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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:
SmallWaistFatFace · 03/11/2021 10:34

Lol this thread is so stupid. It's just ANOTHER thread where the rich can gloat, 'we aren't well off because we have a large house, our kids are privately educated and we have soooo many holiday so we have to shop at Aldi'. Just fuck off.

MrsBobDylan · 03/11/2021 10:35

@VestaTilley I'm sorry you went through that - I can see the effect our financial situation has had in our dc. They can't wait for us to be mortgage free and not to have to worry about money. It is an awful way to live for a child.

EnidFrighten · 03/11/2021 10:36

A lot of people around the world get by on a pittance, living in shacks, mainly eating cheap starchy food etc. They probably couldn't get their heads around what you'd spend an average income on in this country.

I worked with rich people in London for a while, super rich with yachts and mansions etc. They still just compared themselves to others are were miserable about it. Being able to have everything makes people into shits a lot of the time.

YoungGiftedPlump · 03/11/2021 10:37

@Xenia

It is not hard. I started full time in 1983 as a trainee solicitor in London on £6250 a year (about £20k in today's money and those jobs today earn about £35k to £40k a year by the way so that is one career where wages in real terms have doubled over that period.....)

As your income grows you spend more. Eg we could not afford things like hair conditioner or orange juice only squash. I did not buy deodorant. 50% of our net salaries went out in full time childcare for the 2 week only baby (yes 2 weeks not 2 months).

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. Eg to earn £100k when a year or 2 qualified at a City law firm you probably need to live near the office so might have £2k a month rent. £100k after tax is £5557 a month but there is the extra 9% graduate tax for some on earnings over £26k or so.

So let us ask how does anyone spent £5557 a month? First about half might be your rent. Cost of childcare in a good inner London full time nursery (and remember the parents may be working 9am to 11pm every single night and every other weekend so need additional childcare too)... is about £24k a year per baby and the state pays about £2k a year of that.
So rent £2k, childcare £2k x 2 (divided by 2 as shared with a husband) that is still £3000 a month of the £5k just on rent and childcare. that leaves you about £2500 a month left for bills, food, holidays etc etc

As you earn more at one point my mortgage was £90k a year interest only (£1.3m mortgage). I also paid five sets of school fees. Even just now I worked out the other day I will have paid about £230k since the twins went to university in paying their university fees and then 2 years of law school fees and allowance each. (I have no savings and own a mortgaged house and am in my 50s. When I am 67 I will get the state pension but have no other pension. I will work until I died. I have helped all 5 children buy a first property. That is where it all goes. My council tax is about £5000 a year. My heating and electricity is over £5k a year.

Despite all that I am actually relatively careful with money. I always buy a second hand car outright for cash. I do my own cleaning and gardening these days.. I haven't had a night away from home since 2019.

I dont often agree with you Xenia but that reflects us

Started work as graduates in London in 1990 on about £20k each. DH is from a very working class background- no privilege anywhere. Was up against it in his professional role despite both going to very good uni.

Our first house we bought- we had only a mattress for a long time- no sofa, 2nd hand table. 1st child had a basic cot and and cheap fold down pram. Didnt even have a baby bath as they were too much money. Everyone we knew was like this. No luxuries for many years but also no debt.

My 1st pregnancy test in 1994 cost £6 and it almost took us into debt! I had to wait until payday. We lived hand to mouth for many years. I remember debating which of the prescription items to get when ill once- we were both professionals working in London.

When I went back to work after our 1st child our childcare was more than my salary- but a joint cost and I had worked very hard to get where I was and as a woman I would have never got back there again. Had a Nanny for a while when I had 2 children but mostly daycare.

Eventually moved North and took a massive salary drop but housing costs were less and with 2 children we couldn't live in our tiny London flat any longer.

Children dipped in and out of independent.

Our mortgage is now £3700 a month as `I shortened the term to be rid of it by 56. Gas and electric is £500 a month. Council tax £3000 a year. My DH has good pension provision- mine is ok- both aim to be retired before 60 but maybe some consultancy.

I use my car heavily for work and transport items sometimes. It cost £50k in cash- my last one I had for 9 years and the one before that for 10 years.

Our joint base income is about £300k but always bonuses/shares.

