..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?

Not in UK, so our expenditure will be shaped slightly differently.

We live a comfortable, but not wealthy, lifestyle. Tax is a big cut. Mortgage is about the same as the UK. Utilities are a LOT- approx $600 a month and no option to change suppliers, tarriffs etc. Groceries are more expensive here, even though eating out is weirdly cheaper. Insurance is a huge expense. Medical, house, cars, pet, life is another $1500+ per month. Cars and petrol are cheaper than the UK but servicing, annual tax, tires etc are a lot higher. There’s no public transport so we do a lot more driving.

Medical costs are a lot, even with insurance. Prescriptions are around $250 a month. The doctor and dentist are significant costs - easily $5k+ in a normal year (and we are pretty healthy people - I have a long term, but common and pretty routine health condition that is managed with medication). Vet bills are also expensive.

Things like clothing are like the UK, you can buy supermarket, designer and everything in between and are priced accordingly. Haircuts are very expensive- I only go three times a year. Beauty treatments are $200+ (so I don’t have any and stay ugly instead ).

Home maintenance is expensive, even when you DIY. Materials, such as wood, paint, piping, electrical supplies, nails and screws etc, all just cost more here. Any sort of cleaning, window cleaning, tree work etc is a small fortune.

Another cost is travel. We try and get back to the UK at least once a year, so that’s another $3-5k on flights.

On paper, the salary looks great, but the cost of living here is so high that it’s cancelled out. We actually had more spare money when we lived in the UK on lower salaries.

@TractorandHeadphones I agree - my social circle is more about shared interests and hobbies than lifestyle/wealth. We have friends earning very little, and others earning a lot - but we have lots in common with all of them. I can't really relate to the posts where people say that well off people tend to mix socially with other well off people, because that's not my experience.

We don't live in London though - maybe London is more segregated?

I know what you mean OP. In my work I have to verify the huge salaries our client's earn alongside their cost of living. £100k is not not a bad salary but a bigger salary in London would mean that you can save a good amount as well as invest in a good pension. probably have a 2nd home to rent out. pay your mortgage / bills without worrying. Buy good quality food and alcohol/ holidays but also impromptu weekends away. Theatre trips , live sport and music events - buy any books you needed, a cleaner / probably 2 well maintained cars and good quality bicycles. The children may have tutoring in addition to private school fees and good quality extra curricular activities - think swimming lessons probably not at the local community pool. Keeping up with family and friends events. Many have holiday homes in Europe or further . Hmmm I also sometimes wonder how life would be if my salary had an extra 0 at the end .

It's easy to get sucked in and for things to become "normal" very quickly. DH and I earn £100k between us and we don't feel at all "rich." But, we have a bigger house, we run two cars, nursery fees, try to overpay the mortgage a bit and put some extra into pensions. If I want to go out for dinner with friend, or need to buy a relative a birthday present, or just fancy a takeaway then I don't need to think about it and can just do it. That feels quite normal now but at one time would have been inconceivable to me, not so long ago I was taking shopping money out in cash to make sure I couldn't overspend.

It's easy to think "well I'm not buying designer clothes or going on long haul holidays so I'm not that well off" and forget that actually, being free from worry and not having to watch every penny like a hawk is very privileged.

@Pyewackect

If you're on PAYE you'll pay 68% in tax and NI. Why do you think Adele left ?.

68%? You need a word with payroll. Adele isn't PAYE.

According to this she was paying about 14.5% -

metro.co.uk/2016/11/10/adele-made-100-million-in-five-years-and-14-5-million-went-to-the-taxman-6247889/

One of the reasons I refuse to buy her records.

The other reason being that I hate the music!

The people similar to me earn everything between 30K to 100K and are similar in terms of having enough for a nice meal out occasionally but that’s where it ends.

Yes I think that's the gap where people still do have a lot in common. It's the classic middle class range. It's the same as someone on 300K being friends with someone on 370K which most would agree is fairly close together.

I'm talking about much larger disparity like 400K but living on 30K a year. Just don't think that's sustainable on the long run due to a variety of social factors. Of course, someone could choose to live frugally because they're paying off their mortgage or intend to buy a house but those are also all lifestyle factors that have a fixed end. Once the mortgage is paid off, that disposable income is still there. Most people who do this will want to spend or invest on something else at that point and not have it sitting in the bank.

A lot of arguments here are about living frugally for the sake of doing so or as some kind of political statement.

[quote TractorAndHeadphones]@MatildaIThink everyone wants ‘someone else’ to pay tax 🙃[/quote]
I am happy to pay more tax myself, so long as we all pay more, I would abolish NI and combine it to IC, raise the top rate to 49% (yes that impacts me) and raise the lower rates as well. Personally I would like our tax and spend to be more like Scandinavia, which involves us all paying more tax and I do not exempt myself from that.

