..to struggle to comprehend huge salaries?

[missbunnyrabbit]

I was reading the thread about how much people earn having been to grammar/private schools and I just cannot get my head around how much lots of people earn. My head just cannot imagine such huge salaries. People earning over 100k, what on earth do they even do with that money? Do they buy everything gold-plated? That's a joke BUT I have no idea what anyone does with that sort of money or what it could be needed for. This isn't a bashing thread or anything like that. I'm just a bit stunned.

Does anyone else's brain struggle to imagine such huge amounts of money?

@Allsorts1

I don’t really think people earning 100k are a problem. Our household income is 6 figures and we are comfortable but my DP still waits for things to be on sale etc. We don’t have kids yet and I can imagine this will put a strain on things and is the reason I’m putting it off. Anyone going into a professional sales job has the absolute chance to earn 6 figures in commission and you don’t need a fancy degree to get those jobs.

If you want to focus your attention to unfair wealth, look at the remaining aristocracy and the CEOs who are earning millions in salary while their workers are on minimum wage. We need a wealth tax and we need an inheritance tax at the higher levels that gets around trusts etc to break the aristocracy for good (and to raise the cap because 50% inheritance tax over 400k or whatever it is is completely ridiculous in my mind - that’s most people’s family home in London).

If you mess around with things like wealth tax and inheritance tax people will just find ways to avoid it.

Our joint income is over 100k (public sector workers both in management). Only recently increased to this with me returning to FT employment and recent promotion. We choose not to pay a huge mortgage, certainly don't have posh cars, massively opposed to private education ethically (not that we could afford it), have nice holidays but not 5* or long haul etc, often in the UK, won't be able to retire early.
But we do have the capacity to pay for a cleaner, someone to help with our garden in the summer, we were able to pay our friends, whose business was affected by CV to paint most of the the rooms in our home this year. I know we don't have to worry unduly about money, if a large bill came along (boiler bust for example) it would be a pain and frustration but we would be fine. We can afford to make greener choices in terms of what we buy. We don't live a life of luxury by any means and we're not frivolous but we are massive privileged that day to day money is not something we have to worry about.
I work with some of the poorest families in society in my job and know the chasm of difference between their experience and mine.

1300 mortgage (small mortgage here but undesirable area)
200 Life assurance, home insurance
350 Utilities
400 Car tax/insurance/petrol/repairs x 2
90 Internet/tv
90 Phones
50 School contributions/books/stationary
600 food
80 Pet insurance/pet food
200 Health insurance
50 dentist fees x 4

Yes we could rehome pet.

It isn’t long adding up.

@Libertaire

You do realise that the government takes 40% of everything you earn over £50k in income tax, and that a gross salary of £100k equates to take-home pay of around £5500 per month, don’t you?

That’s a decent salary, particularly if your other half also works and you don’t live in London, but it’s by no means rich.

I think you have been really tone deaf here

£5k per month is a hell of a lot of money vs someone who is on MW.
This is being rich vs always wondering about your next shopping and I’d you will need to use a food bank.

As a family, we are not earning £5k a month but are over the national average. We still consider ourselves lucky and rich enough. Because we are not living payday to payday.

[quote Peaseblossum22]@C8H10N4O2 I am not carping , if you search my posting history you will see that I am actually an advocate of paying more tax and personally would happily pay more. But the OP asked where the money went and it is true that a big proportion does go on tax,[/quote]
The marginal rate of 60% however is often complained about but very misleading. Its largely avoidable and of course we get much better tax rebates on pension contributions than average earners.

If you are going to cite the tax burden you need to offset it with the extra tax benefits high earners get on pensions and indirect earnings.

Their expectations for normal things expand to fill the space available.

I know I do that. I’m on nowhere near £100k but my salary is much more than it was ten years ago. Last work dress I bought was £60 from Hobbs. And I can kid myself that it’s not really that much, the dress was on sale, I need work clothes - and that’s all true, but it’s also true that my work clothes all used to come from charity shops and Primark and I’d have considered £60 for a single dress absolutely eyebogglingly extortionate.

Or savings. People putting spare money aside each month in savings typically don’t feel like they are doing any kind of luxury activity in that, they feel like it’s a sensible prudent thing to do with extra money. And it is, but you still need to have extra money to be able to do it in the first place. If you are lucky enough to put hundreds of pounds in savings every month you are better off than so many people.

There is the servicing of a five-bedroom house. If you rely on paying people to help you, you'll need a regular gardener; then you'll want to returf and re-gravel certain areas. £500 of plants each summer, maybe. Things you don't need, like summer houses. Probably carpets will be frequently replaced. It would be easy to spend £100 per week on beauty treatments. And if a holiday home also requires upkeep.

We earn around £250k - have our own business and do consultancy work
We both went to local comps, no Uni, no 6th form even. Late 40s

£85k goes in tax
£90k goes on bills and mortgages (helping out parents too)

We put a lot into pensions at the moment - after 4 redundancies between us, this gives us the security we feel we need

No private school, 2 DC in state
1 car between us (leased Ford)

We do spend a fair bit on holidays (pre-Covid)
Few thousand goes to charity
Gifts to various people - some I know personally, some I don't, sometimes anonymous.

