All bloggers within the realm of finance are split on whether they show the details of their finances or not, and there is no one answer fits all. As I have been asked a few times why I don’t show my returns on my monthly updates page, I decided to outline my reasoning below. I also look at both the advantages and disadvantages of releasing personal information to the world wide web.
Why I Don’t Share My Returns
There are a few reasons why I don’t show my actual returns (in real numbers), and instead show a percentage. The reasons are all of my own choosing and represent my current situation. In the future, if these reasons change, I will reassess my position. All of my actual returns have been documented, so it is not difficult to return to the data later.
Yes, there is a taboo around money-talk, however, I don’t feel that in everyday life. I am happy to talk to close friends and family about money or net worth and tother financial things. However, there are limits. For me personally, plastering your net wealth over the internet for everyone to see can create problems. Here are the 4 main reasons why I will not show my returns:
My Reasons For Not Showing Returns
Reason 1: Security
Not so surprising, security is probably the biggest reason why most people (myself included) don’t want to show their full financial health to the world. What is shown on the internet is generally there for life, and accessible to everyone.
With the abundance of information available at the moment, anyone should be able to find your real address based on your name. From there, people are able to find out phone numbers, emails, family members’ names, kids’ schools, etc. This is generally not an issue for everyday bloggers who don’t have a large net worth, however as your net worth increases, the security threat also increases. Why even tempt criminals with that sort of information? You are basically encouraging something to happen: “Hey, guess what, I have 10 million dollars sitting around in my house!”
Additionally if you are frequently on Twitter or other social media, you would need to constantly think about what you are writing. Say you tweet about a super cool weekend escape that you are on. How many people will then realise that you are away from your home? It could easily encourage your house to be robbed. The majority of people won’t care. It’s that 0.01% that is the issue.
Things can happen to your online accounts as well. One blogger stopped showing his referral money, as he was getting in excess of $20,000 a month and people were either completely duplicating his website (i.e. layout, text, and even extremely close domain names) to trick people into the copycat website, or they were aggressively attacking his website.
In a more recent case, another blogger earned a fair amount of referral money for referring users to a fraudulent platform (at the time it wasn’t known it was fraudulent). Once the platform vanished (as with all good frauds), investors money in the platform also disappeared. In these cases people look for someone to blame. They generally follow the “chain of blame” starting with the directors of the fraudulent company and ending up with the bloggers or other people referring traffic the platform. In this unfortunate case, the blogger does have his name and picture publically available, and many investors are encouraging others to take their frustrations out on him. From simple “call the tax department and report his as a fraud” to the more extreme “make a personal visit”. This is extremely unacceptable behavior, and unfortunately the world we live in.
Reason 2: Opportunity Cost
Opportunity cost is mostly related to employment, whether its your current employment, or when you apply for future jobs.
If you’re running your financial blog and your workplace know about it (which they generally will if you promote LinkedIn), do you think that they will view it? Surely. For that reason, I don’t want to end up in a situation where my employer sees my blog earnings and decides to base my emplöoyment salary on that. It shouldn’t happen, but in the back of their minds, it could definitely be a contributing factor. Additionally, if my employer was faced with the decision of firing someone, I don’t want them to choose me solely because I would be OK financially.
If I was able to live off the income on the blog and didn’t need employment, then this wouldn’t be an issue!
Reason 3: Relationships
Money and how wealthy you are can easily change the relationships that that you have. You can suddenly be expected to be the host of every party, or bring your closest 20 friends to your next holiday.
Generally, if my friends ask me personally about my finances, I will answer honestly. However, this is not a blanket rule. With some people I may be less inclined to discuss various aspects of figures, knowing that I may be viewed in a different way. I could still talk about it, but just not in detail.
Having all your finances posted on the internet is basally the same as me sending our an email to everyone on my contact list saying “Hey, I don’t have to work anymore cause I have $1 million dollars“. How do you expect that to be perceived?
Additionally, I don’t want to become everyone’s “new best friend” because of the financial decisions that I made in my life. I want people to like me for me! Obviously friends that expect you to pay for everything in their life may have to be reconsidered as friends. There are many stories floating around Twitter that highlight this issue, where a friend would ask for a loan, knowing that you are good for it, or the landlord would ask for additional upfront payments knowing how much you have in your account.
By having that selective control over your finances, you can decide how much to share and with who. If it’s posted on the internet, everyone automatically has access.
Reason 4: Context
If you don’t show everything, then you shouldn’t show anything.
