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.

I suspect for most of the really rich in the UK at least, the ones with real generational wealth it was made off the backs of the local serfs and working class. Enslaving the poor was mostly free wasn’t it?

Isn't this why there is the lingering trope of moth eaten clothes, bad teeth, bangers etc. When out and about one must not show off the wealth they made off the backs of others, there could be a revolt by the peasants. Once safely back in the stately home, one can relax and enjoy caviar.

I've seen the Duke of Westminster eating out with his wife a few times in a country pub. Perfectly normal nice people and looked to be dressed very ordinarily ie, not wearing his Dad's jacket.

My family are very wealthy, although you’d never ever guess as an outsider. My dad is extremely frugal and hardworking -at 70 he still works 7 days a week, buys all the yellow stickers and drives a 20 year old car.

His primary aim in life is to accumulate as much wealth as possible-which he’s done (with family help) by investing and using financial advisors since at least the 1980s. It’s probably taken 50+ years to generate wealth exceeding 15 million. There’s multiple trusts set up to avoid inheritance tax, all untouched (spending money is basically a sin). Money is what drives him and I suspect over 99% of the population would not have been able to tolerate his lifestyle-me included. But is he happy? Not particularly as the money has become a burden to manage

What do you mean by "with family help"?

I am neither upper class nor fabulously wealthy, but I have benefited from some generational wealth. I'd say it doesn't take millionnaire levels if you are lucky enough to receive some money early enough. DP and I are in our 40s, we have paid off our mortgage, and we each have some savings and investments. As we live in an area where property is cheap, it's possible that we're actually less wealthy overall than some of the posters on this thread who feel financially stretched, but who may have more equity in their homes than we do.

The effect of this is that we can live comfortably on good but not mumsnet-high-earner incomes because we don't need to save. We can afford holidays etc. out of our income, and we don't have to budget for things like groceries or Christmas presents. We're not particularly extravagant, but we're definitely not frugal. We don't take six holidays a year, but I guess if we wanted to and had the time and energy then we could.

Anyway, I name changed for this because it probably sounds a bit smug, but I think all I'm saying is that OP's friends don't necessarily need to be incredibly wealthy to have that lifestyle. I mean, they might be if they own a nice house in the south east, but they don't need to be landed gentry with holiday homes in multiple countries to do it.

This is my experience totally! Not everybody obviously but it's summed up by the photos of the late Queen at Balmoral in a room full of priceless furniture and china and one small electric heater. Cashmere jumpers rather than central heating too!

They marry very carefully. A lot of genuinely upper class, Old Money families are not nearly as wealthy as you might imagine (living in dilapidated old houses with holes in the roof and no heating etc) New money marries into an established family with useful connections and a country house that's been in the family for generations (ideally with some oil portraits of Important Ancestors) but possibly very little cash- this benefits both parties.

Alternatively they could sell the country estate, and pocket enough cash for two generations (assuming two-three children and six-eight grandchildren) but then they'd have to start working like anyone else. Shudder.

This isn't about what they spend, or what they don't spend.

It's about having passive income. If they're wealthy, the interest on their savings will be providing good money just by itself. They might have other sources of income too, like renting out properties.

I think it helps if you are in a relationship and both of the same mindset - my H is much more of a spender than me - if he hasn’t been away abroad for a few days every 4 months he gets itchy feet and same with good quality food and niceish wine ( £13 a bottle level minimum not the £8.50 stuff) - we have middle income level income but he has very upper middle tastes. I think part of why he feels as he does is a very very wealthy uncle of 89 who lives in a very shitty rented council flat in a gritty town, has been abroad twice in his life , is mean as shit , doesn’t have heating on and spends all his time valuing his investments ( over a million) - my H thinks it’s a total waste of a life and as you don’t know how long life is better to make the most of it whilst you can -

It’s simply understanding the difference between being rich and being wealthy.

Being rich is the ability to spend money. Usually it’s backed by an asset of some sort, that gives people confidence in your ability to pay back money they lend you. Projecting an image becomes very important because your cash flow is dependent on the confidence you can convey to others.

Wealth is about accumulation, rather than spending. So in that sense it’s the opposite of being rich. If you can get your head even a small bit above water, you can start building wealth, albeit on a small scale. And when you have serious assets, it’s not hard to grow them.

Two people on the same salary, with some disposable income : one has a flash car, fancy holidays, credit car debt, car loans, etc. All the outward evidence of being rich. The other has 12 months living expenses in savings. That’s wealth because they can weather a storm. There’s a whole spectrum in between obviously, and various arguments about how to invest savings etc, but it’s the broad difference in mindset I’m talking about.

People with generational wealth can be spenders rather than accumulators. Your family can be on an upward trajectory and there’s on a downward one. Choosing to pursue a net zero lifestyle where it will all be spent by the time you die is a valid choice too. It’s just important to understand the choices. And if those with money don’t let it run through their fingers, the rest of us can’t catch it!

My friend comes from generational wealth and is an NHS nurse so not on a high income. I’ve observed that:

Her parents and grandparents paid for all their kids education, uniforms etc. That seems pretty expected in those circles.

They holiday in other friends and family members holiday homes too, and they also share an inherited holiday home amongst the siblings, it’s a Swiss ski chalet so they can holiday there in winter and summer. I don’t think she has ever booked a package holiday or Centre Parcs weekend and almost fell over when I told her how much one costs.

