..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?

Also depends on when you start earning that much too
Very different being on that salary at 24 than 48 for example
Also depends on whether you are a single parent/one income family/other partner is a low earner
Add in geography and number of children
So many variables!

May be more people should earn more rather than people should earn less. There is in proportion a small amount of high earners in the U.K. ( around 350000 out of the whole population of 66 millions since last census) taxing those high earners to death will not even cover the people on benefits.

We make about £130k combined. Mortgage is a big one! We also live in a really expensive city for husbands job, have two cars to pay for, couple of holidays a year etc. Pay for a cleaner because we’re both at work so much our house would look like a hovel if not. Pay for MIL car to help out. Sounds silly but the more we’ve earnt the more we’ve spent… more expensive food shopping for example. We save a lot as well, around £2k a month.

@CayrolBaaaskin

While £5500 sounds a lot, once you factor in housing and childcare costs you can be struggling. I earned that easily in London but my job was so busy (as you would expect at that level of salary) I needed a full time nanny for dds. Plus my rent (London) was huge. I had about £800 a month after childcare and housing costs for all bills and food and that was working all the hours and living somewhere relatively basic.

As a single parent at that time I actually would have been not much worse off working a few hours in a shop or something because I would have got rent paid, tax credits, etc. In fact I had family who did and were better off (that was pre universal credit roll out and pre cap)

So it’s not the answer to all your problems I’m afraid.

I guess like anything it depends where you live. My mortgage is £300pm so it would be a fortune to me. But I don't know anyone earning anywhere near that kind of money, you probably couldn't get a job earning that salary here.

I earn over 100k. 40k goes into the pension. After 10 years of savings I brought my small 2 bed house for cash. Unfortunately I remember being poor so have minimal outgoings so I am very risk adverse I have a small 13 year old car shop at Aldi or Lidl and have cheap hobbies. And no children. Therefore I save quite a bit too as I attempt to FIRE. My retirement age planned is around 45 unless I am really enjoying myself. So all that extra money removes the worry of paying bills but for me doesn't buy anything yet or improve my quality of life it is all tied up planning for the future which may or may not come.

Would the well off people be able to save massive amounts each month. Eg if a well off family saved 1.5k per month, that would be 18k a year, 180k over 10 years. Do they keep this in a normal bank or are there investment plans which give high interest?

Genuinely curious.

And DH used to commute into London on a much lower salary than we had now too! Honestly, it's mind boggling the mental gymnastics.

As others have said, 100k a year equates to £5500 a month take home.

Mortgage 2000 on a large house
Bills 1000
Childcare 1000

That leaves 1.5k for things like cars, holidays and I bet a fair bit if that also goes into pensions, add school fees into the mix and I bet there's not a lot of cash left.

Pay huge tax bill

Typically Need to live in more expensive area to work in City and earn huge salary = big mortgage

Private school fees

@roundtable - childcare isn’t really a choice and not much option other than a nanny for young children if you work long anti social hours. Also I lived somewhere relatively far out but I needed to be near enough to commute (and my commute was over an hour as it was). I did eventually move and buy a house and things are easier now but a 100k salary does not necessarily make your life a picnic.

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?

Comments like this show how ignorant the other half can be, trying to make an argument on the basis £5500 isn't rich but for many, many people they'd feel very rich if they had £5500 a month.

@roundtable

And DH used to commute into London on a much lower salary than we had now too! Honestly, it's mind boggling the mental gymnastics.

Yes, am always bemused by the cost of commuting being given as a reason why people don't have as much money as you think they do. Poor people commute too. When I was young and poor, my commute cost almost half my salary because I couldn't afford to live closer to work. That one is a bit of a vicious circle for a lot of people on lower incomes.

DP earns that much and we have a humongous mortgage.

This isn't a bashing thread or anything like that. I'm just a bit stunned
Lol

I’m female. I was earning more then 100k in my early 30s.
I didn’t go to grammar school. I just worked my arse off and was good at my job.
What did I do with the money?
I saved it so I could be a SAHM if I was lucky enough to have children. As it was, a lot was swallowed up with ivf fees. The rest has been used for its original intention.

Our household income (before tax not including bonuses) is 150k. We're north west based.

Mortgage - 1k
Car - 1k
Bills - 1.5k (including some historical debt - didn't get student finance so paying off a four year degree)
Money to PIL - £500 (change in their circumstances we're just chipping a bit their way to help)
Donations - £250
Subscriptions / activities - £300
Investments - £500 (long term)

So 5k ish.

