If you are really rich

[sopsmum]

Now, I know this is all subjective, but if you are rich how did you do it. Do you have lots of different income streams. And how much take home makes you rich? Our income is fine (could always have more!) but everything is so expensive.

On paper we are rich. Don't live in London house but have a biggish house with lots of equity. Mortgage is a lot lot less than I see others paying on rent for smaller houses. I'm a professional. Husband owns his own business with largish turnover. I'm lucky to be mid 40's as those younger than me appear to be even more fucked.

But, we don't live extravagantly (no new cars). One child in private school (with a bursary) but state primary for the others. Literally no idea how I'm going to pay their fees when the time comes as I can't really afford the fees for the one that's already there. Have only paid for 1 term so far and am dreading the next payment already.

I haven't been to the supermarket for 2 weeks so just eating through the cupboards. Paying the kids football subs nearly killed me. We never eat out. I'm constantly careful about what I spend and haven't bought myself any new clothes in over a years. We didn't go abroad this year. I had to put the car insurance renewal on a credit card. The roof is leaking.

It isn't just the school fees that have done this by the way. We were fucked before we started shelling out for those. I'm just very interested in how others manage as everywhere I look in my affluent little bubble everyone else is having 3 holidays a year and buying new kitchens from Neptune. A friend of mine spent £11k on 2 weeks in Majorca. Seriously what the fuck.. I'm just wondering if I'm totally out of touch with what is a good salary and starting to think everyone else must be taking home £10k a month.

This isn't a poor me thread. I know I'm privileged. I grew up without much money at all and know for certain that family is more important than money. I just thought as time went on we would be better off. I definitely had more disposable income earning half as much in my 20's.

I have done well, own business, large inheritance.
The work I do would look like leisure to many people.
It was not won through hard graft, it is luck. As is the money my parents left.

Some get well off via luck, inheritance and determination. Some can work themselves ragged and gain nothing.

Graft does not equal becoming well off.
It’s a ridiculous assumption that serves only those who need to justify an unfair system, or perhaps feel superior to the povs.

My DM has always said you worry the same for pennies than for millions!

And it's all very relative. Like someone said if your salary is low then £40k.might seem like a lot. (I know I wouldn't!)

I honestly believe the secret to being rich (and at least one PP on this thread demonstrates my theory) is that you have to start young. So the people I know who are very well off financially are the ones who've had/done one or more of the following:

1. Started professional careers pretty much straight out of uni so that they were earning decent money at a time while their costs were still very low (think accountant, lawyer etc)
2. Got together with a long term partner very young, allowing them to pool resources at a young age. Often this meant buying a house/flat in early 20s rather than waiting until much later like the rest of us but also could just have been more savings and investments from a young age.
3. Were extremely disciplined when costs were low - eg NOT spending on parties, holidays, clothes etc in the first few years of having a disposable income and actually SAVING. As a result, often able to purchase property or make meaningful investments quite young which, 20 years later, pay off.
4. Family support eg inheritance to pay deposit on a house at a young age, lack of student loans or similar, lower start up costs generally, child care support etc.

Sadly, I didn't do or have any of those things. But one thing that means DH and I are able to enjoy our own home is that I DID get on the property ladder relatively early because I was living somewhere where property prices were low and I, rather riskily, bought with a friend. My Dad lent me the cash to pay the solicitor's and transfer fees and in those days, a deposit wasn't necessary. That is the ONLY reason we were able to find the money to pay a deposit on our current house.

We just applied for the bursary and it was granted. We wouldn't be able to afford the fees without it.

Blimey they usually have a limit to what you earn.

Well that’s something. You’ll probably only know why if you list your outgoings.

I don’t consider myself rich, but I suppose we’re comparatively well off.

We have ‘normal’ salaries - DH is an NHS surgeon. But we have wealthy parents on both sides, worked hard and invested in property since the 90s. Benefited from living in London and being tied into London prices.

You’ve just got to live within your means OP!

at least one PP on this thread demonstrates my theory) is that you have to start young.

I think this is definitely true of people around my age who left Uni mid-90's because in 1996 you could buy a 3 bed flat in West Hampstead for

I tend to assume those people you see living luxury lifestyles on average salaries are actually just leasing their shiny, new cars, renting their homes and chucking everything on their credit cards. Can't imagine they have any savings.

@soulrunner yes- exactly. and admittedly, probably a lot harder today. But... having said that, I know a couple who are a few years younger than me (early 30s) who I suspect will be wealthy in their 40s. They were a uni couple. Bought a TINY one bed together when they left uni (admittedly, this was about 2007 or 2008 so they could still get away with a minimal deposit). Over the years they've upgraded etc, always worked in fairly good jobs, kept their costs down and they're starting to reap the benefit. Give them another 10 years, particularly as their respective careers continue to do well and I think they'l be doing very well.

Well, in spite of earning a measley £100k between us, my husband and I are probably the richest of our friends. Certainly the local ones, because although we have high-earning friends elsewhere, they also live in more expensive parts of the country, so our disposable income is high.

But then part of the reason 100k is and will always be rich to us is that we, for the most part, are very financially prudent. We overpay the mortgage, put a lot into our private pensions, AND make savings - all before we spend on treats and fun.

We don't have 'rich' tastes, see - we shop in high street shops, and not often, happy in a 3 star hotel, we essentially have beer tastes on a champagne budget. I could by a £££ designer handbag a month with my disposable income, or we could eat in fancy restaurants.

