To ask if you are rich, and if so how you made your money?!

[jinglebelly]

I run a small ebay business but after DC 3 starts school I'd either like to retrain/get a degree or start up a larger business... I don't know any very well off people hence why I'm asking on mumsnet!

[TheBride]

Njinksy Sorry- what I meant was that there is still money to be made for people who want to get involved in actually improving property, but that houses aren't just going to increase in value to the extent that our parent's did.

My parents bought their house in 1983 for £60k and sold in in 2003 for £500k. I don't think our generation can expect to see that sort of price inflation.

I remember watching one particular episode of The Sarah Beeny property programme where a couple were delighted with themselves because, despite ignoring all SB's advice, they'd made £30k profit on their first project and were convinced they were going to become professional developers. What SB didnt explicitly point out (although you could do the maths from the info given) was that they'd have made £28k if they'd not done anything. As it is they spent £5k doing it up, so they'd actually managed to destroy value but had got away with it because house prices just went up. I think those days are gone.

[Xenia]

I certainly wouldn't put people off buying property either. There have been market ups and downs for hundreds of years but most people owning over most 40 year periods which is the period most of us will own property at least you will find it was worth buying. Can anyone think of a 40 or 50 year period when it wasn't? If you bought during market crash years of late 1920s or that awful time in the 1970s which I remember or the height of the boom before 1990s crash and hold for 40 or 50 years I don't think anyone will have regretted buying a home (or property) over that span which is the span most people own it.

The paper gains of your own home increasing in value when you will never be going to sell it are pretty useless if we're talking about wealth though. It's what women earn through their employment, self employment or investments which will largely determine whetehr they feel wealthy or not. I have pretty impoverished neighbours (some of them) living on interest on savings which presumably is paying about 1% with homes that on paper may be worth a lot but they don't feel rich as they don't want to downsize to a caravan or even a smaller house.

[noddyholder]

To be a successful developer you need to be able to produce a design and finish that will elevate the property value and not rely on the rising market.A laminate floor and some magnolia paint will add very little in the long term You might be lucky once when house prices rise at an alarming rate which we have seen a few times but it certainly is not something to build a career on!The margin between old wreck and refurbed on the same road is narrowing all the time.

[nijinsky]

I've had people telling me over the years what I should and should not do to develop properties. I don't do it as a career (my career is a lawyer), I just do it to make money. Therefore I don't have a "product" as such. I do whatever the property needs to make a profit in that location. If I can make a good profit on a nicely done up semi cottage in a little village I'm not going to put in the hardwood floor, Amtico and Corian that I would in a city centre flat. In a certain way I am selling them my lifestyle, but its very subtle and if the property itself is sound and at the right price then thats what sells, not a bespoke kitchen.

I don't have a particular type of property I go for, and I don't do a lot of properties, only 13 in total over 10 years. And I don't just sell but rent as well. tbh I get a bit frustrated with the idea that there is a magic formula out there by which properties can be developed to make money. Fine while there is a rising market with people prepared to spend silly money on things they could install themselves for half the price, but if I was going down that route I'd do purely steading conversions and new builds. The real secret, if there is one, is buying the property cheaply enough in the first place, not in sticking in yet another bespoke wooden kitchen.

[queenceleste]

I agree, imo 'rich' means:

Holiday home (home or abroad)
privately educated kids (however many)
holidays in all school breaks.
designer clothes for mother
French clothes for kids
Massive garden in big house in nice area
Staff to greater or lesser extent.
Pool in garden.
Interior Designer/architect designed home or extension.
Weekly visit to beautician/hairdresser
cleaner who comes every day.

I have friends in this position but most of them had fairly rich parents to start off with.

Wealthy would cover people with 50% of the above!

I am not in this category!

[Xenia]

Not so sure. Some of those things the properly rich but not nouveau riche wouldn't bother with.