Context is another reason that may catch a few people by surprise. Many new investors, or readers of financial blogs, will make investments based on the investments of other people (in this case bloggers). They can see themselves in the bloggers shoes, and try to replicate similar returns. However, context is something that can be missing in many of these cases.
It is about showing all of your financial information so that others (if they are copying you) can make informed financial decisions. This information would include all income (i.e. salary, referral income, rental, bonuses, social money, dividends, etc), outgoings (shopping, share purchases, taxation, etc.) and savings. Without this, how could others be expected to make a financial decision based on you?
No two people will have the exact same finances!
The information should also include finances from your immediate family (i.e. partner) as their income generally has an effect on how much you can save or invest (i.e. usually two people would contribute shared expenses). Without context, it can easily be a biased view of one’s finances. Here are a few example scenarios (made up) that could significantly bias your opinion (if I didn’t show context), I could:
- marry rich and casually write about how effortless it was to become financially free
- invest my inherited 1 million dollars into a 5% paying stock, and write about how I easily make $50,000 for free a year
- be in a $50,000/yr job, have $50,000 in investments, and also have $40,000 in debt.
- have $1,000,000 invested in shares, but only blog about my $100,000 invested in crowdlending.
Additionally, without context, you can’t gauge if investments are relatively large or small. Lets run through some more hypotheticals:
- Scenario 1: I have $1 million in savings, I earn $100k a year, have no expenses, and have invested $10,000.
- Scenario 2: I have $0 in savings, I earn $20,000 a year, I have a debt of $20,000 and have invested $10,000.
In which case of the above would you more likely invest? The person that earns $1 million but has invested $10,000, or the person that earns only $20,000 but has half of that invested?
In scenario 1, the $10,000 investment is not large at all, as it takes up only 1% of the individual’s savings. In the second scenario though, a $10,000 investment is half a year’s salary!
That’s why I only show a percentage. it’s important that you decide as to how much is right to invest for you (if any). Nothing should be based of other people.
Additionally, it would be a nightmare having to organise everything each month into an internet friendly medium. You would forever be trying to have all of your tables and graphs looking pretty. Also, showing all of your finances heavily ties in with security (identity theft anyone?).
To those that are an open book with their finances… Do you show everything? Are there select things that your not including?
The Advantages and Disadvantages on Showing Returns
Although there are quite a few disadvantages that I have mentioned above, there are also some really good advantages if you were to choose to go public with your name and financial information. These include
- Being featured in big publications – Stories of financial bloggers will generally only get published if the person’s name and photo are present. These sorts of interviews can supercharge your blog traffic.
- Attracting more views – People like to be able to compare themselves with others. Therefore each month you will gain many return viewers to see how well your returns have gone against theirs.
- More credibility – By showing real information (such as your name, finances etc) people can attach to you as an individual, and not just random text on a webpage. However, this assumes that the numbers are not made up (which you will never know).
What Information do I Show?
I try and show enough information to provide context in the platforms that I invest in. Each month I show the percentage gain or loss of each of my various investments. I log into each platform and take note of my initial monthly value, end of month value and any investments or withdrawals, and the interests paid out. These then get put into a running table, and basic interest rates can be determined. The simple sums are:
Percentage Return = Monthly Interest + Cash-backs / Total Platform Value
The reason I do this is that it shows the exact value (i.e. the amount of cash I received) that I am able to generate each month. I can then compile these (as below) to show the percentage increase for the year. A lot of other bloggers and platforms will also mention XIRR (Extended Rate of Return), but I think this measure has major shortcomings if it’s being used to predict the future values of an uncertain investment.
I additionally show my overall progress towards financial freedom, which hopefully shows that I am human, and have goals that I expect to achieve in the near future. You can keep coming back every month to see my progress. 🙂
Showing or not showing returns in a choice that all financial bloggers will have to make. There is no one right answer. But for me, anonymity is the only answer – for the reasons above: feeling safe in my own life, feeling safe within my job, and having great personal relationships. I personally will never intentionally put my family at risk due to my online presence.
While you remain anonymous you can always go public, however, you can never return to an anonymous state.
If I felt a real desire to showcase my life online, I could many a new website with an anonymous name and very little personal detail about myself, and then show all of my returns in detail. Additionally, I could share my name and not show anything about my finances. Or option 3, I could continue as I am now showing my returns in a percentage form and sharing a few bits and pieces about me.
I think for now Option 3 stays.
The information that I show on my blog is not financial advice but instead shows you the platforms that I am investing in, and the returns that I am making. Whether you invest or not is solely up to you.