100k+ salary, is it worth it?

[Goingtogetslated]

For the record…Not trying to be insensitive…

partner and I both earn approx 150k each. Working long and unpredictable hours with high levels of stress and responsibility.

Yet here we are living in a 3 bed terrace in the east end of london, a basic car, neither of us into high end expenses/dining out/clothes. We used to holiday a lot pre children, I guess would classify as our major expenditure in the past.

But is it actually worth it? A decent 4/5 bed house (with kerb appeal I admit) in the commuter belt seems to be coming in at 1.5 million minimum. Add the commuting costs/ extended nursery hours, paid help required theres barely anything left - relatively speaking.

Would we not be better off sacking it all in, moving to the countryside and earning enough to pay the bills?

We appear to be stuck in this middle ground where we earn too much to have any allowances from the state, contribute a lot to the government yet not enough for any real benefits in lifestyle

Lived in London for 30 years.

Yes you're right, it wouldn't be one bus but my point was that you could get home

You're very defensive!
I was talking about getting stuck in London if you'd had a night out with your friend in London - which is what you were describing.

That's great if trains to Birmingham are literally never cancelled. I don't think the fact that trains were invented there has an impact on points failures or broken down trains but I will bow to your superior knowledge.

I think Birmingham is a great city by the way.

@KnickersThatFit

Actually, not as bad as one might think. (See photo).

I didn’t finish reading all the comments, but I think your sticking point is what you think you “deserve” in terms of a house.

Housing costs are NOT related to how much you earn. They have gone up far higher, because of inherited wealth, and overseas money etc etc etc…

You may be in the top 10% (if not higher), but you canNOT afford the kind of house you think you deserve. You just can’t. So, either you lower your expectations, in terms of kerb appeal, driveway, turn-key decor, whatever it is, and focus on costs of services (which means more of your money is paying other people!), paying for decent childcare, holidays, a “better” car, OR you have the house that seemingly fits with your salary, and befitting your status, as you perceive it (and probably others do too), and you find yourself missing out on holidays etc.

You literally can’t do both.

I know what you’re talking about. When I first bought a house with my now husband, I had already bought my first house alone. It was in an area no one in zone 2 had even heard of, in zone 6, and was pretty scary in parts. That didn’t bother me, as I’ve lived all over London, and, for me, it was about being able to live alone for a while, and just getting on the ladder.

It doesn’t matter the sums involved, because it was 25 years ago, but the point is, I could afford black cabs back from a night out if I wanted to, I could afford a cleaner, and when a room needed decorating, I could get someone else to do it.

Being London, the house doubled in price by the time I wanted to sell it, and now it on a new rail line, and if I’d held on to it, well… no point thinking like that.

Anyway, that’s your choice. It’s no different from those who will be thinking “I work 50 hours a week, have to have my children minded most of the week, never see them, and still can’t afford a full weekly shop at Aldi”. But the difference is that your difficulty is about perceived wealth. Not real costs. For them, the bottom line is can they actually feed their children.

If you can manage your expectations, you will be far happier. You can do the job you’re doing now, live in a 800k house, somewhere within decent commuting distance (some wfh possible?), feel you’re achieving something in your career, and at some point, move to a bigger/fancier house if you wish. Right NOW, you cannot ‘have it all’.

At the end of it you will be sitting on a huge capital asset whichever way it goes.

BTW, you should be allowed to talk about this, but the one thing that you should NOT refer to is that you work hard/worked hard. I guarantee, as someone who has done a $10 per hour job, 40 hours a week, and a $150k job for 60 hours a week, the 150k job was far easier. And when I went home at night I felt safe and secure.

Okay so tax is higher above 50k-ish, what national insurance drops to 2%! What the hell? How is this acceptable? At the very least it should be a flat 12% for all!

I think this is an excellent thread to highlight how difficult things are for many, regardless of income status.

Hahahhahahhahaha.

I love being a net contributor. It’s lovely to be so well paid for the work that I love that I don’t need any help from the state, I pay for everything myself and have done my entire working life. It’s a lovely feeling and I am very very fortunate to not be in the precarious position of relying on the state.

It’s extremely unlikely your job is more stressful than mine tbh. But if you’re struggling then by all means take a massive pay cut and see how much…….easier lol…..life is. Make sure you report back.

I think you're just having a moan OP, because you should be able to afford this property if you run your numbers.

On your £150k salary that should qualify you for a mortgage around £700k, with repayments around £3200 monthly. Multiply by 2 and you have a 1.4mil mortgage with repayments around £6500. You and your partner's incomes should be around £15k after tax, which means you'll have about £8k after your mortgage payment. That should be pretty comfortable. And if you have equity in your current house plus savings, you wouldn't even need such a huge mortgage.

You aren't the middle ground. There are lots of nice places in commuter belt where you can get a 4 or 5 bed for under a million. You aren't looking in the right places.

is it worth it? It depends on what you value. Also if moving out I would probably want to WFH, ideally three days a week.

@Goingtogetslated I understand what you’re saying, and do relate - whilst also relating to how those not in your position cannot fathom your viewpoint.

I grew up very averagely, and now earn very well. However, like you I am living in a house that does not correlate to what I thought someone earning what I earn would be living in.

I have come to the conclusion that increasingly earned income is less important to lifestyle than wealth - house prices are such that if you don’t have wealth to start you off you are likely to never meet your ‘expected’ home.

