..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?

It is another world to me OP.
I'm self-employed, and currently earning way below the minimum wage! I'm trying to get some agency work part-time to supplement my income. That would be minimum wage. My monthly income is currently below £1000. I'm renting. I buy most of my clothes in charity shops etc. To be honest, I'm philosophical about my circumstances. It keeps my imagination alive, and I feel very grateful for the small things.
I think so much of it is due to what happened to you in youth. I believe everyone is born with huge potential, but some of us are held back. I've had struggles with my mental health since I was about eleven. It's made life incredibly challenging at times. But hey, I'm still standing. Grateful for the empathy it's given me for others etc. I don't envy financially wealthy people. You can't take any of it with you, and it has its drawbacks. That said, I wouldn't mind just being a little better off! I'm working on it. for all those who are desperately struggling. This thread is a very difficult read for some

People earning over 100k, what on earth do they even do with that money?
Pay people to do jobs they have no time for.
Pay extortionate amounts for kids schooling and activities.Spend £1000 a month on kids activities and tutors plus £2500 on school fees. Things they would do themselves if they didn't work 12hr+ days .

take-home pay of around £5500 per month - 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.

Yeah OP - you are definitely not being unreasonable. There must be a lot of high earners on Mumsnet, as 66% are saying you are being unreasonable.

To my mind £5500 take home pay is an ENORMOUS amount of money after tax each year. Of course it is.

And another poster was saying she is a rich single mother, but has to pay for the pony and her daughter's private school. Well - my heart bleeds - really??

And I don't think the taxes are nearly high enough - need to go much further. DEFINITELY.

*each month!!!

@Bagamoyo1

I don’t earn that much but I have colleagues who do. One colleague for example - his wife doesn’t work. Both kids at private school. 4 bed detached house in nice area. So mortgage is probably about 15k per year, school fees about 25k. They have nice holidays , and they each have a nice car which they replace every couple of years. The kids aren’t spoilt when it comes to presents, but they certainly don’t go without. I think it would be pretty easy to get through 100k in a year. Remember that a big chunk of it will also go to the inland revenue.

In the SE school fees for one child are upwards of 20k

I earn 75k and my DH 85k - we do feel comfortably off but it goes faster than I had realised when we earned less.

Our family house in zone 3 is a nice house but not a mansion or anything and isn't in a super posh area and the mortgage is 2,500 a month which we overpay on as well

Our childcare bill is pretty high - nursery for DS2 and wraparound for DS1

We have no family help so anytime we go out, it's £50 for a babysitter

We have very little time/energy for stuff a lot of people would do themselves so spend a lot on tradesmen, handy man, gardening, cleaning etc

@daytripper28 "And I don't think the taxes are nearly high enough - need to go much further. DEFINITELY."

That unfortunately is the naive view that more tax constantly is fair and the way to resolve inequality. The reality is very few people earn over £50k tops. For those that do there has to be some aspiration.

The reality for those that do, it is

Any money earned over £20 k will be taxed at 20%, plus 13% NI ( from March), 9% student loan repayment and average 6% pension contribution. Total 48% deductions. For those that actually hit £50k and have two children, the marginal tax rate is 40%, 10% child. Benefit tax surcharge, 9% student loan and 6% pension. Total 65%.

So how much more tax and deductions do you seriously think we should be paying? 100%. Because that would suit those that like to sit and wallow on universal credit and other benefits.

DH and I earn average salaries but I can easily imagine what we'd do if we earnt 100k per year.
-actually afford to get a mortgage on a family home nearby
-extra clubs for DC
-replace the tatty ikea furniture bit by bit
-get a bigger car

Nothing would be gold plated

"And I don't think the taxes are nearly high enough - need to go much further. DEFINITELY.’

I always giggle at comments like this because what the poster really means is that the higher tax rate should start just above what they themselves are earning.

I would guess most people on that money love in London. So they are probably spending it on their very expensive mortgages.

@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?

I haven’t earned that much fir the last couple of years, but I first earned a six figure salary about 15 years ago when I was in my mid 30s. Private / grammar school didn’t come into it, I went to a comprehensive in what most people would consider a deprived area of the country.

I have never done anything particularly flashy with the money, but I have never felt like it is so much I don’t know what to do either. Once you start earning those sums an increasing proportion is taken up in taxes.

I have lived overseas a couple of times whilst earning that and rented very nice houses, I have been on some nice holidays too, I have never had nor wanted flash cars or designers clothes. The house I own is a three bedroom end terrace and I was able to pay the mortgage off early whilst I was earning.

My parents (50s) earn that sort of money. They have a garage full of classic cars and a few boats at the local marina. They spend six months abroad in America where they have cars and boats again. They really live their best lives.

@JackieWeaverHandforthCouncil

"And I don't think the taxes are nearly high enough - need to go much further. DEFINITELY.’

I always giggle at comments like this because what the poster really means is that the higher tax rate should start just above what they themselves are earning.

And also people always focus on income tax. Low earners often feel that high earners should pay more, high earners often wrongly class lower earners as not being tax payers. When in reality people of all income levels pay VAT at the same rate and it's a huge proportion of the UK tax income. And on the one hand that's fair because rich people buy more 'stuff', because they can, and on the other hand its unfair because it affects poor people disproportionately, since it applies to so many essential items.

I just don't believe it's possible to have a truly fair tax system. I wish it was possible, but I'm not sure that it is.

Our income is on your bracket and I shop at charity shops!! Honestly it’s all relative to where you live and your outgoings.

