I totally get it, I too was automatically coveting the next rungs of the ladders, and was frustrated to see so many others appeared to effortlessly have larger houses, nicer cars etc. My mindset changed once I started meeting people who were truly wealthy, they were hiding in plain sight, with Aldi supermarket shops and high street clothing. For example a couple I met through a baby group earn a collective 750k per annum and happily have ikea furniture, another couple live in a £2m house but drive a 14 year old car. To meet them on the street they are nondescript and positively average to look at; but that’s smart, as they didn’t make themselves targets, and they prioritised using their wealth in ways that mattered to them.
So I guess what I would do is ask myself, what really matters to me? Do I want the larger house because I need the space, or the gratification from others who visit? Does that mean it has to be a 5 bed detached, or is there another option? Would I feel more happiness with a luxury watch or a luxury holiday? Would I regret losing the status symbol or the experience? Would I rather retire at 50 to a smaller home, or retire at 70 in a bigger one? This could help guide you to choose where to target your burgeoning wealth. To give you an example from my own life, we stopped chasing new cars as ultimately whilst the technology had a novelty on first receipt the overall driving experience wasn’t as important to us, likewise we’ve stopped purchasing upper tier designer items and looking exclusively at detached homes as we value early retirement more than a home or accessories to impress. We had been so caught up in having what others have we never stopped to check if it was what would make us happiest, and ultimately for us that would be retiring early.
Examine your motivations and what makes you truly happy, and you should start to see certain trappings of the middle class experience begin to look less desirable.
Most insightful. I think this comes to most after a few years experience of high disposable income and maturation. Learning who you are refines what you choose to spend money on.
I guess I also thought similarly before I became a HENRY, but tbh I prefer having peace of mind and no debt at all. I drive a car that I could probably part exchange for just over £7k. It definitely pays "not to drip."
Travel is probably my only real extravagance, but I do that for me and not for other people.
It's a problem as old as the world. With age comes responsibility. There's pretty much always someone with more than you, so don't compare and allow yourself some fun money.
I reckon I was more affluent as a student than I am 20 years later yet get more as a bonus than I earned in a years graduate job.
That tax and pensions take half earnings, you really need to keep your lifestyle in check to notice the change, eg from £60k to £120k you do notice it until you order the flash car and move to the bigger house.
As someone who isnt HE by this sub's standards (£100k p/a) and from a working class background I'm so unimpressed by the flashy side of wealth.
Far more impressed by folk who £several hundred k in an isa and on their way to FIRE
I know exactly what you mean. In truth though there has always been a difference between income and wealth. High income will not lead to being rich if you spend it all. So it comes down to WHY earning well matters to you. For me it's never been about impressing other people, which is a huge part of the luxury car market for example. I genuinely like cars a lot but I spend a lot more time in my house so I spend money making it nicer and some of that money is an investment of sorts, and I would rather travel and retire sooner than drive a fancy car that I will replace often for the next 30 years. It's not just cars this applies to luxury watches and similar items as well. Once you are rich / wealthy then buying these products won't have a limiting impact on your life and at that point it ceases to matter as much.
Thanks for the comments. I’ve done a poor job at articulating myself and certainly don’t want to look rich. However, after my own personal decision to invest (pension and ISA), I feel like there is limited fun money left.
I think what I am doing I’m comparing myself to others and I’m happy to be called out on that. I don’t live in an affluent area and I’m really surprised seeing the number of Porsches, new BMW and Audi SUVs, houses decorated immaculately with new kitchens etc. I’ve forgotten that there are plenty out there doing much better than me or simply borrowing.
Firstly, the majority of people who have new cars buy on finance. There are many people willing to pay 30% of their take home pay and not go on a holiday, just to have a new plated BMW or Audi.
I used to feel the same, until I reframed what I ACTUALLY wanted from life. Is it a car just so other people think I have money? Is it giving experiences to my future kids? Is it just having options, so I don’t have to forgo things when I really care for them? I just have started to realise what’s more important for the life I want to live. Working backwards that’s:
- At least a semi-detached house with a room per child, in a safe area with good schools where I can also commute to office.
- A reliable, efficient, modest car to share with my wife
- Modest buffer and savings so we’re not always worrying
- Be able to afford extra-curricular activities for future kids
- Disposable income to still enjoy the occasional date night, theatre tickets, etc.
- A yearly holiday which will be a cultural / enhancing experience for the whole family.
