..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?

Oh and re the City salaries. I worked in investment banking from 1981 until 1995. From 86 to 94 on 100k plus. By the time I had DS in 1994 I was completely burnt out and ready to have 7 years off. However my City years supported DH through his early law years: 1989 - 1995 and gave us an early leg up on London property.

Another obvious point is that you are not rich in complete isolation. You still need friends, events, celebrations, play-dates etc. Purely hypothetically, imagine someone earning 200K but they opt to only use 30K of that which is what many posters in the thread are implying is reasonable. They will have a life identical to that of a median salary. How would such a life look like when you're essentially "pretending" to have the same problems that people who actually earn 30K do? The quote above reflects the attitude of many people who clearly despise high-earners and would obviously not want to be friends with them. So how should "fake frugal" rich people live if they know that their friends and family are secretly resenting them for pretending to be poor?

I don't think anyone is advocating to only use 30k of a 200k salary and 'pretend' to have the same problems. I'm not. What I'm saying is don't earn 200k, spend it on improving your life with lovely houses and cars, fantastic holidays, good amounts saved and pensions that will enable you to retire early, private schools and help like nanny's and cleaners and then say, after paying for all that, that your 200k doesn't go that far because you've not got that much left after paying for those things and therefore have the same problems as someone who has the same left over from 30k without spending it on those things.
There's also a way that this type of spending is being framed as essential, and not optional rather than choice to spend more, or indeed at all, on those things. A holiday isn't essential, school fees aren't essential, they may be highly desirable and indeed, why not have them if it's important to you and you can afford to do so? But don't try and frame it as essential as a means to justify it, you don't need to justify it, if that's what you want to spend your money on then I'm pleased for you, it will enhance your life, but don't start pretending it's not a choice you're making.

Earn your £200k and spend it making your life comfortable, I'm actually genuinely pleased that you can do that, we need all types of jobs and earners to make it all work, but don't then tell me (someone on £19k a year) that you aren't really that well off because you've spent your money on making your life better and there's not a lot left, or that the things you've spent it on are essential and therefore it's not optional to spend that money, or that it doesn't go far.

There have been a few posters who've answered the question, without defensiveness and the answers have been interesting for someone who'll likely never have those choices, but the vast majority have jumped in with being defensive and trying to justify themselves and what they earn/spend.
And also this hang up about flippin' tax! Many on this thread will pay more tax per month than I earn.
I pay tax too, but the reason I pay less is that to lose 43% of my income would result in me living under a bridge somewhere, that's not the same concequences as losing 43% of 200k, that results in less luxury but still able to meet the truly essential expenses of life (and more over!)

Trapped in rent payments is one of the reasons for my depression. I could pay half on a mortgage but I'm buggered financially despite the fact I know I can afford the mortgage and keep up the payments nobody will give me a mortgage.

@Xenia, do you mind me asking why you chose not to invest in a pension? Most high earners see that as a priority and a tax break. We piled the contributions into ours and we have now hit LTA.

@Rainywindoww

DH and I earn over £300k p/a between us. We started out pretty "normal" with him being on a £40k salary and me on a £22k salary. That was 12 years ago. When all the children were in school We started our own business as a specialist in the construction industry. We have been very successful but it hasn't been without it's bad times. We have a very large old house, with land. We drive great cars and all 4 kids go to private school. However it's like a massive gamble all the time keeping it going and often we wonder if it will all come crashing down one day. It would only take someone to have an accident at work and we could lose everything. So we make hay while the sun shines as they say. Oldest kids are now at uni and once they've all gone I think we might sell the big family home and downsize to something more manageable.

We were definitely happiest about 10 years ago, living in a little cottage when the kids were small and the stress levels not so high. I sometimes feel like we've created a monster. We don't even get to go on holiday much as we have to take care of the business the whole time.

This ^^^

DH has earned a 6 figure sum for years, however a couple of years ago he identified a new niche in the market. He set up a new business and it just went stratospheric almost from day one. He says he often feels like Dr Frankenstein because he has created this monster - or, he likens himself to Riding The Tiger, and it's just too dangerous to get off.

He works crazy, crazy hours. He regularly comes to bed with me at 11.00pm ish, but sets his alarm for 4.00am, gets up and starts working. 16 hour work days are standard. Working weekends are just a given. We're going up to the Lakes for a long weekend tomorrow. But it's a given that he will still need to do a lot of work, just in prettier surroundings. The vast majority of people just wouldn't be prepared to sustain this level of effort or workload.

Cheltenham Lady possibly similar to Xenia my DH was self employed for most of his career and didn't benefit from the employer's contribution despite the tax breaks. He has a small pension pot which will be used as an IHT vehicle. Apart from that he chose other investments over which he felt he had more control, particularly vi's a vi's the capital as his father's side of the family tend not to make 80. I am the reverse and am pensioned up to the hilt as I have spent the latter part of my career in the LGPS and transferred earlier pensions into it but have blown my annual allowance twice now.

