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?

It's just so weird. If I want to go on holiday this year, I could pay the balance now and Disney have my cash (if Disney is where I'm going). Or I can put that cash somewhere where it becomes a little bit more cash and then I pay. But the OP is better than me because she does it the first way?

So you save up to pay bills? Even though it just comes out of your monthly income you consider that to be saving?

It doesn't have to be "frivolous stuff". Is a £300k extension 'frivolous" to you? How about buying university age children a property? To the truly wealthy it certainly isn't, and doing so wouldn't compromise their future investments either.

The "investments" which you are referring to having are likely long-term investments that are relatively illquid - not because of the technical access to them but because of the long term nature of their expected gains. A wealthy family would not put themselves in the position of having to liquidise them at the "wrong" time.

Again, there is no obvious purpose to your posts or this thread other than "bragging" that you are relatively financially comfortable and living within your short-term means.

They are clearly relatively high compared to a sizeable portion of the population.

These means are also clearly relatively low compared to genuinely wealthy families - who don't holiday at Disneyland or leave themselves without a large sum of liquid funds to spend on things you define as frivolous because you lack the disposable income to deem them justifiable.

Unless you actually spend (on average) £13, 000, then you do have savings, even if that's left in a current account not accruing interest.

Earning that much it would be crazy not to invest some. No one knows what might happen health wise in the future. But I imagine you have insurance policies, life assurance, pensions etc - which are investments for the future.

Since the vast majority don't have your wealth, I'm not sure what your point is. Lucky you, let everyone else discuss their financial prospects and issues in peace. Its not like you have to take their advice.

If I wanted it to
”earn” an income I would add it our investment budget and kiss it goodbye.

love the notion that investments are kissing your money goodbye. You don’t seem to have much actually financial nous as evidenced throughout this thread…..

And when you have to pay tax on that little bit more and the flight prices go up? Still worth it?

Also - absolutely not better than you. That’s not what this is.

I'm not sure why there's a need to be so scrupulous over the meaning of investments and savings. I think what you're trying to say here is that your cash float is much larger than most other people's, and therefore you don't see the need to have savings.

That's fine I guess but last year my brother got a really good deal for a car except the dealer wanted immediate payment (no loan nor lease) and was only willing to hold the car for him for 24 hours. My brother needed to sell his existing car before he could afford the new one, but he couldn't have done it in 24 hours and would have lost out on the deal. Guess who he had to ask for this bridging loan. Maybe you won't ever find yourself in a situation like this, but if you do, it's really helpful to have savings (very liquid investments)!

To us it is because we don’t see it as a pot of money we access. It’s something entirely separate. Of course we could if we desperately needed to but we wouldn’t be for a holiday or any luxury item like that.

I work for wealthy people. They earn considerably more thank £13k a month. They have properties, mortgages etc. They also have money in savings accounts - the odd million or two here and there. For things like investing in a new company to earn themselves more money. And to cover an expensive month when they've bought a £20k private reg for example. So yes, wealthy people do have savings accounts. They just unconsciously 'save' for things the majority of us won't be saving for, though for them, it's just sticking the spare money in an account until they want to spend it.

For me they must have a few millions in savings to be considered wealthy. I know loads of wealthy people like this - 200k and no money in the bank is not wealth to me Op! Who is going to stump up the PJs fuel costs?! 🥴

We definitely won’t be in a situation like that no.

What sort of hospital are you in, if I may ask?

Well don't you normally book and pay a deposit, then the balance nearer the time? So in the interim, why not have the money somewhere it's earning tax-free interest eg Premium Bonds (not guaranteed to win anything of course, but you usually do on full holdings) or in an ISA? Why do you think it's better to have it in your current account?

And all your posts are full of superiority; it's entirely about proving yourself somehow better than others.

This is an odd thread.

if you look at this definition “Savings represents an individual’s unspent earnings. It is the amount that remains after meeting the household and other personal expenses over a given period, for example, on a monthly basis.”

