Financial Samurai

Slicing Through Money's Mysteries

Never Tell Anyone How Much Money You Make

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Golfing-ducks - Never Tell Anyone How Much Money You Make

Thanks to the global pandemic, the wealth gap is widening. Therefore, if you are doing well, I highly recommend you never tell anyone how much money you make. Instead, practice Stealth Wealth.

Let me share a story of how I shared how much money I made one year. As a result, I ended up losing a close friendship because he could take the comparison.

Never Tell How Much Money You Make

Peter and I were golfing buddies for years until one day he started asking me about my compensation.  I refused to tell him for weeks until he mentioned he was in a tough situation, negotiating a package with a potential new employer and sought my advice as someone several years his senior.

As I stood over my ball, ready to attempt a 30 foot birdie putt, Peter chimes up, “Sam, you’d really be doing me a favor by letting me know, so I can go back and counter them in case they are low balling me.”  Peter then proceeded to tell me what he was making at which point I felt forced to reveal my income because he was so upfront.  When I did, he quieted down, walked to the next hole and smacked his driver down the pipe.

“280 yards with only a sand wedge in!” I applauded after I missed my putt.  “Hmprh“, was the only sound that came out of his mouth as walked further and further away.

As weeks turned into months, I realized he no longer pinged me to play golf.  It also turns out that he never took the new job offer and remains at his company ’til this day.  Peter turned cold and I later found out that the reason why he never took the new job was because he countered them so high based on what he heard from me that they pulled the offer.  Peter blames me for not getting the job and not making the money he feels he deserves to make.  I have no control over what the potential suitor was willing to pay so why is it my fault?

Never Reveal Your True Income

I’ve known Peter for years, and it saddens me that we no longer hang out.  He asked me to be his mentor when he first graduated from college, and his competitive drive drove him overboard.  He compares everything from cars to property with everybody.  

As an example, he purchased a two year old Aston Martin Vanquish around his 30th birthday.  All he had to do was buy a two year old Honda Civic and it would blow away what I was driving and most of our circle since we take the bus!

It was an absolute mistake revealing my income to him.  I like to wear worn t-shirts and jeans, because I don’t like to draw attention.  In fact, perhaps this is why I so often wear baseball caps, so I can be left alone to do my own thing. 

Blending in is why I drive Moose, my 11 year old SUV that’s worth $4,000.  He’s handsome and clean, but will never turn heads.  It’s the best feeling when people look at me and think I’m just a kid with very little.

I’m not going to apologize for making more than Peter when I was his age.  I was just trying to help him out in his negotiation process as he wouldn’t relent on asking. 

We could have come up with a strategy for negotiation, and use my figure as a realistic anchoring point for further talks with his potential new employer.  Instead, he decided to huff and puff and curse the world for life’s inequities.

The Benefits Of Keeping Your Income Hidden

  • You can always play down your wealth.
  • You can play up your wealth if circumstances dictate.
  • Don’t have to always have to pay because you make more.
  • Buy things and go on vacations in peace.
  • You blend in with everybody else.
  • If you make more than the average, nobody will envy you or try and take you down.

The Negatives Of Keeping Your Wealth Hidden

  • You start associating your identity with your income.
  • You might come across as arrogant and boastful.
  • You lose ground in salary negotiations if you ever change jobs.
  • People will start expecting things from you i.e. “Larry makes $10,000 a month, let him get the dinner tab!”
  • You might get reported to the IRS agent who might think, “Oh really now?”
  • 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 can you afford a $25,000 car when you only make $60,000 a year?” “You’re 45 years old and still only make that little?” “You make that much and still drive a beater?” “You’re selling the dream, and your client’s dreams are failing.” etc.

If You Must Tell Others How Much You Make…

If for whatever reason, you just have to reveal your income to others, use this guideline to decide whether you should or not:

Reveal income if your income is equal to the median income of your peer group (industry, level, experience) up to +15% over.  If you are making any more, then it’s probably best not to reveal and speak in generality.  Any income below 115% of the median income of your peer group is fine.

If your business model is making money by showing others how much money you can make by making money off others, really try and reach out to those who’ve bought your products and failed.  Reimburse the occasional failure and set up some type of safety net fund or charity fund to help.

Practice Stealth Wealth

The next time someone tries to dig compensation information out of you, stand strong and don’t reveal any details! Practice Stealth Wealth! If you must share info given the other party has bared their soul, talk in percentages and temper them while you are at it.  

The other strategy is to provide a wide range below and above his or her salary so as to appease some of his/her desire to know, without making them feel unsatisfactory.

Look around at the most financially successful people out there.  You’ll never see or read about them disclosing how much money they are pulling in.  They are secure with themselves and understand the upsides of keeping their finances private.

Manage Your Money In One Place

Sign up for Personal Capital, the web’s #1 free wealth management tool to get a better handle on your finances. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.

After you link all your accounts, use their Retirement Planning calculator that pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. Definitely run your numbers to see how you’re doing. I’ve been using Personal Capital since 2012 and have seen my net worth skyrocket during this time thanks to better money management.