[quote RosesAndHellebores]@thecurliestwurly - I am on holiday this week and still checking work emails.
I'll often have a quick MNet scroll first thing and last thing or for 10 minutes during the day between zooms. I'm usually at my desk by 8.30 and finish work at about 7.30, often working 5/6 hours at weekends. Whilst I shouldn't have to justify that, you made me feel I do.

One thing our DC have is choice. DS wants an academic career (coming to the end of PhD); DD wants to teach. They will never have to worry about having a nice house and paying school feels (providing neither goes mad and has oodles of children).[/quote]
Sorry if I made you feel that way and you certainly don't have to justify that. Many people on good salaries may have more of a flexible schedule to allow posting on MN. The purpose of that post was to highlight to the OP that some posters do tell porky pies as it can be quite demoralising working hard in a low paid job, when some fantasists are having a moment of gloating on here making OP's and other posters feel rotten (especially the What class am I? posts) Some people have been caught out bullshitting about that sort of thing. It wasn't a dig at people earning a good salary - MN has a lot of them - and I do appreciate that high earners offer good advice on these posts too.

People who have jobs generally aren’t the rich ones.

Top 1% wealth in the UK is something like £650,000. There’s plenty of regular retired people sitting on houses worth that, who are much wealthier overall than those earning in the top 1% - especially if they’ve only been high earners for a short period.

@MyAnacondaMight

People who have jobs generally aren’t the rich ones.

Top 1% wealth in the UK is something like £650,000. There’s plenty of regular retired people sitting on houses worth that, who are much wealthier overall than those earning in the top 1% - especially if they’ve only been high earners for a short period.

Agreed, but this thread is about salaries

It's not as huge as you'd think really. My husband earned figures like that and I always felt we should be more comfortable than we were. Higher salary often means more expenses, much higher taxes etc. so while obviously we were comfortable, we weren't "rich" at all.

That may sound arrogant but I grew up in poverty on a dodgy council estate and thought any family earning 30k plus was loaded so I understand how you might think that but the reality is different.

I must be different from a lot of the 100k plussers as I feel really wealthy. My DH have always spent all our income and a tiny bit more and enjoyed it.

DH has earned a 6 figure sum for years, however a couple of years ago he identified a new niche in the market. He set up a new business and it just went stratospheric almost from day one. He says he often feels like Dr Frankenstein because he has created this monster - or, he likens himself to Riding The Tiger, and it's just too dangerous to get off.

He works crazy, crazy hours. He regularly comes to bed with me at 11.00pm ish, but sets his alarm for 4.00am, gets up and starts working. 16 hour work days are standard. Working weekends are just a given. We're going up to the Lakes for a long weekend tomorrow. But it's a given that he will still need to do a lot of work, just in prettier surroundings. The vast majority of people just wouldn't be prepared to sustain this level of effort or workload.

Although yes, your husband is working a lot and having to keep everything balanced, it's sentences like your last one that royally fuck people like me off.
I work 14 hour shifts, with anything between 30 and 90 mins unpaid depending on what's happening and how long handover is - which is standard to be unpaid. I work Christmas, New Year, bank hols etc etc, haven't had a day off in nearly 3 weeks because the whole industry is short staffed (because we're treated like this!) And my income just about affords me survival.
So don't tell me that the 'vast majority' wouldn't be 'prepared' to sustain this level of effort or workload because many are, and they do it because they don't have a choice if they want to survive.
Oh and no, I won't be able to do my job in prettier surroundings, because it's impossible and I can't afford a holiday anyway.
I don't doubt your husband works hard for what you have but your assumption that others won't do it and therefore won't have it sums up the reason why there's resentment towards some people earning 6 figures!

In case it is useful/of interest - here are the average UK household incomes per week, so you can see where you are

(How to understand the graph : A picture of the United Kingdom income distribution is shown below, with all incomes expressed in terms of the equivalent amount for a household of your type. Each bar corresponds to an income band of about £15, and to maintain a reasonable scale, it has been necessary to truncate the distribution at incomes above around £1683 per week. Around 9%, or 6.1 million individuals, have incomes higher than this, after adjusting for the size and composition of their households. Your position in the distribution is shown by the red bar. When we assess the distributional implications of tax and social security changes, we often divide the population into ten equally sized groups, called decile groups. The first decile group contains the poorest 10% of the population, the second decile group contains the next poorest 10% and so on. In the below graph, the alternatively shaded sections represent the different decile groups)

Greentassles I said that the vast majority of people wouldn't want to sustain that level of work. I didn't say that absolutely no one would.