We are very comfortably off but we dont have a cleaner, a gardener or a housekeeper (and no-one I know does- its a MN aspirational myth)

Only now in our 50s could we consider a 2nd home (not that we are). It wasn't affordable before.

I know that we are very well off. We do give back. I work 20% of my time pro bono and I am a trustee of a major charity and 2 smaller ones which takes a lot of time and my professional expertise.

I did help my children buy but by putting £200 a month in a help to buy isa over many years rather than a lump sum. That gave them about £15k each.

But the kind of lifestyle some are describing on here isn't affordable at £500k and certainly not at £100k even in the North.

I often suspect most people on here are spouting bollocks about their incomes or only have 1 highish earner (which is a very different scenario). Or they have massive debt, cars on HP etc. Or only rent their homes maybe or have rich families or interest only mortgages. Or their DH is the high earner and they dont really know the truth about how much money they have longer term.

paloma2 · 03/11/2021 10:37

If you have three children in private school, (London) it’s about 9k per term. So £27k each = £81k.

At 45% tax you need to earn about £160k to just to pay the school fees This is why a lot of people have offshore investments and there’s a certain amount you can bring onshore per person that’s at a lower tax. It’s can get very complicated.

If you buy a house for say £4m, the stamp duty tax on that will be about £150k. It’s not hard to see where money goes - tax and school fees being the main culprits!

paloma2 · 03/11/2021 10:41

Sorry the stamp duty would be £350,000 (eyesight is going it seems)!

RandomLondoner · 03/11/2021 10:41

People earning over 100k, what on earth do they even do with that money? Do they buy everything gold-plated?

I know someone who is earning roughly 91K, including employer contributions. The money will be going out as follows:-

15K to pension
23K to income tax and national insurance
22K to mortgage on 2-bedroom flat being bought for 575K
21K on other normal household outgoings/expenses
9K on half of private school fees for one child

Adding up in my head, that comes to 90K, leaving 1K per year to be spent on gold-plated stuff. (Or clothes, the normal outgoing section didn't include an amount for clothes, for parent or child.)

(If the mortgage payments seem high, it's not because of the interest rate, it's because they have to pay it off over less than 25 years due to their age.)

WalkingOnSonshine · 03/11/2021 10:42

I will never understand why people who seem to be triggered by people earning more than them, open threads with titles saying things like “huge salaries” and then flounce off claiming that their mental health has been affected, telling everyone to fuck off in their wake.

ChazsBrilliantAttitude · 03/11/2021 10:42

I am a high earner, our household income is well into 6 figures and we are bloody lucky.
Every increased expense we have is down to our choices. If we pay more to live in London it's because we chose to. If we have a reasonable house and pay a mortgage to reflect that - its because we chose to. We decided to send our DC to private school - nobody made us do it.
So OP yes its a huge amount of money and it buys a degree of choice and security. I think it is easy for people to forget that many of the expenditures they now see as necessities are in fact privileged choices.

Fudgeball123 · 03/11/2021 10:42

Monthly we spend around:
£3k bills (food, utilities, children's clubs, petrol, DIY etc)
£3k school fees
So that's £72k
The rest goes on tax, white goods (replace every 5-10 years), cars (replace every 10 years), holidays, presents etc.
Always traumatic when we have house issues e.g. last summer we had a water leak on our boiler but couldn't get a plumber out for 2 months as they were all busy and the water bill was £600, currently waiting for 3 dripping taps to be replaced.. it never ends..

oviraptor21 · 03/11/2021 10:48

Stress is ....... not waiting for the outcome of that multi million pound proposal which will bring a big bonus.

This is an extremely naive view of the kind of stresses high earners are under.

NothingSafe · 03/11/2021 10:50

@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.

Surely you can see that if someone is living on a fifth of that a month, 5.5k feels like a RIDICULOUS amount of money, though? And that rich has no formal definition, so I would happily call someone earning over 5k a month rich.

