Wednesday, April 05, 2006

Why I Believe in Revealing my Income

A few other bloggers have posted about whether or not they feel it is necessary or appropriate to reveal their income level. A lot of people reveal their net worth, but fewer people feel comfortable telling readers their salary.
I'm not saying that any blogger should or shouldn't reveal certain information. After all, the nice thing about having a blog is that you can say whatever the hell you want! But here is why I reveal the things I do.
I want my blog to be about every aspect of my financial life. There may sometimes be things that I think are uninteresting or too private or risky to reveal down to the exact dollar amount, but in general, I want this to be the fullest possible picture of one person's finances, with details that inform my decisions and all the things I write about.
To talk about "living within my means" seems a bit meaningless (no pun intended) unless you know what my means are. If I talk about spending $850 on rent, how will you know what significance that has for me unless I put it in the context of my other expenses, and the money I have available to pay for them?
I also think it is important for people to hear the truth about how much money people make and what income levels are for different professions and in different locations around the US. I can't cite a source right now but I remember reading somewhere that more than 30% of people in the US think they are in the top 10% of income level-- obviously 2/3 of those people are wrong! I think that kind of misconception is pretty significant when you think about how much of our political debate these days revolves around tax breaks that may only benefit people in the top income ranges. And though revealing my personal salary doesn't clear up that particular misconception, I think more openness about salary levels is in general a good thing, and when I can, I will write about where my salary, net worth, and expenses put me in relation to other Americans and people around the world, and how I feel about that.
Of course employers hate it when people are open about salaries-- as soon as anyone knows what anyone else is making, they want a raise. (The exception would be jobs where there are strict pay scales that apply to everyone.) If I publicly discussed my salary, I'm pretty sure it would be against my company's HR policies and I could be fired. And of course it would also just go against our social norms of what people talk about-- that is why I write this blog anonymously. The anonymity frees me to be completely honest.
Salary survey articles are always popular media stories, but you rarely hear much about how those people live on their salaries. Other articles discuss costs of living, or net worth, but don't mention salaries. I am just one person and telling my story can only be of limited use or interest, and in fact may be of no interest whatsoever to 99.9% of people out there, but I want to do my part to bring all that information together-- call it a holistic approach if you will! Other blogs may be less personal and specific about their authors' circumstances, which is fine too, and in some ways more useful to a wider variety of readers. But they do their thing, I do mine and the great thing about the personal finance blogging community is that there is something for everyone.
Oh, and just so you don't have to dig back through the archives: I currently make $83,000 a year plus a bonus that can be around 10%. I believe that just barely sneaks me into the top 10% of income levels. (Let's hope I'm not one of those people who's wrong about that!)


freedumb said...

Yup, that's the great thing about blogging, you get to choose! Crazy Money has a great post about it. I tend to lean towards this: If anonymity is 100% guaranteed, then sure, posting income is fine. But if your coworkers or people who know you find out, it could cause problems. So, I'm choosing not to post my least for the time being. I do agree that without income, it's very difficult to see how effective someone is saving and growing though.

calgirlfinance said...

Madame X, great post! I agree that there should be greater disclosure about salaries, but I'm not willing to put it out there yet. If any of my friends, co-workers, or even some acquaintances found my blog, it would be pretty easy to figure out who was writing it - information about my living sitution itself would probably give it away. Honestly if a friend asked me what my salary is, I would probably tell them (and I have told people who've asked me in the past). One additional reason I don't want to post my salary is because I think I'm underpaid!

IRA said...

Madame X - Another thoughtful post. Like freedumb and calgirlfinance, I'm a bit concerned about coworkers stumbling across my blog. It wouldn't take a rocket scientist to figure out my real identity, based on some of the snippets of info. that I've revealed in some of my posts. In this day and age, I'm not sure how realistic it is to have an expectation of true privacy. Anonymity is an illusion that we'd dearly love to hold onto.

I happen to know that I'm overpaid in comparison to some of my coworkers, including my immediate supervisor. She's been working here for a long time but transfered in from a different dept. I managed to come in at an opportune time when folks in my specialty were a hot commodity. So, I was offered a very favorable compensation package. Great for me, but not so great for my peers, who work just as hard and are just as talented as I am. Likewise, bonuses are all over the place. But they tend to say within the same range as the previous year's bonus. Again, I lucked out because my signing bonus was very favorable. So all in all, I've learned to keep my mouth shut about specifics.

