[Finance] What is 'rich' in 2023?

[Weststander]

HMRC take say 40% of £200k earnings.

I went for £500k plus. £25,000 net income per month would enable almost anyttimg.

 

[Weststander]

It is possible to be rich at any of the earning options outlined. The biggest discrepancies exist in unearned income and the transfer of assets between generations.

For example who is richer here?

1 A 25 year old who owns a substantial property outright and a top end car, does not work and has £49K index linked income from investments
2 A household with exceptional earnings within 1 year of £500K, with no assets?

If the household are also 25 year olds, (2).

£0.5m a year for the next 40 years or more, should generate great wealth, assuming they’re not idiots.

 

[nwgull]

Yes you do, there are loads of factors at play, but that would be way too long and complicated to put into a NSC poll.

Someone on a £100K salary would definitely have been classed as 'rich' by a large proportion of the population until relatively recently, I think. But I can't see how that is the case now.

I'd agree with that. Back in 2010 the government implemented the policy of eroding personal allowance by £1 for every £2 earned over 100K - aka the 100K 60% tax trap. £100K in 2010 is the equivalent to about 144K today, so definitely a really good annual income. These days more and more people are hitting that threshold, which hasn't shifted despite 13 years worth of inflation.

 

[peterward]

HMRC take say 40% of £200k earnings.

I went for £500k plus. £25,000 net income per month would enable almost anyttimg.

Its more, the tax bands have been lowered, its now 45% above 125k, and for every £2 you earn over 100k, you'd lose £1 of tax free allowance, so if someone hits 125k they've lost the full 12500 tax free and are on 45% (+ NAT ins on top), overall taxation is way in excess of 50%, and so many things like free child care/nursery hours are lost in full if you earn 1p over 100k.

A lot of people will be worse off financially if they go over 100k without mitigation, than if they stayed under it.

 

[peterward]

Yes you do, there are loads of factors at play, but that would be way too long and complicated to put into a NSC poll.

Someone on a £100K salary would definitely have been classed as 'rich' by a large proportion of the population until relatively recently, I think. But I can't see how that is the case now.

definitely and none of that considers that actual balance of the household, 1 salary at that level for household or more salaries?

nor does it consider the personal circumstances. i'.e bad investments, large debts for multiple reasons, in my own life I had a previous divorce where the ex takes half of everything and you spend years paying maintance for your child from that marriage.... all of which are responsibilities many will righty have to undertake, but can never be pigeon holed into the gross salary figure alone, to decide whether youre rich or not.

 

[CheeseRolls]

If the household are also 25 year olds, (2).

£0.5m a year for the next 40 years or more, should generate great wealth, assuming they’re not idiots.

Exceptional earnings e.g. a one off.

I live in a house with highish earnings. It has five adults. Two are trying to pay off an outstanding mortgage and top up pensions. The other three are saving hard for a deposit to buy properties. In the not too distant future this will be a household of two people with reduced pension sized incomes.

 

[Happy Exile]

I don't think I know anyone whose salary increases in recent years have enabled them to do much more than stand still. The only people I know who are getting meaningfully richer are people who clear their mortgage and so drastically reduce their outgoings. This is less a function of salary and more one of when (and if) you bought a house. I was lucky to be able to buy my current house in 2015 with a 30% deposit. Had I been a few years older and bought it in 2005 the total cost of the house would have been less than what's still left on my mortgage and I'd probably be mortgage free by now. Crazy. And crazier still, I'm one of the lucky ones especially compared to young people today.

 

[Westdene Seagull]

Calling @Steve Foster

Judging by when I saw him on Saturday he's too busy running the Hangleton Old Railway with an 'Ivan' running vest and pushing through anyone standing there talking to be able to answer you.

 

[Westdene Seagull]

Personally I think I'm rich - not because I earn megabucks ( I don't ) - but I earn enough to pay for the things I need and want to - bills, mortgage, eating out etc - and have reserves in the bank for a "rainy day". Compared to most I have a very modest mortgage and only ten years to go. I have three cracking, grounded and loving children and a loving and understanding wife. And in the last few months I've seen BHA play the best football I've ever seen them play. Stuff richness being about how much you earn - it's how rich your life is.

