying about alienating your so-called “friends” is not a reason to withhold that information. If you have people in your circle who would treat you any differently based on knowing your income then TELL THEM IMMEDIATELY SO YOU CAN IDENTIFY WHO THEY ARE AND GET RID OF THEM. There is no benefit to having people like that in your life. Iron sharpens iron and people that are worth having around will only be strengthened by your success. All others can quickly hit the curb.

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I think it’s very rude to ask someone their income and a poor decision to reveal it. In my various circles of friends I have some people who make much less and some who make much more. If we are to see each other as equals, it’s best not to talk about such personal things.

Besides, how much some is making is very different to their hourly rate or even their net worth. A better question may be to find out how much one should be making based on their experience, qualifications and geography – to make sure their are being compensated appropriately.

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From time to time, I share my compensation, I am an IT consultant, with three of my close friends. One of them owns IT business and the other is physician and third one is colleague (strange right). First two of them acknowledged that I make more money than most people. Strangely, physician who is in internal medicine told me that I make more than him too. Luckily, all of them are ‘true’ friends. Other than occasional remarks, both of them treat me well and none of the past relationship changed. The third one who happens to be my colleague happened to have lesser compensation than I did. So, we sort of planned in a way that he could get more compensation so it is almost on par with mine. To me friendship or relationship is give and take. I am always of the belief that the information you have should help so others (in particular close ones) and hopefully they leverage it constructively.

My belief is that you should be share such sensitive information with close friends though my wife disagrees to the point that I am a fool. So far my openness with my friends and relatives worked for me. I get the same respect/warmth as before.

I am open about everything not just financial stuff. They all appreciate my openness and it has served me well.

I guess, it all depends on how you put it across so you do not come across as intimidating or arrogant. Sure, the relationship while strengthening, there could be some transition period where it could be little unsettling. In the end, it should work out fine as long as you choose right people as your friends. You will amazed

It is lot of stress if you keep sensitive information to just to yourself. It is a great stress reliever too if you are open about things to your close friends and relatives. If at all, my relationships strengthened not that they were weak before.

You can make out who your true friends are much before you share financial information.

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I agree with what you said. I feel frustrated whenever my mum or my relatives ask about my salary. Sometime, I don’t know how my salary concerns them. I scared if I were to tell my mum about my salary, she will ask for more despite I have other obligations like car loan and study loan. It gives me nerve-wrecking moments and total anxiety! I don’t know how to brush her off whenever she asks me about my salary. Hope you can advise! Thanks.

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it’s always a mistake, but people, especially friends get huffy and persistent about demanding to know

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There is no such car as a “Masarati Vanquish”

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Financial Samurai Reply:
May 7th, 2013 at 3:52 pm

Aston Martin Vanquish baby!

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