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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

..to struggle to comprehend huge salaries?

999 replies

missbunnyrabbit · 02/11/2021 23:42

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?

OP posts:
SleepyMombie · 03/11/2021 10:01

@Aorh

Truly incomprehensible for one person to earn that much in my eyes.

But surely single income household and private school turns it from incomprehensible to spendable

£100k is something like £65k net.

Approximately £15k per child school fees, let’s assume 2 kids = £30k

Mortgage, let’s assume £1k a month (higher than average but not ridiculous)= £12k

You’re going to be expected to work long hours for that much money, so need a car. Let’s assume total car plus running = £3k

In fact, you’ll probably need 2 to get the kids to private school = £3k

Utilitirs + council tax = £2k

Food, let’s say £400 a month = nearly £5k

And let’s say you have an annual holiday. Apparently average is £5k which has shocked me

So there’s about £5k for spending, savings etc, £400 per month. Which sounds a lot, but if you need to be in a more expensive area go get to work, that could easily get wiped out.

Wish I had that problem 😂

£1k for a mortgage on a property suitable for a family in most of the more expensive areas where there are higher paid jobs is totally unrealistic, unless you have built up significant equity over many years. So is unlikely to apply to anybody with small children who is also paying high childcare costs given that the average first time buyer is now over 30 years old. My house is nothing special and my mortgage is more than twice that amount.
TheKLF · 03/11/2021 10:04

So basically the bottom line is........

If you're 100k+ you earn more but pay a higher mortgage/rent for reasonable accommodation.
If you're NMW you probably pay an equivalent % of your salary on mortgage/rent.

If you're 100k+ you pay a significant amount for childcare.
If you're NMW you probably pay an equivalent % of your salary for childcare.

The massive differences are obviously:
*Increased Pension Contributions - It's a choice.
*Private Healthcare - It's a choice.
*Private Education - It's a choice.
*Employing Cleaner/Gardener etc. - It's a choice.
*Overpaying Mortgage - It's a choice.
*Saving - It's a choice.
*Holidays - It's a choice.

And that's the difference - CHOICE - that's what a big salary gives you and what someone on NMW doesn't have.

So to those who earn a high salary but still think you're poor - you're not, it's the choices you have made (and yes, I am generalising here before you all pile on).

dreamingofsun · 03/11/2021 10:04

Fingers crossed my kids will earn that sort of money one day, though not all have been to grammar schools and none private schools. All gone to uni though and then started grad jobs on not so great salaries.

We live in the south and they will need that to buy a small house - currently they earn a lot less and can no way buy anywhere.
BIL though who has always chosen NMW jobs and has no qualifications is lucky to live in a cheap area and has bought a 3 bed semi by the beach.

just cause you earn a lot doesnt necessarily mean a better lifestyle......its not that simple

OhPatti · 03/11/2021 10:08

Really gets up my nose when people talk about 'hard work' on this type of thread. I don't dispute that many/most high earners have worked hard to be so, but it feels like a tacit implication that people who don't earn a lot are not hard workers. Many people work their arses off in poorly paying jobs and still only manage to cover the basics.

HoppingPavlova · 03/11/2021 10:09

It goes very easily as you gradually adjust lifestyle as earnings increase.
Go from average food/wine to better quality - good wine and steak don’t come cheap!
Go from a modest car to top-shelf and turn them over regularly.
Go from modest home in modest suburb to large home in prestige suburb with accompanying eye watering mortgage.
Move from eating at family/pub restaurants to 4/5 star as standard and have your tribe of hungry teens accompany youGrin.
Pay for private school and uni expenses.
Pay living money to uni kids so they can do volunteer work/internships that will gain relevant career experience and work well on resume rather than them having a standard teen/uni student job.
Decent cars for kids to avoid them constantly taking yours.
Holidays are taken infrequently due to intense workloads but when taken are 5 star luxury, add in teens, uni students, young adults and the cost is sky high.
Medical treatment is often private.

Very easy for there to be little left over at the end of a monthHmm.

TractorAndHeadphones · 03/11/2021 10:10

@KeflavikAirport

I've actually just tripled my salary to well over £100,000 after changing jobs and am wondering how to spend it. I'm very eco-conscious and don't want to consume for the sake of it or buy a bigger house than we need. Will look at charity donations when life calms down a bit.
Eco conscious stuff like high welfare meat is expensive
Sweetpeasaremadeforbees · 03/11/2021 10:12

but still think you're poor

I don't think many people on £100 000 think they're poor, it's just that they get fed up of people on lower incomes assuming they're living an Ed Sheeran lifestyle. A lot of people on here (including me) have said that the biggest benefit is peace of mind and the freedom to try new things, visit new places etc.

