There is so much baggage weighing down our money conversations. Taboos and complicated feelings make talking about money extremely difficult, even though it is important. There is shame, spite, and many strong opinions where money is concerned. The way we spend our money is a reflection of the way we want to live our lives. Everyone has their own opinion on how best to live (including how others should live) and likewise how money should be managed.
There are so many reasons to not share numbers. Many people feel shame around their debt, while others feel shame around their inheritances. We are unhappy if we do not have enough and uncomfortable if we have more than enough. I started exploring the reasons to share my own net worth and weighed them against the reasons not to share.
Reasons not to share
I may render myself unrelatable
The average net worth for a 25-year-old is negative: -$23,704. Student loan debt terrorizes millennials, but I am fortunate in many ways: a high earner, no debt, and free from hardships that hold many others back. I realize that not everyone is in the same position I am in, but hopefully there is still useful information to glean from my story.
Feeding the comparison beast
Sharing net worth might be discouraging rather than encouraging, a new type of frugal “Joneses” to keep up with. OurNextLife, another blog about financial independence, wrote about this comparison beast in their post about why they don’t share numbers. Comparison is the thief of joy, and why rob readers of joy?
Money is like politics
Everyone has their own opinions on how it should be managed, shared, spent, earned, etc. I am not perfect and have made flawed money decisions in the past. By sharing my net worth, am I also inviting others’ judgments about past decisions? What about future decisions? Will I have to endure the mantra of “you can afford it!” until my ears bleed?
This blog is not 100% anonymous
Some people I know in real life know about this blog, and it is really uncomfortable to know that they will now have personal details that used to be guarded. However, they are all friends and family I trust, so I hope that this won’t affect my relationships.
There is also the issue many financial bloggers are nervous about– career ramifications. Some tell stories of being passed over for raises and promotions or being targeted in a layoff because they are known to be well-off and so are able to weather it better. That would be awful, but I hope that while we continue to have money conversations, decisions will be made on a performance basis and not on social whims.
Being a target for fraud is also a concern. Should a man flaunt his wealth on the streets, he is more likely to be robbed while he sleeps.
“Now, I don’t share my current income online because the internet is full of people trying to steal shit: my identity, my money, my self esteem. There is a line to walk between transparency and privacy.” – Kara from BravelyGo
Kara makes a great point, and I applaud her for sharing the numbers from her past as a guide for others in financially tough situations. To combat fraud it is important to follow best practices, ensure the security of accounts, and be on the look-out for suspicious activity.
This might come across as one big humblebrag
This one pretty much speaks for itself. I hope to share the entire story without it coming across like I just want to brag about this number. In fact, I do not really want to share at all, except for the following reasons.
Reasons to share
Open dialogue, transparency, and honesty
The more people share, the more we can untwist fraught feelings. We can have conversations with context. Numbers help to illuminate the overall financial picture. If I want others to share, it would be hypocritical for me not to share!
Attempting to protect other peoples’ feelings by obscuring the truth is a discredit to other people. I would personally prefer to know the truth of a situation, even if it hurts or makes me feel bad. The classic example is riddled throughout our entertainment: the sitcom where critical information is withheld and characters make decisions without all the facts. It is like a friend who lies to you about their opinion of your bright red, shiny, new boots when you ask for their opinion. I don’t think you have to be a jerk, but err on the side of transparency and honesty and I think we will all be better off.
“Net worth does not equal self-worth.”
In their book Your Money or Your Life, Vicki Robin and Joe Dominguez remind readers that you are not defined by your number. Financial situations are fluid. There are stages, and we are all in different stages at different ages. I am sharing my net worth to be a tool, a “GPS coordinate on a financial map,” as Robin and Dominguez write, not as something that ought to reflect my (or your) value as a person.
Time to Reveal
I had a lot to sort out before I felt ready to share my net worth. As you just read, I still have some mixed feelings about it. However, I write about money, and I am writing about my progress to financial freedom, and this is where I am now in my journey.
For simplicity, my net worth reported here only includes what I have in bank accounts. I do not include assets I own and could sell (though I don’t own a car or a home so there is not much to sell).
I am 25 and I have a net worth of a little over $200,000.