Cap said...

hmm yeah, revealing income definitely shines more light into the entire net worth picture.

course, I don't have either. pretty much for the same reasons as above too. if anyone that knows me comes across my blog, it'll be too easy to figure out who was writing it, which can cause problems.

I wish it wouldn't, but thats how the world is right now. if a friend ask, of course I'll tell. it's not like i'm hording a fortune or something.

that said, a student that lives at home with his mommy can't be making all that much. elephants makes more peanuts than I do.

Anonymous said...

Revealing your income is good for us at least :)

Have you decided to reveal (however vaguely) what you do to make that income? That's my main curiousity, more than income.

Anonymous said...

Interesting post - I think the key is how comfortable you are talking about income. Some people are, others aren't.

Btw, I noticed a funny thing on your net worth goal - end March 06 at 284K, Jan 07 target at 275K?? Guess there's some typo.

Unknown said...

On my blog, I wont be sharing either income or net worth. There are a few reasons for this.

First, Im not comfortable with the possibility that friends, family, colleagues, or even casual acquaintences could somehow find this information and connect it to my real-world identity.

Second, information about net worth or income is very difficult to compare across people, so I dont think it is particularly helpful for readers to know this information. We live in NYC and make more money than we would in Des Moines, but things cost more here. Im just not sure what these numbers teach you.

Third, many principles of personal finance apply regardless of your income and wealth. Sure, certain strategies such as tax-efficient investing differ by income level, but many more issues do not. I think a good personal finance blog should be informative for both the millionaire and the pauper.

Fourth, my wife and I have the good fortune of being very well-off financially. If our exact financials were known, Im certain that some readers might conclude that because our situation is so different from theirs, the financial decisionmaking and analysis that we go through is totally inapplicable to them. I'd like to think that this is not the case.

Finally, a major reason why people on the PF blogosphere share personal financial information is to hold themselves "accountable" for their financial goals. Thus, progress toward net worth accretion, debt reduction, etc.
becomes "easier" to accomplish when you have the sense that somebody will hold you accountable for failing to meet your goal, or conversely, who will praise you for hitting your target early. The truth is we make good progress toward our goals on our own, and sharing our financials wouldn't help us accomplish anything faster.

Marshall Middle said...

I agree with you. I think that posting your income gives readers something concrete that they can sink their teeth into. It makes your blog more interesting to read, than others who use fake or hypothetical numbers. I appreciate your honest and enjoy your writing. I share your interest in creating wealth and will add your site to my blog

Chitown said...

I agree. It definitely helps to correlate income with goals and how you go about achieving them. Sometimes I scratch my head wondering how people accomplish what they do in the pg blog sphere. It is very helpful for income to be posted. Even if it not an exact figure...a range in helpful. Thanks for sharing!!!

Anonymous said...

While your employer may not want you to reveal your income, and may imply that it is a terminable offense, the NLRA protects your right to publicly discuss your income, unless you are in a management position.

See for example:

Anonymous said...

All very interesting, but why are you so far up yourself? Or is it an American thing? Yippee you need money? Oh I suppose. Many might admire you but I don't. Just a sad case trying to be good in a flawed system.

Find your millionare boy friend but he will no doubt be an idiot and you will eventually be unhappy.

Tiredbuthappy said...

I get a big voyeuristic thrill out of finding out how much money someone makes, and how much of it they've managed to not spend. That's why I've got my real-life numbers plastered all over my blog. If I want others to dish, I'm going to contribute to the trend.

But I think the cagey folks who have commented above are smart. Sure, we're anonymous, but it's a shaky anonymity. I'm quite identifiable from my blog. My best chance of anonymity (and most of the reason I started the blog to begin with) is that most of my friends and family just aren't interested in talking about finances. I would be shocked if any of my friends started hanging out in the PF blog world. The two or three friends I have who give a rat's ass about this stuff already know all the dirt on me anyway.

My biggest fear is actually that a potential employer would somehow find my blog. So I'm very very careful what I say about my coworkers, employers, etc. And if I'm indiscreet in a post, I usually repent and delete it afterwards

Anonymous said...

