Many money taboos are designed to keep you poor

When I was a kid, I tried talking to my parents about money. I was told that I needed to focus on school and let the parents focus on the money.

I grew up in a moderately strict Chinese American family. We had rules but they weren't ridiculous. A focus on academics but not at the expense of everything else.

One strict thing was that as kids we didn't talk about money. It wasn't something we needed to worry about. (and I turned out fine!)

Many of our social taboos about money exist for social comfort at the cost of knowledge and education. Kids shouldn't have to worry about money but they should understand it. I wouldn't have a 5-year-old balance a checkbook or figure out how to pay for food, but a teenager should have some basic money skills.

I'd also argue that some social taboos about money specifically designed to keep you ignorant. Some exist to enrich others.

Let me explain.

Taboo 1: Talking About Salary

When I go to conferences with other entrepreneurs, we freely talk about how we earn money, roughly how much it is, what's working and what's not. We do this because we realize that shared knowledge will help each of us grow our business. The pie is enormous. We can all take a slice. Heck, we can take two or three and still have leftovers.

When you think about it, what our business earns is what we earn. When Pat Flynn shares that he earned nearly $1.7 million over the last 12 months, that's transparency on a scale that you'd never seen in a corporate office. Sure you can deduct expenses and taxes, but that's still money that pays his bills and feeds his kids.

When Bjork and Lindsay share their income report, you can deconstruct their business down to the ad unit. You know exactly what gets deposited into their bank account each month.

They share this information because the conventions are different.

In the corporate world, employers try to pay you as little as they deem necessary to keep you happy. If they pay you more than necessary, they've failed in their fiduciary responsibility. Remember, whoever decides your salary is not paying for it out of their pocket… but they do have a responsibility to the company to avoid overpaying you. It's not personal, it's business.

This means that the person next to you, doing the same job, probably makes a different salary for the same job. If you two were to talk, one of you would be unhappy and demand a raise. That would be bad for your boss.

That's why talking about salary is frowned upon. (heck, President Obama even signed an executive order protecting employees of federal contractors so they could discuss pay — see the Office of Federal Contract Compliance Programs Pay Transparency Fact Sheet)

The more employees know the more employers have to pay. They need you to remain in the dark.

FWIW, rarely does someone next to you do exactly the same job you do. Even two people at separate registers may earn different amounts for reasons outside of day to day work. One may be more senior, may have more unseen responsibilities, etc. For the purposes of this argument, I think that simplification is fair.

Taboo 2: How Much You're Paying

What's another money subject people don't talk about? How much people pay for things — especially fees for services.

We recently had a 310′ long section of our driveway paved. On several occasions, I got the “if you don't mind my asking, how much was it?” question ($6500). I don't know why I would mind being asked other than it's a taboo to ask how much people pay for things.

Talk to someone who is over the age of 50 and chances are they have a “financial guy.” It's usually a friend of a friend, a guy they know through someone else, or someone who has worked with a family member before.

If that person is investing money with their financial guy, they are almost certainly overpaying. Vanguard mutual funds charge you a fraction of a percent in fees — Vanguard Total Stock Market ETF has a 0.05% expense ratio — that's $5 on every $10,000. Wealthfront will manage $15,000 for free, then it's 0.25%; these are on top of the, on average, 0.12% fees charged by the underlying ETFs they put you in.

All investment advisors will charge you way more than 0.25% annually. They cannot manage a $100,000 and only get paid $250 – they wouldn't be able to put food on the table.

But they've feasted for decades because no one talked about it. Vanguard got flak early on because they were too cheap. Then word of mouth spread about how index funds were fine, how actively managed funds sucked, and now look at where we are. Billions upon billions of dollars are in index funds. That's millions upon millions of advisory fees not being earned.

There are laws that prevent companies from doing this in the reverse. If companies got together and agreed not to compete, they could be investigated for price-fixing! That's how important communication is.

Taboo 3: Talking About Debt

Debt is debt. It's how much you owe. But it's also so much more…

People in debt are bad right? Except for mortgages. And car loans, because you need a car to get to work. And student loans… because, well, education is good. And debt related to medical expense. Because debt is better than dead.