How Did I Get Here
Let’s talk privilege. There are many people who do not have the same opportunities I have based purely on factors outside of our control: where we are born, race, gender, sexual orientation, etc. There were systems in the background helping me to succeed in school and financially. Recognizing this, I will share the actionable things I did to start saving and also try to acknowledge where I benefitted from privilege.
- I enrolled in a babysitting course as soon as possible, pocketing around $7 per hour at age 13. Since I did not have to contribute to my family financially, it could all go straight into my bank account. By the end of high school, my rates climbed to $12/hour.
- I did not have an allowance, but birthday and holiday money were socked away the second I received it.
- At 14 I applied for a competitive summer job at the local golf course. I wrote my first resume, shook with nerves in my first interview, and filled out my very first W-4. I made $6.85 an hour.
- I had around $6,000 saved up by the time I was in my teens. I did not share that fact with anyone except my little sister. I felt like I had to guard my money by pretending it didn’t exist— even to myself.
I knew my parents could help with college, but we never talked numbers, so I did not know how much they could help. For all I knew, they could help for one year and then I would be all on my own, so I approached it as if they were not helping me at all.
I needed scholarships or a full-ride to go out of state, which I desperately wanted. I applied for 11 schools, wrote at least 15 essays, took 7 AP classes, studied relentlessly for the ACT and SAT. However, in the end I went to a school in-state because it was the most affordable option. Though at the time this seemed devastating to me, I see now it was a pretty fiscally responsible choice.
- Going in-state meant my parents could afford to cover the entire cost of my education. No student loan debt to pay off is a HUGE privilege.
- They gifted me what was left over in my college fund. Thanks to the hard work and generosity of my parents, this amounted to a $20k headstart.
- By the time I graduated I had personally saved up approximately $20k from working during school as a research assistant and from summer internships.
This is where the hard work in University starts paying off. There is no denying that a high salary helped me save like crazy. Does this have to be your path to financial independence? No! However, a high income will undeniably speed up my progress.
Engineering as a Career
I pursued mechanical engineering for the same reason I stashed money instead of spending it: I wanted to give my future-self options. Though I enjoyed English more and almost effortlessly aced my writing assignments, I chose to struggle through long nights in the engineering building instead. I decided passion could come after financial safety had been established. The hard work paid off– my first engineering internship paid me $32/hour.
Being Willing to Change Industries
I kept myself open to new opportunities. I graduated with a degree in mechanical engineering, but when I searched for jobs in Portland, Oregon, the best opportunities were mostly software related. I applied anyway. Some baffled friends questioned why I would even attempt to send resumes to a job without the right degree. I kept at it and landed a Software Engineer role, working to teach myself skills on the job. My starting salary was $65,000 per year.
Early Career Development
I worked hard at my first ‘real job’. I was promoted after 8 months for delivering a project that was projected to save the company millions of dollars. I came prepared to meetings with my manager with set goals and achievements. I spoke at community events and helped organize workshops. I worked at the first job for 3 years before I started to feel like I hit a learning plateau and began looking for a new job. I read up on career development and used those skills to change jobs and double my salary.
Avoiding Lifestyle Inflation
A common pitfall to new grads is that the money coming in is immediately spent on new luxuries and an upgraded lifestyle. The first few years I lived with roommates and generally kept living like I did in college. Currently, I spend ~$23,000 a year and the rest goes into savings.
Net Worth Tracking
I started tracking my money just over a year ago. Not including retirement accounts or the $20k from my parents, I had $78,000 saved at 24 years old. I was living with roommates in the city on an engineering salary and kept a high savings rate. For more information about my money management, check out My Money Map – A Complete Financial Breakdown
Over the previous year, I have saved $87,000, which is higher than my entire salary last year. This is primarily thanks to the recent job change, resulting in a jump in pay (which you can see starts about halfway in the graph when the lines get a bit jumpier), a sign-on bonus. The market has been on a bull run, so everything I saved has been growing in the market for the last few years.
- There are lots of reasons not to share net worth, but for me transparency and the hope that concrete numbers will help others is worth it.
- My progress is a result of saving early and earning early.
- My accumulated savings grew due to steadily putting money away. None of it is from a bet on bitcoin or a winning the lottery.
- In times of uncertainty, make choices to set your future-self up for success. I had no idea what I wanted to be or to do, so I chose engineering to get my footing.
What about you?
Have you calculated your net worth? Would you share it with others? What are your thoughts about money transparency?