MatildaIThink · 03/11/2021 10:12

@seethecolours

I have a relative who works in the city, not sure of exact salary but I assume a joint income of over 400k. They seem obsessed with how much tax they pay and said they’d move abroad if a labour government got in at the last election, depressing really as they were educated at state school and brought up on normal salary. I don’t particularly envy them as their outgoings must be huge and the thought of needing to maintain an income to cover that stresses me out.
It is a difficult one, We are a high earner household, only a bit less than our relative, we pay a lot of tax and whilst I would not say that I enjoy paying tax I recognise it is essential for a functioning society. I would like to see taxes rise, but in line with the Scandinavian system, rather than what Labour usually propose which is raising them only on high earners, which neither generates the revenue needed, nor does it often raise more anyway as highly mobile wealthy people leave the country. We all need to pay more tax, on the bottom two thirds of earners we have the lowest effective rate of income taxation in the EU, the top third have the fifth highest, we have the largest tax free allowance by some way and most others do not have a tax free allowance, but our top rate of tax is actually average.

I want to see better service, I accept that they need to be funded, I have been prepared to pay more tax from when I earned minimum wage to now where I earn six figure, but to make it work we all have to pay more.

daimbarsatemydogsbone · 03/11/2021 10:12

My basic salary is 94k - I have a large mortgage due to divorce and having to start again.
I drive a 15 year old car which I have no clue how I will replace when it dies.
Holiday in UK as cheap as poss.
Of course I don't have the misery of food banks etc and I live in a nice house, but I don't have any gold-plated stuff. My income has been up and down for several years including some time I spent with no work at all during covid - so I have a couple of debts (5k credit card and 5k I owe to HMRC) that I am paying off which make a hole in my income. Of course I understand my privilege and I am not asking for sympathy - but to answer the OP - I am largely playing catchup for things that happened in the past - I haven't been earning this for years and years and I will have a mortgage until I am 65.
I often wonder where my neighbours get the money for all their bling......

Grumpyoldpersonwithcats · 03/11/2021 10:13

Having worked in IT for years, 100k incomes are really not unusual as a result of contracting. Moving from a £27k salary to a £400 day rate in 1994 was eye-opening. And actually the work load as a contractor has been no different from that as a perm.
The key element is that this has given us financial stability meaning we don't actually worry about money and have no debt.
Having come from a much poorer background, I fully recognise my privilege.
We don't indulge in expensive 'trappings', children went through state education, our two cars are both over 10 years old, and we don't do expensive holidays. But our house is paid off & I don't have to worry about finding money for a boiler giving up, an emergency car repair/replacement or a vet bill for the cats.

Watchingyou2sleezes · 03/11/2021 10:14

I'm rich.30 years ago I didn't have a pot to piss in, now I could easily take 7 figures a year out of my interests as "pay". I don't for various reasons. There wasn't any luck involved and at times there has been situations that would have crushed many people.

Some people on @£100k do very little for the £ and similarly lots of them are working very hard for their money.
A nice "normal" life in my opinion needs about £1800/week net. An obviously wealthy lifestyle to me needs at least £7k/week net.
I know people on £35k or £25k per annum won't understand but you're not in anyway rich @£100k a year.

There was a thread about £300k the other week, you wouldn't feel genuinely well off on that until you've had it for more than 5 years.

dreamingofsun · 03/11/2021 10:14

OHpatti - I dont think people on here are claiming NMW earners are slackers. But from what i see, they tend to work in jobs that you can leave and go home when your paid hours are up; that you dont worry about when you get home; that you dont commute to get to for hours and hours; that you havent had to study for over many years. That dont have high levels of responsibility because someone else has to take those nasty decisions

Xenia · 03/11/2021 10:15

TheKLF - I agree a lot of it is choice.
Housing is also a choice. In 1984 we bought a small terraced house in outer London zone 5. I still live out there but in a big house as never felt I could afford to live closer to work things - but again a choice. I could sell this house and buy a big penthouse flat in London so all about choice. Money gives women these choices.

