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?

the discussion is about needing savings. I don’t believe those telling me I need savings for an emergency have that eventuality in mind.

I would have thought the people suggesting savings are a good idea have all sorts of different scenarios in mind. That’s the whole point about unexpected, expensive scenarios- they are wide ranging and can’t be predicted. Most people feel more secure with some easily accessible cash in a savings account in case of something unpredictable. You also have that easily accessible cash, but yours is in your current account rather than a savings account. 🤷🏼‍♀️

Surprised you don’t have a pot put aside for your rental property though. I didn’t even break even on mine one year (was a particularly bad year) thanks to lots of unexpected expenses and repairs.

Everyone needs savings/money on tap. Things break in everyone’s house, and in fancy cars. If you have a fancy house then there are more things to break- the skylight blinds are automated, the zip tap, the pool heating. It is very easy to spend a lot. A nice meal out at a good restaurant for you and your partner? £400. Specialist fees aren’t fully covered by insurance, very easy to see gp, get sent for a couple of tests privately, and that’s $400 before the day is over.
we aren’t in the uk, but with interest rates going up, people with big mortgages need several thousand more every month just to pay them. The school fees are rising. If you have what is a moderate mortgage around here of $1m, and 2 children in private school, that’s $14k a month before you’ve bought bread, milk or a bus pass.

but you also don't seem to understand managing money. Cash in a bank account loses value every single day. And fine you’ve defined savings a particular way, but assets and investments do count in many ways.

I'm nowhere near being rich or wealthy but I have been using the YNAB app for a few months, and I think the OP having no savings is the rich person's version YNAB.

Rule 1 - give every dollar a job. It sounds like all the OPs bills are paid, and the excess is going into pensions and investments.
Rule 2 - Embrace Your True Expenses. It sounds like the OP has reduced unexpected expenses by buying new or having insurance, and anything unexpected is covered by rule 3. There isn't much unexpected expense in our lives so we should budget for things. Your roof is going to need replacing eventually, it's not an unexpected expense.
Rule 3 - Roll With the Punches. The OP has said that anything unexpected will come out of their salary. Whereas I will borrow from the Christmas pot, she will order less caviar. joke I'm sure if there was a long-term problem she would sell investments. Most YNABers would budget for a holiday/car within rule 2, but OP is doing this via rule 3.

Most YNABers don't have "savings" because we use our excess money to forward budget our bills and true expenses. One example of a "YNAB win" is to cover all your expenses for the next 3 months. Some YNABers have a pot called "income Replacement" which would cover your bills if you were made redundant. I "save" money each month in premium bonds to cover my tax bill, but I call this tax bill money, not savings. I "save" money in high interest instant access account attached to my current account but I don't call that savings, I call that my Christmas, Birthday and Holidays fund.

This article explains it better: https://www.ynab.com/blog/your-budget-is-your-savings-category and I think being rich means the OP can do this her way.

If you own a property you don't own outright (as in it's mortgaged) and you don't have savings you're in a pretty poor situation if we as a country get into another global financial crisis again. I count myself in this class btw. I'm feeling pretty vulnerable as winter repairs wiped me out.

If all your 13k is accounted for each month and there's no flex in your spending I personally would be anxious.

After tax and other contributions. That’s combined monthly income after all tax obligations have been. Pension payments also been paid. There are some investment payments that are made out but £13k month is the typical amount hitting our account to live off. Has to cover mortgage, bills, and any other incidentals.

I’m saying I’m not sure why we need a pot of cash savings to cover things like a broken boiler. And that fact that we don’t must mean my DH is squirrelling away money or I’m lying.*

Well you didn't understand that yesterday, but now 8 pages later, do you understand? I've read every post on the thread, but you haven't, apparently. Let me sum it up here and then I'd really like to hear you say "yes, I agree, my question has been answered" or specify what we still need to help you understand. I mean it's up to you, but that reply would show that you're in good faith here.

You do need a pot of cash savings- yans yay, you've got one, within the fluffy balance of your current bank account.

You might not need to cover the broken boiler specifically, but broken boiler is a metaphor for "unexpected time critical payment you have to make". Your current account balance covers that - though many have said that you could think bigger as to what kind of very sudden or dramatic events might impact your ability to draw on deeper assets.

the fact we don't must mean my DH is squirrelling away money or I’m lying. Do you now understand that because you didn't explain where your savings were, people thought your financial comments didn't add up? Hopefully you now do...

Right I have to get back to work! (one of my high income-associate shitty things is having to work on Sundays...)

You have zero idea of my financial position Op

I'm cringing that you lack self awareness to the point you start a thread like this and expose your lack of financial awareness

We own the vast majority of two properties, have healthy pension pots and investments. If the salary stopped tomorrow obvious life style changes would be needed but we would get by without a huge problem. This salary isn’t new, it’s been there for long enough for us to be in a secure position. We are actually “worse off” salary wise since I changed careers.