Her kids have trust funds too.

We are certainly very comfortable but my brother is wealthy. He was until recently as he has retired assistant VP of a big pharma company. Him and his wife have brains the size of planets. He is self made and has a few million.

We have more regular jobs, but have made a reasonable amount through the stock market. Some years are better than others. We made 52k last financial year on top of our actual income. That was a good year for us.

DH is from old money, they had a lot of land but due to a combination of bad mistakes that sort of real wealth is gone. We received nothing as it was the generation above who inherited. His Mother, her brothers and cousins made some appalling financial decisions.

😂😂

It's quite simple. Spend less than your income and invest the surplus.

It was a family farm-my grandparents, his brother-everyone mucked in so to speak. It was from insanely hard work- 3 am starts, 16 hr days, 7 days a week. Farming can be lucrative if done a certain way I guess. It was done the hard way-no screwing people over like others have said.

Just to be clear- I’m not wealthy! Middle class ex teacher married to public service husband. - but this makes me smile. I often read MN to learn that what I’ve always considered normal is actually such a Spartan, frugal lifestyle that it attracts amazement!

I do nearly all these things. Rarely eat out and a coffee shop coffee is a definite treat. Most of my middle class friends are the same.

I get that there are folk who have several abroad holidays each year, eat out every week and are into consumption big-time in terms of fashion and technology, but they must all be somewhere else!😀

why ask? It’s not going to be anything you can do.

castle bought for 18th birthday present so no mortgage or rent, couple of other properties bestowed too in exotic destinations so no hotel bill.

lamboghini (I butchered the spelling) bought for 17th birthday so no finance

wealthy early retired grandparents who love to baby sit so no child care bill

What sort of farming? Very unusual to get rich from farming. There's been very little money in it for a very long time.

The Duke of Westminster is a very good example of how the best way of being rich is to be given a lot of money. He lost £243m from his wealth last year - but luckily has another £9.8 billion, so probably isn't feeling it too much... According to most of this thread, I assume he probably lost the £243m through going to Starbucks too many times and buying a new sofa?

It will be that £300 everyday dress his wife bought that broke the camel's back 😂

This reminds me of Alan Clark, who once dismissed his colleague Michael Heseltine as the kind of person "who bought his own furniture".

There is one difference, not paying to use their own money. In other words, don’t waste money on interest and fees.

There are two aspects to this. The first is that the more money you have, the better risk banks see you as and the more money they will give you.

The second is one in people’s control. Aside from a home, don’t buy something that you can’t buy outright. That doesn’t always mean don’t have debt because sometimes the interest rate there is lower than what your money is earning elsewhere.

It is fairly easy for people with money to wait to make purchases because they know that delayed gratification is just delayed. People who struggle financially may have to save for ages to pay cash for something. It’s easier to fall into the trap of feeling like they will never afford something like a holiday without paying interest they can’t afford to add. Yet they are making choices that help to trap themselves in a vicious cycle.

This. They do have mortgages too BTW - for everyone saying they don’t - the money they would use to pay off a mortgage can make them much more money by being invested elsewhere. Whatever the mortgage interest rates are they won’t wipe out the gain of a canny investment. Look at Gold prices. If you have a £20m house that £20m can be usefully used elsewhere. They are not operating on the same scale as us.

money makes money …. Until there is a major financial crash and then the super rich are super vulnerable.

We are comfortably middle class, not upper class (true upper classes actually bleed a lot of money on heating bills and house maintenance and staff).

We don’t use childcare. Ours are old enough now to be out of nursery, but we both do work that isn’t FT so one or usually both of us is around for school runs and school holidays. We only use holiday clubs if kids want to go, not for the childcare cover.

We make a lot of money. This helps! We have a sizeable mortgage (£500k on an £800k house). We are aiming to pay it off within 10 years of buying our house though. We overpay the max of £50k each year. There is no secret to that other than just making more money than we need to spend on keeping ourselves alive, which means that we can drop as much into the mortgage as possible.

We drive secondhand cars. Mine is a 2011. Cost me £6k. I love it. It runs great. No need for £500 a month on car finance.

We are fairly self sufficient. We grow some of our own food, including animals for meat. Because we have the land to do it. We also save a lot on heating because we run wood burners with free wood. A tree falls down and we process it and have space to season it and store it. We do a lot of our own DIY, house/car repairs because we have the time and resources, so those costs are low.

We also have a business set up as a limited company, as many well off people do. It’s a legit business. We have employees, all properly set up with PAYE and workplace pensions and the lot. But it’s hugely cost effective to run purchases through a company that can also be used for other things. We had to make improvements to a barn for work. The business pays for it, but ultimately it’s adding value to our property. I needed a new laptop, bought it through the business, because it’s legitimately for work, but now we have an extra family laptop for the kids to do homework on. That’s £700 we don’t have to spend from our household budget. These things seem minor, but they all add up and mean more capital and more disposable income that someone employed doesn’t have.

This, really. My Gran somehow used to be able to do it on a very small income with 4 children (saving small amounts and an eagle eye on the pension, but day-to-day lifestyle for a family of 6 was, to an observer, not abundant and was based on hard work from all the family, worth either a wage, or not spending more on things such as through making clothes or growing food). Others we know, close to retirement now, do it on a large income along with a lot of work - the most surprised I've been was to find that some people who look very wealthy from where we're sitting, share a broadband account with their neighbour, to economise on that cost.