Holiday home (home or abroad)
privately educated kids (however many)
holidays in all school breaks - not sure most people want to be away that much or have work if that would mean they would go away in every school break but that might be so.
designer clothes for mother - there's an inverse snobbery about designer labels though isn't there - Mrs Beckham is pretty well off but she often manages always look reasonably working class

French clothes for kids - thought a bit of looking scruffy but at just the right sort of level was what marks out certainly in English class consciousness your class level but you're talking about rich and perhaps common and rich rather than classy and rich.

Massive garden in big house in nice area

Staff to greater or lesser extent.

Pool in garden (not always - tiny council house with pool can look really naff)

Interior Designer/architect designed home or extension - perhaps for rich but only nouveau riche - the over done footballers' wives look is not for all however wealthy they are

Weekly visit to beautician/hairdresser - a good lot of the fairly rich are rich enough not to care that much about stuff like that.

cleaner who comes every day.

Perhaps we need an income level to determine rich. It is probably something like £10m in realisable investments/cash rather than pensions and house.

[noddyholder]

There is no general formula but I only develop family houses in the catchments of good schools. They do sell with a bespoke kitchen and a family friendly layout.There is no point sticking to a certain finish in the wrong house which is where a lot of properties in awful areas with granite worktops sit on the market forever! But in areas with a lot of family houses like the ones I do you do need to add something extra to push the price.

[noddyholder]

I agree xenia a footballers wife finish house actually is not popular in teh area I am in. i prefer a more lived in natural family look but with a good layout and finish but no marble or integrated fish tanks.

[Xenia]

I wasn't reall commenting on what sells houses, just what might be the indications of someone being "rich" in financial terms in the UK. We've a few times had people working here suggesting they might take away the cars outside for scrap (the workmen not believing anyone might be content on a road like this to drive cars which go and we're happy with) which is quite funny. In other words the external things don't always indicate someone's wealth and some rich people live quite modestly.

There are lots of different careers/businesses on the thread. Some careers are more likely than others to make people more money but people make money in all kinds of ways. I was talking to someone who is involve in sewage plants in the middle east for example and plastic bags, all kinds of stuff some people manage to make profitable.

[Absolutelyfabulous]

Buy land. Houses are two a penny, land is precious.

[NotaMopsa]

lots of not rich people privately educate their children

[Mirage]

Absolutely,you are right.They don't make it any more! That is what we plan to do when we have enough money.It has worked well for the rest of my family.

[queenceleste]

notamopsa, you have to be earning a lot of money to privately educate. To clear that much cash after tax even for one child, obviously some people sacrifice a huge amount to do so but to even consider it you have to be earning quite a lot of money, wouldn't you agree?
Of course you don't have to be a millionaire but you have to have a reasonable income to contemplate it.

[Xenia]

Around here some of the tiop 20 schools in the country cost about £10k to £12k a year and ni the SE plenty of owmen can earn £20k to £30k a year. Mothers can and often do go back to full time work and it just takes their salary to cover the 2 sets of school fees. It is not that hard to afford if you're reasonably well educated and can earn that sort of sum and can otherwise live on the other spouse's income. And some get bursaries. We paid 15% of fees for my son as his father taught at that school and then he got a music scholarship with fee discount etc. Three are lots of ways people who aren't that well off can afford school fees but I certainly accept the basix premise that a couple where the wife is unable to work at all either because she's too lazy to work or disabled or in an area with no jobs and they aren't prepared to move to benefit their chidlren (lazy so and so) and they need 100% of the husband's income to eat etc then they cannot afford school fees.

[Absolutelyfabulous]

Xenia - true. I have known several women who work simply to pay the school fees.

I am about to embark on a business venture to make a small dent in school fees for our lot.

[queenceleste]

[Absolutelyfabulous]

That bun is why?

[suebfg]

Agree that you don't need to be rich to pay for private education. If you have two sets of wages coming in every month and are prepared to make some sacrifices, it is feasible.

