I recently saw a story about a guy who asked complete strangers the question, “How much money do you make?” The article was an entertaining read because many of the encounters he had with people were quite comical. When asking a man he was sitting next to in an airport the question, the man got up and moved, even going as far as reporting his behavior to an airline employee.
He asked a woman the question while they were both waiting on a cab. She proceeded to lecture him on proper etiquette and when he threw out a number he estimated her annual income to be, she got even more upset and told him, while getting into the cab, that her income was much, much more than his estimate. Even though I was entertained by the story, I can’t say I was really surprised by the reactions the guy got from the people he approached. In our society, at least in the west, there are very few subjects more taboo that discussing how much money you make. Don’t believe me? Go ask the next five people you come in contact with the question and see what the response is. This is true not only strangers, but friends and family as well. A friend or even a co-worker may be willing to tell you the most intimate details about his personal life, but would be offended at the simple question of what he makes a year.
Granted, not all societies are this way. Many eastern societies wouldn’t think this to be a rude question. I remember reading about a game show in the Philippines who greeted each guest with the questions, “What do you do and how much do you make?” Even my own personal experiences in China would lead me to believe that the question wouldn’t be out of the norm in Chinese culture. But in the West we perceive the topic of money, or at least asking others how much they make, as disrespectful, nosey, rude, tacky or simply impolite.
Many would argue that how much money they make is a personal matter and not one to be discussed openly. So what about other personal topics such as religion, medical conditions, one’s love life or your co-worker’s partying lifestyle? Aren’t these personal issues? Of course they are. But nevertheless, I know about them. Of the colleagues that I see regularly, whether they are teachers I collaborate with or simply eat lunch with, I know which of them believe in God, are agnostic or atheist and with many, the path that took them to their current belief system. With other colleagues, that I rarely have contact with, I know about medical conditions they are struggling with and are kept abreast of their condition’s remission or progression. There are other personal details of my colleague’s lives that I am made painfully aware of, whether I want to be or not, such as the love life of a coworker, with its drama or lack thereof, or the late nights spent bar hopping and clubbing (mostly by those without children). But asking someone how much money she makes – that is rude.
For his troubles, the author of the story and creator of the experiment found out a few things. One was that the less someone made the more likely he was to answer the question. Perhaps this was because one way of voicing his discontent was letting someone know how underpaid he is. Two, people on the high end of the income scale, which the author had to conclude by the type of watch they wore or the car they drove, were very unlikely to tell what they made. Why? Was it because they genuinely thought it was rude to ask? Was it because they thought they were overpaid? Why did they not want this man to know? The gentleman at the airport was wearing a Rolex. Does someone who wears a high-end, recognizable watch such as a Rolex seriously not want others to know what he makes? Maybe the man was worried that the author would ask him for money. This seems like the best excuse for not sharing your income level with family and friends, but with a stranger? He could’ve simply said no to any solicitation from the author without fear of guilt or reprisal, unlike with family or friends.
It seems to me that in the West, and more specifically the U.S., money management is not an area that most people have mastered. Simply setting a budget and sticking to it seems a task that many will never accomplish. Is our lack of fiscal expertise rooted in the fact that most people don’t feel comfortable talking about money? And not just how much money we make, but how much we are investing, what we are putting away for college, what interest rate we got on our mortgage or what will we spend on vacation.
If education is the key to success, then why is financial education not an option? I remember as a student going to high school in the 1980’s, there were classes that were less academic in nature and more practical skills, classes like Wood Shop, Auto Shop and Home Economics. I was never interested in these classes, but many students were. It wasn’t just the academic underperformer who gravitated Auto Shop; it was the student who was genuinely interested in working with his hands and learning automotive technology. As the U.S. strives to become more high-tech and ensure a college education for all, classes such as Auto Shop and Home Economics have been replaced by courses intended to help students manage their first year of college successfully. Now, before you think I am trying to relive the “good ole days” of my high school, think again. For one, those days weren’t all that good to begin with and two, I never took a Shop Class and have never been interested in knowing anything about an automobile other than how to pop the hood for the mechanic.
My father, on the other hand, was blessed with mechanical know how. As a matter of fact, growing up I never saw a repairman in my house. Not one, ever. My dad, along with my pitiful and uninvolved assistance maintained and fixed any automobile we ever owned, fixed a plethora of appliance ranging from toasters to dishwashers, put in new air conditioning units and hot water heaters and even roofed the house and built on an additional room. One time while we, or he, was changing the oil in our car, I was visibly uninterested and doing little to hide the fact. At one point I remember him saying, “If you don’t learn how to do this, you are going to have to pay someone to do it for you.” I remember thinking, but would dare not say, GOOD! I can’t wait to pay someone to do something I have no interest in doing on my Saturday afternoon.
And that was the difference; my dad did enjoy doing this stuff. It’s even what he did for a living. My dad could no more sit at a desk and write a blogpost than I could spend an afternoon with my head under a car hood. That’s the point about Shop and Home Economics. As we have moved out of the manufacturing sector into the service sector, many of the disciplines people find of interest are not valued or needed in the corporate world.
So what is the solution? I don’t know if there is one and that is not the point. The point is that personal finance as an optional course of study for young people has gone the fate of Shop Class and Home Economics. And the result is that many people cannot change their oil in their car or manage their finances effectively. For the car this is not that big of a deal as most of us know that our oil needs to be changed regularly even if we don’t know why or how. Furthermore, the majority of us will find the time to stop into the Jiffy Lube for the quick, reasonably priced service. But how many will do the same by paying service to their finances? Hiring the services of a financial advisor is neither quick nor reasonably priced. So where the Honda goes on to live a long healthy life, the driver of the Honda is, many times, in a financial tailspin driving on fumes. When we couple this lack of education in financial matters with the forbidden topic of discussing one’s income, it is no wonder why many people make the poor financial decisions they do. If it were only the discussion of income that was forbidden, that would be one thing, but this lack of transparency regarding finances also bleeds into discussion about other financial matters such as investments, budgets or college funds.
For the sake of full disclosure and to practice what I preach, I am happy to tell you what I make. At the present, my annual salary is $55,215. This is not the most I have ever made in a year, but that doesn’t matter. What I have found out is that it’s not so much what you make, but what you save that matters. When it comes to retirement planning and savings, the big picture is consumption not income. I could make twice or three times my current salary and still save nothing. Or I could try to consume less and invest 50% of my income (which is my goal). Also, I have found that income level has zero effect on my happiness. I have held jobs making half of what I make now and felt just as involved, effective and content. Likewise, I left a position that paid 40% more than my current salary because it was so unfulfilling.
My goal is not to make more and consume more, my goal is to continually make a salary, whether it is $30K, $40K, or $70K, save as much as possible and reach a level of financial independence that will enable me to truly be free. So tell me, what do you make?