Discussing money matters

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thrifty++
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Discussing money matters

Post by thrifty++ »

What do others think about the subject of discussing money matters with friends and family?

I am generally very discrete about it but let things slip a little the other day. A friend started talking about incomes and asked me how much I earn. Instead of telling him to MYOB I actually told him. He then said "my god what do you do with your money? You would never know you earn that much". And I said I invest it. I then talked a little bit about investment. He then asked how much money I have. I said that its highly classified.

I had regrets over this conversation and wish I had declined to answer the question about my income.

Funnily enough I dont mind discussing money matters with people who I know are good with money and occassionally do so. Because I like to talk investments and money strategies etc.

But I dont like to discuss it with people who are not money smart. In this particular case I was talking to someone who is not. Even though he earns a good amount of money he will blow every dime on something shiny and consumption related before it accumulates a cent of interest.

My main fears discussing money with people is: 1) they will get bitter and jealous and 2) they will ask me for money. I know that this friend in particular has asked another friend for money before because he is so bad with it. He complained to me about how he was pissed off this other friend did not lend him money because he is so rich.

Did
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Re: Discussing money matters

Post by Did »

Yeah don't discuss income with people generally. Lesson learned.

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Bankai
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Re: Discussing money matters

Post by Bankai »

Last weeks conversation at work:
Someone: It's a pay day today! Hurray!
Me: Oh, is it?
Everyone: if you don't know when the pay day is, they're paying you too much!

Someone once said to never discuss money with anyone who has much more or much less than you. Seems like a good advice.

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GandK
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Re: Discussing money matters

Post by GandK »

Totally depends on the context.

One of the things I miss about my years in the US military was the candor on financial issues. Because everyone knew what everyone else made, spending, savings and pension discussions were open, frequent, and lacked malice. Contrast that with civilian life where keeping that information secret is in corporations' best interest, so they convince us all to hoard our salary amount (if not the money itself), and when we stumble upon someone else's #, to continue to view that information as leverage.

I remember hearing a speech once by the late Ann Richards, where she teased her female audience for remaining reticent when they, and others, need financial help. She looked around the room and shook her finger at the ladies present and said, "More people have seen you necked [she's a Texan] than have seen the bottom line of your checkbook." For whom is that not the case? And without commenting on anyone's sexual or medical past: are these secrecy levels wise? Do they serve to forward the needs of any of us except corporations?

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conwy
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Re: Discussing money matters

Post by conwy »

I think I agree about not discussing pay/savings with people generally.

However I have disclosed it on occasion to a very small, select number of people, including people who've been close friends my whole life, and who'll likely be in my will. This hasn't done me any harm; I trusted these people enough to be certain they wouldn't use it against me, and sure enough, they haven't.

thrifty++
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Re: Discussing money matters

Post by thrifty++ »

Bankai wrote:
Mon Sep 25, 2017 2:17 pm
Last weeks conversation at work:
Someone: It's a pay day today! Hurray!
Me: Oh, is it?
Everyone: if you don't know when the pay day is, they're paying you too much!
I always know when pay day is. I get quite excited on a payday as I like to shift the money around and tally up my net worth. Ebeneezer Scrooge would be a fitting image for me and fits the season!

IlliniDave
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Re: Discussing money matters

Post by IlliniDave »

I keep it vague but I don't go around trying to downplay things. I'm of an age where my contemporaries are starting to talk/think about retiring, so those sorts of discussions come up naturally. I don't hide the fact that my goal is to retire early (by conventional standards, not ERE standards). Since it generally reduces to ratios (financial means to spending level primarily) and I tend to emphasize curbing the spending side of the equation to reduce the requirements on the financial means side, I think very few people would guess I've built up as much as I have. I certainly don't look "successful". My investing is pretty conventional/boring ("dumb money" as it is affectionately labeled here). So there isn't much about me to trigger any sort of ill will. I stay far, far away from any sort of one upsmanship, but I do try to be helpful when people have genuine questions. When people tell me I'm wrong or stupid or I "don't get it", I just smile and say, "Maybe so." I have no need to be right or be the best. I just want to meet my own goals.