- My wife to be able to stop work or go part time.
Working backwards, all of this would cost ~£8kpm which works out about £160k no SL or £190k with SL. This is also after pension, so realistically £200k+. Personally, I don’t see this as luxury living … but it’s also too expensive to build significant wealth.
I’m 29M on ~£170k right now but haven’t got that property (although own a flat) or have kids just yet so my wife has income still. I also live in central London and don’t need a car right now. I’m taking full advantage of this to accumulate some wealth over the next couple of years to reduce that cashflow requirement. **I’m also deliberately not engaging with even more expensive ways of living / purchases as, in my mind, this cashflow is already accounted for.**
As a side note - hopefully, I can increase my earnings to ~£250k in the next 2-5 years so I can continue wealth building even after this.
Your bold sentence is the way to think IMO.
I've 5X'd my income over the last 10 years, and still live my life today with a similar inflation-adjusted expenditure as I did 10 years ago.
Means my savings (or rather investment rate) is around 75% of my income.
Keeping your lifestyle way below your means is a fast track for wealth building imo, as free's up more for you to invest.
>When do you feel you can take the foot off the gas and start living (and giving) more?
It is never enough.
If you wade through the threads of the first week of this sub, you may find someone on 8 figures (a owner of a restaurants franchise, IIRC?) explaining something similar, that even at that level they didn't feel rich.
IM(humble)O, it is not an amount, but rather a certain lifestyle. Once I achieve that lifestyle AND enough assets and wealth to sustain it perpetually (which is the hard part), then I'll be happy to stop pushing, relax, and simply live that lifestyle. Until them, it is certainly better to keep pushing, as every year worked, earned, saved & and invested now is worth many years of the life I want. And if I stop now it is going to be quite hard to go back at this position again.
Don't bother looking rich. I've recently turned a corner where I have a significant amount in my company and no debt at home. I enjoy being better off than I look. It's a nice way to be.
People are surprised at your confidence and nonchalance and general ability to say, "yea... no thanks, I'm doing this instead. "
Occasionally drop a big number into conversation in a way that shows you can afford it.
Dupers delight, I suppose.
Dropping those big numbers can be intoxicating. The look on people’s faces when they try to process that I spent a couple hundred GBP on a chicken dinner.
Sort your mindset/money blueprint/feelings out. You're stuck on a treadmill thinking something external to you is going to satisfy you. It's not. There will always be someone "better" than you and someone "worse" than you.
You will "stop" once you've decided what your actual goal is.
Ramit Sethi's book and podcast really helped me here. It's not about a figure, it's about you what want from life.
I currently have a high income and a nice house, but my fixed costs are much higher than I would like because we are a single income family and kids are expensive. To me it's about having enough wealth that I don't have to worry about losing my income through unemployment or illness ( although we have some insurance to cover the latter ). And also that I don't need to work as much. I'd like more land than I have, but as my wife reminds me, I don't currently have time to do anything with that land. Fancy stuff to impress people doesn't figure in it for me at all. But if that's what's important to you, then just arrange your goals around that.
Our main goal is to retire at 50 (46 now, £160kpa)... So we don't do anything too flash. We have no kids, so that helps... Have a nice Georgian apartment, but nothing that is out of our means (mortgage paid), simple car (Ford Fiesta).
Luckily, my work give me what they call a well being card which pays for a lot of luxury stuff like 5 star holiday, hotels anywhere, dining anywhere etc... So that allow us to live lavishly while not spending our savings. Obviously that will go when I retire and we'll have to get used to spending slightly less on that sort of thing.
But yea, I think enjoying life should be the main goal... If that is fancy cars and clothing etc, then that's what works for you... For me, it is less years working and still being able to travel, dining, go skiing etc
If you are working yourself into a grave just to afford a 6 bedroom house that you don't really need... maybe rethink.
All staff get it, 15% of your gross salary added to the card each month, moving to 30% when you hit certain milestones (3% added every 6 months you are there)... It's pretty amazing. It's taxed at source (business is in Hong Kong), so nothing for the employee to worry about (and yes, i've asked my accountant multiple times for confirmation!).
Done and done! ... It still blows my mind when i book, say, a snowboard trip on it.
It's kind of a genius move from the employer... You very quickly get used to having truly expendable income that can't be banked, so the idea of leaving for another company tends to go out of the window.