Personal Capital Retirement Planner Tool

Start Your Own Business / Website

If you feel you’re not getting paid what you’re worth and want to boost your income, start your own business online on the side! It used to cost a fortune and a lot of employees to start your business. Now you can start it for next to nothing with a hosting company like Bluehost for under $4/month and they’ll give you a free domain for a year to boot.

Brand yourself online, connect with like-minded people, find new consulting gigs, and potentially make a good amount of income online one day by selling your product or recommending other great products. Not a day goes by where I’m not thankful for starting Financial Samurai in 2009. Here’s my step-by-step guide to for how to start your own website like mine in under 30 minutes.

Blogging For A Living Income Example: $300,000+
A real income statement example from a blogger. Look at all the income possibilities. CLICK the graph to learn how to start your own site in under 15 minutes.

Updated for 2021 and beyond.

Learning From The World’s Happiest People

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The world’s happiest people don’t reside in America, the wealthiest country in the world. No. The world’s happiest people all live in Scandinavian countries: Denmark, Sweden, Norway, and Finland!

That’s right. Despite being dark for most of the time during the winter and freezing for three months a year, Scandinavians are the happiest bunch!

Let me share what I learned about the world’s happiest people after I took a trip to Stockholm, Sweden back in 2012. I’ve since gone back once and had the same takeaways.



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Things I’ll Teach My Daughter: Pay No Attention To A Guy’s Fancy Car And More

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Father and daughter walking on the beach - Things I'll Teach My Daughter

Back in 2016, I wrote this post expecting I was going to have a daughter. Therefore, I started thinking about the various things I’d teach her growing up wrapped around personal finance.

I was nervous about how to be a first-time dad, especially to a daughter. I had one friend in her early-30s perpetually go in and out of terrible relationships. The last thing I wanted was for my future daughter to go through 15 years of breakups.

Instead of having a daughter, we had a son in 2017. Therefore, my thoughts were shelved until the end of 2019, when our daughter finally arrived. Hooray! Now that I am a father to a daughter, this post is even more important than ever. Perhaps you have a daughter as well.

I’d like to revisit this topic and offer additional points. But first, a story.



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The New Rule For Engagement Ring Buying

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The new rule for engagement ring buying

To all the ladies in the house, you’re in for a real treat! To all the fellas thinking about proposing, maybe not! It all depends on how materialistic you are in the first place. Even if you are already married ladies, point your hubby to this article about the new rule for engagement ring buying and you might just get a ring upgrade!

So what’s the new rule for engagement ring buying you ask?

Well before we get into the most obvious new engagement buying rule all of society should follow, let’s discuss some of the current ridiculous rules that must be thrown out the window!



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Solving The Housing Affordability Crisis By Providing Subsidized Housing

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I’ve got an efficiency idea that could do my community some good: Provide subsidized housing to those who may need it the most. Given times are more difficult during a pandemic, being able to provide affordable housing may be very beneficial.

The remodeling in my new home is almost done. I could move into my new home and rent out my old home for a lower rate to help ameliorate the housing affordability crisis in San Francisco.

With the median house price at roughly $1.6 million and the median rent for a two-bedroom apartment at roughly $4,400, it is very hard for teachers and other essential workers to live in the City.

Spending at most 30% of your gross income on housing is usually what determines your affordable housing. Therefore, a teacher would need to earn roughly $128,000 a year just to afford a $3,200, one-bedroom apartment.

Given the average teacher’s salary in San Francisco is closer to $70,000 – $80,000, what ends up happening is that teachers either rent a room in a multi-bedroom apartment, rent a studio, live 30-60 minutes away, share a space with a partner, or do a combination of the above.

Without affordable housing, it’s hard to retain teachers over the long term. With higher turnover, our children and our communities tend to suffer.



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Solving Financial Insecurity To Live More Freely

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Curing Financial Insecurity In Order To Be Free

We all suffer from some level of financial insecurity because society can be cruel. The future is always unknown, as the global pandemic has shown us!

Financial insecurity is the reason why we tend to stay in cash long after the signs of a recession are over. Financial insecurity is the reason why we work long after we need to because we fear some financial disaster might wipe out all our wealth.

During the height of the global pandemic, financial insecurity caused me to wake up at 3 am sometimes! If I had properly forecasted my passive income and wealth, I wouldn’t have had to worry so much.

Financial insecurity is why we buy insurance! I hope everybody with kids or debt has gotten at least a basic term-life insurance policy. Tomorrow is not guaranteed.

In a positive light, being financially insecure helps us become more financially secure because we take action to get rid of such an uncomfortable feeling. But after a certain point, financial insecurity may become debilitating – ruining relationships, limiting potential, and creating a sea of regret.

Here are some signs you might be overly insecure about your finances:

* You constantly tell others how much you make for the purpose of making yourself feel better.

* You crave constant adoration or at least reaffirmation that you aren’t one of your insecurities e.g. weight, education, product.