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Seppia
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Re: Discussing money matters

Post by Seppia »

I would not talk money in specific terms, except with a very, very small group of people.
Those outside of HR and my boss (plus any people they leaked it to) who know how much I make are:
My parents, my wife, one of my two sisters, my two best fiends. Those are also people I know will not change their view of me because of this information.
My wife also knows my approximate (she's a natural saver but not great with numbers) net worth, but nobody else does.

Scott 2
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Re: Discussing money matters

Post by Scott 2 »

My wife, parents and best friend get full disclosure. Their money behaviors are very similar to mine. To some extent, we feed off of each other's frugality and financial discipline. It's helpful to share. Another close couple with similar incomes, who consumes more, but is very grounded, has an idea. They respect the financial path I have chosen and can enjoy frugal activities.

I think it is possible to value yourself on the job market without disclosing salary to coworkers. I see many possible downsides to opening that conversation. I do not participate. If someone's salary negotiation tactic is "Sallys gets X, so I should too!", I don't want to work with them.

I have always let my boss know I am in a strong financial position, without sharing specific numbers. I want them to understand I choose to work, and I could also choose not to. It evens the power dynamic.

Otherwise, I present as someone struggling to get by. It's a natural outcome of my frugal behaviors. I do not value the status of wealth, so I see no benefit to correcting the assumption. The one clue otherwise, might be that I will genuinely celebrate someone else's financial success.

Eureka
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Re: Discussing money matters

Post by Eureka »

Hmmm, I should probably learn from this and talk less about my savings/investments.

I care so little about money and since I am frugal enough, I always have had plenty of money for emergencies and adventures also long before I discovered ere and started working towards fi. Thus, I never thought about concealing my earnings or savings if anyone asked. But I recognize the point of the OP about friends who then might want to borrow.

I remember a good friend who 'ran out of money' and wanted to go home to Germany to visit a terminally sick father. We both lived in Japan at that time and, as two out of maybe five expats in that Tokyo ward, we had shared so many secrets for years and helped each other numerous of times. So of course I lent her money for flight tickets and a sum that would cover her living costs for a month in Germany.

And then I never saw her again.

The only thing I ever regretted was the loss of a friend. I never thought about the money she never paid back. I had more than plenty (and was not counting networth or saving for anything big). I kept writing her for years, (also that she should not worry about the money as I had enough), but she never replied back.

I am convinced that if I had not lent her that reletively big amount of money, I would still know her now 30 years later.

So I guess the staying that one should not mix money and friendship is absolutely valid in this case. And that there is little purpose of disclosing your affluence to even close friends who are on a different money track.

Riggerjack
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Re: Discussing money matters

Post by Riggerjack »

I make no secret of my ER plans, and answer questions as they come up. But usually, most people lose interest when they find out I am saving for retirement, rather than have the secret Bitcoin printer in the basement. They want a retirement scheme, not a retirement plan, if you see what I mean.

But, if they are still interested, I talk about the 4% rule, and MMM, and firecalc. From there, they can find out as much as they want, even find here.

I will say that sometimes, someone who has heard me talk about money will later get me aside later to pick my brain. this happened at my wife's family Christmas party. Her uncle and I got a chance to talk about money and careers and possibilities. I've been to his house at least once a year for more than a decade, and now he was ready for more.

People take time to come around to different ideas, particularly around lifestyle choices. As we age, we find the flaws in our previous choices, and look for better solutions. By talking about earlier retirement, I gave him something to chew on, and a resource to go to if he wants to know more.

I feel I owe that much. I don't need to convince anyone, I just need them to know my option exists, and that it could be their option. Beyond that, it's their choice, and not my concern.

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C40
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Re: Discussing money matters

Post by C40 »

I think that when discussing money with someone who is not good with theirs, one should do it in a way that educates them.

Let's call the friend STAN.... Stan makes about $35k per year and spends all of it or even more. If Stan asks you (us? me?) how much you make...


Compare these answers:

response A - "I make $100k/year" is not helpful for them.

response B - "well, you know I don't spend that much right? I spend about $15k per year. I get paid quite a bit more than that though..."

Response A will just make Stan compare his own smaller income with yours, and he will think "oh, they are lucky, if I made that much, I wouldn't have any of my money problems [when, in fact, he's wrong... he'd probably still spend all the money]. But response B frames the situation in a way that's better for Stan to relate to. He makes way more than $15k per year, so there's a potential lesson in the conversation - that Stan could obviously be saving over 50% of his income.

