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.

1. enclose the commons
2. occasionally marry outside the gentry for a fresh bit of cash
3. get free stuff/ trade favours
4. do trust funds so the kids can’t keep spending down the capital

Agree. It's particularly bizarre in this thread as OP said that the people she is asking about have 6 holidays a year. Very clearly, their wealth is from, y'know, all the money they got given, not through scrimping and saving.

This is correct
If you have £200k in shares and make 1% a day (which is entirely possible) that is £2000 and these people don't usually have mortgages, school fees are paid by family trusts etc.
Imagine how much you can make when you have a million or more invested

1% interest a day?

Clever accountants and friends in high places

Yes, we have done it in our S&S ISA.

Surely you are conflating class and wealth? I don't dispute that many "upper class" people are wealthy, but there are also many wealthy people who have no class at all!

Borrow a time machine. Go back and get one of your medieval ancestors , earlier the better, trained up to be really handy with a battleaxe and make sure they are in close proximity to the monarch during a battle. Also practice management tactics to keep said monarch and their offspring onside, because it can easily go Horribly Wrong. Good luck!

Seriously OP, you've answered your own question, it's the high mortgage and childcare costs. Try to avoid debt and save what you can.

invest money in assets is the way to grow wealth. Maxed out on ISAs as often as I could and upped pension contributions - that approach has enabled me to retire early, pay for weddings and house deposits.

However the wealthiest people I know run their own businesses. They are careful with their day to day spending. No deliveroo, takeaways, smoking or Netflix in their households. They don’t fritter money away.

I agree that the @publicsectorlife friends will have had money gifted or items/holidays paid for by parents. One of DD’s friends has any new electrical appliance paid for by parents and any dental treatments.

1% a day consistent growth would compound to something insane pretty quickly.

To grow your investments by 1% a day you’d need to be doing very active day-trading on specific stocks - and it’s massively high risk.

That it’s just inadvertently happened on the odd day because the market has surged is different.

But more broadly - yes investments can grow quickly and it you have the capital this can deliver significant sums. I think my ISA is up ~20% this year.

There are no tricks that replicate inheriting hundreds of thousands of pounds. They're not better at managing money than you, they just have more of it

Buy a farm and claim to be a family farmer so that you can avoid inheritance tax.
Except, oops, Rachel Reeves closed that tax loophole wheeze and all the ex-bankers (and TV presenters/Sun columninsts) raged that it's an attack on farmers.

Yes this is the crux of it. When you areliving off your investments it means that your not spending any of your capital, which is then passed on to the next generation.

It's why people on tax credits aren't allowed more than £6k in savings. It's to keep them poor and having to do the low paid jobs.

Having money makes life cheap in general. Inherited property means no mortgage and no buying furniture. No work means no childcare or commuting costs. Every single person you know owns a holiday home so you’ll never be paying for a holiday. Your lovely expensive clothes will last you many years without needing replaced. Need a car? A bike? Some skis? Your uncle was about to get rid of his anyway, you can have it.

Borrow a time machine. Go back and get one of your medieval ancestors

You don't have to go back that far, just far enough to buy a house in London in the 80s.

Investments on significant amounts of capital. Money generates money when it’s properly invested, which requires discipline and careful management

I would say having it spare in the first place is key...

If you have £200k in shares and make 1% a day (which is entirely possible) that is £2000 and these people don't usually have mortgages, school fees are paid by family trusts etc.

1% a day is not the norm 😆😆

DH is really into trading and while he doesn't Day Trade as such he usually makes a few hundred a day and sometimes more - he made £1000 one day last week for example. He usually makes more than I earn on his shares AND he has a paid gig too.
He takes most of the profit in cash and we track it. If we have as much as we expect at Retirement it will provide a decent income.
We are not wealthy and did not come from money but with quite a bit of luck and some planning its possible to get a good income from investments - I imagine if you start with a lot of money its even easier

@MidnightPatrol I agree, no one I know bought their first 1m plus London home by not having Netflix!

I agree but DH usually makes a few hundred every day and sometimes more.

Having a financial advisor.

My umpteenth great grandfather was actually a close friend of William the conqueror!

I live in a council house 🤣

Frivolous spending needs to be cut. Tbh I’ve the same issue and I’m what’s called ‘independently wealthy’. I spend all sorts of money on crap. But thankfully, I don’t burst at the seams as a friend does in their Chelsea mansion, complaining they’ve over-extended on their mortgage due to childcare costs etc. while earning a good Mil+ in bonuses every year!

Money, mortgage, childcare, holidays.

they have more money than you so no debt, eg live in family owned house, ‘rent’ house owned by family trust (this is a really nice one because I think you can tax deduct all the maintenance too) holiday in family owned houses.

They have reduced childcare costs, bigger house so au pair for example, bigger house so live in granny, niece, church member to provide extra childcare. Being more secure allows them for example to spread their children out so costs are more spread.

Holiday in family owned properties, this is handy you can rent them out to sub your wages and swap them so you can holiday all over. If the family have a nice business then business can buy you a car to use in exchange for this and that.

MPs were well known for employing family members, which is a handy way of paying less tax on income and finally they have a good accountant who can help with all sorts. Some engage in dubious in segment schemes and some just lie!

Quite a few well recognised names were in receipt of full grants to attend University despite clearly having pots of money ‘in the family’ I guess none of it was theirs..

They know that to maintain their wealth, there has to be a huge gap between what is coming in and what is going out. And that gap has to keep growing. That’s something we can all learn from.

They make shrewd decisions based on living within their means, and would never decide to send little Annabelle off to board if there was a chance of pulling her out if the money ran out. Employing the best accountants around also helps and can enable you to keep on top of compliance and exploit legal loopholes.

I think passive income is a huge factor and never touching the capital. E.g having buy to lets in desirable areas with a high profit yield, dividends from investment trusts.

No debt, ever. There’s no need to anyway. If they do have mortgages (unlikely), the repayments are a tiny proportion of their income.

Having the confidence to take risks with investing, and as early as possible with ALOT of spare money. That confidence partly comes from the knowledge of never putting all your eggs in one basket, financially.