If you have unspent earnings then you have savings. If you then invest those savings in an illiquid asset, you still saved. Most people choose to keep at least a chunk of their savings in a more liquid form.

However, if you are investing an amount each month or year then you still have savings, albeit in a form that is not that readily accessible.

You’ve clearly chosen to pay for insurance for things that you could easily afford to pay to replace yourselves. That is likely to be a waste of money.

https://cleartax.in/glossary/savings/

Lost cats? I’m talking about the blase approach to money, especially for us little people who earn nowhere near as much and struggle month to month to survive.

To us it is because we don’t see it as a pot of money we access. It’s something entirely separate. Of course we could if we desperately needed to

and there we have it. Access to a sum of money, which is pretty much just volatile savings

As in private or NHS? Why?

I have been on my own since I was about 16. I had no clue what I was doing. I was a step away from being on the street and took a loan from a 'friend' to pay for first and last month rent for a room. They called the debt early and I got a credit card and cash-advanced to pay for that. How do you think that went as I was earning minimum wage? So from about 17 I was struggling to pay off a stupid credit card with a 30% rate on minimum wage.

Btw I'm Canadian. I couldn't go to university in Canada because of tax fraud by adoptive parents - I couldn't get student loans. I moved to the US and eventually was convinced by people I worked for that student loans were a necessity and once I was done I would have a good salary and be able to repay the debt. The fact the USA would give me student loans and Canada would not - definitely made me bitter towards my country at a young age.

However, I was given bad advice and I racked up way more student debt than was needed had I known more about the US system. Anyway, I worked full time while doing US university / college over years but my income was only enough to pay living expenses.

I can't tell you how much I would do differently if I'd had a bloody clue about what I was doing! Anyway, after years in the US I was sick of it and moved to France and used all my money to pay tuition for a Masters degree including cashing out all my retirement investments. I also worked full time while doing my masters and was known to be frugal and not a partier. I then applied for a highly skilled visa to move to the UK. It seemed impossible to get a job in the UK and freelanced for a company abroad for 2 years working all night until I got a job here. But oh how I love this country. Then I married the wrong person, sponsored his visa to come to the UK and ended up paying over £10,000 in visa fees while supporting both of us. Before DH moved to the UK he promised he would contribute at least £500pm because I didn't make enough to support both of us. He lied. Worse, he kept spending way more than I could afford, racking up debt. Without delving into details - when DH physically assaulted me I called the police and the police sent him back with a caution. I told them I didn't want him to come home and they said I had no choice because we were married. This led to years of manipulation, coerecive control and economic abuse.

Then when I finally left DH because he almost killed me - he was not deported. I was given an indefinite restraining order but he did everything to evade it. And you know what, I got offered a job abroad and I got on a plane and left with my infant. I left behind everything I had accumulated in terms of furniture etc. But I managed to get full legal custody of my child which was my goal. Perhpas my ex was merely a cocklodger because he made no effort to dispute custody and just wanted to avoid financial obligations it seems. My ex got away with making no financial contributions but it seems he managed to run up debt in my name in the UK whilst I was gone!

While we were in america I had on paper a good salary but was saddled with thousands of dollars in childcare and therapy costs and legal costs which kept me safe from ex but in more debt. My job was salary plus commission and all the deals I had built up in the year before the pandemic fell apart when lockdown hit.

In the end I finally felt safe to move back to the UK which to me is my home. The last company I was working for in the US gave me a job in the UK equal to the salary I had made in the past 3 years in the US. I would have been able to really hunker down and start saving. But no no.... I got made redundant along with the entire UK team less than 2 months after relocating back to the UK.

So why do high salary people struggle? Circumstances.

Woopydoo, so you can just pay for emergency small stuff from your current account. You are wrong in your OP to say 'normal' earners can't grasp that. It's pretty obvious that the higher your income, the easier it is to replace stuff.

People who have to scrimp and save do have the capacity to understand this.

So you use all your disposable income every month instead of saving liquid cash. It's all semantics. You know very well you can use your investments for big ticket items and your surplus cash for holidays and small emergencies, you just don't siphon it off into a savings account.

