The worlds going mad. Am I really part of the problem?

[DHofSB]

Ok, so there’s a lot of talk about the rich, global politics and inequality at the minute and I get it. However, when I look at comments, threads etc people seem to be aiming blame and sometimes hate to people that sound like me.
My real concern, apart from my own sensitivities of course, is for my kids seemingly growing up in a world where being successful is seen as bad and there being little to no desire to strive and work hard any more.

Allow me to explain but I would like your thoughts…

Father was a policeman, mother a part time hairdresser, they’ve been divorced 15+ years now and both retired
No family money or inheritance involved for them, unlikely for me either
Went to normal comp school
I joined the Army at 18
BUT (bear with me, trying to make point not boast)
I now earn £500k+ a year in a white collar job
I have £1m+ in stocks (that I can’t sell yet)
I have a £950k house with no mortgage
My 2 kids go to private school (with VAT will cost similar to our house over their school lives)
My wife doesn’t (have to) work
I have c£90k pension pot (not a viable saving option for me due to my income, anything over £4k a year into pension I have to pay income tax on hence pointless)
AND YET
I don’t feel wealthy, we have a good life (several parents at the school our kids go to have £2.5m houses, how is that possible??!)
I paid hundreds of thousands in tax last year but my family don’t use the NHS (private through work), or the school system, no benefits/welfare etc Obviously other aspects of public infrastructure we do or would consume: roads, policing etc
I work hard and long to ensure I continue to provide for my family, especially once I inevitably stop earning this kind of salary

Modern society seems to suggest I am the devil, part of the problem with society and should be taxed (even more) heavily. Surely what my family and I have built for ourselves is a good thing and something I would expect most people to have wanted to achieve coming from a similar background, or do I have this all wrong?..

Another reason why I think op may be pulling our legs.

How can you earn £500k and not feel wealthy? Especially if no mortgage?

To answer your question, I don’t think being successful is seen as a bad thing though. Our kids want to get well paid jobs and be able to buy houses etc (we both earn around £120k) house probably worth around £2m (London) - we benefitted from rising house prices as we traded up.

I don’t understand how you can earn £500k a year, yet only have £90k in your pension pot.

several parents at the school our kids go to have £2.5m houses, how is that possible??!)

How is it possible that someone owns a house worth around 5 x their gross annual income?

Does such a concept really confuse you? It's not exactly unusual.

It’s really not that unusual. A lot of people aren’t obsessed by having a bigger house than they need. We have a household income in excess of 300k pa yet our house is worth barely 12 month’s pre tax income.

If salary jumped quickly to c250k or above then tax free pension contributions are severely curtailed. Your allowance falls significantly making pension savings pointless.

But op says he can’t understand how someone can own a house worth £2.5m, when he himself could easily own one by his own account. It doesn’t ring true

i would also suggest your situation is very unusual and you live somewhere where house prices are very reasonable. You couldn’t buy a one bed flat where I live for £300k, and if OP’s claiming he lives within a short drive of shops he can’t afford, I’m guessing that he (theoretically) also lives somewhere where houses are expensive.

I sort of get it. We have a high household income (not 500k but if things go as we hope it could reach that in a couple of years). It is spread over two full time+ wages though, so we are very time poor. I know it is a lot of money, but I also recognise some of what the OP is saying about who on earth is buying the £2m houses and £80k cars I see around the place?

when I was earning much less I thought I would be taking amazing holidays, flying business class, changing my car every couple of years, etc. I am very much not. A huge amount goes in tax. A chunk goes towards pensions. Most of the rest goes on mortgage, school fees, childcare and house repairs (old money pit of a house). There is much less than I expected that is truly disposable. Although I recognise that is in some part due to our decisions on the house we bought and the school we chose. When I was in my first job earning 30k renting a little flat and just having myself to think about I felt more flush than I do on a family income of ten times that.

Lifestyles are relative. How much do you spend on school fees and childcare each year? Almost certainly more than one of those £80k cars right there. You’ve just chosen to spend your money differently. You felt wealthy when you were young, because you were spending all your money just on yourself.

If you take a walk around the parts of London where you see supercars and multimillion pound homes, you’ll notice that the majority of the people with those things aren’t like you. They’re largely not families juggling expensive things associated with children; and if they are, they’re the super-rich: tech founders; Russian oligarchs, those at the top of the Saudi and UAE regimes.

💯 agree.

i felt infinitely wealthier with a good standard of living earning £50k with a 1k mortgage 10 yrs ago than i do making 4x
£200k (DH makes 100k) with a mortgage of 2.5k.
We are incredibly time poor and it’s hard.

Since the 2008 global crash and during covid quantitative easing meant those with considerable assets saw their wealth soar whilst those reliant mainly on work income or low paid work combined with benefits experienced miserable austerity. According to the World Inequality Database, Britain’s richest 1 per cent have grown their wealth since 2010 by over £1trillion.

Those lucky enough to draw their income from capital enjoy a rate of tax that is much lower than everyone else. Almost 60 per cent of UK investment income goes to the richest 10 per cent of households. These crazy economics is why we have country with record queues at food banks, alongside record sales of private jets and super-yachts.

Taxes on capital income need to go up such as capital gains tax. If we do it in the right way, we can use that money to help reverse the extraordinary growth of wealth inequality that now deeply divides our country. Other steps such as closing the loopholes enjoyed by Britain’s 37,000 “non-doms”, closing inheritance tax loopholes, charging national insurance contributions on investment income all should be implemented.

Some also propose a wealth tax of 1-2 per cent on the 22,000 fortunes worth over £10m, though there is the risk of capital flight with this measure.

The super rich should be paying back a small proportion of their huge gains, not cuts to the sick and disabled.

Comparison is the thief of joy.

I could just state the obvious, you are wealthy but i actually think i know what you mean. We spend more if we have more by that I mean we increase what we are committed to spend eg private healthcare, private schools, household help, more expensive cars and obviously more expensive houses. We also mix with people of similar incomes so we are exposed to their also extravagant lifestyles, some will have family wealth so have more assets eh I know someone with a ski chalet and another with a villa in the south of France. It becomes normal because “everyone” has these things. Despite a huge headline income once 50% is deducted for tax, and all those “essentials” are paid for including retirement savings, what is remaining isn’t really enough for business class flights and 5 star hotels all the way, and you would think it would be.

You spend what you earn. When our mortgage was paid off we arranged a standing order to remove that money straight into savings so we couldn’t get used to it, it’s too easy to adjust