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.

Haven't rtft, so might be repeating a billion posts already, but...

I think this is the entire argument of Picketty: the return on capital is far higher than the return on income, so wealth in property/land/shares appreciates value much faster than just income from wages. Particularly in an economy with high inflation.

🤣🤣🤣

Yes, but this isn’t ‘wealth’ this is making savings/choices for a cheaper holiday, rather than having the money for a £1,500 holiday without having to worry about whether or not to check baggage, buy inflight food etc. obviously your way is a very smart way to have experiences on a lower budget but it’s not what the wealthy people usually do.

I think it's a bit unfair to attribute this to "not realising" in every case. Some people just realise they don't care that much about the private school and the big house - these weren't actually the things that really mattered to them as kids. Maybe one of their big memories growing up is how dad was hardly around because he was working so hard to get rich, and they don't want their own kids to experience that!

I was thinking more about how to obtain that extra money on an ordinary income. If you are born with it, then yes you can live nicely.
To get it, on ordinary incomes, I’d say you need to sacrifice. Not joyless, but definitely delayed gratification!

I’m thinking of DH and I when we were first married. I’d taken out the student loan and put it in the post office where it earned interest. I had a maintenance grant, and was able to get by on that with a small job, so when we married I had a bit set by.
But we bought second hand furniture when we could afford it, had no carpet for a few years. When the car died, we walked for a few months until we could afford a new one. We have gradually built savings for the DC and for us. No inheritance, though we may eventually depending how things go for our parents.

Obviously youngsters now at uni have huge debts accumulating, which we didn’t. So we had some advantages that young people today don’t have, and we aren’t in the SE.
I’m not talking huge amounts, but we will have money to leave our DC and have saved money to help them set up.

In my opinion they don't "dilute" the wealth by getting divorced and marrying other people ie diluting the line of generational wealth.
They inherit from each other directly.
Children get the family home so they are automatically able to buy bigger, they have a family and leave the bigger house to their children, on it goes.
Divorce, second families etc disrupt that generational wealth so that's why they don't do it!
It's not called "old money" for nothing!
And yes I'm a tad bitter coming from twice divorced parents who both had new families ( Dad numerous new families 🙄) and left me nowt!!

Agree completely; buy second hand good quality clothing, and look after it. Really look after it. I have clothes from the 1920's. I can't imagine much made now will last 100 years. Who said 'Only the rich can afford cheap shoes.?

Rarely parting with their own money

Be born into a rich family.
Marry someone also from a rich family.

Don't get so massively into drugs or gambling that you lose it all.

That's how families stay rich

And this is why interest should be outlawed because it is simply unfair for people to have unearned wealth and hence wield disproportionate influence over society, eg by buying our politicians, mainly to protect the interests of their class, thereby entrenching the wealth divide.

Tax wealth not work!

Oh and avoid inheritance tax with various trusts and other methods that should be banned.

It’s easier to make money when you have money essentially.

Its always the leg up from inheritance, coupled with an attitude to money that means they didn't fritter it away. Once you don't have the cost of a mortgage, you often then don't have to have a parent give up work to provide childcare, as costs are minimal. So no one takes a hit on their career and you have two decent wages going into savings, pensions etc. Then the nursery days are over and your suddenly a grand a month up on household income, that pays for the nice holidays.

This is why I think the government should offer a savings plan for childcare like they do for first time buyers, its only 4 years but it creates huge financial burden and choices that impact households from then onwards.

😆

I have to agree with a previous poster.

No mortgage, no kids - that obviously helps.

Also, inheritance - you said there wasn't much, that helps, too.
Income from rentals - domestic, commercial properties. This doesn't seem to ever stop producing a reasonable income, unless there is an international conflict.
Leaving Britain would help, but it's not practical at the moment.
Speaking for myself only.

I think a lot of it is work, sacrifice and choices.

It’s going to be so much harder to build wealth if you divorce and have a second family. It’s much easier to build wealth if you choose to marry someone with no debts and a work ethic.

If you choose to sacrifice a lifetime of Starbucks you might save 10k. Isn’t much but if your child inherits that and makes similar choices their children will have even more. Wealth people think really really long term. Not just next year or their own retirement. They think of their children’s children’s retirement.

It’s also work and sacrifice. We have family members who think it’s unfair how much we earn. They have never cut short their holiday to deal with a business crises, worked an extra weekend or invested their own personal cash into something risky.

A lot of wealthy people I know do some sort of work well into their eighties. In fact both my father and father in law who are 76+ work what most people would consider to be full time hours. Therefore their pension is a wealth building asset not being spent.

Think long term, multi generational. For everyone who moans about the expensive things kids want, learn to say no and instead invest money for them. Start a pension for them and saving for uni, house deposits from birth. They won’t remember having huge piles of toys and expensive clothing at age 2 or whether their toys were second had but they will be able to make use of that money later in life for longer term use. Not just savings for driving lessons but to do the things that will really set them up for their own wealth.

I think there is a bit of a make do and mend type culture and things like storing furniture in the loft in case it comes back into fashion or getting married and having the wedding at your country pile.

But I think it’s hard getting to the point you can afford to have assets or investments than generate wealth particularly if you start from the point of debt

People with lots of inherited wealth often have family accountants/solicitors that help them move assets off shore to avoid paying tax. They use a lot of family trusts to avoid tax. They also have a lot of spare properties that they can gift to their offspring.

I find it so genuinely depressing that so many people think that people get wealthy by being smarter and more self-sacrificing than poorer people even though this thread was clearly framed in terms of inherited wealth.

They were born richer than you. That's what they did. That's it, no trick you can emulate, and certainly no skill or moral virtue in it.

It’s more likely that money relives a lot of the stressors that test less well off people’s marriages. Financial stress is one of the more common factors in divorce.

I think more to the point for generational wealth - rich women are far less likely to have children out of wedlock, or to be single parents, than less well off women.

Can you explain exactly what you think you mean by ‘interest should be outlawed’…?

No mortgage, inherited wealth and not spending to keep up with the Jones IME
They are often pretty frugal in some ways too, they holiday in The UK a lot and don't buy new cars until the old one gives up.
Of course it varies but the "Old Money" people we know aren't spending much on anything that doesn't have lasting value

They use their money to make money.

I’m curious by the conclusion that much of this is down to extreme frugality (clothes that are 100 years old? A 70 year old pram?).

I know quite a lot of wealthy people. I live in an area where you can spend £2-4m on a house.

People end up with this kind of money through inheritance, building their own companies (both selling them for millions but also being able to pay themselves £££) and sometimes jobs - but these jobs are in the ‘£500k+ as a Partner in a business’ kinds of jobs.

They still splurge money on stuff - have the new defender, a Porsche seems almost compulsory, they would go to IKOS for a couple of weeks, spend several hundred thousand pounds renovating a property.

They have a massive income, have made a massive amount of wealth from selling a business, or inherited it. They’re the buckets. Once you have some cash, it becomes easier to accumulate more as you can invest it.

I don’t think anyone I know is really in the ‘extremely frugal’ category. ‘Extremely frugal’ at this level is not flying business kind of activity, not refusing to buy a new coat. Things like holiday homes will probably be seen as investments / assets and be made to work to pay for themselves.

That's thing once you are wealthy it's very hard to become not wealthy, although possible. Their wealth builds itself passively, interest, investment growth, rent etc etc. They don't have any money saving tricks, they don't need them.