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?

You don’t need cash savings to cover a boiler breakdown because you could comfortably afford it out of general spending. So it’s lovely having that security but to some people, paying for a boiler repair would wipe out their disposable income for that month. So they need savings as a safety net. You obviously have a highly paid job-so must have intelligence-is it really beyond you to realise that?

Because even as low income I would know that wealthy people aren’t worrying about savings for a broken car.

But nobody says they are! We are all saying that wealthy people have wealth and some of it is liquid. I think you are saying the same.

You are obsessed with this thing where you THINK people are saying "Everyone has to have a little piggy bank of cash".

Nobody has said that. Not here, not on another thread.

Most people probably thought this thread was about proper wealthy people and then found it wasn't, title is clickbaity.

1. I said we would use credit card or if I had just been paid we could use that, but actually for an expensive like that I would still use a credit card.

2. aggressive cancer no because the posted was suggesting I would need £000’000s to pay for private treatment. It was absurd.

3. very few of those things you’ve mentioned aren’t covered by insurance but we have access to credit if we really needed it. In reality most could be covered by monthly income. We would just not use money that month for something that wasn’t necessary.

What you seem to be missing is most months we spend most of the money. That majority of it on things we don’t need, things that we could easily do without. And we are in that position because the high salaries over a prolonged period has allowed us to build a situation of financial security. The basics are more than covered and then some.

Also when people are saying you have to have savings, the examples they gave are things that just simply aren’t an issue. A boiler is not an issue. The car is on warranty or leased.

To me, savings are by definition a pot of money you have put aside “saved” for a certain even. Not left over cash at the end of the month you fully intend to spend imminently. It’s incoming / outgoing. Savings have always been something entirely different to me. As someone who has historically saved a lot.

Literally the reason I started this thread is because I’ve seen threads where that is exactly what was said and because it’s said out loud. All the time.

You might not have heard it. But it’s said.

I feel like about half the people on this thread, including the original poster are choosing to die on a really strange hill. 🤣

@BillionaireTea literally this thread. You need money if the boiler breaks.

OP I would have much more sympathy for your post if you’d taken the approach of challenging the statement I’ve seen on here before “we’re all one paycheck from disaster” or variations on that theme. That is one of the real disparities in this country- those who can weather a financial storm and those who can’t. That isn’t a pure income question but an income vs outgoings one. Some people who should have financial security don’t through overspending and irresponsibility. Some people who desperately need financial security are not in a position to build it due to low wages, insecure employment, family responsibilities etc.
Many of the senior decision makers in this country have the potential to insulate themselves against day to day financial shocks so how well do they understand those who can’t.

Isn’t that the whole point of savings. That you don’t need to make lifestyle changes???

As posted previously - I am wealthy (but wasn’t aware I was ‘actually’ wealthy) and have as what you terms investments and savings, massive pension pots, own the majority of the property etc BUT - I do move the money to cash savings...at the 6% interest it’s worth it.....and if the income stopped tomorrow.... the income from the investments plus the savings means there is no lifestyle change and I would have a year to play with re. Getting a job.

getting a job at the 200 k plus level doesn’t happen overnight - and of course you get notice period etc, but a firm may pay statutory redundancy etc.

you are just comfortable with the risk of not having liquid savings and can’t be bothered to move money monthly for say an extra 400 quid a month in interest....

you asked were you being reasonable - in my opinion no, but then in your opinion I don’t need savings to pay for any kind of illness as the NHS is best (when it isn’t). I too have all the insurances, but health insurance in this country does not cover Chronic conditions for longer than a few
mths (I know this as am a lawyer and have advised on it) even all singing all dancing policies.

you are just happy to take additional risks. Say for example we go to war with russia.....the majority of investments will dive......and if there is an unexpected event where you need money - money and cannot put it on CC - you may have to liquidate and crystallise a position that is not the best - you are happy with that risk. Others are not - it doesn’t mean either is wrong or right, it’s risk appetite.

Consider over the course of a month £13000 hits our bank account.
None of that money is in my current account

So how does it work then when you want to book that 20K trip and have no easily accessible cash savings and do not keep large amounts of cash on current account either? If you earn 13, of course spend a part of it, so have a few K left. Spread it all out so one person's flights in January, other person's hotel room in Feburary and so on? Or put it all on credit card and pay in instalments? Keep constantly swapping between 0 interest credit cards?
I'm sure it's doable but sounds like a hassle compared to just paying the entire amount in one go from savings.

