Money Matters: Why All the Secrecy?

by Nora Dunn on 17 November 2007 10 comments
Photo: Vykrasivy

As I alluded to in another article, I am amazed at how people will sit around the dinner table and openly share intimate details of their sex lives, medications, and even psychotherapy before they'll divulge their income.

Why all the secrecy around financial matters? What key to our inner selves is hidden in our balance sheets?

 

Interestingly enough, at other dinner tables (usually the dinner tables of the affluent), I have seen quite an open approach to money. Not only are incomes, tax-saving techniques, and assets openly shared, but there is an air of helpfulness in the tone of the conversation. Everybody wants to share their strategies with others, in order to both teach and learn new techniques.

I am reminded of the book Rich Dad Poor Dad, where the author Robert Kiyosaki refers to his two fathers: His real dad (the poor one), and his adoptive dad (the rich one), who teaches him all there is to know about becoming and staying rich.

One of the themes explored in the book is how affluent people approach their money matters, and it is irrefutably stated that if you want to be rich you must keep company with rich people. Not only is this because they have a lot to teach somebody who aspires to grow financially, but I believe it is also because of a positive attitude and energy towards money in general.

 

ARTICLE CONTINUES BELOW

There are also patterns I've detected among people whose financial situations aren't what they wish; I've noticed a brand of distain towards money in general (and those with money). I have to wonder why this is, and if it ties into the desire to keep finances private. People who don't have money (and aren't happy about it) not only regard those with money very negatively, but some go so far as to see money itself as being evil. “You can't want money - it will make you a bad person. You can't have money - it comes at the expense of morals or general empathy towards others”.

I wonder if the people who feel this way think that people with money are the ones living in the big fancy houses driving the luxury cars and wearing the latest fashion. Do these people feel the same way towards the Millionaires Next Door, who are more characteristically the world's affluent, but don't flaunt it? Is that as disgusting to people who see money as being evil?

 

Of course I am generalizing in the extreme. Not all people without money feel that the rich are immoral or that money is the root of all evil. I am just noting patterns I have observed through my years in the financial industry, and extensive reading I’ve done. Both friends and clients have typically fallen into one camp or another.

 

And ultimately, rich is a state of mind. I have met poor people who think they are rich and rich people who think they are poor. Stay tuned for a follow-up post on a different way of defining Wealth altogether.

 

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Philip Brewer's picture

There is one clear beneficiary to the practice of keeping incomes secret, and that's bosses. If they can get all their employees to keep their wages secret, they have a pretty good shot at paying some employees much less than they're worth without losing them.

Most workers know where they stand in terms of productivity, and will accept being paid less than more productive workers. But let an employee find out that less productive workers are getting paid more, and you'll have a very unhappy employee.

Only when workers can be counted on to keep their incomes secret, can bosses hope to give lousy raises and still retain valuable employees. If they can pull that off, then it gives them some extra money to either raise profits or pay out to retain employees who, although less valuable, are worth keeping if a higher wage will do the job.

Guest's picture

My friend and I were talking about the exact same topic yesterday. Basically he hit it on the nail when he said, "if we aren't open about money, the rich people win". What he means is that the rich people know how to make money and if they don't share then others can't make money. Also, the rich are in control of the banks and institutions that govern money in this country, and if people never learn about how these powerful institutions work then they will never understand what controls their lives.

Guest's picture
Lee

Its interesting that you talk abt money disclosure. I'm Asian and work in Singapore, its quite different here. Here its not that uncommon for peers and colleagues in the same company to know what each other make.

When I joined a US MNC, during the orientation talk the HR director (an American) asked me not to disclose my salary to my colleagues and he said he's astounded that pple do that here. Of course nobody listened to him and we all have a gauge of what's the salary range. One guy even left his opened payslip on his desk on purpose because he was unhappy about his pay. It was his last day at work and he wanted to make a point.

I'm not condoning his behavior but I personally find disclosure healthy. Why hide? It gives the employer more leverage and more opportunity to screw you over.

Guest's picture
martha in mobile

One of my ex-husbands told me that poor people and rich people talk about money, but the middle class avoid it; my family certainly always kept things secret. We were raised very frugally and when I applied for financial aid for college, I was laughed out of the office when my parents' score came back.

When it was time to talk with my elderly mother about finances, I took a leap of faith and told her my net worth. She promptly told me hers, which makes life so much easier than having to guess whether my folks would have enough to see them through their medical/lifestyle challenges.

Guest's picture
Denise

I'm always surprised when fellow music teachers seem PROUD of how little they make. Becoming a skilled music teacher requires at least as much focused study, experience, and interning as becoming a successful psychiatrist or any other professional. I think that music teachers need to focus on strategies for making it a more profitable profession, not measure their dedication by their poor prospects for retirement and their inability to have any luxuries.

Guest's picture

You've raised a great point about how, in too many situations, people are dysfunctional in their communication about money. Discussions within families about finances are very important to providing the necessary skills to manage and grow wealth. If that discussion does not occur a sense of the topic being taboo because something is wrong. The important skills to be effective and productive can not be learned unless a forum for learning exists. Openness is an important and necessary ingredient

Our firm often facilitate meetings with multiple generations of a family to start the discussion that has not yet happened. The outcomes of these meetings is a sense of relief that the topic is finally out in the open. A greater sense of closeness and openness with each other about money and other issues is an important outcome as well. Generally this was a subject that no one brought up and the emotional baggage was never dealt with until the meeting. Now they can discuss issues and understand more fully the reasons decisions have and will be made.

Of course, not everyone is on a "need to know basis" with finances. Let's face it some who are in our circles of friends may not be able to handle it and they may view those discussions are in effect "bragging" etc. Also, too much openness can lead to others taking advantage in a variety of ways. Being safe and how to be safe is also an important skill set to teach in a family situation.

Guest's picture

Nora,

Great points and post.

Being comfortable about our finances. much like the secret to life, lies in knowing in our minds, hearts, and souls that we have enough today. It's a matter of addressing our fears and finding contentment, peace of mind, and safety.

David

Guest's picture
Marcie

I don't share how much money our family has because I'm tired of people asking me for money and I don't want to give people who ask more leverage.

Guest's picture

I think people simply don't want to be judged based on what they do or don't have or earn. It's unfortunate but that does happen. I'd love to be more open with people I know personally about money, but I fear they'd talk about my decisions behind my back, and that people will draw conclusions about my income or debt if they know too many specifics. I speak in generalizations when I talk about money, unless I'm on my blog. But if I had rich friends, I'd love to talk with them, learn from them, and pick their brains.

Nora Dunn's picture
Nora Dunn

Thank you all for the comments! Some great points have been brought up. Just a few responses:

Denise: Both my parents are musicians! And although they never bragged about their incomes or lack thereof, I can attest to seeing different strategies of making money within the same profession. Luckily, both of them are good entrepreneurs and have essentially stayed ahead of the income curve in their field. I wonder if those who are inclined towards the arts sometimes lack the oh so important entrepreneurial skills to maximize their incomes...

Bob: One of the most rewarding parts (and a personal mission of mine) when I worked as a financial planner was just that - getting multiple generations to communicate about their finances and redefine their relationships with money and ultimately each other. I am so glad to hear that somebody else is taking that approach too. 

Sistah Ant: You also bring up a great point about being judged. If only the world wasn't like that...