I can’t imagine it either op. What it must be like to fill your car up at the petrol station, go into a food shop and go crazy without thinking “I’ll get the washing powder next week”

I have no pension and we rent. Future me is fucked. I need to find one of these 100k jobs and fast

@XelaM

I'm one of those people on over 100K, but I'm a single mum with no support from ex-husband and my daughter is at private school and we own a pony. So I'm doing my shopping at Aldi and always worry about how I'm going to pay the next school and livery yard fees

what is it you do ? I am genuinely curious

We earn a lot more than that. We don’t have a large mortgage & aren’t really into cars so a lot of it (approx 60%) is invested or paid into childcare for DS. We do spend more recreationally - our variable expenses are around 1500 per month (on top of fixed bills) as we do like the finer things in life & like to travel.

We are in that bracket.

As well as paying our own mortgage we pay for DHs Mum’s house (a 4 bed where SIL & her kids also live).

Every 5 years we do a family holiday for the extended family (20 people) - because it is nice for the cousins to spend time together. The rest of the extended family nobody earns above 20K - so we just pick up the tab for flights/hotels/meals so it’s not a worry for them.

Maybe not unrelated to my DH’s career hyperfocus and stratospheric earning is that all 3 of our children are autistic. Supporting them has meant that I have not worked for ten years. We are also paying for private therapy for them. This goes up and down depending on need, but last spring I was signing off £400 per week on support/therapy bills to get them through the aftermath of the lockdowns.

The children go to state schools apart from one who moved private 3 years ago because he wasn’t coping. They have nice extra curriculars and a bedroom per child.

I also pay £150 a week on cleaning and house help. I know that I’m lucky that I can - but it would also be disingenuous of me not to pay for the help when I can afford it. My cleaner gets a job out of it & my kids get more of my attention & I can take time out to maintain my own professional skills so that if DH can’t earn we have options.

The truth is - we are very lucky to have high income - but it’s also very different to being ‘wealthy’.

Specifically - the amount that housing costs now vs inherited housing - and whether it works out that we stand to inherit from our parents, or that effectively a single salary is an uplift for a larger group of people.

If I’m honest - the level of hatred and vitriol does sting. DH worked hard at school, first in his family to go to university. Over the course of his career has paid nearly £1,000,000 in taxes. I’m not expecting the local hospital to name a new ward after him - but it’s also not entirely fair to have his success at attracting a large salary be framed as him being an uncaring fat cat.

When DH can’t earn any more, we should hopefully have the family home paid off and a pension, but otherwise we do not have significant savings or assets.

£100k is very achievable if you're ambitious and clever. I have a 24 year old relative earning that amount in London with no related qualifications to the job.

@InSpaceNooneCanHearYouScream

I've read most of the thread, and the thing I'm most shocked by is that out of ALL the posters who admit to earning huge salaries, NOT ONE mentions using any of it to help those less fortunate than themselves. No wonder society is fucked and the rich just keep getting richer

I am rich by standards of this thread - but certainly not getting richer. At all.

Yes, don't assume that everyone in that bracket is some kind of wealth-obsessed corporate fat cat. DH is a teacher. Yes, he's now in a senior position in the private sector, hence the salary. But ultimately he's still a teacher, who spent most of his career slogging away in state schools (when a lot of his university friends were earning high salaries as lawyers and bankers). He still works incredibly hard, and he still does a very valuable job, he just does it in the private sector now.

We jointly earn over £100k and feel very fortunate. Neither of us went to public / grammar school but did both go to University. We are mid 40s and our outgoings probably are not much more than they were 20 years ago when we were earning more like £40k jointly. We spent much more then on going out probably (and clothes for me). Now - Kids are at local state schools and we don't own a car (we use Ubers / a car club or rent when we need to). Don't have a massive mortgage as we were lucky with when and where we bought. We're not really interested in clothes so just buy what we need as necessary. The extra money we save (quite a lot) goes monthly into pensions and ISAs so that hopefully gives us some stability for the future and hopefully the option to help kids buy property if needs be. We also give regularly to the school PTAs and other charities and it's great to be able to do that without thinking too much. Equally, I don't hesitate to jump in cab. I had to get my child to A&E today and thought nothing of spending a total of £40 on the cab there and back. On our older salaries, we would never have got cabs anywhere, it would have been an insane luxury. I would have been checking my budget to see how I could save that £40 elsewhere. We just feel incredibly fortunate that we're in that position that if the boiler blows up, we just go - Ah well...bummer, rather than it being a huge stress.

@NovemberNuggets

We are in that bracket.

As well as paying our own mortgage we pay for DHs Mum’s house (a 4 bed where SIL & her kids also live).

Every 5 years we do a family holiday for the extended family (20 people) - because it is nice for the cousins to spend time together. The rest of the extended family nobody earns above 20K - so we just pick up the tab for flights/hotels/meals so it’s not a worry for them.

