Are you rich?

[Douglas Quaid]

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.

Why don’t you get yourself a bird?

[Nigel_O]

If I’d had £120k when I was 20, I’d have considered myself rich (and I’d have blown most of it on cars, bikes and girls, meaning I’d be broke again quite quickly)

There were dark times in my late thirties when huge interest rates, loss of job, two school age kids meant that I’d have felt rich with £120.

Now that I’m in my early sixties, I have no debt, an average-value house, a couple of cars, a nice watch, a top 10% salary, but I still don’t feel ‘rich’ as I have nowhere near as much as I’d like in my pension.

For me, ‘rich’ means more money than you need. £120k is nowhere near that. Even at my age, it would take another zero on that amount before I’d call myself rich.

[Mr_J]

At 48 when considering my 'wealth' I'm oddly pushed to considering the size of my pension pot rather than the amount of equity in my house.

A £550k house with £120k mortgage left to pay off doesn't feel like wealth.

[Sheets Tabuer]

Douglas Quaid said:

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.

Why don’t you get yourself a bird?

Or a bloke

/modernworld

[AndyAudi]

thepeoplespal said:

S100HP said:

According to the poll, yes. In reality, I don't have two pennies to rub together. My house is worth about 300k, mortgage remaining around 70k, but that's all I have. No savings, nothing. I just about to opt out of my NHS pension as I'm only just taking home enough to cover my bills. Another couple of hundred in my pocket will make a huge difference. It's bloody depressing at 41 years old. Can't afford holidays etc. We're just surviving.

Edited by S100HP on Wednesday 5th June 15:18

While no where as good as in the past opting out of the NHS pension isn't something many people would advocate. Employers make a 20.8% contribution of your pensionable pay, you could also lose out on ill health retirement and death in service benefits. Sad state of affairs when people are having to opt out just to make ends meet.

The current contribution rate is a lot higher than the fully funded local government pension scheme, as in 3% more of every paypacket at the same earnings more or less across the board.

Echo comments,

Don’t want to get personal, but I’d be looking at the outgoings like the mortgage payment. £70k @ age 41 on an NHS job does not strike me as a challenge depending on how quick it’s being repaid. (I’d assume the payment is less than most folks rent!)

Eg Changing the remaining term from 10yrs to 15 years for example would be about £200/mth less repayment. (Yes more interest overall, but insignificant competent to the pension gain)

[croyde]

It's true that for the majority their money is in their house.

House might be worth a million on paper but you are still struggling to pay bills, afford food.

Our house sale was supposed to be completed last Monday but some cock up with the money transfer has the ex now homeless with our boys in a hotel she can't pay for and I'm using creditcards to bail them out.

Our money is in the house and currently we don't have a house or money.

[Mazinbrum]

If you’re a pensioner and you’ve only got 120k in a DC pension you’re definitely not rich!

[craigjm]

Surely there is a difference between being rich and being wealthy?

Also there is a difference between being asset rich or wealthy and just being rich or wealthy

Having 120k tied up in a house makes you neither rich nor wealthy, especially if it is your only house. Having said that as above if the average wage is 35k PA there are loads of people earning much less than that and who can never afford to "buy" a house in todays world. To them I guess someone with 120k in equity in a house is "rich" or "wealthy" but the reality can be much different.

[Countdown]

A lot of "feeling rich" is down to relative levels of wealth in your family or social circle. Human nature being what it is, you always look at those who are doing better than you rather than those who are less well-off.

I do think that you get less competitive/envious as you get older. Things other than money become more important.

[craigjm]

Countdown said:

A lot of "feeling rich" is down to relative levels of wealth in your family or social circle. Human nature being what it is, you always look at those who are doing better than you rather than those who are less well-off.

I do think that you get less competitive/envious as you get older. Things other than money become more important.

