..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?

The more you earn, the more expenditure creeps into the household budget, in particular if you are very busy earning six/seven figures inefficiencies grow

A nice detached house, 2 children at private school, holidays, home improvements saving for pensions its going to be at least £175k per annum

We're on a comfortable but not mega income in our house, which has gone up and down a few times over the pandemic. I can totally imagine what I'd do with 6 figures - what I struggle with is how people get that much, how is it that the family in the big house also has a flash car and sends their kids to private school and go on two holidays a year? I'm thinking that even with a large salary you'd also need inherited wealth to live this sort of life-style.

School fees for 2 kids £2-3K a month? Mortgage on a big house £2-5K a month? Ski + summer holiday £15k a year? Finance on flashy car? Plus all your food and council tax and contract on your flashy phone - adds up super quick. How does someone like say Jacob Rees-Mogg who privately educates his herd of a gazillion children afford it even on a big MP salary? Some people have colossal wealth.

London is a really poor analogy to be honest. By 2013 most of the dc at our dc's former cofe primary would have been living in houses worth at least £1m. 3 bed Edwardian/Victorian terraces at that level. In the infants there might have been a small number of families, in their mid thirties who had started younger than most, who were in 2/3 bed flats worth 400/500k. They mostly moved out by the time the youngest started school. Compare and contrast with another local school in a slightly different catchment where most of the DC were in LA housing with parents on probably minimum wage.

From the DC's primary, there were 6 of the original cohort by Y6 for DS; 11 for DD but 2008 hit that group. DD fared better stretching wise than DS. Intestingly of DS's cohort one (him) went to Oxbridge and one did medicine. Of dd's 11 went to Oxbridge or did medicine. Awfully interesting how cohorts differ. DS's was a disproportionate no of younger sibs; DD's was largely eldest siblings but there were 12 July/Aug birthdays.

DS was far and away the cleverest boy; DD was usually on table 2 and never felt bright or one of the best. Both went to Oxbridge.

I wonder how much that sort of stuff affects later earnings. Dh is eldest; I'm only.

In any society there are a certain number of jobs that have been decided to be high-earning. Law has been mentioned as one. But everyone can't be a lawyer. We need people in all jobs to keep society going. So salaries should be closer to each other, to keep harmony. Countries which have a lower difference between high and low earners (and the UK used to have far less difference - believe it or not, taxes under Thatcher were far, far higher on high salaries) are better balanced, have less crime, have less mental and physical health problems.

I can't think of a much more responsible job than looking after ill, or elderly people, or tiny children at the start of their lives, but look how much we pay caring professions. It really is a mess.

That doesn't go far in London/South East if you want a decent standard of living. Mortgage or rent on anything in a reasonable location, travel costs and childcare. My partner and I both earn around £100K and we're expecting our fist child. Rent, bills and household expenses total £4K month now. Travelling into central London for work is expensive. We enjoy nice holidays and meals out but we buy a lot of things 2nd hand, cycle and don't have Sky or such like. We spend what we earn. Factoring childcare and buying a car we assume we'll cut back on the holidays and meals out. We certainly don't feel rich. I'm typing this wrapped in a duvet so as to not crank up the heating and contemplating fingerless gloves for same reason.

@wonderstuff

We're on a comfortable but not mega income in our house, which has gone up and down a few times over the pandemic. I can totally imagine what I'd do with 6 figures - what I struggle with is how people get that much, how is it that the family in the big house also has a flash car and sends their kids to private school and go on two holidays a year? I'm thinking that even with a large salary you'd also need inherited wealth to live this sort of life-style.

School fees for 2 kids £2-3K a month? Mortgage on a big house £2-5K a month? Ski + summer holiday £15k a year? Finance on flashy car? Plus all your food and council tax and contract on your flashy phone - adds up super quick. How does someone like say Jacob Rees-Mogg who privately educates his herd of a gazillion children afford it even on a big MP salary? Some people have colossal wealth.