If response B is given, Stan's next comments may open up a very good conversation. (things like - how to spend less money, what is the point of saving, how the savings generates income, and so on....)

-------------

I like to discuss money and other taboo subjects. I do think folks like us need to be cautious about who we discuss money with and how we do it, in order for those conversations to be fun and useful rather than creating jealousy.

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Seppia
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Re: Discussing money matters

Post by Seppia »

i understand I may have misunderstood the question.
I do not discuss how much I make, but I am very vocal discussing "money management" with people I care about.
Usually this means stressing the importance of 1 saving as much as possible 2 investing in non-catastrophic ways and 3 pointing other people in MMM direction.
About 1 out of 20 ask me more questions after a few weeks, but that usually on the investing side
I know many naturally frugal people (most Italians born in Italy are, usually out of necessity) but so far nobody was "ready" for ere.

theanimal
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Re: Discussing money matters

Post by theanimal »

I've been pretty forthright about it and have had mixed results. My aha moment came from reading Your Money or Your Life. Excited that the possibility of retiring early was actually within reach, I shared the idea with my then roommates at college. As you could imagine, they were nowhere near as excited and had many doubts and criticisms about what I proposed.

I've shared ERE and MMM with my mom with no success. When I was living at home, I left the book out purposely in the common areas. She read the book and some of the articles I sent, but she said that she didn't want to ride a bike everywhere. :roll: She needles me anytime I head to a meetup with my weird internet friends :D .

My siblings were present for some of those conversations but otherwise I've just tried to preach money management to them. Most importantly avoiding student loans at all costs, as some are currently in school. One of my sisters paid no attention to my advice and will end up with nearly $100k in loans. I preached the hardest to my youngest brother and he will end up the best off with minimal loans.

Then again I've shared ERE with another friend who took to it well and according to Jacob holds the record for converting the most people to ERE in real life (2). He shared it with another mutual friend and his brother. We talk ERE often.

More recently I've been talking about the concepts with one of my best friends. She's hesitant about some things but otherwise receptive. I gifted her a copy of YMOYL to read over the holidays.

I don't say anything for most of my friends even though many are in poor financial states. I throw out something every once in a while to make them think though. Recently, a friend was talking about someone who was able to have multiple large houses and cars on a job that didn't appear to pay that much. I told him he's likely heavily in debt.

I haven't worked consistently for a little over a year now. I know that many people wonder about how I'm able to get by or think that I'm flat out broke. Usually the case is that I have much more money saved then they do. I don't make any effort to correct them.

A few years ago, ERE would be the first thing I recommended if I was talking to someone about personal finance. But I know that's not the case now. Most people are looking for a quick solution and aren't ready for what ERE has to offer. I know I wasn't. I was hoping for a lottery payout through gambling, stocks or the state. It took reading YMOYL first to be able to get on board with ERE. Even after reading it the first time I wondered what was being left out. I was still in the mindset of looking for a magical solution.

Farm_or
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Re: Discussing money matters

Post by Farm_or »

Politics, religion, and finance - tread carefully.

This was a very important reason that I joined this site years ago. There are so many lost souls! You can be completed engulfed by them. You will start to question yourself, surrounded by the insanity.

How do you project yourself? This is a concern, because the non-verbal cues can lead to harmful misunderstanding. My current attempt is to portray humble, mysterious- maybe a little weird? Being declared weird or flat crazy is acceptable to me from the ignorant. But now I have a teenager daughter to complicate matters...

There will arise occasions when you can share a message. But it must be timely! Infant steps like self discipline are unpopular. Unfortunately, that is the first step for most people.

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Sclass
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Re: Discussing money matters

Post by Sclass »

I can only add (I’ve posted many times in this sub forum how I ruined many relationships talking about my retirement plan) people here are too concerned with talking to people below them or should I say, less financially savvy than they themselves are.

You should find mentors and talk about money. And then talk a lot. I had several and they really made a huge difference in my bottom line.

Problem is they are about as rare as any other expert out there. Additionally they don’t get any richer schooling you. I’ve been lucky enough to find a few who just talked to me for entertainment value. There is something alluring about teaching that strokes the ego.