But we don't we go on a lot of cheap holidays, we have a cleaner, and this month when we've been ill we've had takeaway six times without batting an eyelid.

I tend to assume those people you see living luxury lifestyles on average salaries are actually just leasing their shiny, new cars, renting their homes and chucking everything on their credit cards. Can't imagine they have any savings.

Yes, I know a few people like this. We're the opposite - my 'new' car was 8 years old.

With a 1.5k mortgage despite a lot of equity in an area where small 2-beds rent for 1.5k sounds like you live somewhere stupidly expensive. Most people around are probably very well off so when you compare yourself to them, you don't feel that well off.

We're v well off but live in a down-to-earth, relatively affordable suburb. Most restaurants, shops, services etc are reasonably priced so you just get used to a cheaper lifestyle. That means we only spend a small fraction of our income. When I lived in a much more affluent area, I probably got through double the money in a month (in discretionary spending).

OP I get it, we have a six figure income between us but don’t have new cars or several holidays a year. Our mortgage is big because we live in the south and property prices are silly - we’re tied to living here because of our jobs. We were late starters in terms of buying property (late 30s), we were late to staring professions that earned well and we have had no financial help from parents (neither sets have any money). So yes, on paper we earn well but our overheads and commuting costs and childcare bills take most of it.
Of course we’re not poor though and we know we’re fortunate to even have the chance to own a house

We're like you OP. Good salary but scrabbling around for pennies half the time, always counting how far until payday. Two cars both a decade old, do spend on holidays but nothing else. House is in dire need of work and no new clothes for ages. Lots going into our pension though but doesn't help with cash flow. Our own fault entirely.

It's relative. I grew up in rural Scotland, in a low wage economy based on farming and fishing. My parents had significant assets (land and houses) but we were surrounded by people with more modest means and I was always aware we were more comfortable than many of my friends. DH on the other hand grew up in a large city and went to a well known private school so knew lots of much richer people. We now live in one of the poorest parts of the country and have a 6 figure household income working PT. At some point we'll no doubt inherit a significant amount from our parents.

I feel 'rich', we have a nice house, save a lot every month and have done since we graduated, have a nice lifestyle (plenty trips out and holidays) and don't need to worry about money. DH feels skint, and constantly compares us to our richest friends and family who spend more than us. I keep telling him we pay more in tax than many people earn but he won't listen.

@BlingLoving

I think you're probably right in a lot of cases, but not for us. We were in our mid 30s when we got together, DH was earning a v average wage up until about 5 years ago and he started his own business and I retrained in my 40s. No family assistance either.
BUT we have both always lived within our means and never been ones for fancy holidays or a flash lifestyle. Even now we can afford more of those things now, we're quite happy with our lot and have chosen to overpay the mortgage and pay more into our pensions, rather than buy designed gear etc. That's just our choice, I've no issue with other people choosing different priorities.

In terms of "achieving things without help" it does annoy me when landlords with big portfolios lump themselves in this category. I think borrowing money because it was cheap & easy & getting tenants to pay the mortgages is not really the same as studying &/or working really hard in a career.

Your numbers don't make a lot of sense op.

If you're on 100k per annum, that's 5.5k a month after tax. So after your mortgage and council tax you have 3700 a month left to spend. Say your school fees are 700 a month, then you've 3k left.

Other bills like utilities, petrol, sky, say 500 a month. Giving uou 2.5 grand left a month. Say another 500 on food.

And you can't afford to go to thr supermarket or buy new clothes, and you were given a bursary as you couldn't afford the school fees.

So either your income is much less than you're saying or you're missing two grand a month some place.

I think borrowing money because it was cheap & easy & getting tenants to pay the mortgages is not really the same as studying &/or working really hard in a career.

It didn't really work like that did it, or everyone would have done it. Firstly you need the income to get the mortgage in th first place, they don't just give you it because you ask...secondly tenants are not always guaranteed, so you can have periods of no occupancy, thirdly they can also be a shit load of trouble and hard work.

So yes, I'd lump these people in if they did it without help. Because as said, you needed the income in the first place to even get the mortgage. Never mind how much of a ballache being a landlord is.

We are not rich but we are well off my dh earns about 50k per year and I earn anywhere between 5-10k a year depending on how much I work. We live in the Midlands so costs are a lot cheaper. Dh has a company car which he can change every 2 years and our mortgage is small and will be paid of in 10 years. We bought our house in our early 20s. I will probably be rich in the future as my family has some wealth and I will inherit. We really don't have many outgoings and no debt. Maybe look at your outgoings op as you really shouldn't be struggling with £300k. We Don't need to worry about money but still budget so we can save or go on holiday. Perhaps that is what others are doing or perhaps they borrow for there extras.

So @Bluntness100 were interest only mortgages as hard to get then as they are now? Was property as cheap then? Was lending less controlled? Did you have to have such big deposits to qualify for a buy to let? Was it easier to make money from buy to let in terms of tax relief?

I get excited when my old age pension goes up tuppence a week - that's really rich

OP what are you spending your money on?!

I earn just over 1/3 of you, I have a flat (mortgaged) in North London and if I wanted to I could afford school fees for at least one child. I’m not particularly careful with money either and regularly splash out.

We spend double that a month on food bluntness

OP still hasn’t said exactly how much her household income is. If it’s at the low end of six figures then a £1million house is a stretch so your neighbours are probably earning a lot more than you and can afford other luxuries.