Rees-Mogg made a lot of money in hedge funds. His MP's salary is pin money to him

No @wonderstuff. Our mortgage was paid off by the time we were 40. What astonishes me are the 4x4s parked up outside houses worth a quarter of ours.

We have a home in France which pays for itself because of the Gite development so we pay close to zero outside Covid. Otherwise it would be a £12k holiday. Money begets money.

@ChampagneLassie

That doesn't go far in London/South East if you want a decent standard of living. Mortgage or rent on anything in a reasonable location, travel costs and childcare. My partner and I both earn around £100K and we're expecting our fist child. Rent, bills and household expenses total £4K month now. Travelling into central London for work is expensive. We enjoy nice holidays and meals out but we buy a lot of things 2nd hand, cycle and don't have Sky or such like. We spend what we earn. Factoring childcare and buying a car we assume we'll cut back on the holidays and meals out. We certainly don't feel rich. I'm typing this wrapped in a duvet so as to not crank up the heating and contemplating fingerless gloves for same reason.

We are in the same bracket with 2 children, no car, and pay rent in Central London. I am not stinting on the heating and do not feel I go short of anything.

@duffeldaisy

In any society there are a certain number of jobs that have been decided to be high-earning. Law has been mentioned as one. But everyone can't be a lawyer. We need people in all jobs to keep society going. So salaries should be closer to each other, to keep harmony. Countries which have a lower difference between high and low earners (and the UK used to have far less difference - believe it or not, taxes under Thatcher were far, far higher on high salaries) are better balanced, have less crime, have less mental and physical health problems.

I can't think of a much more responsible job than looking after ill, or elderly people, or tiny children at the start of their lives, but look how much we pay caring professions. It really is a mess.

Those countries also have homogeneous populations and high taxes across all bases (not just the high earners). Which is fair.

Unlike in the U.K. where 10% of people pay 1/3 of income taxes if I recall correctly

YABU

I don’t earn that much but it really ain’t that mind boggling. High earners pay huge taxes that subsidise lower earners. Mumsnet can be pretty judgey about people who earn a lot. Frankly it’s dull. The price of a bloody cup of coffee in a nice part of London is almost £4 and when I was earning a huge amount, I was thankful and didn’t mind paying huge amounts in tax….

I earn close to that and it is a high salary. Like a lot of people have said on here you have bigger outgoings on mortgage, bills, childcare etc. You also pay a lot of tax (as you should). So for example my mortgage is around 1400 per month, I pay about the same in taxes.

I count myself very lucky I don't have the same day to day worries my parents had, I come from a working class family who didn't have a lot when I was little. I don't tend to splurge though...small economical car, not big on clothes or accessories or latest gadgets.

I also save a good amount for earlier retirement and funding my parents care when they need it in the future.

I don’t earn £100,000 but as my salary has gone up, so has my expenditure. My DD is at state school but I spend my v decent salary on London rent, bills, pension and the rest goes on tennis lessons for me, drama lessons for my DD, a cleaner, travel to and from work, baby sitting costs, meals out and takeaways, days out, relatively cheap mini breaks and holidays, presents for friends and family (birthdays and Christmas), cinema occasionally. I know I am really really lucky to be able to do those nice things but I do run out of money at the end of the month, I don’t shop anywhere expensive for household goods or food, I buy clothes from cheap shops like Primark and H&M. I also worry about over spending and would never be really extravagant. I don’t take taxis for example. I know it sounds like loads but it just goes when you have it, i never really quite understand why, but it does.

OP seems to have vanished

You can pay off your mortgage, send DC to private school and save more for retirement. Not everyone upscales their lifestyles accordingly.

Self-employed outside IR35, taking home £6.5k per month. Only been a couple of months but I CANNOT get used to it. It's at the same time as nursery bills ending.

I keep having nightmares about having no money and then waking up to realise I do. It's v weird.