I actually agree with Claire but more on a personal level than on an internet level. I reveal my information to people that I want to be able to exchange information with in person. On the internet I don't reveal my income or even net worth/investment account information because for some reason (which I don't totally understand myself) I'm not quite comfortable with doing that. In order to get around this I have created a fictional person that I track the spending and income of (and the spending is basically based on my spending but it isn't exact). I hope that I will be able to keep my 'Sam Spendalot' fairly realistic (and a little more 'average' than I am, our household is probalby in the top 15% in terms of income in Canada).

Anonymous said...

Another financial nudist, shows all the financial private parts. It's a rare and bold thing...

RS said...

Interesting post Madame X. I like the general idea behind revealing your income and I wouldn't mind being able to reveal mine on my blog also...but one possible piece of flawed thinking is that you are in fact annonymous. It generally doesn't take much in our interconnected society now to figure these things out (although being on Blogger should help you a little). If oyu had your own domain it could be easier.

The reason that I cannot reveal my income level is that I am not annonymous on my blog. Many of my friends and family know about it already, but more importantly, I write it with a few of my co-workers. So there goes that idea for me.

Kudos to you though. Thanks for sharing.

MommyLydia said...

It seems to me that revealing how much you make simply leads to jealousy in the workplace. This is not a good thing with people you have to work with, whether it is you being jealous of their pay rate or them being jealous of yours.

A job you loved and was willing to work at forever may overnight, with this one piece of information, become despised "They aren't paying me what I'm worth" -- what is the good in that?

Anonymous said...

I applaud you for sharing your income with us, since that gives us a better perspective on your journey & struggles. Your income level is an important part of the equation to how much you can save. At some low salary level, no amount of squeaking by will allow you to save.

Glad to hear that you are in the top 10%. Good for you. In an anonymous environment like this, I don't see any harm in sharing income level. It depends so much on the area of country, education, state of economy, age, how long you've been at a company, even pure luck, etc. Also, someone always makes more than you anyway, so hopefully people don't see income as a complete measure of other people's real worth.

In my case, I make about 74K a year but don't have a lot of expenses (or expensive vices!).

It is always amusing to read about these professional actors & athletes making millions of dollars that lose everything & have to file bankruptcy. That shows that your income level isn't the only predictor of net worth. Many people keep raising their expenses to meet their increasing income.

Different John
(Sorry posted two other "John"'s before I realized someone else used it.)

Anonymous said...

It is amazing to me that in this day and age, men continually use money to over compensate for personal lack of endowments. Any person who feels the need to identify themself by income level only demonstrates their arrogance. A person is truly identified by their integrity and compassion to love regardless of income level.

In an anonymous environment like this, one should really change their screen name. From experience, I find jmulli10's statement about the measure of a person's real worth hypocritical. Amazing how easy it is to fabricate personal and moral wealth behind a keyboard and monitor. I am appalled by this shameful display of online flirtation.

I was once told that "love grows best in little houses." From experience, this is true. Only deceit and isolation grows rampid in large empty houses. Once expensive vices, such as wives, children and pets are removed, then what value is net worth? Who will truly remember your income once you leave this earth? A name sake would mean more than an appropriated dollar sign. Character markmanship is more valuable than any bank statement.

A supportor of the sports/movie industry only contribute to the rise and fall of such athletes/actors. We worship blindly, placing them on pedastools, and then criticize their fall from grace. It is true that many people raise their expenses to meet their increasing incomes. Others forcefully increase financial demands on loved ones to meet expected socioeconomic status. When the loved ones do not meet obliged socioeconomic status, they are simply disregarded.

It is ironic that a man with a closed wallet is blogging on Obviously this man has not a open wallet, but a closed heart. A person should truly re-evaluate their life to determine what ultimately makes their life wealthier. Money or the unconditional love of a family?


The Lowly Court Clerk

Anonymous said...

I've just stumbled across your blog and this post on income. My question is 'How do you live in New York for less than $150,000/year?"

And, you are saving to boot! You have obviously made some EXCELLENT choices in your lifestyle, and I applaud you for your accomplishments.

I was making $187,500 and barely made it. I rented in a premium area (solo) and had a car (dumb, really dumb!) so my living expenses were high. I left the city for a rural job in Ohio for $225,000 and am very comfortable now. Although, I do miss the city terribly at times.

Great Blog! Keep up the good work!