 

[chickens]

Taking it back a step, don't you have to decide how you measure rich-ness?

You've used income and income alone as a measure, which is fair enough, but I think you probably need to factor in at least one other element - assets and, very probably, debt too.

A lot of those we consider amongst the very richest won't have an income at all, at least not in the way that most of us considers what an income is.

Absolutely this. If you have it to begin with, and as long as you don’t invest unwisely, you need never work a day in your life. Incomes are for mugs as far as the wealthy are concerned.

There’s no real point to political posturing over income tax, it’s a manner of implementing redistributive wealth taxation that doesn’t frighten the horses that’s required.

 

[raymondo]

Taking it back a step, don't you have to decide how you measure rich-ness?

You've used income and income alone as a measure, which is fair enough, but I think you probably need to factor in at least one other element - assets and, very probably, debt too.

A lot of those we consider amongst the very richest won't have an income at all, at least not in the way that most of us considers what an income is.

Exactly this - inherit a million pound house/estate from your folks and you could do well on a modest income if debts are zero.

 

[Questions]

I’m poor…… It’s because I have no drive or ambition.

 

[raymondo]

Personally I think I'm rich - not because I earn megabucks ( I don't ) - but I earn enough to pay for the things I need and want to - bills, mortgage, eating out etc - and have reserves in the bank for a "rainy day". Compared to most I have a very modest mortgage and only ten years to go. I have three cracking, grounded and loving children and a loving and understanding wife. And in the last few months I've seen BHA play the best football I've ever seen them play. Stuff richness being about how much you earn - it's how rich your life is.

Indeed, and part of the problem with this planet is how GDP per head is always the go to measure for "success".

 

[BBassic]

I tend to agree with Westdene.

I may not feel rich but between me and my other half we earn enough to pay our mortgage and bills, treat ourselves to things we want, save money each month and have a holiday. Which, looking at it typed in black and white, does seem to be rich.

Certainly if I were to say all this to someone who earns less than the median I'd probably get called an out of touch twat.

So who knows.

 

[dsr-burnley]

For £20, the charity Mary's Meals can provide a school dinner for a full year for a child who would otherwise have no dinner at all.

I'm rich.

 

[Diablo]

Dickens Mr Micawber quote sums it up

“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

Married Man earning £150k year can easily be poor if they have big mortgage other borrowings and children.
Whereas a single person no mortgage or ay other borrowings earning £50k a year will be rich.

 

[Harry Wilson's tackle]

Taking it back a step, don't you have to decide how you measure rich-ness?

You've used income and income alone as a measure, which is fair enough, but I think you probably need to factor in at least one other element - assets and, very probably, debt too.

A lot of those we consider amongst the very richest won't have an income at all, at least not in the way that most of us considers what an income is.

This is a Mustafa poll.

 

[CheeseRolls]

Exactly this - inherit a million pound house/estate from your folks and you could do well on a modest income if debts are zero.

Even better inherit "farm buildings" if you really want to bypass paying tax. It used to be justified on the basis that splitting up large farms was inefficient. These days farmers seem to be tenants and all the benefits go to the property owners to pass down through the generations.

 

[Harry Wilson's tackle]

According to the ONS, the median household income in the UK is 34,000 yet almost half the voters so far think you need 14 times that to be rich. I'm sure many have had to tighten their belts in recent years but sometimes you have to reflect on how lucky you are.

There is little point in asking a mix of people with sufficient time to piss about during the day on a football forum what 'rich' means. The question, therefore, is a bit rich.

 

[dazzer6666]

Taking it back a step, don't you have to decide how you measure rich-ness?

You've used income and income alone as a measure, which is fair enough, but I think you probably need to factor in at least one other element - assets and, very probably, debt too.

A lot of those we consider amongst the very richest won't have an income at all, at least not in the way that most of us considers what an income is.

This......got loads of early-retired pals living off savings, investment income and redundancy payments who have no income as such. Some are what most of us consider loaded.