"Increased Pension Contributions - It's a choice.
*Private Healthcare - It's a choice.
*Private Education - It's a choice.
*Employing Cleaner/Gardener etc. - It's a choice.
*Overpaying Mortgage - It's a choice.
*Saving - It's a choice.
*Holidays - It's a choice."

I agree all those are choices. It is nice to have the choice. If we were in North Korea etc we would do what big state told us and not have these kinds of choices.

Currently I am saving to pay off some of the mortgage. I turn 60 this year and have no savings and no pensions - again all choices of mine as I preferred to pay for the children's education and first house.

I am not an eco type person and have no problem with humans dying off the planet particularly so that is not one of my choice but it can be for others.

I have never had any trouble spending extra money! I suppose after 3 children having twins was a the biggest (and nicest) choice/cost.

GnomeDePlume · 03/11/2021 10:18

@user1471554720 once a person is in a position to save regularly then they can start looking at different investment plans. People want different things out of their savings (retirement, property, children's future, future care needs) so they will take different approaches to accessibility, tax efficiency, risk.

Nivealove · 03/11/2021 10:20

@NadiaVulvokov

An ex of mine earns £250k. He has worked hard, long hours for about 25 years to get to that point. He works 60-70 hours a week as standard. He is a partner in a professional services firm. He brings in enough business to his firm to ensure at least 25 people are in full time work.

Anyway, he pays about half his salary in tax.

He supports another ex-partner (not me) fully as she can’t work due to chronic illness. That is about £2.5k a month as she has medical costs too, things the NHS don’t really cover like a weekly physical therapist, plus he bought her a flat outright which took a decent chunk of his equity so his mortgage is a bit higher than it would be otherwise.

Otherwise he pays his mortgage and household bills, probably another couple of grand a month. He doesn’t live in a flashy house, he lives in a three bed semi on an estate in a rural village, close to a couple of important clients. The house is worth less than his annual salary. I doubt his neighbours have any idea how much he earns. He will probably move to a slightly more expensive place in the next couple of years, as he will need to relocate to a city for work reasons. He’ll get a two bed flat in a nice neighbourhood but nothing grand. As the city in question is a lot more expensive that the village, it’ll probably be around £300-350k.

He drives a Volvo 4x4 which he first has in lease and then bought after a few years. He needs a 4x4 as his largest client is in a remote area up a dirt track. He thinks he will switch to an electric car in a few years once the Volvo is past it’s best.

He took a 70% salary cut for 12 months at the start of the pandemic to help minimise the lay offs in his firm. He is proud they managed to keep it to a few voluntary redundancies and they have paid other staff who took salary decreases at the time back (but not partners). His firm is paying furlough money back. He’ll take a year or two to repair his savings etc after that.

At that he lives a pretty simple life. He has just about every streaming service going since the pandemic started and shares the passwords with me even though we broke up a while back. He likes craft beer, he’ll have a couple once or twice a fortnight. He buys free range/organic food as much as he can for animal welfare/environmental reasons. He shops pretty frugally except he has a steak every weekend. So he spends maybe £40-50 a week on food/beer etc. He’ll get a takeout pizza or fish and chips once a month. He’d go to a football match two or three times a year pre-pandemic. Same for nights out with friends. His last house he did have a gardner to cut the grass once a fortnight or so and to do a tidy up at the end of summer. But his new place has a simpler garden so he takes care of that himself now.

Clothes wise he buys good quality but very rarely designer. When he needed suits he’d always buy in sales. He’d buy himself a couple of pairs of jeans at about £100 a pair each year and a few checked shirts/sweatshirts/t-shirts. Usually he’d go shopping on holiday so he could take his time and enjoy it. I doubt he spends as much as £1k a year on clothes.

He has a fairly healthy pension and a rising equity stake in his firm. He helps family and friends with money when they need it. He’s told me if I ever need anything he’s never see a friend go without.

For example, I might need to see a specialist in another country for a health condition in the next couple of years and he’s said not to worry about that. I also might need to relocate in the next couple of years and he’s said if I can’t find a decent place in my budget, his priority would be for me to live in a safe neighbourhood where I felt comfortable and he’d cover any shortfall to make that happen.

Whilst we were together my place had a very worn bathroom and he saved up money over a few months so I could get a new bathroom.

