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!

[NotaMopsa]

i would love to know the earnings that people consider to be rich

[suebfg]

What do you think NotaMopsa?

[beesimo]

Marry a lad who has a few elderly bachelor uncles with bad coughs!

[NotaMopsa]

errrr all depends on circumstances but if you HAD to put a fugure on annual earnings i'd probably say proper rich over 200K pa

[suebfg]

OK, that puts me out of the rich league but we are comfortably off :)

My hubbie used to work with someone who earned over £100k a year and his wife worked too. Not sure what their combined income was but their income levels were quite high by most people's standards. However, they spent money like it was going out of fashion (BMWs each, buying champagne for colleagues .....). The last I heard they were over £150k in debt ...
so in reality they were actually very poor.

[onceamai]

I'd say 200k is comfortable, depending on outgoings. Rich is 500k+, really rich is 1m, and phenomenally wealthy is 2+m.

[NotaMopsa]

mine was just an annual earning

dp and i have one whopper of a mortgage - we will never be rich. Life choices though!

[MercurySoccer]

20K is do-able on a shoestring.

£40K would be far more comfortable.

£200K is unimaginable.

[suebfg]

If you look at the 'giving what you can' website, £100k a year income based upon a 2 person household puts you in the top 1% of the richest people worldwide with an income that is more than 75 times that of the typical person (again I think this is on a worldwide basis). So perhaps there is something about feeling poor if our neighbours have more than us and rich if we have more than those around us.

[NotaMopsa]

someone linked to this earlier suebfg more UK specific

[suebfg]

Thanks for this NotaMopsa. I reckon if most people input their data into this, they would come out higher than they expected.

[Kiwiinkits]

We made ours from property investment (residential subdivisions, rentals), mostly due to DH's savvy. We also run two professional careers. Both have postgraduate degrees (mine in economics + law, his in property). Invested in 2001- 2006, and sold enough to cover our investment cost between 2008 and 2010. Rest is profit. Timing is everything in property.

My advice to someone starting out would be to invest young in your first house (borrow the deposit from your parents or gps), put everything into paying down your mortgage. Aim to pay down enough to invest in a second property and to have a bit left over after making mortgage payments. Scrimp on unecessaries, but invest in your education.

[empirestateofmind]

Novice- thanks for your kind words .

I think financial literacy is vitally important for everyone yet it is not taught in schools.

Some families teach it to their children, other people learn about it themselves but many people never ever learn it.

Consequently they work for their employer, for the government (tax) and for the bank (mortgage) rather for themselves.

[frikonastick]

are you talking about 200k before or after tax?

[Xenia]

I suggested rich was hiavng £10m which is not in your house or pension as a yardstick for "rich". I've certainly never felt rich except in terms of having a rich full life with lots of children I love etc

I would agree with Kiwi that buying property young helps, also education - so that might be your own (most of the people who earn a lot on this thread got a good education/ a profession etc) or buying your children a good education and paying down debt (we did that - paid off 3 or 4 mortgages entirely rather than spending all we earned). Taking some calculated risk. Not putting all eggs in one basket (the housewife scenario).

£200k gross pay is only about £114k pa after tax. I wouldn't call that "rich".

[NotaMopsa]

After tax

[atswimtwolengths]

Is it really, Xenia? Doesn't sound as much, now!

[suebfg]

Xenia, you need a reality check. An after tax income of £114k p.a. is rich by most people's standards

[onceamai]

It is rich by most people's standards but it isn't hugely rich. It isn't rich at my dc's school gate, or where we happen to live. Everything's relative and in my world that figure is comfortable. Privileged comfortable but not rich. Add in 54k of school fees per annum and 36k of mortgage and that puts a different slant on it (not for us I hasten to add). Only 2 dc and the mortgage is down to 240pds (a year).

[suebfg]

No it isn't hugely rich but it is still rich. At that level, if you are sensible, you could quickly become mortgage free, still have a nice house and pay private school fees and have money left over. I know because we've done it with significantly less.

[atswimtwolengths]

Your mortgage is £240 per year? Wow that's the lowest I've ever heard of!

Shuddering at the thought of £54k on school fees!

[FlaminGreatGallah]

I'd consider £114k p.a to be a decent income. If the definition of being rich is buying what you like whenever you like well, where does it end? I could win tens of millions, even a hundred million on the lottery and spend it in a year if I fancied buying and maintaining a private jet and yacht decorated with Fabergé eggs.

In actuality if I ever came into that sort of money I have always admired the Bostonian principle of living on the income of the income of one's income. Very sensible.

[tryingtobemarypoppins2]

"I think financial literacy is vitally important for everyone yet it is not taught in schools"

It is. We call it Financial Capability and it is taught as part of Maths and PSHCE.

[MercurySoccer]

Some of us living on a small percentage of that amount would consider that income makes you rich. It's all relative!

"only about £114k pa after tax"

[SybilBeddows]

Of course £114k pa is rich! FFS! Just because you hang out with even richer people doesn't mean you're not rich.