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?

This is utter nonsense - we bring in around £500,000 in salaries and bonuses but wouldn't feel secure without reasonably accessible savings. Our big old house regularly has things go wrong, many of which aren't insured. We've just spent £70k this year between lots of IVF and private birth which would have been a struggle out of monthly salaries. The idea that once you earn a large salary you have no need for savings and your additional expenses are lower is crazy. I definitely wouldn't feel secure unless I had at least 6 figures in easy / instant access for things going wrong.

Also, as I’ve already said I’m sat in hospital. Bored.

Are you Kate Middleton? 😬

"we have no debt at all apart from mortgage".

That's a huge debt. If you are so wealthy why would you have a mortgage? May be you are not very smart with money?

I'm sure I'm not as rich as you but I do actually own my own house (no mortgage) (plus savings)

I actually do work with a woman who must have a household income of at least £300k (her and her husband) who for some unknowable reason has several BTL properties with mortgages, no pension (she has told me, not sure if this means literally nothing), kids in private school and a nice lifestyle. She is periodically stressed out about money - paying all the mortgages, paying her tax etc. She is a barrister so high income but irregular payments. Seems like an absolutely mad way to live to me.

Financially savvy people won’t have tons of money sitting in a bank account. It’ll immediately get transferred into investments to make the money work.

But investments are still counted as savings, so a moot point.

We have a service plan that covers all our appliances, it includes servicing. We consider it worth it.

Good for you re pet insurance, we have it but so far I consider it pointless. 3 cats and I’ve only needed it for one and ended up paying for loads anyway. The life time cost definitely exceeds what we’ve used.

Ok so this thread is living in my head rent free.

So OP, you don’t have a slush fund from where you underspend one month to meet overspend the previous month?

I’m a relative high earner, but not £200k, but also no kids so lower spending requirements. For context of earning, last month I paid of £9k of credit cards that are cards that get paid in full every month from income (not savings) as that’s what I’d spent. Partly towards booking a £10k 2 week holiday for later in the year that will be paid for by not saving for a couple of months (ie we don’t need to touch existing savings but generally we earn more than we spend).

About £500 a month goes into what I call my slush fund savings as some months I spend more than we have available in income and I don’t want to reduce our fixed monthly saving amount (which is saved for significant (10k+) home improvements and retirement) so I use the slush fund from underspend in previous months.

I actually can’t believe you spend £13k a month, but never more. We take home c £10k between the two of us. Sometimes spend is £5k sometimes it’s £10k sometimes it’s £15k. We save £2k in every single one of those months and try not to ever touch it to fund ‘income’ spending.

I’m not sure YOU know how the wealthy live. You just know how you live.

The OP is obviously bored and has decided to wind people up with her nonsense.
Stop feeding her!

Investments are savings though, maybe not as liquid though. However much you earn it’s always useful to have some money set aside that you can access quickly.

I have no idea why you are running this thread. To tell us repeatedly about all the money you have? I have never heard anyone say they are wealthy so many times. Absolutely ridiculous. You may be wealthy but I would certainly not want to have your outlook for one moment.

The fact that you have made so many factually incorrect sweeping statements makes me question with your financial literacy and your ability to accumulate such a "wealthy" position.

You haven't educated anyone on the thread. You've used to brag and inadvertently highlight your own lack of understanding in many areas.

You may have plenty of money and assets but I suspect that this is a result of a good financial start in life, combined with inheritance/financial gifts and spousal earnings rather than the intelligence and ability to arrive at your financial position on your own.

I must admit I wasn't expecting Elon to be posting but was expecting someone more Martin Lewis, Elton John, Beckham, league of wealth not your common or garden MN higher earner who is bored in hospital. You have no idea in the title leads one to expect things that you couldn't imagine

Critical illness often takes many months to be paid out. And there are many conditions it doesn’t cover; even the conditions it does cover have strict criteria that isn’t always fulfilled.

Life cover is typically quicker to be paid - assuming it’s not payable to the estate and is either joint life or in Trust. But even that can take several weeks - if it’s to the estate you might be waiting a year or more.

So we can understand what you’re actually describing OP, what’s the lowest your current account reaches?

And where does this monthly £13k get paid from?

I can see why you’d need less savings than most but I still think you’re very naive in not having a comfortable emergency fund.

