One of my pet peeves is people telling me how much money they earn and flaunting their wealth to strangers. I am not talking about the cars they drive or the size of their homes, but rather about revealing their income without any reason. Usually it is because they want to let me know how successful and important they are. This does not impress me. In fact it is a turn off. I am only interested in their character and what they are doing to help others succeed.
A recurring theme in The Millionaire Next Door, is discretion about one's wealth. Don't be too flashy, live conservatively and have a modest home. However, it is also important to enjoy your money by indulging in things that make you happy.
Here are some reasons why people reveal their income:
Is it Generational? : Maybe it’s a generational thing, but those who enjoy talking about how much money they make are generally younger e.g. under 30. Perhaps thanks to the internet, it’s more acceptable nowadays to blast over Twitter and Facebook that it’s your birthday or a picture of your latest car. There have been several studies showing that Facebook is making people miserable because suddenly they have to compete with hundreds of “virtual Joneses” instead of a couple.
Lower self-esteem. The people who are most confident have no need to tell anybody how much they make. They don’t need to buy a fancy car to make themselves feel better. They don’t need to incessantly highlight they went to X school and have Y things because their work and success speaks for themselves. Perhaps they fell behind in life early on and need to pound their income drum to prove to the world they are somebody. How many of us have imagined returning to our high school reunion as great successes to prove our detractors wrong? By telling others how much more we make than the average or median, we feel better about ourselves.
The desire for adoration. Adoration and self-esteem are tightly related. Have you ever met someone who was in good shape and keeps telling others she needs to lose weight? The reason why she brings up her weight is so that her friends can tell her she doesn’t need to lose weight! Everybody wants to feel pretty, respected, admired, and adored. It’s just one of our many traits as humans.
Lack of perspective.There’s a lot of suffering out there, but it’s hard to know if you’ve never traveled around the country or around the world. It’s like Prince Siddhartha Gautama believing that the whole world lived in privilege like he did within the walls of his palace. At the age of 29, Siddhartha left his palace for the first time to meet his subjects despite his father’s efforts to hide him from the sick, aged and suffering. The outside world moved Siddhartha so much that he strove to overcome ageing, sickness, and death by shunning luxuries and living the life of an ascetic. Eventually, he discovered the “Middle Way” and after 49 days of meditation under a Bodhi Tree, tradition says Siddhartha finally achieved enlightenment.
New wealth. If you go from not having much money to suddenly making a lot of money, it’s hard not to get excited. An easy example is going from a poor student to making $100,000 a year as a first year analyst at an investment bank. Now imagine if you won the lottery. Although you probably should not tell everybody, you would be hard pressed not tell all your friends and relatives about your good fortune. You buy a new house you don’t need when you can’t even fill the one you have. Instead of figuring out a way to make your new found wealth work for you, you blow it on material things that provide only momentary reward. It’s immaturity with money that gets people in trouble.
In conclusion, unless your occupation is to teach people how to make money by showing them how much money you make, I advise caution when revealing income. It’s much better to keep things low key, downplay what you’ve got, and be the underdog to get ahead.