Maybe not unrelated to my DH’s career hyperfocus and stratospheric earning is that all 3 of our children are autistic. Supporting them has meant that I have not worked for ten years. We are also paying for private therapy for them. This goes up and down depending on need, but last spring I was signing off £400 per week on support/therapy bills to get them through the aftermath of the lockdowns.

The children go to state schools apart from one who moved private 3 years ago because he wasn’t coping. They have nice extra curriculars and a bedroom per child.

I also pay £150 a week on cleaning and house help. I know that I’m lucky that I can - but it would also be disingenuous of me not to pay for the help when I can afford it. My cleaner gets a job out of it & my kids get more of my attention & I can take time out to maintain my own professional skills so that if DH can’t earn we have options.

The truth is - we are very lucky to have high income - but it’s also very different to being ‘wealthy’.

Specifically - the amount that housing costs now vs inherited housing - and whether it works out that we stand to inherit from our parents, or that effectively a single salary is an uplift for a larger group of people.

If I’m honest - the level of hatred and vitriol does sting. DH worked hard at school, first in his family to go to university. Over the course of his career has paid nearly £1,000,000 in taxes. I’m not expecting the local hospital to name a new ward after him - but it’s also not entirely fair to have his success at attracting a large salary be framed as him being an uncaring fat cat.

When DH can’t earn any more, we should hopefully have the family home paid off and a pension, but otherwise we do not have significant savings or assets.

You're saying it's not wealthy to:

Pay another person's mortgage as well as your own
Pay for a family holiday for 20+ people every five years
Pay £400 a week for your children's therapy needs
Pay £150 a week on household staff
Pay fees for one child at private school.

I don't begrudge you any of this, but to say you're not wealthy is ridiculous.

Over the course of his career has paid nearly £1,000,000 in taxes.

Someone who earns £100k PAYE for 25 years will pay £825k in tax/NI, so there will be a lot of people in this category - more people than there are hospital wards to name after them!

While it's great that he complies with the law, paying tax is just the basic requirement to live in a civilised society. With the exception of criminals (and Adele, it seems!) we all pay the taxes that are due. It doesn't indicate any great morality.

Having said all that, I think it is preferable to redistribute wealth through tax rather than charity. I'm with Clement Atlee on that one.

You're saying it's not wealthy to:

Pay another person's mortgage as well as your own
Pay for a family holiday for 20+ people every five years
Pay £400 a week for your children's therapy needs
Pay £150 a week on household staff
Pay fees for one child at private school.

I don't begrudge you any of this, but to say you're not wealthy is ridiculous.

And I do agree with this. You may not be frolicking on a yacht with the super rich, but you are definitely wealthy.

It’s a high income.

But when DH stops working it all stops.

Of course we are madly privileged. However, we don’t have the security of inherited housing/inherited wealth/ family connections to cushion us.

I notice that the nasty headlines always seem to be about people who have high incomes rather than people who have high assets.

High earners are taxed more aggressively than people who have a lot of assets. High earners also generally pass most of it straight back into the economy by employing help etc and presumably are doing something useful to attract the high income.

People seem to mistake wealth with being cash rich,

just because you're not 'cash rich' at the end of the month does not at all mean that you are not wealthy.

@MatildaIThink - once you're past a certain income there's no tax relief on pension contributions, you lose it completely

I fully agree re: income vs wealth - the truly rich in this country (e.g. Dukes who own half of London through inheritance) pay very little tax as the wealth is in trusts etc.

But this:

But when DH stops working it all stops.

You know that's normal, don't you? If you work for a living, the income stops when you no longer work, whether you earned £20k or £200k.

@InSpaceNooneCanHearYouScream

I've read most of the thread, and the thing I'm most shocked by is that out of ALL the posters who admit to earning huge salaries, NOT ONE mentions using any of it to help those less fortunate than themselves. No wonder society is fucked and the rich just keep getting richer

That wasn't entirely the question though was it? I think most people give to charities in time or money they just don't bleat on about it.

As others have pointed out once you get into six figure salaries the government take a big bite out of it in income tax.

Also it's human nature that the more you have, the more you can spend. Our house is over 200 years old and needs frequent upkeep. We employ a gardener and a cleaner to help us out. DD1 is now at university and I really didn't want her living in sub standard accommodation in a rough part of the city - so we pay £180 per week for her lovely double room in a brand new student build. DH's Range Rover only needed a couple of new tyres and 2 little fixes to get it through its MOT and service, but it still cost over a grand. I dislike cooking so we eat out a lot or buy the easy M&S stuff. We have 3 foreign holidays booked for next year. It just all adds up.

Having said that, I don't feel rich. My eldest brother works in Private Wealth Management in the City and DH's best friend is a millionaire living tax free in Grand Cayman. We are paupers compared to them