Ive also realised now I earn more how much I took for granted when earning less/didn’t appreciate in terms of loss of support in different areas (child benefit, tax bracket pain etc) and also how much it costs to support the well paying job in terms of clothes, expected networking, having to pay other people to do all the little things I used to do myself as job hours are so long. Also how growing up ‘poorer’ gave a network of friends who helped for ‘mates rates’.

this is turning into an essay (sorry) but in conclusion I’ve had the same thoughts as you but have concluded I value my income being dependent on me rather than the whims of the governments support of various in work taxes, but I’m definitely looking to earn ‘sensibly’ rather than continue to earn ‘high’ in the foreseeable future as I want a better balance, and the added benefit in income above 100k but below 200k does not feel worth the additional stress/represent a good return on my time.

I didn't read it that way, rather that OP isn't seeing any of the lifestyle benefits that you'd think would go with being nearly-1%-ers.

I agree, Im assuming the OP didn't get on the property ladder over a decade ago so hasn't got the huge equity growth to fund a more expensive house as opposed to using salary. That makes a massive difference ime. Lots of school mum friends/neighbours moved out of London over lockdown because they wanted more space but couldn't afford it where we are. The ones who stayed & can afford the bigger 1.4m houses got on the ladder very young & tend to have family help.

How can someone who earns £150k not understand the concepts of a starter home and the property ladder?

Very few people, even very high earners, buy the bigger, forever home first.

To answer the question, no I don't think it's worth it. Consider moving out of London.

having said that I assume you live in a bubble area, there are plenty of places in or commutable to London that you can buy a nice house for under 1m.

I think the thing is that the price tag of decent family sized housing in your area is sadly now only achievable to those that got well on to the property ladder many years ago, or have inherited money/property.

Actually working hard and saving up from scratch is just unachievable in those areas.

this is the crux of it. There was a good article on the FT about it.

I'm a single parent on just over £100K and I can afford ponies and private school (just about) and not have a crippling mortgage in London.

But when did you get on the ladder cause I don't understand how you are affording private school?

Your posts do come across as bitter and entitled though

I disagree, I don't think it's fundamentally wrong for someone who earns very well to want a certain standard of living otherwise what's the point? My cousin is a surgeon & says she know so many NHS staff who have gone abroad or thinking about it because they want better pay & to actually be able to afford a decent house.

@Goingtogetslated I think I understand what you are getting at. Income is all relative and as you earn more, benefit and support get taken away, taxes become high and add in the stress that comes with high level positions it can start to feel like it’s not worth it.
We have a combined income of ~£120k so a lot less than you, but I can often feel the same.

Are you able to move out of London at all? I know this sounds obvious and a bit thoughtless but quality of life would improve massively if you can move. I have friends who commute to London living in Essex, Bristol, Welwyn Garden City areas and all do some WFH but have been able to buy houses with gardens, driveways, more bedrooms and close to good schools.

Mentioning house price rises over the last 15 years does sound bitter, though.

Why? Do you not think there are any issues with the housing market? My in-laws house was super cheap back in the day (East London), those houses now sell for over 2m, it's a massive issue.

Actually, that's not quite accurate. £150k salary would be just under £7.5k take home pet month. If both are earning, then this is £15k per month combined take home.

OP - this puts you in the top 1% earners. I haven't read the entire thread, but if you can't live on this comfortably, then you are doing something very wrong.

Who can afford those houses? People who have inherited, people who don't have children and have two good incomes, people who got lucky with their starter home increasingly massively in value and upgrade to that kind of house.

I personally prefer slightly older homes for the character. New homes look nice but I find them quite sterile. Given the choice, I'd rather have a simple home in a green area than a fancy home in a concrete jungle.

Big houses aren't all they are cracked up to be OP. I know you pay a cleaner but it'll cost you more. I look forward to downsizing one day.

How much is your current house worth? How much is your mortgage?
The listed house at 1.45 million shouldn't be hard for you to achieve. What is your monthly income and expenses?
£150k = monthly take home of £7,481.53. So both earning £150k, you have monthly take home pay of £15k. What are you spending it on?

You do understand taxes is what the government money is right, and that someone has to pay for it 🙄 it's not just random money that appears from nowhere.

When you personally contribute upwards of 60k a year in tax and NI to the pot, you are well aware that it isn't random money that appears from nowhere!

OP I understand what you are saying, I earn a similar salary to you and the hours/travel/responsibilities sometimes don't seem worth it when you live in a bog standard semi on an ex council estate because the next step house is still out of reach (in my case). People assume on that salary you are 'rich' but if you live in London or some parts of the SE it doesn't actually go that far. Yes you aren't on the breadline but also not rolling in it either

And I really can't understand why people see a thread that is clearly identified as being about earning 100k plus and feel the need to come on and tell you that the thread is insulting or to 'read the room' (urgh), or to tell you that they earn 20p and a packet of crisps. After all it's not mandatory to read a thread, if someone else's salary is going to upset you just don't read it!

It is 60% tax on a portion of it because you lose personal allowance on a salary like that.

Few people realise that there is an effective tax rate of 60% but alas there is.

As you have seen, if you combine the effect of the expensive option for size, kerb appeal and decor etc and location, it multiplies up to a price that is beyond even the top 0.001% of household incomes, especially when you add in other significant costs such as childcare.

So you either have to put up with 'only' having a normal house and not a wow one or you need to change/compromise somewhere.

Can you work in other cities? Do you have housing equity to use?

Even if you earned less elsewhere, you'd be able to afford a great house and a great lifestyle in another major city.

But maybe double check your numbers? Many have said your income should be a lot higher than you've said, and a mortgage wouldn't be quite as much as you fear, especially if you have equity, so you should be able to afford the big mortgage you need to buy the big house you want, and have money leftover to 'live', especially as you say you don't have expensive tastes?