To be absolutely fucking amazed how much money people have?

[HiggsBoson]

I thought we were in a recession.

I thought people were genuinely struggling.

DP and I certainly do as we are on low incomes, but we try to be grateful for what we have.

How is it then, that so many people can afford ipads, clothes from the likes of Joules and Boden, Mercedes and Audis, Hunter wellies for their kids ffs, expensive overseas holidays and huge 10/20/30K weddings?

Honestly I'm quite baffled. Everybody seems to have an ipad - they're £500!!

What's going on?

'I was to find out how many acquaintances are interest-only with no repayment vehicle.'

Which will work out for them if they bought before the boom, I suppose. Sell up when the principle is due, pay that off and still have enough left over to buy something smaller in cash if the house has appreciated enough.

I don't think it is how much money you earn, but how much you spend. if you have few overheads and outgoings you can live on next to nothing and still live really well without having to earn much.

Just because we are in a recession doesn't mean that everyone has lost their jobs or taken a pay cut. And it is just as well that not everyone has got caught up in the austerity mood and stopped spending, because that would mean more people would lose their jobs. The people who are still splashing their cash around are keeping all the businesses & shops afloat.

It may seem tasteless when so many people are struggling, and obviously it's not good if anyone is doing it all on credit, but when you think about it, it us actually a good thing that someone is still buying £800 prams and eating out three times a week.

If everyone stopped spending on anything but basic necessities tomorrow, the economy would grind to a halt and we would be even deeper in the shit than we are now.

Personally I think it would be much better if income and spending power were a bit more evenly distributed, but that's a whole different question.

Chocolatecake Hijack? I was commenting on the thread - from what you read in the papers and see on the news, everyone is struggling which is why i said you wouldn't think it on this thread.

That's kind of why I started the thread and I've been educated by it, however I don't think there are many people on the thread earning as little as we do (and we do work hard!), so perhaps they are viewing things from a slightly different perspective?

"Personally I think it would be much better if income and spending power were a bit more evenly distributed, but that's a whole different question."

That is an interesting question - how could that happen though?

Its no big mystery why some people have more disposable income. We're not living in a communist regime where everyone must earn the same, we earn different amounts and sometimes luck plays a part.

Some people even do better in a recession.

....and my £800+ pram was a gift from my father.

"That's kind of why I started the thread and I've been educated by it, however I don't think there are many people on the thread earning as little as we do (and we do work hard!), so perhaps they are viewing things from a slightly different perspective?"

I don't know? It was more of an obsevation based on what i have read on this thread rather than a judgement on society as a whole

Chocolatecake - that's a highly political question because the main answer is redistribution through the tax system (ie tax the rich more, have more effective corporate taxation etc) as well as things like higher minimum wage and measures to promote employment - all of which are the absolute antithesis of what this government's policies are.

...but that will start a whole new argument and diverts the original theme of this thread.

Want2b - oh. That was my best guess! Inheritance / family money?

They can't all have won the lottery!

I guess if they got the mortgage at the height of ridiculous borrowing they could have got 5* income ie £200k in mortgage.

So would need £250k in savings. Age 32 that means saving £20k+ a year which seems a bit unlikely on that income.

Must be missing something!

ChocolateCake

I also wondered how income and spending power could be more evenly distributed.

Higgs

I think we probably have even less than you coming in tbh, but outgoings are very few. Hence my post above about not needing to earn much under those circumstances.

I have noticed that our Town Centre is dead during the day. The old and unemployed are not about anymore. All the shops are closing and it can be like a ghost town, during times you knew it used to be heaving

Thing is, over all the economy is struggling. But people's personal circumstances might be completely different. In the early part of this century, before the credit crunch, we were young, expecting a baby, I had no job and dh earnt less than a third of what he does now. Fast forward thirteen years, I am now working as a teacher, dh has moved on in his career, and we have saved lots so overpaid on the mortgage, and now have less mortgage than we did then. So certainly we have MUCH more money than we did before the recession.

I still don't have an ipad though, as I don't really see the point in them. And I just sold my car for £100 as we are going down from two cars to one, and it was a clapped out old banger. So perhaps I am not quite as well off as I feel!

Many of the big spenders may have lived a life on credit, and are now raking in the ppi refunds.

OP - I think it comes down to you assuming that everyone does earn roughly the same, and have the same outgoings. As others have said, you might be assuming wrongly how little others have coming in, or assuming wrongly they have the same amounts going out.