I do feel incredibly privileged and am aware that we are in the top few % of earners

I am very grateful that I don't have to think about the day to day spends

I am not naive and realise we are very well off

I think anyone suggesting the money give you more time is mad - in order to get that salary you usually have to work very long hours. I have much less time earning well over £100k than I did when I earned £18k (both full time jobs). You may be able to retire early so get more time that way but day to day more money costs time.

As others have said, tax, mortgage, childcare, pensions and school fees take a massive chunk of the money. It’s obviously a privilege not to have to stress about money and to be able to have the house that comes with the big mortgage and education that comes from the school fees - but we are certainly not buying loads of gold plated/super luxury items.

@missbunnyrabbit I find it fascinating how this thread has brought all the higher earners coming to defend their salary and tell you that it’s actually not that much money and don’t you know they have to be so careful too?
I mean they shop at Aldi!!

All the while they don’t seem to question at all the fact that, if they have to be careful with their £100k salary , with a ‘simple 3bed house’, those who are living with MW must have a really hard time indeed…..

My 4 bed terrace house in the South East is worth about £350/360,000. The estate across the road is even cheaper. The prices have risen a lot in the last 10 years though which means it's unaffordable for a lot of people on an average income. Which is not £100,000.

There are cheaper housing options in the south east. Some higher earners just don't want to live there. But that's a choice not a need.

@GoldenOmber

Their expectations for normal things expand to fill the space available.

I know I do that. I’m on nowhere near £100k but my salary is much more than it was ten years ago. Last work dress I bought was £60 from Hobbs. And I can kid myself that it’s not really that much, the dress was on sale, I need work clothes - and that’s all true, but it’s also true that my work clothes all used to come from charity shops and Primark and I’d have considered £60 for a single dress absolutely eyebogglingly extortionate.

Or savings. People putting spare money aside each month in savings typically don’t feel like they are doing any kind of luxury activity in that, they feel like it’s a sensible prudent thing to do with extra money. And it is, but you still need to have extra money to be able to do it in the first place. If you are lucky enough to put hundreds of pounds in savings every month you are better off than so many people.

Yes to all that!

I earn just over £102k plus bonus. Husband earns £67k. We don't live a "rich" lifestyle. Most people wouldn't have a clue. I drive an old car, buy my work clothes from ebay, I even do my own cleaning. Haven't had a holiday abroad since 2019. My kids are state educated. A lot of our days out are doing stuff like National Trust properties (annual membership). I'm naturally frugal though. And as PPs have said a large amount disappears in tax.

No mortgage but a lot of money has gone into doing up our house and garden. A total renovation and still not quite finished three years later. I think overall it will have cost £200k on top of the house price and it's been a gradual process of save and spend for each stage. I put a lot into pensions and savings as I want to retire at 60 (very stressful career). We're planning for our youngest to go to private secondary and also saving for uni (older parents so may be retired or close to it by then). Our eldest has learning difficulties and we doubt he'll be in a position to buy a house so want to help him when the time comes. Also have spent a lot on private therapies/assessments for him. Childcare has also cost a lot over the years. Until covid times we also had an evening Nanny some days to bridge the gap of long working days and enable the kids to be back home, doing homework supervised etc.

I know how lucky we are and I've never taken it for granted. The best part is not having to worry about an unexpected bill/car repair/needing new glasses/can we afford a school trip. at the moment we need a new mains supply pipe (unexpected) and that will cost £5-10k. My life used to be so different (struggling on low income and huge debts to put myself through law college in the evenings after working FT all day) and I won't ever forget.

It might lead people to wonder why we don't live more extravagantly. But stuff like eating out/weekends away wouldn't seem like a treat if we did it all the time. I'm also knackered from work and prefer chilling at home to be honest. My kids were both in nursery from a few months old so there have been those sort of sacrifices too.

When the renovation is finally finished we are definitely getting a cleaner again!

[quote Peaseblossum22]@C8H10N4O2 I am not carping , if you search my posting history you will see that I am actually an advocate of paying more tax and personally would happily pay more. But the OP asked where the money went and it is true that a big proportion does go on tax,[/quote]
@C8H10N4O2 the irony is that well spent tax benefits everyone. Both the rich and the poor. Things like private school and healthcare(insurance doesn’t cover everything) are expensive. If we had good state schools everywhere and adequate provision then there’s no need for that extra is there?

As it stands though tax isn’t being spent on these things. And even if high earners are taxed to death there won’t be enough and it’ll all go on wealthy pensioners. Can you blame people for not wanting to pay tax but more important - funnelling more of it to charities who do the work that the government should be doing? Especially in terms of SEN. I’m an adult diagnosed ADHD and there was no help at all - still isn’t. Cost me thousands out of my own pocket. I’d be happy to pay all of that as tax and get the service but that’s not happening is it?