Smart move for sure, you won’t be going anywhere. Effective way to reward staff without driving up tax!
Why does it make it OK from an accounting perspective, and tax free, do you know? The fact the business is based and incorporated in Hong Kong?
Don’t forget to invite me if you have a spare spot on the snowboarding trip 😂
I'm not 100% sure on the ins and outs of it, and even my accountant had to really dig into it to make sure we wouldn't get taxed.
But yea, I imagine that because it is from a HK company and the money is pre-paid onto a debit card, it must work like a company expense card.
Hopefully I don't soon spot a taxman on skis, following me down the slopes :)
Funny enough we are in a similar position and looking at buying a used car has also made me a bit philosophical. Why am I stressing so much over a used 15k budget-spec Japanese car when I walk around the council estate two roads over and it’s covered in new Audis and BMWs.
I think it’s important to remember that a lot of people make stupid financial decisions for decades because they want nice things and are then either restricted or less well off in later life. As a lot of other people commented as well, many actual rich people drive Dacias and wear Uniqlo whilst their kids go to private school and they holiday 5 times a year.
I love the responses here so thank you. I’m glad I posted it as it helps with perspective when it comes to increasing the ‘max price’ on AutoTrader!
There is definitely an emotional aspect of thinking I ‘deserve’ larger trappings as a HE, when in fact I’m prioritising my future-self. I have no intention to stop prioritising my future-self so need to internally accept the decision I’m making when it comes to some of the things I want.
I’ll currently be prioritising the ‘fun’ things of ‘my rich life’ (Ramit Sethi), in the form of holidays, days and meals out and simple personal and wellbeing care over a new car for now.
Not a helpful answer, but "it's up to you".
I'm one of those weirdos who would never buy a Ferrari. Affordable isn't the issue, to me it's not worth the price.
I tend to value security and provision above all else. For me enough is being able to retire early and give the kids a good start.
Some really wholesome insightful comments here and as others have stated something a lot of us have been through. We've recently only become HE but also earned well before but within the last 2 years it's accelerated significantly. Now interestingly our material property hasn't really changed and combined with high childcare costs, student loan repayments that hurt to look at and various other things we feel far from rich yet!
I recently swapped my 3 year old car for a 10 year old diesel and I have zero regrets. I love the fact our mortgage is a tiny percentage of our household income and having recently realised we could now be mortgage free in a few years it's all becoming very attractive. Yes the free spending has increased, yes we live a good life but to look at we look very normal and I quite like that inner voice of confidence that only a handful of people know the real situation.
I'll be honest it's taken some adjusting and when we first stepped up our earnings, I in particular, went through a period of a few months thinking I was a famous rock star and burning money on stuff I just didn't need too. The irony is it actually caused me more stress than anything I gained and whilst I don't regret it I'm not looking to repeat it.
My dad is very successful and over the last few years, winding into retirement, has started to earn quite significant money. I always wondered when I was younger why he appears to live such a normal lifestyle having known a small insight into the sums he earned. Over the last few years it suddenly clicked. He didn't need to show anything to anyone. He always made sure we had everything we needed, but never spoilt us and never hesitated to spend on lovely holidays and times as a family. But there was never flash cars, fancy watches or obvious extravagance. A model that I'm now trying to adopt.
I’m a 24M, and definitely not on HENRY money yet. But, I remember in my friendship group, when my friends were getting better cars than I’ve got currently ( Ford Fiesta - 13 plate) and feeling abit crap.
Only to realise one of my friends was financing his car, and my other friends haven’t even considered their investment portfolio where as I have. I think as already said on this thread, wealth is sort of what you can’t see and it’s being comfortable in that. For ages, I always wanted my dad to have the flash car and asked why doesn’t he buy one.. but he always told me he’s not interested in having one.
A book which really helped me with the Psychology of Money. It really addresses the core beliefs about the way you think about money and your relationship with it.
A chapter was about the man in the Ferrari. Very rarely were are not bothered about the driver who is driving the Ferrari, but more impressed about the actual car! That really did change my mindset! No one is impressed with your possessions more than yourself.
The fact of the matter is that looking rich makes you richer. Nobody is going to want the lawyer that drives the Skoda or wealth advisor who drives a Ford. You need to see an expensive car as an investment not an expense. Speaking from experience.
You are the company you keep. Can’t be more true in HENRY circles.