Thing is you don’t really know who is “doing better”. There are a lot of people out there who appear wealthy especially from an assets point of view when in reality it’s all smoke and mirrors and / or debt

[Phil.]

Rich = the time and money to do what you want when you want

[NRS]

Countdown said:

A lot of "feeling rich" is down to relative levels of wealth in your family or social circle. Human nature being what it is, you always look at those who are doing better than you rather than those who are less well-off.

I do think that you get less competitive/envious as you get older. Things other than money become more important.

There’s often a lot more judgement of those who don’t have money though, and a view it was all done by hard work rather than a lot done by time/government policies and so on.

I’d certainly say I am lucky enough to be rich, although I’m still in overall negative equity at 37. Around £115k in savings, flat is worth around £400k with around £200k left to pay off on the mortgage. Consider myself very lucky.

[lizardbrain]

craigjm said:

Surely there is a difference between being rich and being wealthy?

Also there is a difference between being asset rich or wealthy and just being rich or wealthy

Having 120k tied up in a house makes you neither rich nor wealthy, especially if it is your only house. Having said that as above if the average wage is 35k PA there are loads of people earning much less than that and who can never afford to "buy" a house in todays world. To them I guess someone with 120k in equity in a house is "rich" or "wealthy" but the reality can be much different.

I think they mean about the same thing. Disposable income is a different thing.

I read somewhere average allocation of net wealth held in property is 35%. Obviously there are outliers, rich renters, and overstretched home owners.

But in general if you have 120k just in your house, you probably have at least as much in savings/sipp also. statistically

[Earthdweller]

If ..

You have your health
People who love you and support you
A secure roof over your head
More money coming in than going out

You are rich

[craigjm]

Earthdweller said:

If ..

You have your health
People who love you and support you
A secure roof over your head
More money coming in than going out

You are rich

Yep that’s how we should be thinking

[monthou]

lizardbrain said:

But in general if you have 120k just in your house, you probably have at least as much in savings/sipp also. statistically

I'd be amazed if that were shown to be true.

[Pit Pony]

beagrizzly said:

I keep getting told that I am somehow in the top 5% in the UK for earnings. My main response to this is 'how the fk do the other 95% afford anything?'

We engineers, solve problems. The problem of low pay is solved by ingenuity and making do.

[Steve H]

lizardbrain said:

Can't say i've noticed any correlation between significant wealth, and how thrifty someone is on a month ot month basis .

It can make or break a pleb's retirement of course, but the truely wealthy don't aquire their wealth via what's left of their monthly payslip

But this question doesn’t seem to be about the significantly wealthy.

The premise is that you are "rich" if you are above the mid-point of if you drop dead tomorrow is your estate worth over £120k

Being thrifty, or at least not spunking out on every bit of credit you can get at every opportunity, is likely to be a factor in this measure.

Inevitably there is a point in most people’s lives where they do not hit that threshold, I would hope that for most it is a question of what age they pass it.

[lizardbrain]

monthou said:

I'd be amazed if that were shown to be true.

Why what would your expectation be?

This image seems to back up the average being a third, skewed higher for lower deciles (though still under 50%)

My SIPP isn't so large, but I have a relatively tax efficient Ltd to channel stuff through so don't really do the SIPP thing.

[monthou]

lizardbrain said:

Why what would your expectation be?

This image seems to back up the average being a third, skewed higher for lower deciles (though still under 50%)

My SIPP isn't so large, but I have a relatively tax efficient Ltd to channel stuff through so don't really do the SIPP thing.

I'd expect it to be a hell of a lot lower.
Maybe lots of people have savings as large as their house equity, but £120K sounds like someone who still on average has a significant chunk to pay off. You really think your average mortgagee with £120K equity also have savings - of whatever flavour - of equivalent size? I'd expect people's savings to increase dramatically in later years, as incomes rise / kids grow up / mortgages are paid.
And I'm not sure how your chart supports your point.

Edited by monthou on Wednesday 5th June 21:00