Listen — we all have debt. For some, it's high-interest credit card debt. For others, it's a lower interest rate mortgage or a student loan. But it's still debt.

Bottom line: You owe someone else money.

When talking about debt is taboo, it keeps people more in debt. Alcoholics Anonymous works because of the support system.

If you're able to share your debts with your friends and family, who are your support system, they can help. At best, they can keep you accountable and check-in on you. At worst, you get to take this thing that you feel embarrassed about (if you didn't feel that way, it wouldn't be taboo to you!) and put it out in the open. You take its power away and now you can fight it.

Heck, if nothing else, they'll stop asking you to do expensive things so your debts don't get worse.

The only people who don't want you to talk about it are the folks collecting interest on your debt. They prefer it if you keep paying.

What To Do About It

Here's the beautiful thing — it's becoming less and less taboo to talk about this stuff. That's great.

It starts with using and contributing to places that collect this type of information – where you can discuss subjects like salaries and benefits openly – but ultimately it comes down to individuals openly discussing it with their friends.

The first time I talked about money with someone it was a fellow blogger. It felt strange at first but over time, as we mutually benefited from sharing strategies and tactics, the benefits were becoming clearer and more tangible. We would both benefit significantly from our respective blogs and part of success could be attributed to our conversations.

Start with your financial peer group, as it'll lessen the social and emotional awkwardness, but start communicating these important topics. Knowledge is power.

Oh, I Get Why They Exist…

I'm not a fool, I know that many of these taboos exist because they can lead to uncomfortable conversations and feelings.

Salary can be a deeply emotional subject because it's not unreasonable to tie our self-worth to the work we do. Salary is the only quantifiable aspect of our jobs – it's hard to measure happiness, fulfillment, growth, and other aspects of why people work. Learning that someone earns more than you can sting, especially if much of your self-image is tied to your salary.

It can engender feelings of resentment, envy, and other negative emotions that outweigh the value of sharing knowledge. While I recognize it's a little crab mentality (in any other situation, why would I feel a certain way about you if someone else paid you more!?), it is the world we live in. That's why it's important to tread lightly (but not avoid it entirely!).

Have you become more open about your finances? How have you benefited?

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About Jim Wang

Jim Wang is a forty-something father of four who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools,, everything I use) is Personal Capital, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

He is also diversifying his investment portfolio by adding a little bit of real estate. But not rental homes, because he doesn't want a second job, it's diversified small investments in a few commercial properties and farms in Illinois, Louisiana, and California through AcreTrader.

Recently, he's invested in a few pieces of art on Masterworks too.

>> Read more articles by Jim

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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  1. Leo T. Ly says

    I am quite open-minded about money and will share with others and I don’t have a problem when people ask me how much I earn. I truly believe in the benefits of sharing. Thank you for a great post and sharing your thoughts Jim.

  2. Andy Hill says

    Great article Jim! I agree that these taboos are old school and need to go away. Like everything in life, with increased openness and communication barriers are broken down and opportunity abounds.

    • Jim Wang says

      I also think that separating money from emotion is an important step. All too often people equate net worth with self worth and we need to work hard to separate the two.

  3. Vic @ Dad is Cheap says

    Love this post Jim!

    I totally agree that if we were all more open about money, I think it would help EVERYONE out. Negotiating starting salaries at new jobs can be a challenge because despite the research online, it can still be hard to find a good apples to apples comparisons for salaries.

    I try to do my part to talk money with people, but I find that most people are set in their ways. Even when someone is telling me about a horrible financial decision that they’re doing that they think is awesome, I often bite my tongue because people don’t really want to hear it.

    • Jim Wang says

      So you can never offer advice unless people ask you for it, and usually you need to ask a few questions to see how serious they are in the first place. Unsolicited advice is actually bad because the receiver usually doesn’t listen (they didn’t even ask for it!) and the giver ends up looking like a jerk. Just let people be and if they do ask for advice, find out how serious they are by what they’ve been able to do.