@Atla but yes thats why in a way london salaries look so low compared to the costs. London is disproportionately home to the insanely wealthy (whose wealth is in millions or even billions), young, the ethnic minorities and the people who were lucky enough to buy in 1997. The towns which pay the highest income tax are places like beaconsfield and weybridge as middle class londoners on 6 figure salaries tend to move out to these places with only some people staying in some select affluent areas in the city like Richmond. The young don't need much to live well in London if they rent (or even own a small place) and have no kids, a lot of the EU workers pre brexit were transient or expats (and so the london living wasn't a long term cost), ethnic minorities i.e. indian, chinese, jewish, pakistani often have a support network and live together which reduces the costs. But cos this is mumsnet where people tend to have families and probably most are not Asian, I am talking about how much a family who needs to pay childcare would need assuming they have a mortgage and no help with benefits.

*no help from govebrmenr
ADHD charities have a fund to help, and I’ve donated quite a bit to these. Again - doing work that the government should be doing

husband till recently earnt about 125k and i about 40k. We saved so we could retire early as we both hated our jobs. He has usually had to work away from home so his job has been more costly to do than most. When the kids were younger we employed a nanny as my job meant i had to be flexible on my working hours. we also had a cleaner and house maintenance had to be done by professional - both too busy/tiered to do ourselves

@TractorAndHeadphones

Don’t you have children OP? Or are you a SAHM/grandparents care in a tiny village?

Childcare costs a bomb. So do kids’ activities like sports or an instrument.

Plenty of people also have things to save for like kids uni and deposits, their own retirement. Even that’s fortunate because many never will retire.

I have also been poor (had to work max hours while I was at uni) and don’t want for much but this wide eyed pretend innocence is idiotic. You can’t afford to buy gold plated everything if you earn 100K and have children!

I mean, I pay for activities for DS and I'm on minimum wage so I'm sure it won't break the bank of someone on £100k. Also, they are a choice, not a life necessity.

Private healthcare too.

We have a combined salary of around 220k. But we live in London and our mortgage is over 3k a month. We pay about 2k a month into pensions/LISA. Spend and save the rest. It is a lot of money, but particularly in London or other areas when a lot goes on a mortgage, it doesn’t mean we have what would look like a luxury lifestyle to outsiders - we are definitely comfortable, but we don’t own luxury cars (I don’t own a car at all, DH has a Golf), we go on holidays but not insane resorts or 1st class travel, we have a house in a nice part of London - but it is a small Victorian terrace. Don’t get me wrong - I know we are very lucky but I don’t think we’re living the gold-plated lifestyle you might think!

I'm not on anywhere near 100k but I looked up how much more I'd actually take home once ni, tax, pension and student loan had gone out, my take home isn't vastly more than I'm getting now and I'm way off that figure. The more you earn the more you pay in taxes etc (granted paying into a pension is going to benefit you in the long run but you still have to part with the money now). I think you'd need to be on far more than 100k to take home the sums of money you talk about, £1000 a week take home (which is what figure I came out with after deductions) though quite a lot once you've paid for your mortgage, childcare, car, bills you aren't going to have lots left after the basics, granted you'll be ok but not "rich".

Oh, and when we need to pay childcare it will be over 1k a month.

I didn't earn a six figure salary, but just shy of 60k in my last job.

We'd bought our house earlier in our careers, so no temptation to get a huge mortgage, but I found the following:

• I became deskilled by being able to "money" a problem away. Things that I would normally be capable of attempting were paid for instead.
• But on the other hand, if a problem could have money thrown at it to make it go away, I didn't lose sleep on it. Car needing sudden £££ repair? Didn't blink.
• With each payrise, our lifestyle subtly upgraded. No big purchases, but a steady migration towards better groceries.
• However... I did buy myself a large number of random purchases which in retrospect were just trying to make me feel better about life.
• Living as a household with an income over 100k for just three years gave us the freedom to move to different careers etc with ease.

(it's worth saying that on the whole, my husband and I live very modestly on whatever salary we have, these were things I spotted)

It's always been a habit of mine to save more than I spend of an increase in salary, and by the end I was saving almost half my take home pay.

I've taken a much lower paying PT job that fits around my studies now without batting an eyelid because I know that my pension and savings are well ahead. But I've noticed myself regaining autonomy by tackling issues with skill and effort rather than money, which is nice.

(and yes, I'm aware that it's a privilege, etc, I'm just sharing observations of my experience)

We both earn a lot and work hard and long hours.
We have a large old creaky, leaky house in the South which has high maintenance & running costs, have a cleaner, and a gardener for a few hours a week. Big mortgage. 2 sets of school fees followed by Uni support for kids who only qualify for minimum loan. We usually go on holiday in UK or Europe - have not had a long-haul family holiday in over 10 years. I spend a lot on decent local organic food and gardening, DH also has a hobby that requires some expensive equipment.

Aside from those clearly optional extras, I think our remaining/disposable income is probably lower than SIL who is a retired primary school teacher, lives mortgage free in a large bungalow up North with a decent pension, has time to help look after her grandchildren, they have much better cars than us & go on several foreign holidays a year.
Everyone makes different choices.

My DH earns around 100k. Our outgoings are around 4k per month and we are able to save. You live within your means though so you get a bigger house and a newer more expensive car, bills increase because your lifestyle expands, you go out more and spend £100 on a family meal. So you don’t see it if that makes sense.