We spend the rest on things like home improvements (been in nearly 3 years!) and emergency savings. We tend to do what we want at the weekends, eat out far too much and buy things we want (within reason!) without too much thought. It's been a progression over 6 years, so the lifestyle creep has definitely got to us. It's something I don't take for granted, that if I go food shopping I don't have to count or worry about what goes into my trolley or if we go to the shops and I see a book I fancy or a nice outfit, I can just buy it. It supports my DH through his expensive hobby (golf!) which he really enjoys. And my expensive hobby (shopping and eating out!). We spend too much money on eating out, and takeaway coffees and fuel for day trips.

I think we had a better handle on our finances when we both earned less, because we had to. Now we've got a bit frivolous, which we've sat down recently and talked about - we want to try and get back to being more careful, as the lifestyle creep has led to us being less cautious with money (which is enjoyable - but not future proof!). If we were back earning what we were when we met, we'd still be happy, but probably have way more stress around day to day surviving life and the general living expenses.

I know people hate the whole "we work hard for the money" comments, but we do. I'm not suggesting other people don't work hard for less (I remember busting my butt as a waitress for less than minimum wage and I used to be so tired and stressed and taken for granted), but I think that when you factor in 3 days a week travelling, alongside 60 hour weeks, the pressure that if you don't perform and bring in money and contracts for the business it'll impact people that work in your team it's definitely not "easy" to earn. Part of the level of pay is because of the level of responsibility, especially for my DH. If he doesn't win work, his team will be downsized and people will be out of a job. It's a constant pressure knowing 10+ families rely on his performance, as well as us!

Also meant to say for me a big chunk (15% of the amount over the threshold) goes on student loan repayments.

'Not a lot of cash left' is what most of us have for the whole month. Mortgage/rent, bills, everything.

I've been at the scraping by end when the children were little (ex not paying anything, mortgage and childcare to pay and and not a big salary)

Now we earn well over 100k between us. And while we aren't throwing bank notes around and drinking champagne for breakfast rich, not a day goes by when I take for granted the things we can now pay for and do

• big house
• gardener, cleaner, dog walker

-tutors and lots of hobbies for the children (horse riding, music lessons, theatre school etc)

• hefty pension contributions and savings

We aren't materialistic though, so still have mainly second hand furniture, unimpressive cars.etc.

@LizzoBorden

We’ve got a combined salary of about 150k and I do not feel rich by any means! We go on nice holidays and admittedly have a big old house but I drive an 8 year old car, children at state school - I have no idea how the posters on 100k afford school fees!

Very similar for us. We are in rented looking to buy so saving. Where we are in the south east we are far from being able to afford a sizeable family home.

The property we have under offer will need upwards of 100k worth of work. Which is far more important than a designer handbag.

I don't think people appreciate how significant tax can be. I'd love to be able to send my children to private school however we simply can't on our current income which I'm sure most would find surprising.

We drive 7/8 year old cars owned outright
I regularly shop in charity shops and carboots
I invest so we can retire early
We have horses

It's a very comfortable life which I'm fully aware of and appreciate however it comes with a huge amount of hard work/sacrifices.

[quote CayrolBaaaskin]@roundtable - childcare isn’t really a choice and not much option other than a nanny for young children if you work long anti social hours. Also I lived somewhere relatively far out but I needed to be near enough to commute (and my commute was over an hour as it was). I did eventually move and buy a house and things are easier now but a 100k salary does not necessarily make your life a picnic.[/quote]
Definitely would be harder that 2 adults bringing in that income but I have friends who work multiple jobs and/or their hours are long and they get paid peanuts with no chance of affording a nanny.

They are stuck in areas they can't move away from to go somewhere cheaper as they need to be near family for support.

They are to make decisions with less income to use to make those choices.

I agree with you but think people tend to live according to their income.

Have nc for this thread obviously!

I work in the City and earn 6 figures. Our mortgage on a 3 bed flat (not house!) in south London is 2200 a month. Our nursery fees for one child, 4 days per week (grandparents do 5th day) are £1400. We are very very lucky that I earn what I do, but our fixed out goings are HIGH.

In terms of the remaining money, after food clothes card bills etc we are trying to save - our house needs work, so am saving for that, and also hoping to have another DC in a few years so saving for another mat leave. If we had another DC now, childcare and mortgage alone would take basically my whole salary after tax. I know we are very lucky to be able to afford the mortgage and nursery we do, but in response to OP we are NOT buying gold plated everything!

@missbunnyrabbit The more you have the larger your outgoings. Also depending on size of family 100k doesn't stretch far.
There is always someone wanting something off you whether that be the government or family.

I wish there was an edit button! Mortgage is 2600, nursery 1400 - 4K together per month.