..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?

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

Many of us know very well because we DID.
DH and I have both done every crap low-paid skivvy job you can imagine, and lived within that income in crap accommodation counting every penny. That was our incentive to do better.

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

I don't need to imagine, I love already done it!

... have you seen the price of London property?

What I really value is being able to take dd shopping: have lunch out, buy her a pair of boots and new coat and feel my 23 year old who is incredibly fortunate give me a hug and say "mum are you sure, they're £140". Because the boundaries and moorings we put in place meant our dc didn't grow up spoilt and entitled.

If you look at % of children who go to top tier universities from private schools compared to state schools, that might explain some of the fascination.

We are fortunate enough for afford private school and still have a nice life but there’s no end to the things I would sacrifice in order to pay for private school.

This ridiculous thread epitomises what's wrong with the "class war" in this country. Low earning working class clashing with high earners, bickering about what is and isn't "rich".

With a couple of notable exceptions maybe, anyone that comes from a poor background has the potential opportunity to find themselves a high earner later in life. Not just by hard work, that was never enough, but being clever, paying attention to your education, working smart, taking risks, and just maybe having a little luck along the way.

Conversely, many of the high-earners on here could have a change of circumstances and end up much poorer in later life, through bad luck, bad choices, whatever. Even if they've got enough wealth to avoid being "poor", their children, or grandchildren can rapidly find themselves with no more advantage in life than anyone else. That upwards and downwards social mobility is a fact for 99+% of the country.

There are those, the actual "super rich", the mega wealthy in this country, and as it makes little difference, in the world, that have such substantial amounts of wealth that their families will be wealthy for generations, AND here's the real problem, probably just continue to get wealthier.

£30k/month is nowhere near being super rich. £30k/month net does make you rich.

I'm rich enough to afford a the sort of boat that most people would think of as super flash.

The super rich are in as different a league to me as I am to a homeless street urchin in India.

I'll never be able to earn that sort of salary. I'm educated to gcse level, which I did in my forties. I've tried studying further, but really struggle with focus due to asd and inattentive adhd. I'm now 51, in a lovely privately rented house which is secure and bring home £1300 per month. I support my eldest son who has asd and loves with me. We're moving towards getting him to a place where he'll be able to work part time. These sums of money are what I can only dream about.

However, I do okay. I have what I need materially. A bit more money would be helpful. The more you have, the more you spend.

DH earns a good salary. £95k a year. We are in South-East where house prices are high. DH didn't go to private or grammar school - he got where he is at due to his hard work and determination (he did go to University and achieved a 1st in his subject area).

Our DD will not be going to private school. Whilst we have a nice house, it is where the majority of our money goes. Our mortgage is quite high per month. He is also heavily taxed on his earnings so whilst it might sound like a good salary by the time you deduct outgoings / tax it's not what you necessarily as much as you think it is.

We don't go on luxury holidays, we don't have a fancy kitchen, our home needs work doing to it. I'd dearly love a cleaner to help with the cleaning, but it's not in the budget. We don't drive fancy cars - mine is a second hand Kia Picanto!

@gelatodipistacchio

... have you seen the price of London property?

Yes. back to 2014 prices and still falling for flats. Can get a 1 bed in central London for the same as my road in the North (albeit in a very pricey place) at the moment.

Houses in London- very different.

@glitterbug87

DH earns a good salary. £95k a year. We are in South-East where house prices are high. DH didn't go to private or grammar school - he got where he is at due to his hard work and determination (he did go to University and achieved a 1st in his subject area).

Our DD will not be going to private school. Whilst we have a nice house, it is where the majority of our money goes. Our mortgage is quite high per month. He is also heavily taxed on his earnings so whilst it might sound like a good salary by the time you deduct outgoings / tax it's not what you necessarily as much as you think it is.

We don't go on luxury holidays, we don't have a fancy kitchen, our home needs work doing to it. I'd dearly love a cleaner to help with the cleaning, but it's not in the budget. We don't drive fancy cars - mine is a second hand Kia Picanto!

But what do you earn?

If average earnings at £30k (approx don't jump on me). then 1 person on £95k is only 20% above average earners allowing for tax. £2000 each take home as opposed to £5,300 for 1 person.

You Tend to spend time with people on a similar income. So the decision to send kids to family vs childminder vs nursery vs expensive nursery and the area you live and size of house is made based in what those around you are doing,which is probably a financial stretch for everyone around you,but they do it because it's the done thing. As so it perpetuates as you live in a certain area and your kids go to the same sorts of settings etc so your world view of normal becomes increasingly fixed.

@TractorAndHeadphones In our case the £30k average income would just about cover our nursery fees (two children, four days a week, paying the going rate for a bog standard nursery around here, and with the 30 free hours for one child). I can’t see how anyone on an average wage covers that level of cost for childcare, unless they have family who can help with childcare or one parent stops working.

DH and I, joint income of around 120K, in the past 12 years my income has trebled, through strategic job changes and gaining qualifications, his has doubled, working his way up in his field.

The difference between now and 12 years ago is that we can afford a nice sized house, can actually save a decent amount each month, pay into pensions, have a nice 2 week holiday and a couple of weekend breaks a year. We can also go food shopping without having to think of the cheapest meals etc. I'd say we are comfortable, and by no means rich.

Big salary comes with big outgoings and in almost 100%cases an awful lot of stress.