So to state the exception, you only get better if you play with people better than you.

If you find one who is willing to share, listen up and hang around, and talk. They’re rarer than people who don’t have $400 to cover an emergency expense.

EdithKeeler
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Re: Discussing money matters

Post by EdithKeeler »

I, like IlliniDave, am of an age where people around me are starting to talk about retirement. In fact, several coworkers are much closer to traditional retirement I’m perpetually surprised at how many of my coworkers don’t understand how our pension works or don’t know how much they have in their 401k. I never talk about amounts, but I do talk about how things work, etc. But several people just sort of shrug and I guess they think it will work out. And it may.

But what’s frustrating is that many of them bitch about their jobs. But when I ask if they’ve modeled the possibility of quitting, they haven’t. Just keep working and bitching. Oh well.

Stahlmann
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Re: Discussing money matters

Post by Stahlmann »

Sclass wrote:
Fri Dec 29, 2017 9:36 am
...last post....
Hmm.

How do you define mentor?
In what kind of "money field"? Investing?
I mean - What has been left after you discovered simple living idea?
In this case (high earnings+low spending) some ideas should flow naturally :P
(Sorry, you're on my "ERE-list" but my knowledge on your journey is not complete)
How have you found them?
What's in your personality that they flocked to you? I've got perspective of person who people don't like to talk to.

My bad opinion on them stems from being flooded with low quality "personal coaches" and books written like
"many steps why my method is the best-just do it-I've changed your life-buy my X product on Y for Z (now is sale!)-cheers!".

On the other hand I would consider older folks from my current work as mentors with great pleasure (willing to help, giving rod instead of fish, not so much dickish behaviour).

EDIT: Hmm. I think we could discuss this issue separately in new topic/PM.

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Sclass
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Re: Discussing money matters

Post by Sclass »

Stahlmann wrote:
Fri Dec 29, 2017 4:04 pm
Sclass wrote:
Fri Dec 29, 2017 9:36 am
...last post....
Hmm.

How do you define mentor?
In what kind of "money field"? Investing?
I mean - What has been left after you discovered simple living idea?

EDIT: Hmm. I think we could discuss this issue separately in new topic/PM.
Yes. I deleted too much of my post to keep things short. sorry.

Investing mentors. Guys with a track record of returns. There is another world beyond simple living. For what it is worth, the guys who mentored me looked like average Joes. Ford trucks. Polyester shirts. Cheap coffee. Millions in assets. Gained through systematic and focused investing styles.

Simple living is only one knob. Turning up the assets knob just shifts the balance of the living equation.

Old coworkers gawd no. Those guys were only good at drawing paychecks for longer than me. If anything they taught me how to remain poor with stability. Gasp.

I was going to tell the story of how I got schooled by a couple of people but it is too long. Basically I met two successful investors mostly by chance. What wasn't chance is they took an interest in me and answered my questions about getting rich...which was all I knew to ask back then. I'm very fortunate that they shared their knowledge with me when I didn't make them a dime. At that point in their lives they were probably looking for some satisfaction in seeing if I could replicate their success. Perhaps I'll one day get to that place.

I was just saying, usually talking to others about money is talking down to a bunch of less competent people and dealing with their cognitive dissonance. Especially coworkers and family. If you like teaching and it makes you feel good go for it. But rarely will this kind of talking make you richer and move your ERE goals along. The exceptions are when you talk to richer people who know how to make money with money or when you talk to poorer people who know where the lowest priced pinto beans and rice can be purchased in bulk. Both good things.

Yes, I know I'm contradicting myself. I was mentored by generous people. I'm just repeating much of what has been said here that talking money with most people is a waste of time and energy with additional unpleasant results.

Good luck.

Farm_or
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Re: Discussing money matters

Post by Farm_or »

Small world? I know SClass hates when I say that. My first "mentor" fit your description to a t. Ford trucks (with rusted out floor pans), polyester shirt (wore two at a time because seperated were too holey), and non-assumingly worth millions.

I really began taking closer notice when I saw the stock tickets on his kitchen table. I still remember the companies and the big numbers. Funny part is, I never had a one to one discussion with him. I just listened when he came around and observed his actions closely. And thus began my mining for local sagacity...

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