Makes me laugh these threads - "but we have school fees!. And the pony!." Like... yes. Because you're rich. Don't have those things then, they're not a requirement. If you feel worse off and aren't getting the luxuries you'd like cos you spent all your lots of money on ponies and private schools, you're missing the point that you're already paying for luxuries - if you'd rather holidays than school fees, stop paying them and book a villa in Barbados instead.

boymum88 · 03/11/2021 10:50

I really hate these threads - it's just 'rich' ( or what people perceive as rich) bashing
We earn just under 90k a year combined and by no means are we rich, after all bills are paid we have £100 to put into savings each month until dc start school. Then will increase. We don't go on luxury holidays have expensive cars, private school.
I do however realise that we are fortunate to not worry about putting food on the table, put clothes on my kids backs, but we are still sensible with money and budget carefully.

I don't like people degrading others for spending money or having money. We would all like to live more comfortably and not have to worry. Also the 'rich' that do spend money fuel the economy

RandomLondoner · 03/11/2021 10:51

I just want to highlight that that 90K budget posted doesn't cover car ownership or holidays. They would be technically out-of-reach, though in reality the person does have savings they could use for that. (The majority of their mortgage payment is capital repayment, so taking say £1000 a month from savings to fund extras would not be reducing their net worth.)

Tipsylizard · 03/11/2021 10:51

Both myself and my husband earn over 100k and I am.always marvelling at why I don't feel rich? Taxman takes 40%, we have a mortgage of £3.5k each month, both have cars to get to work, 4 kids, a nanny for the younger ones to help out with school.drop.offs and pick up after school clubs,a cleaner to help keep the house in some semblance of order. We both have good pensions though and some savings (off set against the mortgage) so although we don't have much left at the end of the month we are planning to retire at 60 with no mortgage and a good pension. Its hard work at the moment - hopefully will be worth it!!

We both went to inner city comprehensive in the North of England.

SmallWaistFatFace · 03/11/2021 10:52

Exactly @NothingSafe

qualitygirl · 03/11/2021 10:52

It's not a given that high earners send their dc to private school...my dc go to a state school. A lot of the parents a high earners.

SmallWaistFatFace · 03/11/2021 10:53

@Tipsylizard

Both myself and my husband earn over 100k and I am.always marvelling at why I don't feel rich? Taxman takes 40%, we have a mortgage of £3.5k each month, both have cars to get to work, 4 kids, a nanny for the younger ones to help out with school.drop.offs and pick up after school clubs,a cleaner to help keep the house in some semblance of order. We both have good pensions though and some savings (off set against the mortgage) so although we don't have much left at the end of the month we are planning to retire at 60 with no mortgage and a good pension. Its hard work at the moment - hopefully will be worth it!!

We both went to inner city comprehensive in the North of England.

You don't feel rich? You can afford a huge mortgage, four children, a cleaner, a nanny and to retire early. I think you need some perspective.
theremustonlybeone · 03/11/2021 10:53

I understand your view as someone who lived in a tenement flat with an outside toilet.We moved to a new town when they pulled down the flat which did leadd to better housing but I grew up getting provident checks to get uniforms and free school dinners. Holidays were visiting aunties and uncles. My mum counted every penny and it was tough, she had to sometimes scrape meals together. (dad buggered off)

However I have ended up earning a very good salary as does my DH, I didnt go to university and my take home pay is 4K his is 6.5k. I live in a wealthy area of london and mortgage is 2.3K a month, school fees are 3k. I would never have expected to earn what I do, i bumbled through school fell into a career that allowed me to move and i have gone up the ladder. However I have heard my BIL and his wife ( my DH brother) suggest there skint, living in a 2 million pound property, 3 DC in private school. They are extravagant in there expenditure but suggest they are living in tight. As someone from a working class background, growing up in a council estate i find there attitude disgusting and not in tune with the reality of how others live.

NothingSafe · 03/11/2021 10:54

@ChazsBrilliantAttitude

I am a high earner, our household income is well into 6 figures and we are bloody lucky. Every increased expense we have is down to our choices. If we pay more to live in London it's because we chose to. If we have a reasonable house and pay a mortgage to reflect that - its because we chose to. We decided to send our DC to private school - nobody made us do it. So OP yes its a huge amount of money and it buys a degree of choice and security. I think it is easy for people to forget that many of the expenditures they now see as necessities are in fact privileged choices.
This is what I was trying to say with my previous message - thank you for putting it more eloquently.

