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AIBU?

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

1000 replies

AnneValentine · 28/01/2024 07:38

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?

OP posts:
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Am I being unreasonable?

733 votes. Final results.

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You are being unreasonable
59%
You are NOT being unreasonable
41%
renthead · 28/01/2024 08:00

I think you're misunderstanding what people on MN mean by savings Confused no you don't need to have a high interest savings account at NatWest. But everyone should have some easily accessible cash that isn't tied up in illiquid assets. This is just a no brainer.

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Fredthefrog · 28/01/2024 08:00

Pensions and investments are savings. If you are wealthy you probably have different savings to the man on the street but you have assets to fall back on. Investment portfolio, property or even art/wine/jewellery. This is the rich person equivalent of a basic ISA. If you don't have any of that then you aren't wealthy.

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Counciltelly · 28/01/2024 08:01

So if you have investments that’s savings.

i think you op may have to consider that other “wealthy” people do save money and it’s possible you are just poor with money.

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Ginmonkeyagain · 28/01/2024 08:02

Investments and pensions ARE savings.

I get your point that "considerably richer than you" people such as yourselves do not need to bother with cash savings like ordinary little people. But you still have savings. You are not living pay day to pay day.

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Octavia64 · 28/01/2024 08:03

If you are defining savings as money that can be instantly accessed, then some investments fall into that category.

Property is an investment but the money in it can't be easily accessed.

Stocks and shares are an investment and the money can usually be accessed within a couple of days (close to instant)

Money in bank accounts depends on the terms of the bank account - you can get accounts where you lock it away for a year and get a higher interest rate but you ca. usually access the money immediately by sacrificing the higher interest rate.

So if a family had investments then unless all their investments are in property they effectively do have savings

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Saltbaern · 28/01/2024 08:03

Heatherbell1978 · 28/01/2024 07:52

I agree with PP that people on high incomes can choose to make their lives easy or hard. They can live well within their means, squirrel money away into pensions, savings etc and have a nice buffer. Or they can 'invest' in high end cars, fancy houses and a high end lifestyle. I know both types and I do think the latter is quite a high risk way of living life.

100% this. Also very nieve of the OP to think people who have a high income (im talking 150-200k, maybe OP is different) don't get made redundant. Every job my DH has had at director level they've sacked his predecesdor before him (big pay off or pushed to 'retire'). We are well aware that one day that could be him. Unless it's your company people are ruthless even if you've been there 20/30+ years.

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Sayingitstraight · 28/01/2024 08:03

I don't really understand your question OP....are you looking to define wealth?

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TeenDivided · 28/01/2024 08:04

AnneValentine · 28/01/2024 07:58

No they are not. Savings are money you can easily access in the case of an emergency. That’s not the case with pension or investments, neither of which can be accessed.

Rubbish. Of course they are savings!

You would be foolish not to have some assets that you could liquidise within say a 6-12 month time frame, but the longer your high salary notice period the less liquid you need your assets.

If you want to discuss cash in the bank at instant access you should say that, not just say savings.

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LadyLucksalot · 28/01/2024 08:04

Investments are NOT savings. Please, please do not think of them this way. They have the potential to go up, or equally go down.

Assets are not savings. An asset is something that provides you with an income.

Your home, for example, is not an asset as long as you have expenses on it: mortgage etc.

Savings should be thought of as a pool of liquid cash that you can dip into should you need to - though not as a way to meet your day to day expenses.

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lostontheunderground89 · 28/01/2024 08:04

donotsubscribe · 28/01/2024 07:47

People live to their means though, and plenty of people I know who would be perceived as well off don’t really have savings, and often stretch to living beyond those means.

They have high salaries, but then buy an impressive house with a high mortgage. With that comes high bills. They want an impressive car, so they buy one or two on a finance deal costing hundreds of pounds a month.

They go out for expensive meals, have expensive hobbies etc.

These are just the ones I know, who sometimes say “we can’t come out for that meal, things are a bit tight this month”.

So yes, if you have high salaries and are sensible with the income, you can have a stress free life, but many people aren’t sensible so end up with the same stresses as anyone else (I’m not saying this is a wise approach!)

Absolutely this.

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AnneValentine · 28/01/2024 08:04

Heatherbell1978 · 28/01/2024 07:48

I think 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. Not sure what you're asking OP? Are you saying that if all your money is tied up in assets, investments etc you can get away with £0 in your bank accounts?

Our boiler is insured. Mainly for the emergency service. It won’t break. It’s a few years old. That’s the other thing, when you have money you buy new products with warranty and replace regularly. Things don’t break as a result.

We don’t have £0 in our bank account, I wouldn’t include money in current accounts that’s going to be spent throughout the month with no expectation at all that any is left after bills covered is not savings.

OP posts:
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Flatleak · 28/01/2024 08:04

You think I could walk in the bank tomorrow and withdraw money from our investments? Ok 😂

Why is that your definition of access? Confused

I honestly cannot work out if you're insane, high, or just a bit dim.

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DryIce · 28/01/2024 08:05

Of course investments are savings. And if you have enough passive income coming in to cover unexpected expenses, then sure you don't need a pot of cash in a high st saver account.

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macedoniann · 28/01/2024 08:05

I don't understand your point OP?

