It’s like a parallel universe

[Imustbemad00]

Inspired by a few threads recently about money. Specifically money in London. I’m shocked at how many people seem to think you need to be rich to live in London (£100k per year is rich to me) and how many people think £100k is not a lot in London.
Why is this specific to London?Other than house prices?
Just to put it into perspective, I’m a single parent with 2 children living in zone 1 London. I take home £22000.
Admittedly, cheap rent at £650pcm. But we manage. Obviously we’re not well off, can’t afford fancy holidays, buying clothes for summer at the moment is a struggle, have no savings, can’t afford to decorate. But we have what we need, the occasional treat, short break
Most people I know locally are in similar positions. But I suppose people have a tendency to mix with their own kind.
I just find this ‘other london’ bizarre. The London where you need 100k to barely get by

What difference is that then?

Well, Brockley (for example) is in z2 and has an abundance of green space, outstanding rated schools, plenty of regeneration over the last ten years, trains (and ginger line) into town every 5 mins or so... and you can still get two or three beds there for under £500k. So there are areas like that, in London. Just because they're not trendy (and I use that phrasing deliberately - no better or worse than a lot of known areas such as Shoreditch or Hackney, though possibly fewer hipsters!) doesn't mean that they aren't there. SE London has always been cheaper than the rest because it doesn't have the tube but there has been a massive influx of young professionals because it is still 'affordable' (relative term).

I looked up Brockley LBO out if interest. Yes it does seem slightly cheaper than say Fulham. SE London has always been cheaper than SW, yet still totally out of whack on a national scale and somebody trying to buy a flat from say, Scotland or Wales or most of England for that may matter would no doubt describe those prices as a “parallel universe.”

So this is my point really. You can “other” anyone. You can realise there are many / most people less wealthy than you, but still not feel particularly wealthy in the context of where you are living.

It’s all very well saying, “Well you don’t HAVE to live in Zone 2, do you? Shut up and stop moaning!” That’s like telling someone in Birmingham to shut up and go and live in the Outer Hebrides or something. Easier said than done and people generally tend to stay put because that’s their norm, even if it’s not everyone else’s.

I’ve been in similar positions to both situations. Been low-ish earner with other sources of income in a secure social housing tenancy and a high earning owner occupier. They are different worlds. But they are both very livable worlds with their own strengths and weaknesses.

Have also been a middle earner living in the private rental sector. That was shit compared to the other two. Very little security, very little control, very expensive compared to the other two.

Another factor is whether you have a good support network locally- family, long term friends etc. A lot of people in London/big cities don’t have that. And it can make things very expensive.

There’s a book called “The City & The City” that describes two parallel worlds living side by side in the same space. It’s very like some parts of London.

@Pa1oma I don't know what you're getting at

Thing about earning the £100k is that when your childcare costs decrease, you get to keep more of it. And when your mortgage is paid off, you get to keep even more of it.

You can look forward to a more affluent middle age/retirement compared to someone on benefits who will lose a lot of help once their children are grown up.

Late to the party but great post at 01:38 @gluteustothemaximus

“@Pa1oma I don't know what you're getting at”

Can I ask why not?

Income is relative to living expenses
Someone in a higher income may or not have more disposable money, depending on their living expenses
What is the point in comparisons?
When had it ever happened that everyone earns the same and has a similar financial disposition?
Why is anyone surprised that some people earn £100k? Of course they do! Just as some people are multi-millionaires; some are on benefits and some live in poverty without benefits outside the UK. The OP would no doubt be seen as living in a “parallel universe” on a worldwide scale. But all this is obvious.

just that there's a LOT of threads describing how to spend £100K and be left with nothing

Perhaps you could knock one up

Well of course you could spend a salary of £100k and not be left with much. It’s called a mortgage and a family.

Cheers GimmeBread

Your rent is £650, that wouldn't have got a 2 bed flat in zone 2 twelve years ago when I lived in London. I suspect if you paid realistic rent you might change your tune. I couldn't rent a 1 bed where I live now for that ( outside London)

You manage because your rent is ridiculously cheap.

Income is relative to living expenses
Someone in a higher income may or not have more disposable money, depending on their living expenses

I think the lower earners realise that. That's not our issue, certainly not mine anyway.

High earner: 100k
Expenses: mortgage, bills, private education, cleaner, pension, ironing outsourced, holidays, good food, eating out, travel expenses, kids clubs, childcare, haircuts, activities.

