Are you rich?

[CammyN]

It is all relative to your own situation whether you are poor, average or rich.

Perhaps the start line for richness should be £1m excluding house and pension.

[vikingaero]

MrBig said:

jdw100 said:

£60K per year salary puts you in top 1% of global earners.

About £8,000/year puts you at the global average.

12% of global population (adults) have £100,000 - 1,000,000 in assets.

1.1% have over a million.

50% have under USD10,000.

Staggering statistics. And not in a good way.

The thing with global averages are that most people tend to be very continental centric. £8k would be nothing in many European and American countries, but could be a decent wage in a developing country.

One statistic I found interesting was that 1/3 of American households have an income of $100k or more. There's a guy on YouTube who goes around asking Americans what they earn and there were guys wrapping cars on $500k-600k. I doubt that many wrappers in the UK would be on that amount.

[crofty1984]

Skeptisk said:

MrBig said:

I assume net assets includes any equity in your home? £120k seems rather small, but eye-opening!

Yes it should include all assets less all debts

I thought I was approaching it with the equity in my house, but I owe far more on the mortgage than I have equity, so no. Not by a long shot.

[ChocolateFrog]

Probably been mentioned but isn't that measure a bit irrelevant if not corrected for age.

You're arguably not rich if you're 65 with £120k of assets but you're definitely doing very well if you're 18.

[lizardbrain]

crofty1984 said:

I thought I was approaching it with the equity in my house, but I owe far more on the mortgage than I have equity, so no. Not by a long shot.

Perhaps I'm getting muddled but does it really matter how much mortgage you have?

If you have 100k equity on a 200k house with a 100k mortgage, or 100k in a 500k house with a 400k mortgage.

then either way your net wealth is 100k in both cases?

[monthou]

lizardbrain said:

monthou said:

Isn't that looking at household rather than individual wealth?

There is one link for each. As men tend to have 2x the pension as women household is often usd.

However that link shows average sipp of 55 yo is 300 so it all fits

What's your beef with the numbers exactly?

You're now saying the average (median) sipp for a 55 year old is £300,000.

The Telegraph quotes the ONS as saying it's £107,000 for 55-64 year olds. So you'd reasonably expect the median for a 55 year old to be (a lot) lower than that.

DT said:

According to the ONS, the median average UK pension pot is £32,700, yet this varies significantly depending on age and pension type. For 25-34 year olds, it's £9,300, but for 55-64 year olds it rises to £107,300.1 Apr 2024
https://www.telegraph.co.uk/money/pensions/private...

Can both of those be right?
From the same article:

DT said:

According to the latest figures from the Department for Work and Pensions, the average single pensioner has an income of £13,884 a year. For couples, that jumps to £29,172 between them. This is after housing costs.

Those figures seem more than a bit low if the median pension fund at 55 is £300,000 - so presumably a lot bigger at retirement - don't they? Bearing in mind £10-11K will typically come from the state pension.

Edited by monthou on Thursday 6th June 10:12

[lizardbrain]

monthou said:

Those figures seem more than a bit low if the median pension fund at 55 is £300,000 - so presumably a lot bigger at retirement - don't they? Bearing in mind £10-11K will typically come from the state pension.

Sorry you quoted that before I fixed the type, the 300k is for household, not individual.

I've given you direct links for my numbers. perhaps you can give me direct links for yours.

[monthou]

lizardbrain said:

monthou said:

Those figures seem more than a bit low if the median pension fund at 55 is £300,000 - so presumably a lot bigger at retirement - don't they? Bearing in mind £10-11K will typically come from the state pension.

Sorry you quoted that before I fixed the type, the 300k is for household, not individual.

I've given you direct links for my numbers. perhaps you can give me direct links for yours.

I've linked to the Daily Telegraph. They quote the ONS.
You've gone from claiming £300k median individual SIPP at 55 to £206k median household SIPP at 55. That's a heck of a difference! But in any case can you provide the direct link and quote for that number?