He does have private healthcare through work and pays a monthly premium for it- his firm insist on it and that’s he gets annual health checks tied to a life insurance policy they have in him (which pays the firm in the event of something happening to him, he has his own life insurance policies for his former partner his still fully supports, his mum and also for me). I’m still down as his partner on the health insurance so I get private health cover at a very reduced rate and he covers that.

His one place he does sometimes splurge a bit is travel. He likes a nice holiday. He will go to a European capital for a couple of weeks, stay somewhere nice but not flash, eat out a lot, sit in cafes and bars drinking coffees or having a cocktail, tip well, do some clothes shopping, maybe try or see a football match at the local stadium. But he’ll also spend time in parks and just walking round, going to museums and galleries, or hanging out in the apartment watching local tv. He hasn’t done that for the last couple of years and probably won’t travel again for at least another year or two, so at the moment he lets himself have all the streaming services going as compensation.

When we were going out I think I paid for a meal for us once, as a birthday treat. He’d say ‘get the tip’ or ‘you buy the first round” for drinks before or after. I never paid a cent towards a holiday and he’d take out spending money either in cash or prepaid cards and split it 50/50 between us. He’d always spend less than me and end up using his leftover money on the last day to buy me a gift, like a belt or a pair of sandals.

In essence he saves a lot of his money and where he does spend is usually about taking care of the people in his life he loves.

He basically gets no time to himself though. On holiday he would switch his phone off in the afternoons but would work for at a least two or three hours in the morning. He’d switch his phone back on late afternoon/early evening and handle urgent calls or important emails for an hour or hour and a half. So basically on holiday we’d do our own thing In the morning, then have lunch and go out in the afternoon, go back early evening, he’d do work, I’d relax, watch tv, and then either cook or get ready to go out for the evening. Then we’d go out for drinks or dinner.

I don’t think he’s had a day he didn’t take a call or respond to an email for over a decade. One sick day in twenty five years for norovirus and he views that as a bit of a blot,

Wow your ex partner is generous! Imagine if you had children with him?! He definitely would not want his kids to go without.
SleepyMombie · 03/11/2021 10:21

@hollyhocksarenotmessy

The lies on here about tax are making me feel quite angry. It's fair to include NI as a tax. Its not fair to include your pension contributions, student loans etc as 'tax'. Your pension contributions are still your money that is invested for you (opt out if you'd rather have it now).

No one is losing half their income in tax.

The. Gov site calculates that on 100,00 you pay a total 33,307.24 tax and NI. That means 33.3%. This disregards any pension payments (which yes, reduce your take home but are still your money so not tax). The fact that most people do make pension contributions and they reduce your taxable pay, means that actually you pay a lower % of tax than the 33.3% calculated above.

I have no beef with people earning as much money as they can, but I do object to people telling lies about their imaginary tax bill to protest they don't earn a lot.

Student loan repayments are effectively a 9% graduate tax, over the threshold set.
Captainj1 · 03/11/2021 10:24

I earn a lot more than £100k. Only thing to add to what others have already said is that my job, if I make a mistake, can result in significant (hundreds of thousands) personal fines and reputational damage so significant that I could never work again in my industry. Even jail in an extreme scenario if I’m found to be negligent. So for me some of it is danger money, it isn’t something I want to do until I’m too old to enjoy the fruits of it and the majority of my earnings goes into savings to cover pension/worst case scenarios where I suffer a major fine and can’t work again. Several people who do my job suffer mental and physical health issues as a result of stress so great that they cannot continue working. So that’s also a possibility and if I ever find myself starting to feel that way, I will quit (with savings making that possible).

Toodlydoo · 03/11/2021 10:25

@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.

I’d agree with this, felt pretty virtuous putting money away but to be frank when it was just two of us we would have had to really go out of our way to spend all of our monthly income and there just wasn’t much either of us wanted. But it’s easy to think of yourself as a sensible person rather than a very very lucky one.

But yeah on reflection, clothes from cos, makeup form hourglass. You don’t feel like you are being extravagant because the volume of stuff and the type of stuff you are buying hasn’t changed but yeah imstead of the £5 dress it’s now a £60 dress.

Our bedsheets were ripped and I wanted to buy new ones and my DH took them to a local tailor to get them fixed for a few quid. It was a revelation really about how much my mindset has changed as our income has changed whereas DH probably hasn’t. This is all giving me some serious pause for thought.