In fairness, the comment about long hours is relevant to the poster that suggested that high earners clock off at 3. Many high earners put in long hours and have stressful jobs for their large salaries. I don't think anyone is saying that low income earners don't put in long hours or have stressful jobs either.

@peaceanddove

Greentassles I said that the vast majority of people wouldn't want to sustain that level of work. I didn't say that absolutely no one would.

Yes you said the vast majority, and not that absolutely no one would. But that wasn't my point. My point was many, many people do sustain that level of work and don't earn 6 figures in return, they earn just enough to survive on in return. Yet here you're saying that the vast majority wouldn't want sustain that level of work in return for a 6 figures salary, when (maybe not the vast majority, but a significant majority I reckon) people on low incomes have to work those kind of hours and have the same work ethic and commitment in order to survive. You don't get 6 figures by putting the hours in and working your arse off only, it's far more complex than that.

@Whatiswrongwithmyknee

Although you pay more tax as you earn more, it's clear from this thread that people also just make more expensive choices - whether they recognise that as such or not.

On this thread examples have included school fees, paying loads into pension so you can retire early, eating better quality food, eating or drinking out a lot, buying expensive clothing (even if not very often), multiple holidays abroad, buying more expensive cars.

Frustratingly many people seem not to realise that these are choices you only have as you are financially privileged. These are the choices which demonstrate your relative wealth. The fact that you can't fly everywhere first class or drive a Ferrari does not mean that you don't have loads more than other people. Oftentimes I think people have lost sight of the extras they are having.

This

The thing is when you don’t earn huge amounts of money you cannot comprehend people who do.
I know a number of people who earn 100k plus and many of them don’t see themselves as wealthy. They fail to understand that having the ability to earn 100k + is a privilege which most people will never have.

This is a very good thread. Thanks to everyone contributing.
I work 365 days a year from choice but now I am in my 50s that is a choice I make as I like the work and if I want to take 2 hours off to do the garden when it's not raining but it's working hours I can do that which is what spreading my work over 7 days does for me. I would always work on holiday away but usually try to limit that to 1 -2 hours a day. Earning a lot gives women choices.

1. Someone asked me about pension. I have never had an employer paying into a pension and I have always had high expenses - full time childcare for a start. However I did before my divorce pay some money into a pension. I cashed it out at age 55 and gave HMRC 45% of three quarters of it - massive sum which I hope HMRC spent well !!!!! and rest went to some of the older children for a first property. So yes entirely my choice. I chose the shares in the pension fund and I managed them. Like all my investments it did not do that well but there we are. My health is good and that is all that matters most. Even on the divorce in 2003 when my husband got nearly £1m as the lower earner and I got a £1.3m mortgage costing £90k a year...... he got £100k of shares (my only shares) which were then valued at £30k - I lost £70k on them and he got all my life savings. On the other hand for many women marrying a man who earns well is their best financial investment ever so as usual I made the wrong choice - laughing as I type. Although in a sense marrying someone who earns a lot less means women are less likely to go part time and ruin their careers so I gained from having to work full time.

"Can I ask at what age people got to earning £100k per year?" someone asked above... I have a record of every year since about 1980s of my spending and income so can always check those things. However I started work in 1983 and inflation affects what figures form the past actually mean. I remember that in 1994 when I set up on my own my salary was £59k at a law firm before that and I was making another £60k from other activities which were permitted by my employment contract eg wrote a law book and legal articles at weekends - so basically doing 2 jobs so that was over £100k (before tax) if all added together.

I went to university aged 17 ( a year young) and read law as I wanted to earn younger. So that was part of the whole plan. Graduated in law aged 20 so did not have to spent a year doing a law conversion course after and had no gap years ever. Then finished solictor finals aged 21 and so was working full time as a trainee lawyer on £6250 a year (already married that year) and qualified aged 23. Qualified salary was about £10 500 in 1985.

£10500 in 1985 is £32k in 2020 taking account of inflation. It is interesting that lawyers in that firm I went to in 1985 instead today are not paid £32k but are paid £100k. So for those top city law firms the pay in real terms is three times what it was in 1985!!!!! Lucky young people of today.

There are also people in Mumsnet who mysteriously earn 200k a year while spending the entire week posting on here and will leap all over threads like this to talk about their salary.

I'm an influencer working from home and spend loads of time on MN during the day because it's how I switch off best between tasks. I don't have a boss or anyone looking over my shoulder so I can write replies whenever I please. Last week, I earned 18K from doing 2 campaigns.

So yes, there are high earners who are perfectly able to be online during the day without people like you insinuating we are liars or fantasists.

Out of the 100 fee earners in our department, there were 3 women (of which I was one). They were desperate to level that up but not many women wanted to work the silly hours - not that they were lazy or workshy, but that they didn't think the rewards were worth the sacrifice.

