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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%
JimBobsWife · 28/01/2024 08:09

Is OP saying she earns a mega high salary but has no savings and thinks other people don't understand this state of affairs.

Or is it about something else?

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Ginmonkeyagain · 28/01/2024 08:09

@AnneValentine if you are so wealthy why do you bother wasting your money on boiler insurance? We are not wealthy by any definition but have more than enough put aside for boiler repairs.

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Setyoufree · 28/01/2024 08:09

This is ridiculous. So you have a load of investments in illiquid assets. So what you're saying is you have no liquidity whatsoever in any of your assets? Sounds pretty unlikely to me but you do you.

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Cornishclio · 28/01/2024 08:09

It takes about a week for us to access our investments. Most people who invest know that it is wise to have some liquid savings in case you do need money to replace a car or do a long haul holiday and the stock market is low. Having a liquid savings pot means you are not forced to sell investments in a slump.

It is incredibly naive to think high income people don't get made redundant. As they are expensive they often go although presumably they would get a redundancy package but if the business went under it may take a while to pay out.

Are you saying OP that you don't need emergency savings if you have a high salary? To some extent I would agree with that but circumstances can change so even if we did have £200k per annum I would still save.

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renthead · 28/01/2024 08:09

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

Of course you can do this, I'm sure your wealth advisor would be happy to walk you through the process OP! It isn't always going to be advisable, for instance if the markets are down, but it can be done quickly. Stocks and bonds in publicly traded companies are liquid assets.

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theduchessofspork · 28/01/2024 08:10

This reply has been deleted

Message deleted by MNHQ. Here's a link to our Talk Guidelines.

S/he is using this thread to bolster his/her ego in an entertainingly mad way.

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Caffeineneedednow · 28/01/2024 08:10

Firstly you said you have assets and investments which I assume you can sell to get cash if required. So that is essentially using a different name for savings.
Secondly no job is completely safe. My cousin was on a 6 figure salary had a brain hemmorage in his early 40s which destroyed his short term memory and ability to work. His wife had a small part time job just for hobby money really. She is now the sole earner as he can't work. They had to sell their big house and downsize. My point is things can happen

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wubwubwub · 28/01/2024 08:11

The problem is with no savings even when you're bringing in £13k pm, is what if you lose one of your jobs or can't work for any reason...

Say you...have a car crash and are in hospital for a month, and then can't work... Or the computer goes bust or anything...

How are the bills paid?

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AlreadyDropped · 28/01/2024 08:12

Of course rich people need accessible money in cash, however you want to define that.

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Loopytiles · 28/01/2024 08:13

You seem to be talking mainly about your household.

You seem to depend heavily on the earner(s) remaining in very well paid job(s). Stats suggest that gets harder as you get older.

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BingoMarieHeeler · 28/01/2024 08:13

Methinks Anne Valentine from Mumsnet is not the oligarch she is trying to make us believe she is 😄

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Counciltelly · 28/01/2024 08:13

Op I think you might just not be very good with money. If you burn through £13k a month “with nothing to show for it” as my mother would say. Also things like insuring your boiler, actually that’s a really expensive way to manage the risk of a boiler breaking down (rather than having some cash sitting just in case) . It’s helpful for someone who could not build up enough cash for a big repair. these kind of insurances/extended warranties are one of the ways less well off people end up worse off.

i think you might not be very financially literate but have masked this by a high income.

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AnneValentine · 28/01/2024 08:13

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?

We haven’t hit £0 in well over a decade. Cash sitting in your current account isn’t savings.

The irony that this thread is entirely proving my point is not lost.

Just poster after poster not understanding at all.

assets are not savings.

investments are not savings.

savings is your money, it’s secure money where there is no risk to it losing value. The same is not true for assets or investments.

OP posts:
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Noicant · 28/01/2024 08:13

We keep 20-30k in our current accounts just for cashflow, it’s not going to be spent but if it’s needed it’s there, we skim it off if it goes over and put it somewhere more useful, we don’t need it, it’s not spent so we aren’t scrimping to keep it there, it’s just excess and at times it’s been useful.

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Erdinger · 28/01/2024 08:14

howaboutapartysong · 28/01/2024 07:53

OP is making no sense

My thoughts too.

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Holypricks · 28/01/2024 08:14

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.

Of course it is.

Investment ISA’s are fully accessible. Maybe not great to be a forced seller, but it’s totally accessible and would be deemed as ‘savings’ despite the assets being non cash.

Furthermore a GIA is accessible, 5 days max.

You would always have some liquidity beyond this, whatever your income. Maybe not lots of cash, but our current account will always have excess in it.

Makes me wonder if you do indeed have these things OP, you’re not very informed on the mechanics.