SleepyMombie · 03/11/2021 10:26

@hollyhocksarenotmessy

The lies on here about tax are making me feel quite angry. It's fair to include NI as a tax. Its not fair to include your pension contributions, student loans etc as 'tax'. Your pension contributions are still your money that is invested for you (opt out if you'd rather have it now).

No one is losing half their income in tax.

The. Gov site calculates that on 100,00 you pay a total 33,307.24 tax and NI. That means 33.3%. This disregards any pension payments (which yes, reduce your take home but are still your money so not tax). The fact that most people do make pension contributions and they reduce your taxable pay, means that actually you pay a lower % of tax than the 33.3% calculated above.

I have no beef with people earning as much money as they can, but I do object to people telling lies about their imaginary tax bill to protest they don't earn a lot.

Also, while obviously pension contributions are not tax, they are a necessary deduction from take-home pay. I mean, if somebody earning a six figure salary got to retirement age and posted a thread about how they hadn't saved a pension, I am guessing you'd be fairly disdainful and unsympathetic!
BarbaraofSeville · 03/11/2021 10:26

@daimbarsatemydogsbone

But can’t you see that earning enough to qualify for and be able to afford to pay off a large mortgage that will eventually lead to you owning a valuable asset outright is the privilege of the well off. That mortgage payment you are making will pay off massively for you in later life.

People on average salaries are likely to never be in such a position and far more likely to lose hundreds of pounds a month in rent that pays for the roof over their head, but builds up an asset for someone else, not themselves.

LemonTT · 03/11/2021 10:26

IME this bracket of high earner, c100-150k per year, don’t live lavish lifestyles. They are just very comfortable and financially resilient. If they have children then they can spend a lot on childcare and thus sustain good careers. As they get older they are able to save for old age, university fees and fund the bank of Mum and Dad. In the meantime their purchases are less budget and more premium. A 50k new kitchen rather than a £5k one.

And at the end of the day people who ear a lot do so because they bring in a lot business / profit for their company or they have skills and abilities that are scarce. It’s not necessarily that they work “hard” or even long hours.

IME high earners deliberately decided to go into fields and careers with high financial rewards. They didn’t put a lot of emphasis on personal satisfaction or work life balance when they picked careers. That being said they have also succeeded in securing flexible arrangements to enable PT working and family life.

I think a lot of people can imagine how these people live. That’s what they aspire to and that’s why they keep voting for right wing policies.

A better question is whether these people can imagine what it like to live off average earnings.

Tubs11 · 03/11/2021 10:27

@OhPatti exactly! Not to mention parents who work three jobs to keep the whole show going

C8H10N4O2 · 03/11/2021 10:28

Also as you earn more tax gets much higher eg I bet some people on here don't even know you get no single person tax allowance at all over a certain level. You also don't get child benefit. No one is going to cry for higher earners but it does have an impact on the salary

We also get substantially better pension benefits in line with tax rate which (for me at least) was worth more, especially as you could offset it largely with extra pension contributions. I suspect most people don't realise that high earners get bigger subsidies on their pensions.

VestaTilley · 03/11/2021 10:32

They live in expensive areas, often pay for private health care, sometimes private schools, Nannies, often have large mortgages, buy their clothes and household goods eg sofas from more expensive shops, take more holidays etc.

My DH earns a high salary, and mine was relatively high before the stress forced me out of work, and we have just (finally) bought our own home. Our money goes on the mortgage, nursery fees and (at the moment) buying things like wallpaper for our new house.

But, we’re quite sensible and frugal most of the time. I put a lot in to my pension (when I was working), we used to save a lot, when DS goes to school he’ll be going to state school, we haven’t had a holiday for three years and we don’t have a car. When we did have a car it was my DF’s old rust bucket. No gym membership, no fancy handbags, no cigarettes, not much booze. No credit cards, no loans aside from mortgage.

We’re comfortable, but not rolling in it. I grew up with parents who were often perilously close to running out of money. I pray I’m never back there again; it’s scarred me for life.

MrsBobDylan · 03/11/2021 10:33

Mortgage costs are generally huge (although renting is far, far worse).

We are doing a downsize to a flat with 3/4 bedrooms to be mortgage free.

I'll feel rich when we can start saving and not have to sell stuff at the end of a month to put food on the table or get into more debt.

I love spending money and could easily burn though a wage of 100k and still have nothing to show for it. Probably just as well I have fuck all Grin