Also a single Mum. It's crazy...

average house price in my city is £300k and i'm old enough to remember when you could roughly expect to buy a house 3x your salary so £100k is only enough to buy an 'average' house here.
we earn it between the two of us and we certainly don't use it to buy flashy things, and have no interest in materialistic designer stuff. But we do go on holiday twice a year (usually in the uk) and have weekends away with friends and eat out with friends and host family for meals with high quality ingredients. I know we're really lucky, but we do have that 'average' house with a bedroom each but no spare room so nothing extravagant.

And no sick pay, no company pension, no holiday pay, not much security but I did a masters whilst absolutely skint so trying to enjoy it now...

@duffeldaisy

In any society there are a certain number of jobs that have been decided to be high-earning. Law has been mentioned as one. But everyone can't be a lawyer. We need people in all jobs to keep society going. So salaries should be closer to each other, to keep harmony. Countries which have a lower difference between high and low earners (and the UK used to have far less difference - believe it or not, taxes under Thatcher were far, far higher on high salaries) are better balanced, have less crime, have less mental and physical health problems.

I can't think of a much more responsible job than looking after ill, or elderly people, or tiny children at the start of their lives, but look how much we pay caring professions. It really is a mess.

Why would anyone bother to go into highly stressful demanding jobs, or go to uni for years getting degrees and PhDs if the end result was that they got paid the same as someone working as a shop assistant in retail for example? I agree that some jobs do demand a high salary and its hard to see why in some instances compared to carers etc, but what you're suggesting would just mean no-one would be prepared to study for more niche or specialized jobs.

@logsonlogsoff

We have a LOT coming in in salary and accordingly pay a massive amount of tax. No flash lifestyle here but we have freedom to travel, eat decent food, have kids do extra clubs etc.

This would have been flash to me

I was a disabled, single parent to 2 boys and my highest salary was still under £22k. Yes I got child and some disability benefits but that was it.
My kids went to state schools, I had a mortgage to pay and ran a car.
We had no holidays, ponies, swimming lessons etc, I couldn't afford them.
Since I had to give up work 11yrs ago, thankfully my boys are now grown up and left home but now I survive on government benefits.
You have to 'cut your cloth' according to what you've got but yes, it amazes me when I see threads on here where people go on about not being able to afford things when they have household income in excess of £100k!

@ChampagneLassie you don’t need £200k a year income to live a decent life in the south east. Many many people live in the south east and earn far less yet live happy and decent lives! You’re so rich you can’t even see that. I swear the richer people get, the more oblivious and out of touch they become.

£100K really isn't much in London. I used to think it was a fortune, but now I'm on almost two thirds of that and can't even afford to buy a one-bed flat. I'm limited to the low end of the market and am still saving up a deposit, which isn't easy when renting alone. My partner earns similar and if we moved in together, we'd definitely be better off, and pretty comfortable, but definitely not rich. We'd be able to get a very ordinary 3-bed terrace or semi in not the best area, the mortgage would take up half our takehome pay, and if we had any kids they definitely couldn't go to private school.

When I was in my twenties I earned a pittance and imagined 40k+ would feel very rich but it really doesn't. Tax eats up a lot of money once you get to higher rate.

the problem is high house prices & wage stagnation. If you are younger you need a high wage in order to save a deposit/pay high rents.

If I had not bothered with uni, got a job in retail & bought a house in the late 90s/early 00s on an interest only mortgage I would be far "richer" than I am now

@ChampagneLassie

That doesn't go far in London/South East if you want a decent standard of living. Mortgage or rent on anything in a reasonable location, travel costs and childcare. My partner and I both earn around £100K and we're expecting our fist child. Rent, bills and household expenses total £4K month now. Travelling into central London for work is expensive. We enjoy nice holidays and meals out but we buy a lot of things 2nd hand, cycle and don't have Sky or such like. We spend what we earn. Factoring childcare and buying a car we assume we'll cut back on the holidays and meals out. We certainly don't feel rich. I'm typing this wrapped in a duvet so as to not crank up the heating and contemplating fingerless gloves for same reason.

Sorry but this doesn't make any sense. 200K household income and you spend what you earn? No savings? What do you do with the other 6-7K every month?