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Original poster

How much would I have to earn?

41 replies

callip · 05/10/2022 11:49

I am in my mid 20s and am really keen to gain some understanding. My parents refuse to talk about money and I have no clue how much they earn.

I looked up their house and it's worth over £1m but they bought it years ago for a lot less.

My parents run businesses that have a small number of staff. They have always struggled with money but also had two houses, a nanny, and sent us kids to private school. They didn't have much left over.

I would really love to have children one day, live in a similar house to my parents, and have the option to send them to private school (I don't think I will choose this but I would like to be able to afford the choice.

How much would I have to earn to be able to afford this and have enough spending money to eat out and go on holidays? I am just looking for a ball park figure because I'm not sure if its £100k or £300k

OP posts:
YumYummy · 05/10/2022 15:51

What’s your plan to increase your salary so you have these choices?

Original poster
callip · 05/10/2022 15:54

I don't know yet I'm trying to educate myself and gain inspiration. I don't enjoy what I do anymore.

OP posts:
Iamthewombat · 05/10/2022 16:07

They didn't have much left over.

Yeah cos they spent it all on their ‘small number of staff’, two houses, a nanny and private schools!

How many of ‘us kids’ were there in your family? Let’s assume three. The private schools around here (north west) cost £8k per term for day pupils. That’s post tax, of course. And before extras. So each year you’d need say £25k per child, post tax. Equating to the thick end of £40k, pre-tax (you’d need to be a higher or additional rate taxpayer). £120k, pre-tax, per year, for three children. Ouch. I’ll let you do the maths for three children for their entire school career.

Augend23 · 05/10/2022 16:18

So if you want to buy a house for a million pounds, let's say you put a 10% deposit down. That would require a £900k mortgage, which at a 4.5x multiplier would meant you need £200k of income to be able to be given the mortgage. And that's before interest rate rises.

Are you looking at retraining? You can earn that much as an accountant if you train with one of the big firms and sit it out to partner track, but you would need to accept having 0 work life balance probably indefinitely.

CFinn · 05/10/2022 16:28

DH and I are buying a 900k house with a 70% mortgage. Our combined income is around 150k. We don't intend to send our kids to private school, partly for financial reasons, but they do currently go to nursery full time which is probably a similar cost. Nursery for two kids and mortgage altogether will come to around 4.5k per month.

When we applied for our mortgage in July we were able to secure a rate of 3.06%. We wouldn't be able to afford the same mortgage now.

Hope this helps.

mewkins · 05/10/2022 16:41

Augend23 · 05/10/2022 16:18

So if you want to buy a house for a million pounds, let's say you put a 10% deposit down. That would require a £900k mortgage, which at a 4.5x multiplier would meant you need £200k of income to be able to be given the mortgage. And that's before interest rate rises.

Are you looking at retraining? You can earn that much as an accountant if you train with one of the big firms and sit it out to partner track, but you would need to accept having 0 work life balance probably indefinitely.

Tbf I'm not sure numbers are the OP's strong point 😂

WonderingWanda · 05/10/2022 17:16

It sounds like your parents' struggle was to live within their quite considerable means rather than actually struggling for money.

If you are early 20's and earning 25k, I think you are a long way off being able to afford a £1million house.

I presume you won't be having these future children on your own so you will have to consider your partner's finances and debts as well. It's probably a safe bet to say that you should be aiming for over 100k per year before you are 30 but even then you'd be looking at huge mortgage payments which will cripple your spending money for other things.

What are you planning to do to increase your income?

LondonQueen · 05/10/2022 17:19

"They have always struggled with money but also had two houses, a nanny, and sent us kids to private school."

This must be the most Mumsnetty comment I have ever readGrin

beonmywaythen · 05/10/2022 17:24

You can do the maths yourself - look up how much these things cost and then how much you have to earn...

CantFindTheBeat · 05/10/2022 17:45

Hi OP,

It's a reasonable question.

Best way to work things out is to get a rough idea of how much things cost.

For example:

Private school, one secondary aged child: £15k-£25k per year
Mortgage on, eg, 4 bed house in your area £1200 per month, £15k per year
Utilities, insurance, council tax on house £15k per year
Food for family: £500 per month, £6k per year
Car insurance, phones, Netflix, etc etc -
£1500 per year

This is all random-ish, and is around £65k. You'd need to earn around £110k to take home £65k.

It also doesn't include a deposit for a house, savings, pension etc., childcare when small, etc.

Private school fees are an immense commitment for most people.

Augend23 · 05/10/2022 18:22

mewkins · 05/10/2022 16:41

Tbf I'm not sure numbers are the OP's strong point 😂

Show quote history

I'm not sure that rules out some of the big 4 accountants I knew... xD

JaninaDuszejko · 05/10/2022 20:02

What is your degree in and where did you get it from? It would be quite a jump from running your own charity and paying yourself a small salary to getting the kind of high pressure high salary job that would sustain your parent's lifestyle.

Sunseed · 05/10/2022 20:05

This is an example of where Inheritance makes a massive difference to the options available to you!

Original poster
callip · 06/10/2022 11:25

Yes numbers are not my strong point and accounts and financial forecasting is where I struggle most with my charity.

OP posts:
Testina · 06/10/2022 15:15

“I haven't received any financial help from them since I was 18 and worked minimum wage jobs through university”

This makes no sense. Why, 7 years into this, aren’t you able to just approach this by adding up what you would like to have, and working out what gross salary gives you that net?

Your idea of a nice holiday / house / lifestyle won’t be the same as someone else’s.

BarbaraofSeville · 06/10/2022 15:35

It's probably worth being aware OP that a very small percentage of people could afford a £1M house now, without a very significant deposit from equity or inheritance - that is probably how most people afford them, rather than from earnings.

A very tiny percentage of people earn £300k, probably about 1 or 2% at most. So even if you have the right skills and experience, you'd probably need to spend a long time working your way up to that salary, which isn't achievable anyway in many industries.

What is their house like, because a £1M house can vary enormously. In certain parts of London, it will look very ordinary and you could buy a similar house in most of the country for maybe £2/300k, which is much more achievable.

Conversely, in a lot of places, a £1M house is very grand, so as well as costing a lot to buy, also costs a lot to run, high bills and expensive to maintain.

Morbid as it may seem OP, it sounds like the best chance you have of living in a house like your parents is to inherit it. However, that doesn't always happen due to care fees and inheritance tax and even if it does, it might take many decades to come to fruition.

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