Upper class habits to stay rich

[publicsectorlife]

What habits do the upper class have to stay wealthy? What would they never buy that they would consider a waste of money?

Our household income is very good. But yet we seem to be haemorrhaging money with high mortgage, commuting and childcare costs.

But yet our friends with generational wealth (ie small mortgage) seem to be living such a different lifestyle with about 6 holidays a year.

We can’t do much about having no inherited wealth but I think we must be missing a trick.

My friend is pretty wealthy and from a wealthy background. She’s married well twice and divorced, which has left her able to live and travel without a ‘proper’ job.

She is very socially adept, will talk to anyone and makes friends easily, she has an effortless and inoffensive expectation of life being a certain way so it just is. I do notice that she doesn’t have lots of things, a few which are good quality.

Another wealthy friend works his arse off, is very clever and personable.

Are your friends paying for their own holiday?
Do their parents pay?
Do they stay in friends second homes for free?
There's lots of advantages to being generational wealthy.
I know people whose expenses are significantly reduced by family money.
For example very generous financial gifts from parents at Xmas, birthdays, just at random times of year, parents pay school fees, for holidays, for cars, for a new kitchen etc.
They may have been given a house or at least had an extremely significant deposit gifted to them.
They may have a trust funds.
In short they may not be living just on their salaries.
And of course having contacts, having a private education, access to mentoring, role models, gives you confidence and contacts to succeed in your career.

@WhatdidIforget and also that they are so sure of themselves. The decision was never questioned and never deviated from, even when it caused some friction in wider friendship groups because they declined every invite that involved spending anything outside of budget including milestone events like big birthdays, stag/hen parties etc.
Now they say yes to everything but some relationships are damaged and probably won’t recover - plus all the weddings/babies/big birthdays are done for another 5 years or so there’s nothing to go to!

I come from a wealthy family on my mums side (I'm not myself, single parent with a normal sized mortgage) but generational wealth is not only passed down in death its also passed down over a lifetime. My maternal grandparents not only helped there children financially in their lifetime by helping them buy houses and helping them out in difficult times, they also died leaving not only cash but also a number of businesses and share portfolios which provided second incomes to there children who were all working.

However my Mum's family are also very frugal. They don't buy excessive amounts of clothes or have exceptionally lavish holidays, meals out are treats, food isn't wasted as lunch is often leftovers from dinner or soup. My Mum has no sense of entitlement when you speak to her, she does some volunteering with her time and is incredibly generous to her friends and family.

If you are interested in this then you might enjoy reading the book The Millionaire Next Door, it is American but a lot will be universal: https://en.wikipedia.org/wiki/The_Millionaire_Next_Door

We’re North Americans living in London, so don’t know about “upper class” habits; but we invest a significant portion of income to stay wealthy. The UK just doesn’t have the same investing culture as NA, but compound interest and market gains over the last 20 years have contributed massively to wealth. Also mortgage free and living frugally helps. We don’t bleed money and make very conscious choices around spending. Biggest spend is school fees. We travel back home and other places every year.

We managed to avoid lifestyle creep as our incomes keep rising and don’t care at all about keeping up with neighbours.

You get rich by either earning it or inheriting it.

You stay rich by not actually spending it.

You buy quality clothing in styles that suit you, rather than are fashionable, and you don’t have a large wardrobe.

You grow food, use leftovers, don’t buy brands.

You don’t drink (or drink much).

You don’t think there’s any problem with sourcing things second hand. Then you use them to death (preferably unto your death).

You keep detailed accounts so you know what you are doing with the money.

I think it was terry pratchet who spoke about the rich man shoe theory. A rich man buy a pair of expensive shoes that last a long time a poor man has to buy cheap shoes that need replaced more often and therefore spends more on shoes. It applies to lots when you think of it for example expensive washing machines last longer, insurance is cheaper paid in one payment that monthly direct debits . The world is built for the rich

Even “new money” types use these strategies.

