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?

If you’re earning £200k+ and don’t have easy to access savings quite frankly you’re an idiot.

One health crisis and you could lose everything.

I disagree. I am selling a property to enable my 2 children to purchase a property each. I am not selling it to give them money to blow. And it also removes the property from future inheritance tax obligations.

Is £13000 a month truly wealthy though, especially with no savings. It's extremely well off and comfortable, and probably puts you in the top 1 % or 2% of earners. However the difference between the top 1% and the top 0.1% is extreme. I thought to be considered truly wealthy you needed around £1m just sitting in the bank. Having been exposed to truly wealthy people, I am most definitely not one, they own estates, millions in property/investments, businesses etc. £13k a month is very well off, but it isn't truly wealthy.

Does your household have one or two over £200 k incomes?

I had a friend who was a high earner - business went bust - school fees was huge problrm
as no savings.

so it’s just about needing savings for different things

strikes me that for your all valiant snobbery OP you still can’t get your mind out of the gutter with the peaSants who worry about boilers breaking down.

I have to disagree here. A lot of my colleagues are in the £200k-£400k earning bracket, and all of my clients are in the £5m+ wealth bracket. They all have savings. What will you do in retirement? At £200k salary you can’t put enough into a pension to retire comfortably.

Also, investments are savings - it’s just another way of saving.

The really wealthy actually have all of their money in investment or property portfolios and are highly leveraged with lots of debt and they live off the debt, and leave their ‘savings’ in tact.

So from my experience, the savvy wealthy DO save (or rather invest). It’s not for holidays or for repairing broken down cars or even buying new cars, it’s because those who are working will all retire in their early 50s or because those who are ACTUALLY wealthy live off the income their savings/investments yield or use it as leverage to borrow more to make further income yielding investments.

In fairness, if your spouse does, then it's family income, and yes you can.

6 figures is not an unheard of, unachievable, lottery lifestyle income anymore. It's a good salary. Not even a great one.

Yes, it's a great deal more than NMW. But the big deal made about "oooh a 6 figure salary" as if it suddenly affords you a millionaire lifestyle, is bizarre. It's about £5k a month. Take off the £2000 mortgage. Take off the £1000 council tax, bills, insurances, utilities. Food, clothing, vehicle payments. It's not the kings ransom it's made out to be. And if you've got a big childcare bill in there too...

11 pages in and it’s as if you’re trying to convince us that you’re wealthy. I don’t quite understand the point of this? If you believe you’re wealthy, then great. If you don’t think you need savings, then great. What do you want from us?😂

OP, it is a pretty standard banking function to auto-transfer everything that is left in a current account at the end of the month, across to savings.

Whether it's £10 or £1,000. Savings can happen without having to do anything more.

In the case of my boss's breakdown, I went to rescue him because he was on his way to the airport. He took my rather tatty Golf and made his flight, I stayed on the hard shoulder and organised a tow truck.

He had recovery so it cost him the same as it would have cost any other person. He had the benefit of me rescuing him in time, but the disadvantage of every sales person asking him, innocent faced, how he was getting on with his new car for the following three months. Much to their amusement.😁

People with money are just the same as the rest of us, but with zeros on the end.

We both have life and critical illness insurance. Health wise there’s actually very little risk, arguably the area of least risk. The only real impact, financially, would be that we couldn’t expand beyond where we are now. But that’s fine. We certainly have the assets / insurance to mean we would be comfortable. The bigger issue would be if I got unwell because of one of my children’s disability would cause issues with paying someone to care for her. But that isn’t something savings could mitigate against.

@AnneValentine that is literally a scenario which savings would mitigate against

I wanted to hear about living with your private aeroplane not your boiler insurance and package holidays

I missed this before I posted. Of course they are!

I have a second property, I don’t count the equity in that as savings particularly, but it is an “emergency fund” that I know is there if I need it. However my stocks and shares ISA and my clients investment portfolios are most definitely savings.

All of your points have just become moot.

My point is that almost everyone who is on here all day claims that they EARN six figure salaries. Not that their spouses do (although most of them apparently do as well). Only 4% of the population earns more than £100k a year but mysteriously they're all here...

I earn half that as a single person and my bills are £2200 a month (including repayments to debt that yes I got myself into). I have a very nice life. That wasn't the point I was making though.

So he didn’t need savings to buy a new car? And he has the access to enough funds to pay for things like recovery. So doesn’t need savings to cover the cost of repair or even a new car?

Many people on this salary in my industry at least, are on 3-5 year contracts, so they aren’t made redundant and given a big payout, their contracts are just not renewed. When that happens in your early 50s you’d better have some savings because there aren’t that many opportunities for someone with that experience, on a comparable package, in other companies.

No it’s not - it’s selling an asset and the yield might be rubbish. However it does show that the OP really doesn’t have much money!

If we needed £100k I’d take £100k from our investments ISA’s.

Wealthy people have people who work their money for them. They're not salaried. Why get 5% in the bank when you can borrow money invest it and enjoy a much higher return.

I could do you one of them, from life with ex.

You'd be equally disappointed

don’t worry. Thanks to mumsnet I’ve established that our property ownership, investments etc mean we do have savings.

You borrow against it and get proper IHT Advice. Rental income covers the borrowing costs and the IHT liability is managed. Your DC get the benefit twice not once.

This thread gave me food for thought, so I googled and found this really straightforward explanation describing the difference between savings and investments.

https://www.santander.co.uk/personal/support/savings-and-investments/saving-vs-investing

However, I would still class invesments as savings as far as we are concerned, albeit long term and not instant access.

Like PP we have investments, ISAs, a buffer in our current account, and easily accessible savings in building society accounts.

However, we are not wealthy. Our income is a fraction of the OP's. We are just sensible with money and don't live an extravagant lifestyle, and DH is very financially savvy. This means that we didn't need to dig into savings for when my car needed a 4 figure sum for some repairs.

I wish my friends husband was an ex she's paid a high price for the good life ☹️

This.

What a pointless thread.

We have IHT advice thank you.

When the time comes that might well be what we decide to do, we might decide to move into the flat and sell the house. Who knows. It was a quick fire answer to someone who asked how I would do 4 things. I answered. Whether that’s what I actually do who knows? I was pretty flippant about my cat let’s face it.

Your probably right the average Joe Bloggs has no idea how the wealthy live. Just like someone whose born blind has no idea what its like to see but i’m pretty sure they know that it must make life so much easier 🙄