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Heatherbell1978 · 28/01/2024 08:14

I agree OP that savings and investments are two different things. You can't access pensions until you're 55 (at the moment) for example. This is my line of work. However, not sure what point you're trying to get across. People with a decent income should really have both and spread their risk. If you're able you should have easily accessible funds for 'emergencies' and if you can have money in investments then great. The latter is the next step up from accessible savings and you need to have decent income to do this or potentially be prone to taking risks. Although pensions are for everyone.

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Evaka · 28/01/2024 08:15

Hi OP, your post is difficult to understand but my two cents if I'm understanding correctly. Yes, having a good income is a huge cushion. DP and I are high earners, no kids, with no debt and v low outgoings. We never worry about money and if a big cost comes up we tend to pay out from that month's salary. But we save because we can and should. Also, could both lose our jobs any time as could any low, middle or high income person. He's in an industry undergoing change. I hire and fire people but that doesn't make me immune. I could fuck up, org could change direction and decide they don't need me anymore. If you are indeed minted, I'd recommend you put a few bob aside. Your investments might be difficult to access or in a nosedive when you need cash. FWIW neither of us comes from money and know what it's like to be broke.

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AlreadyDropped · 28/01/2024 08:15

Also I know a number of higher earners who’ve lost their jobs. Colleague on about £1.2m gross, for example.

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BuddhaAtSea · 28/01/2024 08:16

@AnneValentine genuine question: did your husband tell you you guys don’t have any savings because you don’t need it? Has your dad always ’taken care’ of finances? Do you get an allowance?
Im asking because it sounds like you don’t really have a clue how it all works, ‘somebody’ takes care of it and made you think wealthy equals magic.

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BillionaireTea · 28/01/2024 08:16

OP let me reframe the question you are trying to ask:

"On Mumsnet people are always talking about having a few months' worth of salaries in a separate high street bank savings account, in liquid easy access form, as an emergency fund.

Do posters think that it's equally important to have some cash liquidity if you are a high earner with an income each month that is usually spent on everyday things but could be diverted at a pinch, insurance against job loss, and non liquid assets?

The non liquid assets include a pension that you can't draw on yet, investments in funds where you have to give notice to redeem your capital, and housing."

That is the question I think but it is very faux naive because the answer is in the question. Everyone needs liquid for emergencies. If your liquidity is in insurance and everyday salary, that protects you against some things. Doesn't protect you against others. Cash is an extremely versatile asset so it seems silly not to have some.

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spriots · 28/01/2024 08:16

AnneValentine · 28/01/2024 08:13

We haven’t hit £0 in well over a decade. Cash sitting in your current account isn’t savings.

The irony that this thread is entirely proving my point is not lost.

Just poster after poster not understanding at all.

assets are not savings.

investments are not savings.

savings is your money, it’s secure money where there is no risk to it losing value. The same is not true for assets or investments.

Err but cash sitting in your current account meets your definition of savings - it's secure money where there is no risk to it losing value?

I accept that stocks and shares are not technically savings as they can go down as well as up but I have a balanced portfolio and can access it within 48 hours so I do have access to cash.

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Loopytiles · 28/01/2024 08:16

Eh? cash in current accounts IS savings, just with no interest!

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ABwithAnItch · 28/01/2024 08:17

I agree money can eliminate worries but people can get addicted to spending and end up cash poor even though they are very wealthy. My dad sold his business about 15 years ago and became a multimillionaire overnight. My brothers and I were so relieved, we thought, great now they have plenty of money and we don’t have to worry about them in old age. Fast forward to now and they are basically broke. Not broke as in they need help from us but they have whittled away their money on expensive vacations, cars, houses, boats etc. I think they’ve made
bad investments too. Now they are having to sell assets to have cash to pay for healthcare (they live in the US). I can tell my mother is struggling with this. She wants her luxury lifestyle not
to cut back. I think a lot if people think ‘if I get x amount of money I will be set or happy or whatever’ Unless you are prudent, it’s very easy to get caught up in a lifestyle you cannot actually maintain unless you are a billionaire.

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SophiaElise · 28/01/2024 08:17

Passingthethyme · 28/01/2024 08:00

You need to define wealthy. To me wealthy means no money worries at all, ever, several properties, not actually needing to work etc etc
Savings to me is just standard unless you are actually poor and live from pay check to pay check. Most people have some savings for a rainy day?

The OP (and others) are conflating being rich with being wealthy.

https://www.forbes.com/advisor/retirement/difference-between-rich-and-wealthy/

What’s The Difference Between Rich And Wealthy?

Luxury labels. Expensive cars. Sprawling mansions. We're accustomed to thinking of these things as symbols of wealth, but visuals can be misleading. Renowned billionaire investor Warren Buffett drives a decade-old car and lives in the same house he bou...

https://www.forbes.com/advisor/retirement/difference-between-rich-and-wealthy/

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