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Never Tell Anyone How Much Money You Make

Updated: 01/09/2022 by Financial Samurai 217 Comments

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.

If you start telling people how much you make, you’re inevitably going to make people feel bad if they make less than you. And when you make people feel bad about their financial situation, you will no longer get their love and support.

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 couldn’t contain his jealousy.

The amazing thing is, he makes millions of dollars today as a biotech research analyst at Jeffries. So I hope he’s happy now!

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.

Then He Turned Sour

“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 Tell 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. 

Go “Grey Man”

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.

Related: How To Convince People You Are Middle Class When You’re Actually Rich

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’re running a personal finance site, fewer people will take you seriously if they don’t see some financial transparency. As a result, I’ve shared my net worth when I retired in 2012 and my latest passive income streams. But I don’t share my entire income or net worth because it will likely piss a lot of people off.

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. Never tell anyone how much money you make.

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.

Related posts to never telling others how much money you make:

Keep Your Donations Private

Combine Stealth Wealth With Stealth Action

Make More Passive Income With Real Estate

If you want to make more passive income, investing in real estate is one of the best ways. Real estate is a tangible asset that is less volatile, provides utility, and generates income.

By the time I was 30, I had bought two properties in San Francisco and one property in Lake Tahoe. The rental income of over over $100,000 a year from these properties have enabled me to retire early.

In 2016, I started diversifying into heartland real estate to take advantage of lower valuations and higher cap rates. I did so by investing $810,000 with real estate crowdfunding platforms. With interest rates down, the value of cash flow is up.

Take a look at my two favorite real estate crowdfunding platforms.

Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eREITs. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most people, investing in a diversified eREIT is the easiest way to gain exposure to real estate.

CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have a lot more capital, you can build you own diversified real estate portfolio. 

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 - Never Tell Anyone How Much Money You Make

Never Tell Anyone How Much You Make is a FS original post. FS has been helping people achieve financial freedom since 2009. Sign up for my free weekly newsletter if you want to build more wealth.

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Filed Under: Career & Employment, Relationships

Author Bio: I started Financial Samurai in 2009 to help people achieve financial freedom sooner. Financial Samurai is now one of the largest independently run personal finance sites with about one million visitors a month.

I spent 13 years working at Goldman Sachs and Credit Suisse. In 1999, I earned my BA from William & Mary and in 2006, I received my MBA from UC Berkeley.

In 2012, I left banking after negotiating a severance package worth over five years of living expenses. Today, I enjoy being a stay-at-home dad to two young children, playing tennis, and writing.

Order a hardcopy of my upcoming book, Buy This, Not That: How To Spend Your Way To Wealth And Freedom. Not only will you build more wealth by reading my book, you’ll also make better choices when faced with some of life’s biggest decisions.

Current Recommendations:

1) Check out Fundrise, my favorite real estate investing platform. I’ve personally invested $810,000 in private real estate to take advantage of lower valuations and higher cap rates in the Sunbelt. Roughly $150,000 of my annual passive income comes from real estate. And passive income is the key to being free.

2) If you have debt and/or children, life insurance is a must. PolicyGenius is the easiest way to find affordable life insurance in minutes. My wife was able to double her life insurance coverage for less with PolicyGenius. I also just got a new affordable 20-year term policy with them.

3) Manage your finances better by using Personal Capital’s free financial tools. I’ve used them since 2012 to track my net worth, analyze my investments, and better plan my retirement. There’s no better free financial app today.

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Comments

  1. Lance M Jungers says

    May 19, 2021 at 5:29 pm

    It’s all about what you do and your priorities though. He’s right in asking you what you made and comparing it, because we are in a world today that experiences a 5x cost of living, but only 2x the salary compared to the older generations. We live in a world of inflation. The average person today needs 3x the retirement of someone 10 years ago to retire, but yet wages are not going up to represent that. Most people today have to work their entire life, because wages are not going up at the same pace as inflation.

    I get very jealous when other people make more money than me. So I think it’s only right that other people tell me what they make so I can make more. The world is not fair and I think I deserve to make more as well.

    Reply
    • Tim says

      July 19, 2021 at 11:16 pm

      It’s not right for you to expect other people to tell you how much money they make…I’m very happy for people to make millions and millions more than me.
      look at Jeff bezos and elon musk…
      Ambition is the key not jealousy!

      Reply
    • Lokiison says

      November 11, 2021 at 2:34 pm

      Greedy rich people. All of you. I wish discomfort and pain on all of your lives. People go without and put in more work than you. Yet they never see what real luxury is. Only the illusion of it. PIGS

      Reply
    • Kaki says

      November 13, 2021 at 8:39 pm

      Not right to be jealous of them bc they didn’t create your situation.

      Reply
  2. Jerry says

    May 14, 2020 at 8:05 pm

    Question, first off, very simple , yet sometimes so simple of a rule it can be overlooked sometimes, example, I was approached by compitition and asked how much I bid a job for that he had bid prior but wasnt awarded. I proceeded to tell him that everyones overhead and markup are different and it would be of no value to tell him my bid, he then told me what he bid, then was an awkward silence, I folded for who knows what reason, maybe just to get him to go away so I could continue working on my project, I quickly figured what could it hurt? I already had the job, so I told him, I immediately regretted it as the whole conversation was awkward. What do I do now? I just pretend the conversation never happened, and remember to never tread those grounds again

    Reply
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