Now people who have an income of £250+ completely blow my mind. I have no idea how living that lifestyle must feel l😦

The lies on here about tax are making me feel quite angry. It's fair to include NI as a tax. Its not fair to include your pension contributions, student loans etc as 'tax'. Your pension contributions are still your money that is invested for you (opt out if you'd rather have it now).

No one is losing half their income in tax.

The. Gov site calculates that on 100,00 you pay a total 33,307.24 tax and NI. That means 33.3%. This disregards any pension payments (which yes, reduce your take home but are still your money so not tax). The fact that most people do make pension contributions and they reduce your taxable pay, means that actually you pay a lower % of tax than the 33.3% calculated above.

I have no beef with people earning as much money as they can, but I do object to people telling lies about their imaginary tax bill to protest they don't earn a lot.

Up until the last few years we earned salaries that meant most months we just made ends meet. We also were both made redundant in 2009. We’ve both had decent promotions in the last 2/3 years though and now we actually have quite a bit of ‘spare’ money. Although we haven’t really seen it yet as we’ve finally done the house up and we are just finishing paying some debts off, that we gained in the years we struggled. In a few months we’ll be in a position to save quite a large sum per month (well, large in my opinion). We’ve never been able to save. It will just be nice to know we have something going away for when we are older or to use to help our DC out when they buy their own houses etc.

The other thing to remember is that it’s very unlikely that someone’s income has jumped from £20/30k to £100k overnight. It’s likely to have been gradual and your lifestyle and financial commitments gradually increase at the same time, so your disposable income doesn’t jump ten fold and leave you feeling incredibly rich.

**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?

To the pp, I hope YOU realise this is 5 x My take home pay.

Our household income is £130k - but the vast majority of if it goes out on 1) recently upsized house 2) full time nursery fees and wraparound care in the south-east.

We could move elsewhere in the south-east to very different county/area - and immediately slash the mortgage, but that's not something we are going to do.

My own income is due to rise to 90K or so within next 5-6 years, at which point we will be free of nursery costs too, but we will then upsize again to forever home all being well and then again, mortgage will eat vast majority of income.

@hollyhocksarenotmessy I agree on pension but student loan repayments are pretty much a graduate tax.

In general on Mumsnet, I have been struck by the number of lower earners who live very close to their families and get a lot of support - my sense is that this is a lot less common with higher earners and goes some way to explaining where money goes. E.g. I know someone whose mum does childcare so they can work and their dad does 90% of their DIY, their income is fairly low but they do ok for disposable income as a result

@BangingOn

The other thing to remember is that it’s very unlikely that someone’s income has jumped from £20/30k to £100k overnight. It’s likely to have been gradual and your lifestyle and financial commitments gradually increase at the same time, so your disposable income doesn’t jump ten fold and leave you feeling incredibly rich.

THIS. So much THIS. I am 36 now and sure, if I look back to being 26, my salary has well more than doubled itself - but I recall having far more disposable money as a single person in a studio when I was 26 on my lowest entry level pay than I have now as a person on more than double that pay at 36, but as a mum of 2 little ones, with a mortgage. At 26, with my little money to spend on only me I'd think nothing of a splurge at a spa-day. Now - with way more money, I wouldn't do that and instead put any disposable away towards... erm.... this month - getting one of our loos tiled, or the upcoming holiday club.

OP, I earn just under 100k, which is about 5.5k per month. To earn this, I have to put my children into nursery full time, which costs me 2.5k per month. My mortgage is 1.5k per month. This leaves 1.5k per month. From this, I budget for the following:

300 food
250 council tax
150 gas, elec, phone, internet, insurances
200 savings to travel to see parents twice a year abroad, one week per trip spent in a really cheap hotel.

This leaves £600 per month. This pays for all other one off type costs such as annual car service / MOT, clothes for the children, house maintenance / repairs (eg we needed a new boiler this year, last year the gas pipes in our house developed a leak, the year before we had water damage etc).

I realise I am very fortunate. It's a comfortable life, but it's not a luxury life. To be able to earn so much I have to live in an expensive area, so have a high mortgage. Similarly I have to send my children to nursery full time. But these costs will reduce in a few years when nursery costs are replaced by wraparound care and holiday clubs.

Earning this amount of money gives me flexibility and choices. When I don't want to cook I can order a takeaway without worrying. When the mortgage is paid off I can think about reducing hours at work. Most of all, I don't have to worry about money, I can go to the supermarket and buy a food shop with extra treats without thinking about it.

I lived my childhood in poverty, counting our pennies before we went shopping, so I am really lucky to be in the position I'm in.

I guess if you get a house in an expensive area and send kids to private school, that eats up a lot of money without having an obvious ‘increase’ in your everyday life (doesn’t apply to me btw).

I'm In that salary bracket now . I think it's an obscene amount and I don't need that much to live well. My mum brought us up well on what''d now be £20-30k.
So what do we spend on?
I can't bring myself to support private education and kid is happy and doing well in state school and has lots of friends locally.
We have moved to a nice house with a bigger mortgage.
We run two cars - jobs in different directions - which are now nearly 10 old and earning more means we can think about switching to electric.
We've started buying more organic/local.
Thinking about solar panels / heat pumps.
I treat my mum whenever she'll let me, although more often she still insists on slipping us a £10 here and there.
We have a cleaner once a week.

10% goes to charities I care about.
Rest goes into savings.
The big difference it's made to me is the financial security. Knowing we can deal with broken appliances or car dying or roof coming to the end of its lief, or I know I could go private if there was a really urgent medical issues.

Well half of it goes on tax
Loads into a pension
Mortgage
Lease cars probably

You don’t exactly roll around in fifty pound notes

Just more financial security