Which figure from the Telegraph are you disputing exactly?
median pension fund for 55-64 year old being £107,300?
Or their numbers for average pensioner incomes?

[CellarDoor]

Jim H said:

This is no ‘bragging rights’ - But.

House worth a fair bit. No mortgage.
Debts - none.
Cars worth a bit - no loans.
Property abroad - owned 50/50 with family
Good salary - 60K
Final salary pension.
No wife or kids.

And not a soul to leave it to.

Do you think I feel rich?

I’m 51 and not exactly looking after myself. It could all end tomorrow. I certainly don’t wake up in the morning thinking ‘jeez I’m rich’

I honestly don’t.

Just a thought: have you considering mentoring disadvantaged children or helping out at a local foster home?

Perhaps you could be an excellent guardian to a child / children that do not have parents - spend time with them as a father figure, help them with education, fund clothing for them. Nothing major but just start small and it could build from there. If you enjoy it then who knows (fostering, adoption, local foster home in your will, etc).

[craigjm]

vikingaero said:

MrBig said:

jdw100 said:

£60K per year salary puts you in top 1% of global earners.

About £8,000/year puts you at the global average.

12% of global population (adults) have £100,000 - 1,000,000 in assets.

1.1% have over a million.

50% have under USD10,000.

Staggering statistics. And not in a good way.

The thing with global averages are that most people tend to be very continental centric. £8k would be nothing in many European and American countries, but could be a decent wage in a developing country.

One statistic I found interesting was that 1/3 of American households have an income of $100k or more. There's a guy on YouTube who goes around asking Americans what they earn and there were guys wrapping cars on $500k-600k. I doubt that many wrappers in the UK would be on that amount.

Indeed its not about what you earn its about the power of what you earn. You can live quite happily on much less money than 60k a year in the UK and you can live like a king on that in lots of countries. Similarly there are some countries where 60k would make you a pauper even though you are in that top 1% of global earners, its all relative.

Personally I think the constant desire of many to compare themseleves to everyone else is the crux of the issue. You never know if the neighbour you envy that has the flash car and four international holidays a year is just up to their neck in debt.

[lizardbrain]

monthou said:

I've linked to the Daily Telegraph. They quote the ONS.
You've gone from claiming £300k median individual SIPP at 55 to £206k median household SIPP at 55. That's a heck of a difference! But in any case can you provide the direct link and quote for that number?

Which figure from the Telegraph are you disputing exactly?
median pension fund for 55-64 year old being £107,300?
Or their numbers for average pensioner incomes?

No, I'm out. You win

All the best with your future endeavours

Edited by lizardbrain on Thursday 6th June 10:39

[monthou]

lizardbrain said:

monthou said:

I've linked to the Daily Telegraph. They quote the ONS.
You've gone from claiming £300k median individual SIPP at 55 to £206k median household SIPP at 55. That's a heck of a difference! But in any case can you provide the direct link and quote for that number?

Which figure from the Telegraph are you disputing exactly?
median pension fund for 55-64 year old being £107,300?
Or their numbers for average pensioner incomes?

No, I'm out. You win

All the best with your future endeavours

Probably for the best. Nice edit btw.

[98elise]

crofty1984 said:

Skeptisk said:

MrBig said:

I assume net assets includes any equity in your home? £120k seems rather small, but eye-opening!

Yes it should include all assets less all debts

I thought I was approaching it with the equity in my house, but I owe far more on the mortgage than I have equity, so no. Not by a long shot.

But your debt is balanced by the asset value of the house. You didn't blow the mortgage money, it was exchanged for an asset of equal value, which can be exchanged back for cash.

The equity is part of your net wealth because that's what you would have if you sold the house and settled your mortgage debt.

[Ken_Code]

The Gauge said:

I'm 52 and have never really been able to have savings. A few years ago my wife got £40k redundancy package but that didn't last long after buying a car, sofa, boiler, carpets, new patio and our first holiday abroad in 18yrs.