Why does it automatically come with big outgoings? Tax aside and with the exception of social housing, the only real criteria for buying or renting is if you can afford it, you don't have to buy the most expensive you can afford. And you don't have to buy expensive cars, holidays or anything else, the cheap versions or the choice to just not have are equally available to those who can afford better to those that can't. So it's not a given that automatically more income will result in more outgoings.
And stress is relative, low income jobs can be and are stressful, they're just not compensated for that.

People rarely have a luxury of finishing at 6 or switching off work for the evening and weekends when they earn 6 figures.

Or indeed when they don't, some jobs are required 24/7, 365 and don't earn 6 figures over years, never mind one. I work in a nmw job - and it's an absolute expectation that I work for free. It's not just expected of those on 6 figures.

And no, I don't think they were just lucky, it is a lot of sacrifice. I hear a lot of moaning from people with a modest salary about how life is tough, but they made a choice to pick something 'rewarding', 'fullfilling' or something that makes them happy instead of attempting to join the rat race.
Good for them, just don't blame others and don't think they have been lucky or have an easy life.

So, having a low income is a choice of not choosing the right job or willing to make sacrifices, but high spending from your high income is not? 🙄

@Captainj1

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).

Audit?

@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.

Jesus, by no means makes you rich? I could go on a holiday every damn month on that salary!

We take home £7k + a month but could never afford private school fees. Mortgage (housing is astronomical here), child care, council tax, utilities, insurance etc = £4.5k, clubs / music lessons etc = £500, then there’s food, cost of running a car etc. We spend very little on clothes or holidays, don’t buy much ‘stuff’, don’t watch tv or have expensive phones etc. We put some by each month for unexpected costs. Our kids would only be able to go to private school if their grandparents were funding it (which happens a lot here).

@Iwonder08

Big salary comes with big outgoings and in almost 100%cases an awful lot of stress. People rarely have a luxury of finishing at 6 or switching off work for the evening and weekends when they earn 6 figures. And no, I don't think they were just lucky, it is a lot of sacrifice. I hear a lot of moaning from people with a modest salary about how life is tough, but they made a choice to pick something 'rewarding', 'fullfilling' or something that makes them happy instead of attempting to join the rat race. Good for them, just don't blame others and don't think they have been lucky or have an easy life.

Exactly. Huge difference between someone whose circumstances prevent them from earning more and those who could - but chose something in line with their interests. In real life most of the people around me are these. None of them on NMW (unless they chose it because they’re being subsidised by a partner) but not paid v high salaries either. NMW isn’t ‘average’. All judging me because I have a ‘high’ salary but they wouldn’t do what I did and choose a profession for the money.

MN is different but it’s random strangers on the internet soo…

I can't comprehend it either OP
But I bloody wish I earned it!

[quote twoofusburningmatches]@TractorAndHeadphones In our case the £30k average income would just about cover our nursery fees (two children, four days a week, paying the going rate for a bog standard nursery around here, and with the 30 free hours for one child). I can’t see how anyone on an average wage covers that level of cost for childcare, unless they have family who can help with childcare or one parent stops working.[/quote]
Hello 👋🏻 this is us. It’s really hard. Our household income is £75k which I appreciate is a lot to a lot of people (clearly not compared to many on this thread!) but we are skint. All our money goes in childcare, mortgage and essentials. DH and I often say if he wasn’t on his decent salary we would be completely screwed. The real question is why is the cost of living so out of sync with average earnings thus plunging so many into poverty.

It's all relative. As PPs have said, higher income, higher outgoings.
A friend of mine who is a solicitor worked for a large firm that during the 2008/9 financial crisis made 80 admin staff and 20 solicitors redundant. They then asked for senior staff to take six weeks unpaid leave staggered over the next year, to avoid more redundancies. My friend said it was staggering the number of highly paid staff who could not cope with any sort of pay cut because of the high month-on-month cost of financing their lifestyle - huge mortgage, school fees, extra-curricular activities, expensive leased cars. They were spending every penny of their high salaries - a surprising number had no savings.

@C8H10N4O2

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.

It's not a "subsidy". A subsidy is money granted/ received, not less money confiscated. Everyone can save into pensions without being taxed. Obviously if you are someone who pays a higher marginal rate of tax, the % saved will be higher! That's totally fair because everyone can save from gross earnings with no tax at all.

The principle that pension savings are tax free is extremely important to incentivise pension saving, and also because pension savings are taxed at the point of withdrawal. It would be grossly unfair for them to be taxed twice.

Consecutive Governments of all stripes have maintained this principle for very sound reasons. As the state pension is on its last legs, this is even more important to maintain now: if pension saving is discouraged by punitive double tax then those who can afford to do it will save less, meaning higher demand for what state support remains when the current cohorts of workers reach retirement.

Big salary comes with big outgoings and in almost 100%cases an awful lot of stress.

People rarely have a luxury of finishing at 6 or switching off work for the evening and weekends when they earn 6 figures.

So many misperceptions. DH and I are both high earners and have hardly any outgoings - no mortgage or other debt. We don't work evenings or weekends and very little stress.

@twoofusburningmatches 30K is the average income for one person. If your combined household income is 30K then you’re below the average. NMW is not ‘average’ which is what I keep saying. Everyone on the thread is comparing 100K to people on the breadline when there’s plenty in between.