What seems a little odd in the context of you apparently being on the recieving end of professional financial advice is that you appear to have zero high expense one off costs predicted for the next 2-5 years.

It's very unusual to be earning your sums of money and not to have anything whatsoever planned in that sort of timescale - new car / garden landscaping / new kitchen or bathroom etc - costs that you clearly could not cover with your monthly salary.

Most people on your income would have a cash reserve to do this. It would be poor financial practice to tie the money up in most long-term investments in the knowledge that you will draw down from them in such a short timeframe.

Perhaps 3 years ago it might be worth the risk given the poor interest rates offered on cash reserves (although the risk would still be unreasonable to many). In today's climate it would be complete nonsensical to risk money on short term market fluctuations when you can get 5% in a high interest savings account.

That's what you are really discussing here.

“Bet the husband has a shit ton of hidden savings”.

right there. It’s that nonsense that led me to start the thread.

OP it seems like you are responding to a specific comment on another thread which you have given no context for

so you can pay for a broken boiler out of your monthly cash flow - we’ll done

that’s not got anything to do with your general statement about not needing savings if you earn that kuch

You're making little sense... If you have enough cash flow each month that you have an extra £9k to get yourself and your family home from abroad in an emergency, then you're amassing an extra £9k every month that you're not spending, so you have... savings! Or, if what you actually mean is that while you don't actually have £9k extra every month but you have that amount (or more) just sitting there that's been accumulated from previous months, then congratulations, you've got savings.

You've said now that two examples (being stranded abroad and having aggressive cancer) are not relevant because they're - what - too much of an emergency and thus not what emergency savings are for? They're exactly what emergency savings are for. An emergency situation. A new roof, getting home when you're stuck, your house burns down, everyone loses their job, your investments go down the pan, one of your kids is very mentally ill and needs private therapy, your car explodes on the M1, all your teeth get knocked out by a passing golf ball... It literally doesn't matter. One doesn't have to stipulate in advance what the savings are being saved up for in order for them to be savings.

If the outgoings were everyday household expenses, that would be money set-aside to cover these expenses. But in regards to money to pay for work on the house - that is indeed savings. I could have gone out and bought 5 Hermes Birkin Bags but didn’t and instead saved the money for this work.

I really hope he has !
You have 2 properties and 13K a month and you have no savings?
Batshit

We have been high income for a long period. It’s not new. We purchased our home and refurbished 7 years ago. There is nothing that needs doing to it. Our mortgage is not large, not even close to large. As a proportion of joint salaries we could have borrowed considerably more than we did. We chose not to. So no we don’t need a cash reserve for that. We don’t need a cash reserve for any large items. I can’t think of anything large we would need to buy any time soon.

OP are you okay? This is a very odd thread to start - arguing with strangers on the internet because they don’t understand how wealthy you are and how you and your husband manage your money.

take a deep breath, take a long look at yourself and start enjoying your life without worrying what other people might or might not believe.

I personally wouldn’t classify you as wealthy. Rich yes, but wealth is very different to what you are describing. But why do you care what I think?

2 properties.
pensions.
low mortgage.
investments.

no, we do not have a little pot of cash for a boiler or aggressive cancer treatment or hydrotherapy.

I don’t care what you think.

I mean really I could be low income and the question would remain. Because even as low income I would know that wealthy people aren’t worrying about savings for a broken car.

You’re obsessed with this, OP. Why do you care if an inconsequential stranger or two on the internet thinks this?

OP if you saved £3,000 of your income a month you would barely notice it and in 10 years you would have £360,000 plus interest which you could send to me/spend on jewels.

I agree. Just be glad you have money and don't struggle to pay bills and feed your kids.

The OP isn’t wealthy in the true sense. She is a high earner, lives a modest lifestyle with budget tastes and so has money left over at the end of each month.

You patently care very very much what people think. The question is, why?

Yes, so in 5 years time your kitchen and bathrooms will be 12 years old. Your cars, assuming for the sake of argument that you bought them new last year, will be a minimum of 6 years old.

Most people that consider themselves "wealthy" are not driving around in 6 year old cars, or have 15 year old bathrooms. Hence why they have a cash reserve to pay for these when they arise. Liquidating long term investments for these predictable, largish expense is completely nonsensical.

Yes, so in 5 years time your kitchen and bathrooms will be 12 years old. Your cars, assuming for the sake of argument that you bought them new last year, will be a minimum of 6 years old.

Most people that consider themselves "wealthy" are not driving around in 6 year old cars, or have 15 year old bathrooms. Hence why they have a cash reserve to pay for these when they arise. Liquidating long term investments for these predictable, largish expense is completely nonsensical.