I've seen a fair few people in this thread going "Oh well, if the pipes go or the roof needs replacing, we'd be screwed, we're not rich by any means!" - you are, you're just prioritising spending all that money on luxury services like private schooling rather than savings or other life costs. I don't disagree with that choice - I'd probably do the same if I had the money or children - but it seems very odd. Like standing there with a Ferrari going "Well, if the tyres pop on my push bike, I won't be able to afford to fix it, so you can't call me fortunate!".

MarleneDietrichsSmile · 03/11/2021 10:56

I have a friend on this kind of salary (well, mainly her husband tbh) who always pleads poverty, much like the people on here Grin

Kids in private schools, doing Uni without student loans, every winter to Antigua and later skiing. Cleaner, gardener, nice cars

… but in her own words they are weeks away from living in a tent. They drive an “old banger” (a 5 yr old car, the horrors Grin), the private schools are not posh but essential, the skiing is in cheap France, not fancy Switzerland. The Barbados holiday was a “cheap offer” and they always shop in Aldi (she went there once, thought the chocolate was ok, and now mentions it all the time). The cleaner is essential as the house is so big

They are actually very very poor though, and go on snd on about their “poverty” and when coming for dinner will bring the cheapest of the cheap plonk. From Aldi. To make a point. Did I mention they are poor? Wink

I am still friends with her as she makes me laugh

Changechangychange · 03/11/2021 10:57

School fees are £20k per child per year around here (not boarding, just normal independent day school). Full time nursery fees are £1500-2000 per month. That plus a big mortgage (I’m in south London, a three bed terrace is easily £1m here). Job done.

If you earn that salary but live in Barnsley and send your kids to state school, I agree you probably have a lot of spare money. But most people on those incomes will be in the SE.

MatildaIThink · 03/11/2021 10:57

@WalkingOnSonshine

I will never understand why people who seem to be triggered by people earning more than them, open threads with titles saying things like “huge salaries” and then flounce off claiming that their mental health has been affected, telling everyone to fuck off in their wake.
People seem to get angry about a lot of things, often things that don't matter, whilst not caring about things that do actually matter. I am not offended by someone earning £10 million, £100 million or even £10 billion, I don't resent them or even hate them as some on here seem to. People have different lives, different careers, make different choices, with an element of luck thrown in as well, but I don't resent someone for having made good choices and experienced a bit of luck, or even made bad choices and had a lot of luck and it would be childish to hate them.
NothingSafe · 03/11/2021 11:01

@boymum88

I really hate these threads - it's just 'rich' ( or what people perceive as rich) bashing We earn just under 90k a year combined and by no means are we rich, after all bills are paid we have £100 to put into savings each month until dc start school. Then will increase. We don't go on luxury holidays have expensive cars, private school. I do however realise that we are fortunate to not worry about putting food on the table, put clothes on my kids backs, but we are still sensible with money and budget carefully.

I don't like people degrading others for spending money or having money. We would all like to live more comfortably and not have to worry. Also the 'rich' that do spend money fuel the economy

Nobody's saying it's bad that you have those things. But a family earning £90k is a long way above average - the median household income in the UK in 2020 was £29,000. HOUSEHOLD. Your household income is three times that.

You may not feel well off, but you must be bringing a fair few grand home a month in tax. Not everyone's bills and living expenes cost that much with £100 left over, so you must have a big mortgage, or nice cars, or decent pension contributions, or other bills that aren't 'essential' and therefore are as a result of your higher household income and a choice. If you don't have lots of money left over, it's because you've made choices to spend that statistically-high income in a particular way - it doesn't mean it's not high, though.

I'm not degrading or bashing you for having it, I just think some perspective is necessary before people on very high incomes compared to the average try and claim they're not well-off. You are. Whether you feel the kind of 'rich' you expected to is your own personal issue and down to your spending choices - but you are, compared to the UK average, well off. That's a fact.

daimbarsatemydogsbone · 03/11/2021 11:02

[quote BarbaraofSeville]@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.[/quote]
Of course I can see that - did you miss the use of privilege in my post?
I don't know how many times I have to say it - and I was trying to answer the OP about where the money goes.
I am very very well aware that I am EXTREMELY FUCKING FORTUNATE and was not trying to claim otherwise.