[forehead]

One cannot become 'rich ' if one works for someone else, unless one invests money in something else.
I am always shocked when i see young footballers with numerous top of the range cars(new plate) and cannot help but think how stupid they are. Even if you earn millions of pounds a year as a footballer ,you can lose every single penny if you do not invest your money wisely. The average footballer wil be on the scrap heap by the age of 30, if they continue to live an ostentatious lifestyle and are no longer playing ,they are up shit's creek as their expenditure will now exceed their income.

My dh and i work hard , because we want to obtain financial independence. We are not interested in some of the trappings of wealth, luxury cars, designer clothes etc because the money used for these purchases can be used for something more useful. This does not mean that we don't buy ourselves nice things, we just plan ahead. We are both on the same page and are frugal, but by no means stingy. We live in a £400,000 pound house, but could probably afford to live in a more expensive house, but we choose not to.

[NotaMopsa]

queen celeste - reasonable income -yes rich - no

[onceamai]

I think you do have to be pretty comfortable to fund school fees. Once all other overheads are taken care of: mortgage, utilities, food, modest car, modest holiday, daily expenses, notwithstanding bursaries or scholarships which cannot be banked on, the cost, here in London is a whisper over 30,000 per annum after tax. So, providing one income can meet all the other expenses the other, if sufficient, can meet the school fees but that is providing there are no redundancies, illnesses along the way. For many families there would need to be a huge number of sacrifices over a many many years to meet the fees for two children.

On the other hand there were a number of occasions at my dc's state cofe when I had to bite my tongue when mothers said "you're so lucky, you have choices". The same mothers in the early days were the ones who said "I wouldn't put up with my DH working those hours and every weekend - I'd put my foot down" and "oh, you're so lucky you got a part-time job". Yes, with a five year plan and on a very low back to the bottom wage to get the professional quals I didn't have in my first career.

As I've said earlier on this thread, we are comfortable, not in my opinion rich but everything is relative and we're certainly rich by the standards of the 50 per week on groceries MNetters but a lot of hard work has gone in on the way. The DH is just reaping the benefits of that work having built up a significant reputation over 20 years. Our house is valuable and well maintained, reasonably co-ordinated but by no means cutting edge or ritzy. My car is 10 years old, the garden is a generous 80 foot (which is large(ish) for this part of London, the DH wears reasonable suits a shirts for work, I don't do designer but have a few good pieces. The DC wore George and M&S when they were younger but seem to moved onto Jack Wills with a combi of River Island and Top Shop. I have my hair done every 6 weeks but have never had my nails done or seen a beautician, but do outsource the cleaning and laundry (our cleaner, a lovely Polish girl, lives in our spare room and works gratis). We have one holiday in England, one in France and the boys go ski-ing at Feb 1/2 term. I certainly wouldn't have a swimming pool, the maintenance is hellish and the associated expenses - not least the cost of entertaining too many visitors - are ridiculous. I might buy one Radley handbag (or equiv) a year and have no desire to own a pair of Jimmy Choos. Sitting here in a six year old pair of splitting Joseph Siebel sandals.

What is for sure is that we didn't get here by making daft choices, I didn't get pg by mistake before I got married or live with anyone or get involved with people who might have been a bit dodgy, or go clubbing on work nights and neither did DH.

[SofaQueen]

"One cannot become 'rich ' if one works for someone else, unless one invests money in something else."

Not necessarily. The most wealthy of my acquaintances work for firms (think annual incomes in excess of £2,000,000 in bad years) - just pick the right industry and right firm. I am not speaking of footballers, but people in financial services (banking, asset management, hedge funds). Granted, they are not billionaires, but that is another strata of wealth. I do know some billionaires, but their families are from developing countries and their wealth stems from monopolistic control of basic commodities in very corrupt political environments.

[indulged]

One of my friends is a footballer from old. He didnt make his (present) money from salary but from his endorsements, contracts with certain companies and governments and contract stuff.

[onceamai]

And for every one of those Sofaqueen are another 50, possibly more, who started the graduate training scheme and didn't make it. It's a very very tough life - not even for all those who thought they wanted it and made the right decisions to get there - Oxbridge, Ivy league MBA, etc.