To think it's easier to effortlessly get richer when you are already rich?

[SpreadableCheeseOnEverything]

Someone that I know is married to a wealthy man who has family money. His parents bought them a house for £1.5million a few years ago. They did a kitchen extension and a few other renovations and recently sold the house for £3million. So in excess of £1million profit made in just a few years with a few home improvements.

Her husband works in the city in a well paid job, and now she has started her own business, which is going brilliantly and is very profitable. However, her in laws paid all of the start up costs of the business. So without initially having money to start this, she wouldn't be able to make the profits she is making now.

AIBU to think it's so easy to make money if you are rich?

@lucylantern it's a perfectly rational perspective. It is possible to have personally benefitted from something but still think it's absolutely fucked up that it happens - eg me and the property market (mostly)

of course, money goes to money!

It does get evened a little bit with each generation as huge fortunes are taxed again upon death.

Does it? The rich tend to take advantage of the loopholes

If you have financial security then you can take bigger risks.
Bigger risks can equal to bigger returns.

@BlastedPimples wealth is often down to luck more than hard work. Being in the right place/profession/industry at the right time. Age, who your parents are.

We're modestly wealthy and it's mostly down to luck not hard work and some risk taking which paid off.

Agree with all of the above, rich people can also afford to enlist an accountant who helps find all the loopholes, recommendations on how to avoid paying as much tax, similarly with financial advisers etc.

Firstly you have to pay interest on mortgages and loans. Secondly you don’t have the freedom to start a business and weather the initial period where it isn’t profitable. Thirdly you don’t have the money to invest in starting a business. And fourthly you have to be able to afford the risk of losing that money.

Yes once you’ve got a business you can make a profit. But without that initial investment you can’t even get started. My husband basically runs someone else’s business as the manager but he can’t afford to buy it off him to run himself.

Yes it’s true at the most basic level eg being able to take advantage of offers and sales, buying better quality products etc. Being poor is expensive - Terry Pratchett Boots Theory
https://www.goodreads.com/quotes/72745-the-reason-that-the-rich-were-so-rich-vimes-reasoned

Very much so. Money makes money is a very well known phrase.

Lots of true and very well made points on this thread.

I think it is worth repeating that the poverty premium is real.

Yes definitely, I’ve never had any savings and a few years ago I unexpectedly inherited almost 100k. I used 70k of it to set my DC up in his first purchased home and then invested the rest.
I’ve also been able to add to the savings, now if I need any big purchases I use the profit from my saving.
I spent almost £1000 on Christmas last year and this came from growth on my ISA’s. Within a month of withdrawing the 1k my ISA’s had grown by the amount I took out so do me it seemed like a free Christmas.
I am going on a holiday soon and wanted to book a big excursion and some spa treatments so invested in Bitcoin with some spare money I had when I noticed the price dropped, the next day I sold them as the price had gone back up and booked the excursion with my profit.
So I am not actually getting richer but monetary aspects of life are so much easier.

Definitely, even the most basic things. We have an extra freezer, filled with food which we can buy on sale and in bulk (can do it online, which saves time and petrol money, and don't need to do as many trips).

It's almost easier to think of it the opposite way, if you live pay check, something happens to your car which you need for work (which also breaks down often and so costs you money, but its the best you could afford), you have to get a loan to fix it, you can only pay the minimum amount so then you get into debt and have to pay interest etc etc. Then you can't afford your insurance, something happens, you're not covered etc, etc. The spiral down is very quick.

At a more basic level, money buys time, and it is mostly the time aspect, which enables people to get richer.

If I can afford a dishwasher, that's 10-15min/day saved instead of given over to cleaning up after cooking. If I can afford a washing machine instead of having to go to the launderette, I can save 1-2hours/ week. If I can afford a car instead of public transport, that's many more hours of saved time, which I can then invest into other things - education and studies to get promotions, time for schmoozing at work to build connections, time to dive into investments or simply time to research better deals.

On a slightly higher income level, I can then expand this by outsourcing jobs that poorer people need to do themselves, from getting my car washed to cleaning my house, to sending my kids to camps where they will network and make new experiences. All of this freeing up more time to get even more educated, networking more and being able to pay an accountant to optimise my finances.

From there, it then spirals.

It always has been. If you have spare money, you can invest. Perhaps you’ll buy a buy-to-let “for your pension” or to help your child out. On the other hand, if you are extremely poor you probably live somewhere crowded and groggy and can’t, eg, take advantage of bulk buying offers on food. Chances are you’ll be renting and that is just money thrown down the drain. No money for decent clothes means no decent job (I was brought up in hand-me-downs, and good god the constant snobbery) because you won’t pass interviews, and so the cycle continues.

The choices society makes - to slow usury and buy to let’s, to emphasise appearance and social connections over ability and work - have a far bigger impact on our lives than our own choices: especially when you are poor in a country valuing wealth, because lack makes you powerless.

Britain used to value freedom and industriousness far more than it did wealth and appearances once.

Well, of course it's true, but it can be true at a much lower level too.

We're well off on income, and I was able to pay for and self-study for a qualification in an area I'm already experienced in. It took me six weeks to consolidate my learning and take the exam, and £250.

The qualification is a fairly niche one, and it gave me a leg up in salary of 25% by moving jobs. I plan to continue to acquire related quals and leverage myself upwards like this.

I recommend it by far over the approach of gunning for promotions etc.

allow usury.

Capitalism - the clue is in the name.

Long term prosperity is down to how well you deploy your capital.

If you don't have any capital then you gotta play the tutorial and keep trading your labour for some.

Lots of people haven't clocked this and get stuck in the tutorial.

@Reality25 hmmm. If only it were that simple. It's really not. So many people labour really hard and never get any capital.

You're absolutely right, they're stuck in the tutorial sadly where the exchange rate of labour to capital is bad.

And how do they leave this tutorial?

Yes, absolutely. My husband and I both benefited from family money (and an education in financial matters, which is extremely important) which gave us a solid foundation upon which to build.

Of course. Even at the most basic level, if you can buy in bulk you will pay less overall.

If you can buy basics to stock your food supply, like spices, you can home cook and save £££.

We don't carry pet insurance on our dog. We have enough capital to cover any eventually and would have spent around £10k in insurance over the last 14 years - that 10k is in our bank, not the insurance company's.

Managing to get a mortgage and pay it off early is a massive money generator.

It's like a snowball rolling downhill. The mass accumulates as it goes.

Many never do.

Few who do usually sacrifice to get out of it. Long term gain for short term pain. The specifics of the sacrifice will vary from person to person.

All generational wealth started with someone living below their means and building up capital to benefit their descendants.

There will be people like that today who make that sacrifice for their descendants.

But on the other hand, how often have you heard "you can't take it with you after you're dead". "YOLO". "I live life in the moment"?

These are the destroyers of generational wealth. The antithesis of the generational wealth builders. And their descendants will suffer for that attitude.

Like it or not, we are all in an invisible state of competition with each other. So will our children be, and their children etc. If you choose not to give capital to your children, then they will be outcompeted by those whose parents did. And if they in turn do the same thing it will compound until there is a massive wealth gap between those two lines.

Like it or not, we are all in an invisible state of competition with each other. So will our children be, and their children etc. If you choose not to give capital to your children, then they will be outcompeted by those whose parents did. And if they in turn do the same thing it will compound until there is a massive wealth gap between those two lines.

This is true

Be pleased for her. You sound jealous.