Why I Will NEVER Share My Net Worth Online

There was an excellent post last Monday (November 30th) featured on Rockstar Finance by Mark titled Why 185 Bloggers Are Sharing Their Net Worth. Mark's article was well researched, informative, entertaining, and gave many reasons including honesty, progress, hope, motivation, accountability, inspiration, control, and freedom why people share their net worth online. I commend every one of the 185 bloggers who have the guts to update and post their net worth every month for all the world to see.

On the other hand, I will NEVER share my net worth online. Additionally, I can't think of a situation during which I'd share my net worth with anybody in real life. When asked to give my approximate net worth while applying for mortgages, credit cards, and opening brokerage accounts, I tend to give a nice round number that might have been applicable 10 years ago. There are multiple reasons why I choose to keep my net worth private, and I'll explain the main ones below. 

Fear

What’s so scary about posting one’s net worth online? The fear of family, friends, colleagues, acquaintances and strangers judging me based on an irrelevant number (see reason 3). Everybody who posts their net worth online runs the risk of having people associate them with a number. We’re all complex, multi-faceted people that should be defined by more than just a financial figure. Yet, reading that blogger X has a net worth of $XXX could lead others to form conclusions on the individual that have little to do with reality. 

I also fear repercussions if I post my net worth online. I’m perfectly happy working for my employer, and the thought of them knowing exactly how far down the road to financial independence I am scares me. Through my own experiences and observations, I’ve seen employees let go from different companies for a variety of justified and arbitrary reasons. If a company is trying to decide to let go off a high net worth employee or a low net worth employee with a similar skills set, my bet is that they’d let go the higher net worth employee.

Privacy

In an era when people willingly give up their privacy to make their online presence more engaging, I prefer to leave a little mystery. Although I understand that providing an increased level of disclosure about your financial position makes it easier for readers to identify with you, it’s simply not a trade-off that I’m willing to make. That said, I completely understand why a blogger who is dependent on their website as an important source of income would make this trade-off in an effort to better connect with their readers.

Upon reflection, I think privacy is closely related to my fear. Even a technological dinosaur like me realizes that finding out the identity of an “anonymous” blogger is not a huge challenge for someone who is motivated and has the necessary resources and abilities. Since blogging is only a hobby for me, I’ll continue to avoid a high level of financial disclosure on-line.

Irrelevancy of Net Worth

Out of the three reasons I choose not to share my net worth, this will likely be the most controversial: I feel net worth is an irrelevant figure when it comes to assessing financial independence. The personal circumstances of an individual, like their family, work, and hobbies are ignored. Net worth says nothing about the income and expenses of an individual, and how those might change over time. The figure also does not speak to the ability of an individual to generate income from the asset components of their net worth, nor does consider the rates of interest associated with the liability component. I’d argue that when assessing financial independence, the percentage of an individual’s regular yearly expenses that are covered by their yearly passive income stream is a much better indicator of progress. Add in the expected percentage growth in passive income compared to an expected future inflation rate relating to regular expenses, and I think you’d have a highly relevant metric to judge progress toward financial independence.

Additionally, consider for a moment how many assumptions need to be made when attempting to calculate the net worth of an individual. If the individual owns a house, they would need to assess the value of the home (something even real estate agents with comparable home sales struggle with), real estate commissions, land transfer taxes, moving expenses, mortgage penalties, future mortgage rates, etc..  Are you part of a company pension plan? Congratulations! Now if you want to calculate your net worth all you have to do is accurately forecast future salary increases, rates of return on the plan, the year of your retirement, and a reasonable discount rate. Are any of your income producing assets in tax favored accounts? An accurate net worth calculation requires you to predict future income tax rates, additions and withdrawals to the accounts, and rates of returns on those assets.

In summary, I’ll never post my net worth online as I fear providing an irrelevant figure could cause people to judge me and might cause negative consequences if my privacy was ever compromised. It’s worth re-iterating that I have a great deal of respect for the 185 bloggers who post their net worth monthly. If updating the figure online monthly helps them track their progress, hold themselves accountable, motivate and inspire others, all the better! It’s just not for me.

Do you or would you post your net worth online?