Comment by markc | Hacker News Reader

Comment by markc | Hacker News Reader

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I'm in favor of this sort of disclosure in principle, but I have a (perhaps uncommon) problem with it.

I don't want to disclose my income because my kids are unlikely to ever earn what I do - and I don't want them ever to feel bad about it, and I don't think the budgeting aspect would be very useful/instructive given that it's "not normal".

We have lived far below our means, and I'm a known cheapskate. While my kids know we're "comfortable" the frugality seems to have rubbed off. They're savers (agonizing over substantial purchases, delaying gratification) and when they earn wages or get monetary gifts it goes in the bank rather than into clothes/gadgets/cars. I'm proud of that. They recoiled at my hints that they might consider a college major that would lead to a decent wage, claiming that they don't care about status buying and owning stuff. I hope it lasts beyond youthful idealism.

So here's the thing. If I show them my salary, it's likely 3X to 4X what they'll ever earn (based on median wages for college grads) so I can't show them "reasonable". I can show them some sort of freak-show budget with >60% going into savings, but it's still not likely to be very useful to them.

Part of me wants to share this info, and I'm happy to hear other opinions, but on balance it seems like it could do more harm them good. They're already financially wise for their ages. Maybe I should just show them our bills? Then they'd at least know what it takes to run an average home.

My dad earns 2.5x my graduation salary (which in France is a huge difference - I'm 31 now). Don't worry about your kids knowing the figures, I've always rationalized about my father: He's from a business school (earns more than engineers), he explained me stuff about fluid mechanics theory (=He's smarter than me), he had 30 years of experience when I had 0.5, he manages 150 people when I would be incapable of that, and most of all, if your child isn't that rich, you may have 3 kids when he can adjust to having 2 or 1 if necessary.

If anything, knowing the figures will help kids plan their life accordingly and with more anticipation; the only drawback is I'm not good at holding secrets and a few friends have known about my father's salary.

The most important is probably something your kids already know: My father has a belly, and that's the result of long years of stress; In other terms he paid his wealth with his health.

Why not be frank about it, if they're old enough? Tell them just what you wrote here and be honest about why you make so much and why they should not take that as a "normal" salary. Maybe talk in terms of percentages -- rent/housing this percent, expect taxes to be this percent, food this percent, etc.

As a child (rather than a parent), for me, this:

1. Reinforces that saving is something everyone should be doing no matter what their income.

2. Helps reassure me that parent is making and saving enough to retire.

3. Gives me passive reinforcement in knowing that other people are also budgeting [despite whatever they make].

I'll never match my grandfather's income. That's fine.

I didn't understand the need to be frugal, when I was young, because of this. But dealing with my own money and my own jobs, gave me hands on experience with the value of being frugal. This went well with their sharing of their own experiences - the value they got out of being frugal.

The lessons sunk in well. It's not just "savings are good" and a list of abstract rationalizations - savings feel good because I absolutely get it why they're good to me even this moment.

Understanding my grandfather's wealth taught me other important things beyond frugality, however:

I was able to learn from my grandfather's success about managing money - the value of compound interest, savings, calm and diverse long term investments. The dangers of panicked short term day trading.

I was able to learn from my extended family's failures with managing money - putting all their eggs in one basket, throwing good money after the bad, the disadvantages of lending to family - really underscoring what these mistakes can inflict on people, losing more money than I'll ever earn.

All the frugality in the world won't secure one's financial future if you can't resist shoving a retirement fund all in on the housing market. Or into a tech bubble. Or any number of baskets you couldn't see were going to come to an end eventually.

I am really struggling to follow your reasoning. Why can't you explain exactly what you just said here to your kids? Explain to them why you are so frugal (I imagine you either want to be prepared for any down swing in finances, or to retire early? Whatever your reasons are, tell them!)

I think the key is to always explain your thinking process to your kids. That is the important part, and that will translate no matter what their future earnings are.

My reasoning came from my concern that they'll somehow feel less satisfied with their economic status someday if they struggle to get ahead and fall short. I admit this may be entirely wrong; I may be "projecting" based on my own minor but lingering discomfort from being told (as an adult) what my Dad's peak earnings were (more than mine..).

I think you hit the nail on the head with the comment that it's explaining the thinking process that's most important. I've long had a goal of being able to retire early, and that has driven much of my frugality. For most people, the key long term financial security is living below your means, and that's really the message I'd want to communicate - not that you need to earn a ton. I can also explain that my savings are intended to last through 30+ years of retirement (one can only hope..) with some cushion against a market crash, etc. This seems like the right approach to sharing our finances - and how the relative balance of income, expenses, and savings all factor into my goal of early retirement.

I realize now too that part of my discomfort in sharing income information comes from the fear of either showing off, or seeming excessively materialistic - but with this approach of "goals driving behavior", it need not seem that way at all.

Thanks.

It sounds like you've already done a great job instilling the virtues of budgeting and the value of money. I don't think you need to share your salary.

If you still had young kids, you could share instead your budgeted amount. Just don't even consider the savings income as being in the picture.

I think the strength of the lesson is to go from "wow, that's a lot of money on the table that I can touch," to "wow, almost all of it is gone due to overhead."

A secondary lesson is the concept of private information, formation of trust with sensitive sharing, and the harm in gossip.

You sound like my parents. Though, they left the monthly budget lying around and I'd browse it on occasion. From that, I now know that I'll never earn near what they made. As well compensated as software development is, managing big projects for oil companies pays better. Especially when you get options and the economy is booming.

That's fine. I still earn enough to live very comfortably off half my income. I'm perfectly happy with that.

Your last point reminds me of a post from MMM that's slightly weak on the detailed math, but conceptually very sound: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...

If you have a high salary and live far below your means, then you have substantial savings. Do you disclose your overall assets / amount of savings to the kids? If you have savings and kids do you want to gift the maximum each year, and do you discuss estate planning and such?

I think annual income is just a single metric in a much larger equation which should be discussed by every family. E.g. the realities of what support you might need in the future, or what support you might be able to provide.

My Dad (early 50's) has made more than I'm ever likely to (late 20's). He was always very circumspect about it, as it sounds like you are, but as I just became a father (and for some other reasons as well) he recently decided to share some hard numbers with me. I don't know how I feel about it, but I don't think I'd have been any worse off for not knowing.

tl;dr As someone in a similar position to your kids, I think your reasoning is sound.

It strikes me as odd that you would think that your kids are "unlikely to ever earn" as much as you have, or even less than a third as much. I'm curious about your basis for that assertion. Perhaps you're American, and it's grounded in the increasing concentration of wealth. Or perhaps it's just probabilistic. But in any case, isn't it better to share all of that with them?

maybe his children are disabled

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