We now only have about £1k in savings.

You and I have a very different attitude to money. I could not imagine having no savings, getting £40,000, and then just spending nearly all of it. I’m actually feeling stressed just reading about you doing it.

[Ken_Code]

crofty1984 said:

I thought I was approaching it with the equity in my house, but I owe far more on the mortgage than I have equity, so no. Not by a long shot.

You are double-counting your mortgage there.

Your equity is the total value of your house, minus the mortgage.

[beagrizzly]

Ken_Code said:

The Gauge said:

I'm 52 and have never really been able to have savings. A few years ago my wife got £40k redundancy package but that didn't last long after buying a car, sofa, boiler, carpets, new patio and our first holiday abroad in 18yrs.

We now only have about £1k in savings.

You and I have a very different attitude to money. I could not imagine having no savings, getting £40,000, and then just spending nearly all of it. I’m actually feeling stressed just reading about you doing it.

Same here. I get very antsy if I've not got at the very least a few thousand in the bank. Many people I know seem to have no problem with zero cash and racking up the debt to get the stuff they want, when they want it.

As none of them, yet and AFAIK, have lost their houses or had any other serious problems, perhaps I'm the one getting it wrong?

[Ken_Code]

beagrizzly said:

Same here. I get very antsy if I've not got at the very least a few thousand in the bank. Many people I know seem to have no problem with zero cash and racking up the debt to get the stuff they want, when they want it.

As none of them, yet and AFAIK, have lost their houses or had any other serious problems, perhaps I'm the one getting it wrong?

I don’t think so, not knowing how much stress I’d have every single day if I didn’t have a good emergency fund. I reckon this could well be behind why I worked so hard to get into a job that paid well. I didn’t want “rich people” things, I just wanted as close to certainty as I could get that I’d never end up facing financial disaster.

I’m the same with not wanting to run out of stuff, so drive my wife mental by buying 20 tubes of toothpaste at a time, rather then one.

[ThingsBehindTheSun]

Ken_Code said:

You and I have a very different attitude to money. I could not imagine having no savings, getting £40,000, and then just spending nearly all of it. I’m actually feeling stressed just reading about you doing it.

I thought the same, but people have very different attitudes to money. For me, money is security, having some put side helps me sleep more soundly at night and lowers my anxiety.

For others it is there to be spent.

My ex wife's family are an interesting one, her mum got £4K in back benefits paid to her, the most money she has ever seen. Within a few months it was all gone, wasted on complete crap.

My ex wife's brother in law received a small inheritance from his mother, we are talking £20k or £30k, again more money than he has ever seen in his life. He ended up buying a Jaguar and blowing the rest of crap. A year later the Jaguar has problems and he can't afford to get it fixed.

I know a couple who divorced recently, sold the house and ended up with about £70K each. Rather than invest the money they both couldn't spend it quick enough. The husband ended up buying a new £30K Peugeot and spent the rest on crap. The wife ended up spending all hers on beauty treatments and rehab.

My uncle is another one, back in the 80s my gran passed away and he used his half of the inheritance to buy a house in Birmingham for cash. He had some sort of breakdown after that, sold the house and ended up bumming around for a while. He tried to get benefits but they said he had too much savings so he ended up just blowing the lot.

He now lives in a one bedroom council flat.

I just think some people are destined to have nothing, any money they do get just slips through their fingers.

[Ken_Code]

I’m not saying that any of them are wrong, it’s obviously a personal decision, but again, I feel anxious just reading about people I don’t know doing that.

For a lot of years my pay was split between a relatively low fixed salary and a variable bonus. The bonus was uncertain enough that it couldn’t be relied on, and so I always lived within the fixed salary. This meant that the good years gave me money to save or invest, and in the bad ones I didn’t use any of the money I’d put away.

[borcy]

I think for some it's feeling like they are in control. If you've not much money then it's easy to feel helpless. Money and spending it takes that feeling away.