* You enjoy constantly checking yourself out in the mirror, taking selfies, and posting pics of yourself for all to see. There’s a correlation between physical fitness and financial health.

* You sometimes lie awake at night, unable to sleep because you’re worrying about your liabilities or potential liabilities.

* You buy nice cars, fancy clothes, expensive jewelry, and nice watches to show off your wealth or make up for shortcomings.

* You have multiple-years of living expenses saved away, but still work at a job you hate in order to save more money you don’t need.

* You feel your friends are all more successful than you, despite having an income or net worth well within in the top 25% for your age.

Let’s see if we can provide some help to a reader who writes in about his financial insecurity!



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A Lack Of Emotional Intelligence Is Costing You A Fortune

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Recently, I’ve been daydreaming about life before COVID-19. As an extrovert, I generally enjoy plenty of human interaction. However, sometimes, I come across folks who completely lack emotional intelligence.

When I come across such folks, I immediately begin to wonder what happened? Is the lack of emotional intelligence a parental failure? Is it a failure of the school system? Or is a lack of emotional intelligence genetic, no matter how much tutelage one gets? Please tell me if you know the answer!

Let me share three examples of how a lack of emotional intelligence cost these people some money. One example also cost a friendship.



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Why Are Asians Ignored By The Media, Research Institutes, And Politicians?

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As an Asian American with children, I’m often wondering why are Asians ignored by the media, research institutions, and politicians? Asians make up roughly 6% of the American population in 2021 and earn the highest income among all races.

Instead of ignoring Asians, the media, research institutes, and politicians should focus more on Asians. Asians, collectively, are one of the fastest growing races in America.

It is an inevitably Asians will have bigger purchasing power and hold more positions of power in society. Therefore, ignoring Asian Americans and our issues is a mistake.



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Increase The Value Of Your Professional Network By Befriending These Five Archetypes

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Your professional network is incredibly valuable in order to get ahead. With a strong professional net work, you will have more professional and personal opportunities. More people will root for you and want to support you. This posts shares how you can increase the value of your professional network.

For 10 years I acted as a mentor to incoming analysts or associates at one of the two investment banks I worked for.

Being a mentor was rewarding and a way to help younger folks navigate the often terrifying waters of a cutthroat work environment.

Increase The Value Of Your Professional Network By Befriending These Five Archetypes

One of the main pieces of advice I gave was this: You should spend as much time selling yourself internally as you do externally. 50/50.

What I noticed during my career was that those who zoomed up the corporate ladder always seemed to have the strongest networks, regardless of whether or not they were the best producer.

The majority of people hate to network. They believe hard work is enough to get ahead. Unfortunately, from a career and financial perspective, networking is vital if you want to outperform.

There is no true meritocracy.

Disclosure: Financial Samurai has partnered with CardRatings for our coverage of credit card products. Financial Samurai and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.



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Dear Minorities, Use Racism As Motivation For Achieving Financial Independence

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When I was a kid, I used to be very combative when it came to fighting racism. Part of the reason had to do with attending international schools in Asia until I was 14.

Kids from all over the world can get pretty nasty towards each other along racial lines, even though you’d think the opposite might happen in a diverse group.

I took up martial arts and learned ways to cripple my opponents in a fight if necessary. It’s just in my personality to stick up for myself and others, even if it means going to the hospital or jail. 

Use Racism As Motivation To Get Better

It’s easy to dismiss racism as no big deal if you’re not a minority. You don’t experience the same slights, perceived or otherwise, that frequently come your way. It happens at work, or in the grocery store, or on an airplane, or when you’re standing in line anywhere minding your own business.

Over time you become inured to the insults, but the sting never goes away. It just gets buried. You move on.

Now that I’m an adult who has gone through the system to finally have enough to live life on my own terms, people have stopped pissing me off as much.

I don’t have to kiss someone’s ass to get ahead, nor do I have to sacrifice any shred of dignity to make more money. I’ve really got nothing to complain about, so I don’t.

But when I see bullshit incidences like when a white woman called the cops on a black man after he simply asked her to leash her dog in Central Park or when a white police officer murders a black man by placing his knee on his neck for over five minutes after he cries out multiple times for help, I am outraged!

These types of situations keep happening over and over again. We need to make our voices heard. We need to share our experiences. We need to make people accountable for their actions.

I don’t know what it’s like to be a black man living in America, but I do want to share some perspective on what life is like as an Asian minority living in America. Racism was a big reason why I decided to save so much and aggressively work on my passive income streams.

The desire to have absolute choice and be beholden to no one was and still is a huge motivating factor.

I hope by sharing my experiences with racism others will share their own experiences as well. Ultimately, I hope to encourage those with racist tendencies to realize how much their actions hurt others so they can finally stop.

Every single hateful encounter I experience offline or online is from someone who has something difficult going on with their financial or personal lives. I believe that if more people at least can get their financial lives in order, some of their hate for others will slowly melt away.



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