AIBU to think most people have no idea how wealthy people live their lives?

[AnneValentine]

Just that really off the back of a lot of threads but most recently one where multiple people were adamant that the only way it’s possible to have no savings if you have salaries of £200k plus unless one of the couple is squirrelling savings.

Followed up with how do they pay for a broken down car with savings? Hasn’t even dawned on them that people on those salaries don’t have cars that are breaking down.

Is it so hard to believe that money literally eliminates money worries? That you can create a level of security that means savings and such aren’t needed?

YABU to think anyone actually gives a shit!

Lol - I think this comment rather proves the OP’s point:

even if you're wealthy you need 'savings' or 'money in the bank' as that's all it is. They could have a £3m house but if the boiler breaks they still need to pay for it somehow.

If you have even a decent income (not talking megabucks) and the boiler breaks, I presume you just get it fixed instantly by either paying the £150 bill from the salary in your current account, or more likely, sticking it on the credit card that you pay off each month. No need for savings.

I’d expect you to save at least some of your very fortunate salary for emergencies, which is the whole topic of the thread. It doesn’t matter what figure you reach, that’s not the point. It’s about your intentions.

If your stance on money from the very outset is “I refuse to save, will spend all my disposable income as I see fit, and use whatever services I like as my tax contributes to them, doesn’t matter who else needs them”, then that’s your position. And I’m glad it’s a rare one.

Investments are savings, often riskier and more lucrative than savings accounts based ones. The richest of my friendship group aren't moving money around regular savers like I do!
High income roles are often risky, rely on performance and can be high stress. I know several people managed out of their roles, not made redundant like my husband has been but literally terminated with a severance payment. They found something else and lived off savings enjoying a jolly time in their 6m between jobs.

^^ I agree with this. ‘Wealthy’ isn’t earning 200k it’s having assets and investments that you don’t have to work for.

Sadly I’m not wealthy by either definition though 😂

My DH has a high salary of 125k plus bonus (up to 50k) and shares (golden handcuff). But he works on the principle that he could get made redundant at any point, and that his next job will be a step down. So security for the future, and tax efficiency are our biggest considerations.

• He puts the max into his pension and I (on a 60k salary) put enough into my pension to keep me on basic rate tax. Those pensions are investments, but they aren't easily liquidated.
• We also use our maximum ISA allowances every year - those are "savings" that can be easily liquidated.
• We have a pot of money set aside in high interest accounts waiting to pay off our mortgage when our current low-interest mortgage deal ends.
• We have more money set aside in high interest account for home improvements and holidays. (This can also be used for emergencies if necessary)
• Anything else surplus is given to our kids - we are paying for DC1's university fees, and paying into his LISA and ISA. DC2 has a JISA and will also get a LISA when he turns 18, and whatever he needs for university.

So if someone said to me "do you have savings set aside for emergencies" I wouldn't hesitate to say yes.

We only buy insurance for the big things - home cover (not bothering with accidental damage cover), car cover, holiday cover.

I dont think the super wealthy bother with boiler insurance 😂

Wealthy people dont managentheir money or accumulate it, they have a bank manager to do it for them and have a certain amount on hand to influence those that need influencing or help those they want to help.

Rich people have jobs, the wealthy influence.

Maybe the wealthy have jobs too but only to give credence to their influence or before becoming an patron or board member.

Royalty is an extreme example. But the top CEOs of the big companies arent just doing that role and they arent doing it for a 200k paycheck - they are holding hose roles for the influence and other opportunities they bring.

Savings are money you can easily access in the case of an emergency.

I see and appreciate the distinction you’re trying to make.

however:

savings is your money, it’s secure money where there is no risk to it losing value.

secure money with no risk to it losing value? That has got to be a joke! 😂😂

Is a well know fact that most people spend according to income, that is that the more they earn the more they spend. People with a take home family income of £10k a month will be spending more on mortgage, cars, other loans, household help etc. typically, then they will have higher expectations of holidays for instance ... savings may be sensible but not many people do think ahead to be honest, nor do people remember circumstances can dramatically change.

I'm not typical, we save over half our £7k a month income, but we want to retire fairly soon- easier to save when you have a goal. (And when you earn a lot, though I've always saved, even when I earned £1500 a month as a single parent)

@AnneValentine Its a genuine question. I see this position on threads repeatedly. Completely incapable of seeing why everything is different when you’re financially secure.

Why do you care, though? Why does it bother you that people who live in completely different financial circumstances don't understand what it's like to be as wealthy as you are?

Is it because you feel frustrated that people don't understand the power that comes with having money? Do you wish people really understood how much happier you are than them, and how much better your life is?

Why do you care?!

This thread is so weird. Most people have savings not just for emergencies, it's also a nest egg, for your children, money to help them through university, for home improvements, holidays etc. If you can pay for all that on your credit card without having to think about it then bully for you. Just say that and be done with it.

