Friday, 15 June 2012

How much do I tell others about my personal finances

The question of 'how much do I tell others about my personal finances?' may seem like a simple question with a simple answer - i.e. nothing.  However the issue most often does not arise from a conversation about ones wage or ones net worth but in far more oblique ways.  It tends to arise when:
  • You tell someone that you work in a profession that is typically well paid (e.g. doctors, lawyers, financial professionals)
  • You buy a nice car and go to fancy restaurants or go on expensive holidays
  • You buy your second / third / fourth investment property (people always get excited when they buy investment properties and tell their family and friends)
The problem with people suspecting / knowing that you earn a lot of money is one of simple jealousy and envy from both family and friends.  There are plenty of problems that can and do arise.  The biggest ones that I have seen (both personally and through other message boards where people ask the same questions include
  • The perception that money is 'all important' and that you do not spend enough time with your kids, family and friends
  • That you are greedy and are cheating others to make money
  • That the 'rich' do not pay enough taxes and do not do their bit to support society
These problems tend to typically arise where a person has worked hard and pulled themselves up and done better than their peers or their family in a monetary sense.  In Australia we typically call the problem the 'tall poppy syndrome' where people like to pull those who are doing well down to their own level. 

The fact is that this is not an easy problem to overcome and people deal with it in different ways.  A common thing I see posted on message boards is that you 'should not associate with people who are bringing you down'.   I think this is a simplistic solution.  I do not know many people who associate with their family and friends just to push themselves up.  We associate with them because we like / love them for who they are and how they have treated us.

I think that every person needs to find their own way of dealing with this problem.  I deal with my family and friends in the following way
  • I have never told anyone what I earn.  For those who comment / try and get it out of me I make very vague comments and will even downplay it.  I am comfortable in how much I make so I have no problems if they think it is substantially less  
  • I do not give them details of my investments.  Most people know I have an investment property but they do not know its value, how much equity I have in it nor do they know about any of my other investments
  • I try not be be ostentatious.  I realise that this is a cultural thing.  I have been to Asia several times and once got told that people are flashy there because what is the point of having money if people do not know you have money.  I do not find this works for me but each unto their own I guess
  • I am aware of how each person is likely to react and treat them accordingly.  There are friends of mine that are doing as well and even much better than I am and there are those that come from very wealthy families.  I am a lot less guarded around them and we are the ones who discuss investment techniques and strategies as we are comfortable with each other and know that we are not going to get jealous. 
Again this is such a personal topic but I know it creates so much havoc among friends and family.  I find that keeping finances personal is an old tradition that works well for keeping friendships and families whole. 

I should preempt a natural question and although this may seem a strange topic for me to cover given the nature of this blog and the amount of detail I post (including my expenditure reviews from which you can gain a rough estimate of how much I earn and my net worth posts) I have never told anyone I know that I write this blog and I am fairly careful to ensure that my personal details are not on this blog. 


  1. Decent post, plenty to ponder about this one. I'm quite young myself & if I continue to try & build wealth I can see this being a potential issue (given that I currently live in a working class western suburbs area).
    A question I have from this post (feel free not to answer) I was wondering how your financial objectives affect your ability to commit to a relationship or find like minded partners? (I understand this is a personal one that you may not want to or feel comfortable answering).

    1. Hi Jef - I have never objectively decided to enter a relationship (or more pertinently) not entered a relationship because a person did not have the same financial objectives as myself.

      However I find that I tend to be attracted to quite 'sensible' people and while they may not be as interested in wealth building and finance as I am, they are not the type who would set my financial objectives back a long way.

      In the short term I have found that there is no real way of avoiding the increased expenses associated with a relationship. To me it's much like owning a car - I could probably do without one but I find it is worth the extra cost!

      How do you think about it?

  2. I agree, I would never compromise being happy merely to have financial gain cause my philosophy, which a lot may not resonate with but you can have all the money in the world but this alone is unlikely to make you happy.

    At the same time it is important to be realistic & appreciate that not everyone will be well intentioned be that friend, girlfriend, family etc. I doubt I could ever date someone in the long term who wasn't determined to work hard though or at least understand my desire to want to work hard initially.

    Sounds a bit fluffy I know but it's not always about money. :)