      If they’ve done nothing, they’re not serious. Give them something simple to do but don’t devote much time.

      If they’ve done a lot, to the point you recognize they’re serious, those are the folks to help.

  4. Doug @ The-Military-Guide says

    This is why I enjoy financial conferences so much– they break down money taboos. (Example: Noah Kagan’s keynote speech at FinCon16.) We never had this conversation with my parents, even after I was grown and on my own. I can’t have this conversation with my neighbors or even with most of my relatives. Not today, anyway. Maybe someday.

    Even in Hawaii’s culture, where many residents are keenly focused on our finances, discussing the skills & techniques can be interpreted as bragging. As you’ve mentioned before, Jim, we have to choose the right audience.

    Yet it’s an important discussion, because everyone can benefit from learning how to follow our footsteps… and how to avoid our mistakes.

    • Jim Wang says

      At Fincon there’s definitely a much lower level of social anxiety around money, which is a good thing. I think we’re all so used to writing publicly about money that talking about it, especially over a few beers/wine/whatever, seems nearly trivial. Plus, when you put it on something as permanent as a blog, a conversation seems so ethereal.

      It’s unfortunate about the “interpreted as bragging,” I wonder what it will take to change that. I think that when there is a different in power dynamic, mixed in with people’s general insecurities about themselves, you get these situations where things are seen more as competition (bragging) than cooperation. How do you beat that other than to find the right audience? I wish I knew.

  5. Selene says

    Thanks for posting this on Pinterest! Otherwise, I may not have seen it. I also usually don’t read too many financial blogs out there because (in an ironic twist), there are a lot of 20 somethings trying to earn ad $$, without knowing much about the topic and are limited by their experience. But this one was different, for reasons I cant identify, I followed the link to the article and read the whole thing! Something else I dont do very often! So, thanks Jim for an honest and insightful article. If more people communicated about money and more, we’d be in a better place as a country and earth!

  6. Latoya | Femme Frugality says

    I definitely have no problem discussing these things now that I’m just a tad bit smarter with money. My friends and I regularly discuss these types of things and how they apply to our goals. I would say that each of us are doing better than most too because we benefit from this type of camaraderie.

  7. Sylvetta Clark says

    Hello Jim,

    I have to say, I practiced all these taboos religiously! It allowed me to hide my shame and pretend that I had things all together. Now, at 34, I’m starting to be more honest with myself about how I got in this situation and talking about it with people that have experienced it has helped me so much. Every month when I pay a small debt off on my credit report, I feel so good! Talking with people on your blog and to you has forced me to confront those feelings of shame. Now I’m talking to my partner about their debt and how we can resolve it or get into the same financial habits before we combine our households. As always, thank you!!!

    • Jim Wang says

      What a great transition story — it’s far better to be in control rather than look like you’re in control, right? 🙂

  8. Mustard Seed Money says

    I found when I started to freely share information that I was able to start opening up my horizons and aim higher than I previously was.

    Previously I was afraid to share information thinking that I would make people upset but in reality I was afraid of my own insecurities.

    Now that I opened up I’ve been able to receive some investing tips and share information myself and have seen my investments and savings substantially increase.

    It’s amazing how sharing information benefits everyone involved.

    • Jim Wang says

      That’s an excellent point – often times we’re afraid to share because of us even when we say it’s because of others. 🙂

  9. Revanche @ A Gai Shan Life says

    These taboos are why I’ve spent so many years blogging about money instead of talking about it!

    Considering how badly my family continues to manage their money, and how much I’ve learned from the PF blogging world, this was a good decision. PiC and I are stable and building a solid financial foundation for our family, this was an uphill battle every step of the way because of my family.

    If they knew what my salary was, I have no doubt that I would have lost that battle years ago. Sharing debt is somewhat taboo, but much less a bad idea than sharing assets. For that reason, in that case, the taboo works in my favor.

    With a select few friends, sharing salary has been amazing motivation. We push each other, share negotiation tactics and strategies, and accomplished a heck of a lot more than we would have on our own.

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