I thought this thread was about the really wealthy and how they live but OP is just a fairly high earner so a bit meh really. Title is wrong for a start

I can see why for the most part you don’t need savings, I guess the sort of emergencies that might require some element of savings are things like a catastrophic injury or illness leading to a disability and an inability to work. Even if you are insured there are always things that won’t be covered and it can take time for payments to come through, if you needed house adaptations and equipment and care etc it might be frustrating not having any money to pay for those things. Even for things like a house fire or flood that might be covered by insurance payouts can take such a long time it would be less stressful to have money in an easily accessible account that could be used to buy replacement items etc when needed straight away, That is a worst case scenario kind of situation though, I can appreciate that if you have around £13k coming into the household each month and own credit cards etc then things that won’t cost more than a few thousand like a new boiler etc aren’t a concern.

Personally even if I was on a high wage I would still want to try and save some of my money for the future, for things like potentially putting children through uni/ further education, a lump sum to give children for wedding/ house deposit, money to put towards upsizing the house to reduce future mortgages costs etc. Maybe you have enough money tied up in investments etc that you would easily be able to free up money for any of those things, if that’s the case then personally I would argue you have ‘savings’ even if they aren’t the traditional kind in an ISA or whatever. If you are literally spending every penny of the £13k with no money put away for the future in any kind of way (whether investments, stocks & shares, a second property that could be sold or a more traditional savings account) I do think that’s a bit irresponsible.

You are very very short sighted if you think that someone on £200K a year will never be made redundant @AnneValentine

Some of the top FTS100 CEOs are sent packing at short notice.
Yes, they get a good pay-off but to think any job is secure shows how out of touch you are.

Mind you don't fall off that high horse.

@AnneValentine if you were booking a holiday, would you pay for this out of the money in your current account? I’d imagine people on high incomes would spend upwards of £7k on a holiday

I work in the City and if you believe people on high salaries don’t get made redundant you are mistaken.

Many of the people I work with and myself have a combination cash, easily liquidated investments and less liquid assets (eg rental properties). Some people are flash and live month to month but most aren’t. Their focus is on longer term wealth building. There are quite a few doing variants of FIRE (Financial Independence Retire Early). None of those assume their job will last forever and they certainly won’t want to liquidate investments due to the lack of a cash buffer.

People with high salaries may not need savings to cover the minor vicissitudes of life but that is not the same as being wealthy. People who are wealthy don’t need a salary at all.

re 1 We did Disney last year. That was the cost. We paid for flights one month. The accommodation the next. Etc.

re 2 never has a tax bill of that amount, if our tax bill was looking to be that amount we would put money aside in advance to cover that. Yes SAVE for a specific thing if we needed to.

re 3 we don’t have a dog. We have cats. I wouldn’t pay that - I would have it put to sleep. I am a perspective of what is cruel and unfair to animals and that kind of surgery wouldn’t be.

re 4 sell my flat that’s currently being rented out.

They don’t have savings, they have investments.

Why would you deliberately not have easily accessible savings though? That seems financially unwise.
High income high spend couples seem particularly vulnerable to financial shocks to me.

Between us we earn about a third less than you but due to the nature of the income stream, earnings were vastly reduced at the start of covid. Fortunately we are not even close to over extended and are diligent savers so we could weather that.

I don't really understand what there is to spend all that money on month after month. Maybe lots of nice holidays? That's about the only appealing thing I can think of.

Very much what I was going to say!

OP why do you care if people don’t understand how ‘the wealthy’ live?

Do you get annoyed when people in MN mention needing savings and feel attacked by that? Do you need your approach to money validated by a bunch of strangers?

Just be content that you’re wealthy/ better than everyone else 🤷‍♀️😂

I thought this thread would be about super yachts and private planes, I'm disappointed.

Your answer to 4 is a wealth fail. You would sell an income producing asset to fund a cash expense.

It depends - if we are doing package deals with BA we will pay it off over a 3-4 months, if it’s not package we pay for each bit as we book. We don’t save for holidays if that’s what you’re asking.

A few years ago dh was on about £150k at the time but we'd spent all our savings (and more) on a big house renovation. Our attitude to money has always been save a bit and then live for today. So I think by then, we had built the pot up to about £30k in savings - not huge but enough for a rainy day and we'd agreed we'd just sell the house and relocate if we fell on hard times.

DH's sister wanted us to give her £40k so she could buy her ex out of their house. Apart from being quite surprised that she expected us to give her the money - she said she wouldn't pay it back, she did not believe that we did not have the funds to cover her request ( she didn't know dh's salary - she knew he had a good job). I don't think our relationship has ever recovered, she felt we let her down in her moment of need.

OP, wealthy people don't do "package deals with BA."