I saw a Jordan Peterson lecture on Youtube where he gave this as a major reason why women are seldom mega-high earners. He has followed people in high-flying careers, e.g law, and when they hit their 30's they're faced with the question: do I want to work 70 hour weeks for the next couple of decades, not have any life outside of work, not have any interests other than my job, not know my family, if I even have one? The people who say yes to that are almost always men. The women nearly all say "fuck that", correctly, in his opinion.

@RandomLondoner

Out of the 100 fee earners in our department, there were 3 women (of which I was one). They were desperate to level that up but not many women wanted to work the silly hours - not that they were lazy or workshy, but that they didn't think the rewards were worth the sacrifice.

I saw a Jordan Peterson lecture on Youtube where he gave this as a major reason why women are seldom mega-high earners. He has followed people in high-flying careers, e.g law, and when they hit their 30's they're faced with the question: do I want to work 70 hour weeks for the next couple of decades, not have any life outside of work, not have any interests other than my job, not know my family, if I even have one? The people who say yes to that are almost always men. The women nearly all say "fuck that", correctly, in his opinion.

Because the men are often supported by a woman at home. But not the other way around!

@User134356356

There are also people in Mumsnet who mysteriously earn 200k a year while spending the entire week posting on here and will leap all over threads like this to talk about their salary.

I'm an influencer working from home and spend loads of time on MN during the day because it's how I switch off best between tasks. I don't have a boss or anyone looking over my shoulder so I can write replies whenever I please. Last week, I earned 18K from doing 2 campaigns.

So yes, there are high earners who are perfectly able to be online during the day without people like you insinuating we are liars or fantasists.

I have explained about this on another post and people seem to be taking this personally.

I acknowledge that some people can do this as we don't all work a 9-5. I think there are a lot of high earners on MN, but there are also people that lie about salaries, just like any other forum/in real life and I posted that to remind the OP of this that it is a forum and you really don't know if the person is being honest or not.

When I was earning a low income I used to compare myself with people who later turned out to be lying/in serious debt and it did get me down. I just wanted to warn the OP of that.

@jackstini

In case it is useful/of interest - here are the average UK household incomes per week, so you can see where you are

(How to understand the graph : A picture of the United Kingdom income distribution is shown below, with all incomes expressed in terms of the equivalent amount for a household of your type. Each bar corresponds to an income band of about £15, and to maintain a reasonable scale, it has been necessary to truncate the distribution at incomes above around £1683 per week. Around 9%, or 6.1 million individuals, have incomes higher than this, after adjusting for the size and composition of their households. Your position in the distribution is shown by the red bar. When we assess the distributional implications of tax and social security changes, we often divide the population into ten equally sized groups, called decile groups. The first decile group contains the poorest 10% of the population, the second decile group contains the next poorest 10% and so on. In the below graph, the alternatively shaded sections represent the different decile groups)

I think this is a good tool for looking at household income. I think many of the people on this thread are on the far right end. It would be interesting to see how household debt comes into it too.

Another reason I think there is such a contrast in two groups/opinions on this thread is because in one world (world B) there is something called the salary game, and in the other world (A) there isn't.

In world A your profession has a salary dictated to you. The job has "bands", an advertised salary, and pay increases/bonuses that are pretty much set in stone. So you enter the workplace after an apprenticeship or degree grad program, on quite a low salary, and your salary progression is laid out for the rest of your working days. If you can reach band c, you will get this much. But it's so far from 100k despite years of work. It's predictable, comfortable and it feels nice to have a plan. But 100k, no way.

In world B, salary is fluid. It's like a game of snakes and ladders but you have some control over the roll of the dice. You also start low but you move around the board and you negotiate at every stage. You spend a good percentage of your working time thinking about how you can negotiate for more at your next review. You try to organize your tasks strategically so that you can work them into your performance discussion. You build relationships that can influence salary. So a big portion of your time and effort goes into salary development. Even if you are hired and not self employed, you have to think like you are self employed, you are your own business and you need to be constantly increasing your prices. If at the end of the year you are earning the same, it's not really a successful one.

It's not just hard work or responsibility - nurses and care home staff work incredibly hard and long hours and they are responsible for peoples lives. But the salary is the salary. No matter how hard they work, the pay opportunity won't change.

It takes a certain kind of personality to succeed in world B. You're not just working hard but also strategically. Lots of people saying they are earning 100k and working in finance or law. Well they have learned to think that way through their studies and from early exposure in the workplace. If they weren't strategic by nature, they wouldn't have made it into that field in the first place.

There's no point on high earners being smug about their hard work because many low earners work hard too. You could say you are smug because you just had the right thought paths in your brain to play the game, and were fluid enough in your decisions to take the right ladders and avoid the snakes.

But I also agree with posters that say growing up in hardship can make you successful or a high earner - if you spent your childhood having to be inventive and avoid obstacles then you are more likely to choose a career path where those skills are relevant.