To think the problem with wealth inequality is that rich people don't know how rich they are?

[Neeroy]

Article in the Times today saying that people earning six figures 'don't feel rich'.

Because they are surrounded by six figure earning peers they are comparing themselves to people who have more rather than the 90% of the population that have far less. This is why the budget is poorly received in the news, because rich people think they already shoulder too high a burden when in fact compared to everyone else they still have far more disposable income. Even if they have to cut down on the number of holidays they go on. They aren't sitting in the dark under a blanket. Or only making food that doesn't require turning on the oven.

I don't think they realise how so many people have to live.

www.thetimes.com/article/1fb46414-8f65-436f-8f95-451d69626148?shareToken=8061d939633164c0dfbd805240c8e008

Chat GPT reckons the average age at buying of a first time buyer in 1980 was 31 years, and it now risen to 34. I'm not convinced that's really terribly significant TBH, particularly given the much bigger jump in age at having first child.

We run our own business, we are probably what people consider rich. We went on holiday today, a project has gone off the rails so Dh has worked all weekend trying to avoid it impacting on our holiday - events have moved beyond our control - he's worked all day - we're going out for dinner in half an hour and then he will probably work all night - he won't ask the team to do it but that is what he does when I say he "works hard" - he has always worked long hard hours. But you won't hear him moaning about it and you won't hear me either (except tonight, maybe) because where would we get sympathy from? - we know not to complain - we don't complain about taxes either - who would sympathise. I want him to stop working, I want to stop working - we don't need the money - he is worried about the team and them getting good jobs, they are all amazing - they'd get a new job in an instant...but he feels an obligation to them. Sometimes I wish he was more ruthless about this but I love him because he isn't - but the perception is if your successful it's because you've shat on someone else and I'm sure many do, who cares about stereotyping the wealthy, it's hardly picking on the weakest - so we shut up and put up.🤐

I don't, we're not far off that in my household but I bloody know that doesn't make us poor

I'm not a communist, more of a socialist.

My in laws are in their 60s
They bought their first house in 1980 ish.

They were both 21 and earning low wages, in jobs which would be the equivalent of minimum wage jobs now. It is a 3 bed semi in a not great area of a northern city. It’s still worth £250,000.

Two people on minimum wage would not be able to buy that same now without significant help.

260k cents is only $2600–so no, not much income.

Fair point 🤣

Its not that they don't think it's a lot.

Its that people who are told their household income allegedly puts them in the top 2%, fairly reasonably, expect to feel like they are in the top 2%...they reasonably expect to buy what they fancy within reason without worrying....

But they cant...unless they had gifted deposits most live very ordinary lives.. they cant just buy the £300 coat they fancy or throw whatever they want into the basket in waitrose.
they have to double check and budget and shop at aldi and sainsburys and drive some unremarkable but "okay" car.

Like i said people working high stress job for 130k arent the enemy billionaires are...

Not as much as people on here seem to want.

May be they can’t afford their own children and still pay for the children of people on welfare?

I earn slightly less than that and she earns around that. Gifted nothing as from deprived backgrounds. I can buy a £300 coat if I really want to, and of course everyone has to check what they spend on food etc. we are a bit blasé with a fair few leisure activities. I'd like to be able to afford a bigger holiday.

It's expectations related. Imagine whinging you can't afford a £300 coat when there are people struggling to buy their kids a pair gloves. It's ridiculous and the reason people think those on higher income are totally out of touch

They aren't comparable tho, because in 1980s dual income households were very much not the norm, so everything (including houses) was priced to a lower/more easily achieved baseline...

Both working/saving to buy a house in 1980 put them very much in a position of privilege vs both working MW jobs now.
To compare to now you'd have to look more at a couple where 2 people work 3.5 jobs. Could they afford a house doing that? Probably.

Not to deny there are issues with housing and wage growth in the UK, but these historical comparisons/statements of 'they had it easy' often aren't fully grounded.

I am not whinging, my point is there is a reality vs expectation mismatch.

And again for the people at the back
people working high stress job for 130k arent the enemy billionaires are..

Private School.

An interesting thought experiment for those interested in talking about wealth rather than incomes.

Would you consider someone with £1,000,000 in the bank as wealthy?

I'm guessing yes...

Would you consider someone living in a council house as wealthy?

I'm guessing no...

-

Shelter estimates that in London, the difference between average social rents and private rents is over £1400. This would be higher in zone 1/2 areas - in my area I have seen £2k+ differences.

What is the value of the real annuity you'd have to have in order to generate that difference? Let's say the social housing tenure is 50 years, age 25 to 75. You want a sum in the bank today, which you will slowly draw down on to generate £1400 a month for 50 years. Social tenancies are relatively safe so let's assume a risk-free rate of 1%, although you'll be taxed on it, so let's say it's 0.6%.

The private renter would need to have ~£700k today right now in the bank to get the same "value" as the £1400 rent difference (or ~£1M+ for £2000).

(This is assuming the private renter dies neatly at 75. Add another ~£100k for every extra 10 years she needs to live.)

Do you view, say, someone who sold a business and got a payout of £700k-1M, in the same "bucket" as someone who just got allocated a London social house? Why / why not?

--

We are very bad at conflating incomes with wealth, but there are also significant distortions in the market (such as council housing, but similar applies to other benefits, and even arguably "mortgages from 20 years ago" which have value in their protection from market rents) which make it very hard to compare either wealth or incomes "head to head".

Surely high salaries and high prices are related though. If people earned less then London prices would have to come down because nobody would be able to afford them except for the super rich (who will be there regardless). Pay people more and you are essentially pushing up prices.

Prices largely reflect what the local population can afford to pay

There is a big difference between earned wealth and inherited wealth. Those with inherited wealth are the real rich. Those who have earned their money can see it suddenly dry up and then they are unlikely to still be rich.

This is one of the reasons it was so tone deaf for Kirstie Allsop (inherited wealth) to go after Michael Rosen (earned wealth).

Noones saying those of us on highly paid, high stress jobs are the enemy, just that those who don't recognize their wealth for what it is are at best a bit embarrassing and at worst painfully deluded

I’m not smug. I’m also not greedy.

What’s the difference between inheriting £30m and accumulating £30m through earnings? Why is one more likely to dry up? I mean obviously one person sat on their bottom and got the money and the other worked no doubt very very hard for it. But it’s not more unstable if it’s earned

They don’t.

100% this.

There are those that are clueless, and it can be a barrier to a serious conversation on wealth inequality, but I don't think it's a major part of the problem.

Yes, the people on six figure have wider shoulders than those making 20k, but they're still tiny compared to those who make 6 figures or more from investments and other assets who have a long standing history of bending the laws to their whims.

The only way to have any form of a functioning society is to have competitive capitalism.

And how do we have truly competitive capitalism in a country where a significant amount of the land ownership and asset wealth is connected to having an ancestor who was mates with William the Conqueror?

Having centuries of laws to protect that small group is distinctly anti-competitive and fairly damaging to the country.

Thanks for correcting me, I overdid the hyperbole! Though I did read a responsible journalist saying Musk could do a LOT to alleviate poverty without impoverishing himself, instead he has cut USAID, so becoming the world's richest man who has purposely made the world's poorest even poorer.

Of course having money is aspirational as it gives you choice. Doesn’t mean one shouldn’t also aspire to the other things you mention. Dh is in 0.1% due to his business, always been aspirational to give his family a good life and certainly doesn’t need your pity.