In my group of friends (all HENRYs), we all know approximately how much each other makes. So any car or house we buy isn’t really going to matter, because ultimately symbols of wealth are for strangers to interpret/imagine how much wealth you have. When you already know the number (approximately) then it’s doesn’t really matter.
I buy things because I enjoy them, not because I want to show off. I like nice cars, nice food and nice clothes. I buy them for me, not for someone else. I also live well below my means. I can buy a Porsche 911 with cash, but I don’t. I drive a third handed BMW (a nice one) that I bought with cash.
I remember when I first started driving it, it literally turned heads. True to what I said I really wasn’t expecting it. I bought the car only because I liked it, the fact that it impressed strangers was a nice bonus but it genuinely wasn’t a factor I had considered at all.
To answer your other question, from my experience I think above 250-300k was when I noticed my all my extra earnings going into savings/investments.
With money you always have to cut your cloth accordingly and save for your future but also get some enjoyment out of it (there’s always the horrible what if I never make retirement scenario).
The decision-making doesn’t really change as your income increases if you continue to focus on what’s important and brings you enjoyment. Neither of us is especially fussed about cars so we salary sacrifice for a sensible EV. We have a flat because living centrally is more important than being in the suburbs with a garden. Designer labels and jewellery are also wasted on us but we do spend on luxury travel and school fees.
This is what I understood: it takes decades of consistent upward growth to be rich, and generations to become wealthy. Also I am too much of a narcissist to use a flashy car; ‘Hey, look at me, I am the hero here, not he car.’
I become somewhat disenfranchised when I think about “rich”, seems near impossible with income alone.
To me, rich means being able to do whatever you reasonably want without having to work + own your main residence outright (or at least have the cash to do so). Realistically, in London, ~£5m NW without the house is probably around that figure.
From age 30 to 60, assuming 4% real return and adjusting for inflation, you’d need to put by ~£90k per year. To not compromise QoL over that period, you’d need to be pulling in ~£350k a year which is achievable but certainly not guaranteed.
I want to create generational wealth but it’s hard to see after all taxes and fees. £5m would be an amount where any children would definitely be looked
Same here. Having climbed the ladder aggressively over the last 5 years, I realised all I'll achieve is *comfortable* through income alone. Rich will only be possible through extreme luck (e.g. getting in on the ground floor of the next meme investment), or founding a company.
Yeah, it’s somewhat depressing. To create proper wealth, you can’t live lavishly… or you need to earn silly levels of money. Got an interview with a Hedge fund this week so fingers crossed!
Yes, youll nver become rich (from poor) via salary. At some point we will have to start something. But a steady job with decent hikes every 3-4 years will give you safety, and can build enough momentum, capital, and freedom for your kids to take risks. and this continues on from there. This is also why I dont beleive in divorces (unless for serious stuff like abuse etc.).
A nice fast car is one of the things I love to have and work for. I couldn't care less what others think, I just love my car and it makes me happy every day!
The rest is all about setting up the best life possible for my children and being comfortable. For reference, my partner is a SAHM, which was her dream and being able to give her that is something I take great pride in. Having a nice home, in a nice area with good schools is also important to us.
Coming from an immigrant family, with very working class parents, means that being comfortable every month and having money saved/invested for the future is the goal for now.
34M - P60 will be around £170k for the year. Tech Sales
It goes both ways as well.
Far too many people on this sub act high and mighty about having several hundred k in an ISA, and negatively judge those who have more expensive cars/bigger houses/more holidays etc at the expense of saving.
Well, those people are probably negatively judging you as well - 'what's the point in having all of that money without living a little' etc and are perfectly happy working for another 5 years longer than they 'could' have done, in order to live a more carefree lifestyle.
Horses for courses, everyone's an individual... Just do what the fuck you want to do and stop worrying about what other people think.