I don't know why you think people's spending habits should have changed, unless they've lost their jobs in which case they will obviously be worse off.

I'm better off now than I was a few years ago, as I have a better job. Dp has stayed in work and has his usual incremental pay rises but no bonuses.

I don't know anybody in my family or friendship group who has been made redundant. Our lifestyles haven't changed. Why would they, if our income has remained steady?

OK, so the UK being up shit creek hasn't affected a lot of people financially at all then? I didn't know that, hence being puzzled about the amount of brand new Mercs I've been seeing outside Surestart groups.

From what I have observed in the UK I think Starbucks is the least of Inland Revenues problems. If you want a mortgage here in the US they want 3 years worth of tax returns or a darn good reason as to why you have not got them ,plus evidence to support your income, to qualify for a mortgage.

Evasion/ avoidance of taxes or benefit fraud are the only reasons I can think of as to why people my age have so much money to spend. Parents are paying for some if but not that much.

Still, no answers on the house question. Even with an interest only mortgage the cost would be 900 a month or so. I fail to see how a household income of 40k a year is enough to pay for a 500k house.

CheerfulYank I wish I was back in Minnesota! We are currently living in the UK due to DH's work. Hoping to get back to Minnesota in a few years though!

Not taking political sides but just throwing in some "but what if..." questions.

If you tax the rich more doesn't that lead to people taking their money abroad to lower their taxes so the UK lose out even more?

What does one define as rich? 50K? 100K? 500K?

Corporate tax needs sorting.

Raising minimum wage is a grey area because it might not sound alot putting staff wages up by say 50p ph but if a company employs thousands of staff they will lose millions in profit. People forget that profit is used for re-investment too and without re-investment new jobs aren't created so it's a lose lose situation. Plus businessed would start laying off staff to pay the other higher wages. Sounds easy when it is a big company but for small businesses profit is not a million pound sum in some cases.

The Government need to step in and ensure basic utilty companies and the like are not ripping off people (which they are.) Start there and maybe we will get somewhere.

YANBU. I've had to hide a few threads recently where people are complaining they've got to decide between moving to a 10-bedroom house or keeping the family helicopter, and how hard it is that it's such a squeeze these days!!

I hear ya thermals

OP - yep, that's about the size of it. it's all swings and round abouts, jobs where you earn the same, not relying on overtime or bonuses, mortgage payments being lower than people budgeted for which can counteract the higher food costs, discounts if you can bulk buy things or lots of deals on everything from meals out to new fridges, and not needing to top up income with benefits, then they aren't affected that much.

DH and I live fairly frugally, but we've been helped by several factors, the biggest one being our parents. House is on interest only mortgage, so cheap. PIL lent us the deposit. My Mum buys lots of our extras and fun stuff.

Wedding: we're one of those 10k ones, however, 4k was from bonds my Gran had set up for me, which had matured, 1k from PIL who had put aside that much as a contribution to each of their children's weddings, 4k from my parents and final 1k from our small savings.

I have never had a credit card, I rarely drink, rarely drive (have a very cheap to run car that was my Mum's that she gave me when she bought a new one. My DH got my Dad's car when he died), buy most of DS's clothes from nearly new sales, wear one pair of boots that get reheeled and soled for £20 each year, cut my own hair, don't buy make up. I don't buy much clothing, only essentials when I've worn something out, usually from supermarket, or similar. But, I do get Joules clothing as Christmas presents from Mum and DH.

We only go on an abroad holiday about every 3 years, cinema about once a year, theatre once or twice. We have NT membership for days out, go to free museums, stay with family or have weekend breaks in cheapish hotels in UK. We eat out about once a fortnight, either at local Indian (£30) or pub (£10).

Jobs: I'm a teacher (on a pay freeze), DH is self-employed plasterer who some months brings in £50 and other months £1500. He does most childcare, but if he has a job on, my mum steps in. We have no debts apart from mortgage and loan from PIL. Only government support we get is child benefit.

I guess it all boils down to how you measure wealth? I'd love a 3 bed house, with driveway, a foreign holiday every year and be able to occasionally do things like upgrade telly/laptop etc. myself. Others already in that position probably want a 4 bed, 3 holidays a year and so on.

There is so much to disagree with you on your last post, I'm lost for words Chocolate.

Oh funny, MNNice! I've lived in Minnesota since I was 7. (Ohio before that.) I love it here. :)