If it works for you, crack on but don't assume that people can't grasp what it's like.

I was just thinking this and wondered if I’d read it correctly, because I don’t consider £13k a month income wealthy at all. That’s ‘well off high salary’ position, but isn’t wealthy.

OP keeps banging on about the wealthy not needing savings and investments not being savings, but all the scenarios of needing money other posters have given her she has answers with either ‘selling property’ (using an investment), ‘paying for it in instalments’ (that is saving - short term or long term, saving and the ability to save) or ‘not doing it (eg, putting a pet down instead of paying for surgery to save it), which isn’t answering the question.

She claims people with exceedingly high salaries don’t get made redundant, which is the most bizarre thing I have ever heard. Yes they do. Me and my husband have seen in first hand in both our industries (and they aren’t obscure ones). However if someone posed her with the question of redundancy, she would simply answer ‘retire early’, or ‘withdraw some of private pension’ or ‘sell a property’, all of which is relying on an investment saving. Don’t even get me started on her reliance of insurance and the event of them not paying out or only partially paying out.

The belief that scenarios don’t happen to you because you haven’t experienced them yet does not equal ‘wealthy people don’t need savings’. It’s simply a piss poor way of managing your money and OP sounds very miseducated in that.

OP, at best, is asset rich and cash poor, which describes a lot of the country’s high earners. That is not wealth.

And, if OP were to claim any sort of ‘jealousy’ or any inexperience on my part, we bring in £11k a month and have save a six-figure savings. One of us also works in finance at director level. We are not wealthy, we are well off (and very lucky). And we also aren’t naive enough to believe that savings aren’t necessary or complacent enough to believe the wind never changes.

It would not be instant access and would require a lot of effort. It’s not something that could be considered in anyway emergency savings. Much like “I don’t need savings I own a house” wouldn’t make sense. Because I’m assuming when people say you need emergency savings they’re not including things like equity in property but a pot of money that can be easily accessed.

If in fact things like that are included and emergency savings includes things like this then I apologise. I completely missed the point. Given the statement “for an emergency” I took that to mean a pot of money saved that could be accessed at the drop of a hat.

God this is painful. I really hope your job isn't something where you need to understand language and concepts.

No. I don't personally consider paying monthly bills as savings. Because I am in the same position as you and they pay themselves automatically, comfortably within the total of my income, and they are paid in the same cadence I am paid.

My sister is paid weekly. She has to SAVE UP for her bills to be paid at the end of the month. She also has to have a bit more left over for other things she might want to buy or emergencies, because this SAVING doesn't happen by itself, as her income is low.

I am determined to get to the nub of your stupid question here OP. Is it about the definition of saving up? The intention of putting money aside for something in future?

You do that!!! But you do it AUTOMATICALLY.

Jan - 13k comes in, 8k goes out. Balance 5k
Feb - 13k comes in, 12k goes out as you buy random things that occur to you. Balance 6k.
Mar- 13k comes in. Oh, we would like to go to Disney! Look the flights cost £7k. Let's buy them. Usual 9kish goes out as well. Balance now at end of month is £2k.

You have SAVED UP to go to Disney land. You just did it without having to do it very consciously. It still counts as savings.

It’s because I said I would choose to put a cat to sleep before I put it through the trauma of expensive invasive surgery. Weird thing to get upset about.

All this thread proves is that you shouldn't debate or argue with an idiot.

They'll drag you down to their level and beat you on experience and relentlessness.😀

Posters will drop out as they realise the OP is clearly incorrect and unwilling to recognise that but the OP will continue on and on as they are so assured of their superiority.

This ranks as one of the most bizarre threads on MN that I have read. I am not sure why the OP feels the need to post in explicit, micro detail about her financial situation. My impression is of a pompous, conceited, self-obsessed bore looking to rile the little folk with stories about her (supposedly) earnt riches. Frankly I don’t give a toss about her financial set up but it has made me chuckle, reading about the assets, investments and tax planning.