Left over: £0

Lower earner: 15k
Expenses: Rent, bills, value food.
Left over: £20

This example does not mean that the lower earner is better off because they've got a spare £20 to spend!

How can no one see that? We're not calling you rich. We know London prices are high (I had to move out of London even though born there as I couldn't afford it) we know your childcare prices are high (but that won't be forever, kids go to school eventually), we also know to earn 100k you must be putting in the hours, obviously.

But look at your choices. Look at your luxuries. You also have far more opportunities for your children too.

Of course gluteus. I dint think anyone would argue for one second that a higher income doesn’t give you more choices. That goes without saying.

What I do find odd is that someone really can’t imagine where your money might go if you earned more.

As your income goes up, your expectations go up accordingly and you take on more commitments.

Or do people think that because their rent is £600, then clearly everyone else’s should be and then you can just spend the rest in whatever you like?

Also, people who have a lot of money (as in multi millions) tend not to see it as spending money.

They are approached by investment banks who promise to make your money work for you. It often gets tied up in long term investments. Nobody just sits there with millions in the bank for ready “spending money”. They invest it, they buy property, become involved in certain charities and so on. Sometimes you can lose millions if you invest in something that doesn’t work out. You might think of the money as your children’s legacy, rather than something for the here and now. You may need to pay advisors, accountants, lawyers etc which can be a minefield and expensive.

I’m not for one second suggesting that multi- millionaires should be all “woe is me”, but there are different choices and risks that you would not otherwise consider.

Also many high earners are entrepreneur- types and just as the financial opportunities can be unprecedented, so can the risks.

Actually I think I take it back. Being on 100k is rich. Richer than most anyway. It's not rolling in money, I do get that. But what that 100k affords you (I think it's 66k after tax) is pretty comfortable. And the house that comes with that big mortgage, will no doubt be worth a fair bit.

@gluteustothemaximus

“High earner: 100k
Expenses: mortgage, bills, private education, cleaner, pension, ironing outsourced, holidays, good food, eating out, travel expenses, kids clubs, childcare, haircuts, activities”

Except if you go back to my post (and the multiple others on this thread walking through the outlays of someone on 100K in either private rental or mortgage), you will see that £100K in London doesn’t buy all of that. Not all of it, not at the same time.

Yes, the person on £100K is surely better off. But the lifestyle you have just described requires a much higher income (especially if the family has more than 1 child).

I forgot all about this post and just catching up on some comments.

Firstly in my original post, I stated I take home 22k. That’s everything all In. I don’t know why people are assuming I actually have loads more than this because of benefits. 22k is what I physically have.

Also, I was talking 200k take home.

Lastly, people keep going on about my rent. I’ve said several times I know I’m lucky and it’s not the norm. But I’ve also said, on 100k one could pay the market value rent for my property and still be very well off.

Do you mean a £200K salary OP? Which would be about £115K post tax/in the hand?

Agree with Namechange. You can’t put two DC through private school on 100k, unless you live mortgage / rent free and literally do nothing else. 100k means £60 ish k after tax and the school fees wouid be at least 40k of that at 2 x £7k a term each x 3 terms.

Despite this, the hundreds of independent schools in London are all full, oversubscribed, highly competitive and all with waiting lists. Maybe some families have trust funds for education? Maybe some have GP’s paying the fees? Or there’s a lot of people earning a lot more than £100k?

Sorry I meant 100k take home. But to be honest even 100k before tax, my point still stands.

I see there’s a 50/50 split with the replies. Some people are completely missing the point and seem more focused on my rent. Others are understanding what I was trying to say. I can’t really explain it anymore than I already have tried to so make of it what you will.

Part of the problem of having a city increasingly made up JUST of social housing tenants and high earners, is exactly this gulf of understanding. London is, in some ways, a failing city.

I'm neither a high earner nor do I qualify for social housing, and I'm a Londoner so had to eventually move north to buy. It's much more normal here - a much wider range of different people. I much prefer it.

See if you can get a swap up to a Midlands or Northern city. Or that new "right to move" scheme of you can get a job up north.

You'll be better off out of London in the long term and so will your children.

@RubberTreePlant I would love to but my family is here. As a single parent, I’d be crazy to move miles away with no support.
I’ve been looking for a swap out of London for years though, just to see what’s available, so far no luck. I’d consider it if it wasn’t too far.

That's a shame. Maybe in a bit, some of your older relatives will start to think about moving out anyway.