I mean, at the risk of sounding like a snob.
There's a difference between 'rich' and 'wealthy'.
What you are saying about the 'wealthy' not having savings is true.
They don't.
They have a lot of valuable assets (investments that you're referring to?) and in order to access liquid sums they borrow against these and pay the interest on a rolling basis. If they need to pay it off they simply sell some assets to fund it.

They don't have savings sitting in an ordinary bank account to be accessed is that what you mean?

Investments can go up or down but these people have so many, and portfolios constructed in such a way that the risk of it dropping heavily enough to impact daily spending is extremely low. Capital begets more capital.

FWIW '200K salary' is just 'rich'. It's not wealthy. Wealthy to me means not having to worry about money, losing your job or anything. Tech millionaires like Mitchell Hashimoto for example will never have to work again!

A 'high salary' isn't enough especially as 200K will be taxed to high heaven. Unless you invest very prudently, and earn that amount for a sustained period of time.

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AnneValentine · 28/01/2024 08:05

LadyLucksalot · 28/01/2024 08:04

Investments are NOT savings. Please, please do not think of them this way. They have the potential to go up, or equally go down.

Assets are not savings. An asset is something that provides you with an income.

Your home, for example, is not an asset as long as you have expenses on it: mortgage etc.

Savings should be thought of as a pool of liquid cash that you can dip into should you need to - though not as a way to meet your day to day expenses.

Thank you!! The fact that people responding don’t even know this has pretty much made my point.

OP posts:
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Meadowfinch · 28/01/2024 08:05

Incidentally OP, I once collected my boss from the hard shoulder of the M3 where his new Bentley had broken down. Even cars that cost as much as a 3 bed house, break down on occasion.

You have a very odd view of 'how the wealthy live'.

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Ginmonkeyagain · 28/01/2024 08:05

I have a number of pensions, a stocks and shares ISA, a cash ISA and a couple of instant access savings accounts I use to put money aside for big ticket items like holidays and home repairs.

They are all savings.

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Holypricks · 28/01/2024 08:05

AnneValentine · 28/01/2024 07:48

People at this level are rarely made redundant. They make others redundant.

That’s very untrue. At C suite level, you can get the tap on the should very quickly. If the CEO goes, you often can too as the new person wants their team. OK you might get a big payoff, but it certainly happens.

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sleepyscientist · 28/01/2024 08:06

Heatherbell1978 · 28/01/2024 07:48

I think 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. Not sure what you're asking OP? Are you saying that if all your money is tied up in assets, investments etc you can get away with £0 in your bank accounts?

We aren't in the 200k club but comfortable, I would say the lack of worry about savings is a middle class thing. We have a couple of thousand in an easy access account but the majority of our "savings" are investments so are in assets that we could sell.

If the boiler breaks we have enough coming in to just pay it out of that months fun money (how we usually do it), insurance covers illness and we are very unlikely to be made redundant from our main jobs but the mortgage includes income protection insurance. Life insurance includes critical illness cover.

My husband is from a more working class background and is more comfortable when we have thousands in savings (hence it stays like it is now). I can quite happily blow the savings on a holiday, as if something happens I have a credit card with a 10k limit that has a <£100 balance (used for online shopping and when abroad).

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theduchessofspork · 28/01/2024 08:06

AnneValentine · 28/01/2024 07:59

You might consider them to be savings but they aren’t what I’m referring to - I’m talking about the emergency pot of savings that apparently you have to have for an emergency.

OP you are being obtuse

Most people on a high income do have easily accessible savings IME, to deal with stuff for the kids, the roof, the pool. No they wouldn’t need them for a broken washing machine.

Of course not everyone would. Most people understand that at any income level you can be disorganised about money.

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JimBobsWife · 28/01/2024 08:08

What is this thread actually about? Can someone please explain?

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shreknjumps · 28/01/2024 08:08

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AnnaTortoiseshell · 28/01/2024 08:08

Do you know other people who earn as much as you, have no immediately accessible cash, and whose bank accounts literally hit zero at the end of the month? I’d be surprised. It sounds like you’re just not very good with money? And I take your point that you don’t need to be as you have such a high income, but then if there was an emergency - and an emergency by your standards of course would be more significant than the tumble drier breaking - the money to deal with it would have to come from somewhere. If you’re committed to spending £13k a month, where would you get it from?

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LolaSmiles · 28/01/2024 08:08

There's no homogeneous group of rich/wealthy people. Their attitudes to finances will vary substantially based on their circumstances, upbringing, and priorities.

Not sure what point you're trying to make OP other than create a thread where you argue that nobody possibly understands what it's like to be as rich as you and the ordinary poor people wouldn't understand.

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Wictc · 28/01/2024 08:09

Investments are savings. For example, we invest in shares and I can easily sell them and have the money in a week or less.

Lots of jobs over £200k get made redundant. We’ve just had a round of redundancies and it affected a lot of the senior team.

We have easily accessible cash in an instant access savings account, so do all my friends. With the high rates at the moment, I’m not sure why you wouldn’t? We move it as soon as we get paid, as the interest is much better than our current account and then move back when required.

I don’t think the OP really has any idea about what most people do with their money. Most make it work as hard as possible, especially on a high income, the way the OP manages theirs sounds inefficient, maybe a financial advisor would help?

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