I get a takeaway pizza about once a year, and a McDonald’s once a year because it’s convenient on a specific annual outing.

It always surprises me the amount of money that lower-wage or financially insecure friends spend weekly on takeaways and dining out. The same people are always complaining that they have no money.

I'm very risk adverse with whatever savings I have, as they are small and a cushion for car dying/roof leaking kind of thing. So they stay in a savings account. If I had ten times as much saved, I'd feel a lot better about investing in riskier ways that could bring in far more money.
So a richer person could make more of their excess wealth each year than I do, if you see what I mean.

Yes, it was Terry Pratchett - Vimes' Boots Theory.

Pratchett wasn't the first to come up with this economic theory, but his Vimes character popularised it.

Yes - saves a few quid when the annual skiing holiday is at your friends chalet, or you visit them in the south of France for two weeks.

Yes I do wish that instead of spending so much money in LK Bennett in the mid 2000s I'd invested the cash instead!

For me, it's investments. No one ever told me I could or should invest money.
I have a friend who sells some shares when she needs to free up some cash for school fees.

We are the same age. She invested heavily in her 20s when working and no kids. Wish I'd known about that.

I think most of us chase the money, whereas people born into wealth have it already, it’s not something that drives them, it’s there already.
What drives them is different, it’s the way of life. They do have 5-6 holidays a year, but it’s going to their other homes, the one in Marbella or the chalet in the Alps.
They pay £4-500 on a pair of boots that they have for 20 years, if you pay £50 twice a year on shoes, you just spent 4 times the amount they would. They have no interest whatsoever in displaying their wealth, why would they, it’s been there since year dot. A car is a car, a jumper is a jumper, even with holes in it.
Their job, if you want, is to maintain the wealth. To keep it in the family. Chasing the money isn’t the end goal, keeping it is.

Class has nothing to do with money and not all Upper Classes have money. However, I know some Working Classes who have done well and a rolling in it - I believe they are known as the Nouveau Riche. Upper, lower, middle - whatever your "class" money will never buy Upper Class - a lot of what money can buy would be considered vulgar by them. Wealth and class are two different things.

Saving, investing , having incomings >> outgoings. Objectively easier to be done for larger numbers.
There is no magic bullet like "stop buying coffee in starbucks" (or equivalent) but avoiding impulse buying helps.
Also limiting the number of children /not having them helps a lot.

The wheels detach from the frame and the cot part comes off the frame and then it will fit in the boot of most standard cars. Not easy as it's pretty heavy but it does work.
You can also buy and then sell vintage prams for about the same amount so they hold their value.

Basically just inheriting money.

I'm not sure I agree. Have you seen the price of even an Aldi peasant recently?

First post nailed it.

I think there were a couple of great attitudes that my parents really instilled in me:

1 - invest. I am shocked by how many people save for their kids in low interest accounts or premium bonds to "keep it safe" and think stocks and shares are incredibly risky.

2 - don't go into debt for anything except a house. Again I find it quite shocking how many people will stick luxury things on a credit card and then spend years paying it off. Of course sometimes people have unexpected difficulties and go into debt but I just don't get sticking a holiday or Christmas presents on a card with no plan on how to pay it off

im trying to think about my very wealthy friends and how they stay wealthy.

All I can see is that they earn way way above early 6 figures, have married well so an equally successful partner. I just think you need to earn a ton to stay wealthy these days. One couple is gay with no kids, both highly successful. Second are in finance but have property abroad so save money on hols. The wife told me they always buy second hand. Id say their combined annual income is >1m.

I make decent money, live frugally but ill never have the initial level of income they do.

Invest, understand compound interest, understand good debt vs bad debt, have multiple income generating assets. To name a few.

And do either of those meet modern safety standards?

The wheels detach from the frame and the cot part comes off the frame and then it will fit in the boot of most standard cars. Not easy as it's pretty heavy but it does work.

Sounds a bit of a pain in a busy car park?