Plenty of folk live beyond their means. And plenty of folk live frugally with lots of savings and won't spend a penny. I know a few of those.

That would have been a much much better post!

No one is entirely secure in their lifestyle because of money they have sitting in a savings account.

YABVVU. One person (or couple) could be earning more than £200k and be very undisciplined with their money, while another could be earning <£50k and by careful planning and saving, can appear to be wealthier than the first.
I learned this over 40 years ago when my building society colleague, earning the same as me (around £3000 p.a.) asked me to change over her joint savings account to a new savings book “because she knew I wouldn’t blab about it” to realise that she had in excess of £200k in savings. She and her husband had decided at the beginning of their marriage to live on only the lower of their two salaries (he was a plumber) and save the other so that they could buy a house outright and afford to retire early!

I didn’t state that. Read it again - it’s about risk appetite. You are happy with where you are and your risk appetite. Others are not.

Personally if I need hydrotherapy for a chronic condition (btw I don’t) I would want to know I can pay for it and it won’t affect my lifestyle...... fine if you don’t think you would want to recover from a stroke (the NHS does not provide hydro for stroke - again I know this because of legal work). Perhaps it’s because I have seen at first hand what the NHS does and doesn’t pay for....and it has affected my risk appetite.

You don’t appear to be able to see both sides of an argument......and maybe I would be like that if I didn’t have the knowledge I have......but I do, and there you are.

i agree with the OP to a point. When you’ve got a decent income you’re really looking at cash flow rather than being faced with an unexpected bill that could wipe you out. We can access high amounts on a credit card and that would be our first emergency fund for the majority of things. That would likely then give at least a month to access money in investments etc if needed to pay off the credit card or more time to spread the bill out.

We’re in a similar place where we don’t tend to have much in cash savings through choice. Where I don’t agree is the false split between savings and investments. She might not want to access investments or it might take a few days to liquidise but that provides a massive safety net and it’s disingenuous to pretend that couldn’t be used in the same way as cash savings if needed.

If you’re on a lower income, access to cash savings becomes a lifeline. You don’t have access to the same easy (and 0 to low interest) credit.

We could afford hydro without any issue.

That’s the point.

I have asked what we would be saving for an so far the answers are all things that we could afford with no issue or things that one actually saves to mitigate against anyway.

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

Wealthy folks don't need a little pot for
emergencies, they need a healthy liquid pot for far bigger unexpected expenditure.

Yes, mistaking wealth for high income.

The wealthy want to retain wealth and will have savings in terms of investments etc.

The high income flash harries have no savings and it will only take a tip in the wrong direction and they'll be looking to sell all the flash.

Two very, very different types of people. You have a distinct lack of understanding here.

It’s clear from this thread that OP is deluded. And financially illiterate to boot. And She doesn’t know any truly wealthy people well. Most people of this thread probably don’t know truly wealthy people well. The difference is that OP is deluded and thinks of herself as wealthy.

Imagine if she came out with this nonsense if having this conversation with a wealthy person. She would look like such a tit. Not that she’d know it. This thread is truly cringe.

Im not really sure what the point of the thread is. I don't fully understand what its like to be very wealthy....because i'm not and never have been.

But I'm not sure what the benefit of having money for any and all eventualities in a current account, than having the same amount spread between a current and savings account?

Surely everyone has unexpected or unplanned for spending, whether they are on NMW or £200k?

So on top of everything you can easily pay for stroke rehab and care from the 13k....so 5/6 k a month - without affecting lifestyle. And it’s not short term if it’s a major stroke? As that is not what you said previously.......

rehab to recover on the NHS is not available......

Amen.

I've explained that most people in your position would be putting cash reserves aside for new cars and kitchens / bathrooms and you have implied that you are happy with a 12-15 year old kitchen and 6yrs+ car.

That's very unusual for high-earners and in all likelihood not true.

You can't "afford these with no issue" purely from your monthly income.

And you babe had to alter your home to make it accessible before the person comes home from hospital at say 20k, plus a decent wheelchair - oh and the person that is still working will be taking unpaid leave as the annual leave will not cover hospital appts.....