You describe having to pay holidays off bit by bit- that’s what the rest of us have to do if we don’t save. You’re hugely wealthy but can’t afford to pay for a holiday - can you not see why most of us consider you to be high income rather than truly wealthy? My DP used to work for a millionaire and the man had an affluent lifestyle but equally could afford to do whatever he wanted at the drop of a hat. He certainly wouldn’t have had to spread out payments for a luxury holiday. Example: on a whim, he took the company (about 30 people) to Vegas. A spontaneous treat. That’s the lifestyle of a wealthy man. You wouldn’t be able to do that unless it cost £13k or less - and then that would wipe out your money for the month.

If you have to think about money and make choices, then you’re not wealthy. You may have good money coming in but you’re having to work out how to pay for big expenses - that’s not being truly wealthy.

I mean, it doesn’t matter. You live however you want. But you’re actually living the same way as the rest of us really - you can’t afford to do what you want without spreading payments out or re-organising your finances.

Normally I’d agree but the deliberately goady fuckers usually name change and this is a fairly prolific established poster. I suspect there is some medication involved. It would account for the lack of cogency.

I personally think there is a difference between being wealthy and being high income.

I would count my mum (my dad died in 2017) as wealthy. She's a millionaire. And the reason so is because of good inheritances from both sets of parents, and investing for YEARS. Dad's dad was a consultant in a London teaching hospital. Mum's dad had his own very successful business, as did her grandparents.
None of those people lived extravagant lives. All their earnings went into "rainy day" savings and they lived quite frugal, modest lives.
My parents went on to do the same. They invested wisely, and lived modest lives.

Mum has more money than she'll ever spend. She does her weekly food shop in her local Co-op, and Sainsburys for the rare "top-up". She drives a 9yo Ford Focus. Her idea of a lovely holiday is a 3-day walking holiday in Wales.

But then I know people who are high income, who go out for meals multiple times a week, always on weekends away, jollies to the theatre, driving swish cars, but don't have a penny saved.

It's all down to choices and priorities.

@ThirtyThrillionThreeTrees

has it spot on

We never spend more, ever, we spread things like holidays across various pay checks. Some months we have leftovers that we carry across to the next month for a bigger expense. But it’s not money being shifted across into emergency savings. There are also - obviously - lots of things each month that we don’t need each month, or indeed at all, so we have room to play with money each month, it’s variable like you say. What we don’t have is money coming each month that is going into a savings account for an emergency.

Whats interesting is that people are saying you have to have savings for emergencies. Giving examples of things like a broken boiler. Something we could just pay for in cash. And that’s now moved on to you need savings for a holiday. We literally do not. No one needs a holiday.

This is a very long winded way to say husband makes a shit ton of money but won’t give me my own debit card 😀

it sounds like you are in a precarious position financially OP in spite of the high earnings and you don’t even realise it. If you earned 200 million than the wouldn’t need savings although by default you would have them by money resting in your account. That is even without any financial planning.

Ah okay so your last paragraph is the crux of it (although I still think it odd you never buy anything above £13k less bills… but I digress).

You don’t have saving for a reasonably expected emergency.

Same. I don’t save for holidays, I don’t have boiler cover, I could repair the car from monthly spend. I do have savings for bigger things though, like an extension to the house, or early retirement. Or anything over £500 ish, as that would then impact our day to day living, and I wouldn’t want to have to not eat out for a month because the car broke down.

In all seriousness though, if you can’t afford to drop 8k on a holiday to Disney and need to pay for flights one month and accommodation the next, you’re not proper wealthy. (What would you do if you also want another significant purchase that month?)

Or if you need to sell a rental property (not to mention the significant work that entails) in order to buy your kids an apartment, then you’re not proper wealthy. Well off sure, high income yes, but not proper wealthy.

Of course they can.

We don’t have to pay holidays off bit by bit. That’s how we choose to do it. When I booked a week in Tenerife over half term we paid in full up front. When we booked Disney we paid for flights one month, accommodation the next, why would I transfer money to a savings account to pay for it all in one go when I can just pay as I book? That makes no sense at all.

We also could save and do more luxurious things but that’s not really a need is it? That’s a choice of how you choose to live your life. I mean that’s the reality of this, we could very easily adjust our lifestyle and save thousands each month but we don’t need
to do that. We don’t need the money for a broken car or boiler.

We needed a new roof - it was old and it started to leak. It cost £20k. We used savings for that. What would you have done? What do for house repairs not covered by insurance?

@hydriotaphia £300k pa is really not an exceptionally high income for a barrister couple.

Barristers are self employed so get no employer contributions to pensions. For that reason DH's private pension is very modest but he invested in a range of other things during his career as a practicing barrister. That includes a couple of BTL's purchased in the early 2000s and for which we pay management fees because they are a pain the backside. Anyone investing in BTLs in the last 10 years is too far behind the curve.