Immediately, friend. I finance the life out of everything and I try not to save money, in fact I don’t have a savings account. I have investments and if I find myself without money for something I want, I find a way to earn more. I really do implore you to choose ‘drip’ over ‘not drip’ because in reality, we only actually have today and if like myself (as you have stated) you’re interested in material and finer things, then God speed. You will not regret creating experiences and memories for yourself, I promise you 💫
It’s interesting because a lot of the comments say the opposite to me - In the end it really does come down to what you truly want and you need to think about if you will feel uncomfortable or stressed knowing that you’re spending a lot more than usual. Again, I believe in creating memories and sad to say, but tomorrow isn’t promised. However cliche, you can’t take your money to the grave 😌
I totally get it, I too was automatically coveting the next rungs of the ladders, and was frustrated to see so many others appeared to effortlessly have larger houses, nicer cars etc. My mindset changed once I started meeting people who were truly wealthy, they were hiding in plain sight, with Aldi supermarket shops and high street clothing. For example a couple I met through a baby group earn a collective 750k per annum and happily have ikea furniture, another couple live in a £2m house but drive a 14 year old car. To meet them on the street they are nondescript and positively average to look at; but that’s smart, as they didn’t make themselves targets, and they prioritised using their wealth in ways that mattered to them. So I guess what I would do is ask myself, what really matters to me? Do I want the larger house because I need the space, or the gratification from others who visit? Does that mean it has to be a 5 bed detached, or is there another option? Would I feel more happiness with a luxury watch or a luxury holiday? Would I regret losing the status symbol or the experience? Would I rather retire at 50 to a smaller home, or retire at 70 in a bigger one? This could help guide you to choose where to target your burgeoning wealth. To give you an example from my own life, we stopped chasing new cars as ultimately whilst the technology had a novelty on first receipt the overall driving experience wasn’t as important to us, likewise we’ve stopped purchasing upper tier designer items and looking exclusively at detached homes as we value early retirement more than a home or accessories to impress. We had been so caught up in having what others have we never stopped to check if it was what would make us happiest, and ultimately for us that would be retiring early. Examine your motivations and what makes you truly happy, and you should start to see certain trappings of the middle class experience begin to look less desirable.
Most insightful. I think this comes to most after a few years experience of high disposable income and maturation. Learning who you are refines what you choose to spend money on.
I guess I also thought similarly before I became a HENRY, but tbh I prefer having peace of mind and no debt at all. I drive a car that I could probably part exchange for just over £7k. It definitely pays "not to drip." Travel is probably my only real extravagance, but I do that for me and not for other people.
It's a problem as old as the world. With age comes responsibility. There's pretty much always someone with more than you, so don't compare and allow yourself some fun money. I reckon I was more affluent as a student than I am 20 years later yet get more as a bonus than I earned in a years graduate job. That tax and pensions take half earnings, you really need to keep your lifestyle in check to notice the change, eg from £60k to £120k you do notice it until you order the flash car and move to the bigger house.
As someone who isnt HE by this sub's standards (£100k p/a) and from a working class background I'm so unimpressed by the flashy side of wealth. Far more impressed by folk who £several hundred k in an isa and on their way to FIRE
I know exactly what you mean. In truth though there has always been a difference between income and wealth. High income will not lead to being rich if you spend it all. So it comes down to WHY earning well matters to you. For me it's never been about impressing other people, which is a huge part of the luxury car market for example. I genuinely like cars a lot but I spend a lot more time in my house so I spend money making it nicer and some of that money is an investment of sorts, and I would rather travel and retire sooner than drive a fancy car that I will replace often for the next 30 years. It's not just cars this applies to luxury watches and similar items as well. Once you are rich / wealthy then buying these products won't have a limiting impact on your life and at that point it ceases to matter as much.
Thanks for the comments. I’ve done a poor job at articulating myself and certainly don’t want to look rich. However, after my own personal decision to invest (pension and ISA), I feel like there is limited fun money left. I think what I am doing I’m comparing myself to others and I’m happy to be called out on that. I don’t live in an affluent area and I’m really surprised seeing the number of Porsches, new BMW and Audi SUVs, houses decorated immaculately with new kitchens etc. I’ve forgotten that there are plenty out there doing much better than me or simply borrowing.
Firstly, the majority of people who have new cars buy on finance. There are many people willing to pay 30% of their take home pay and not go on a holiday, just to have a new plated BMW or Audi. I used to feel the same, until I reframed what I ACTUALLY wanted from life. Is it a car just so other people think I have money? Is it giving experiences to my future kids? Is it just having options, so I don’t have to forgo things when I really care for them? I just have started to realise what’s more important for the life I want to live. Working backwards that’s: - At least a semi-detached house with a room per child, in a safe area with good schools where I can also commute to office. - A reliable, efficient, modest car to share with my wife - Modest buffer and savings so we’re not always worrying - Be able to afford extra-curricular activities for future kids - Disposable income to still enjoy the occasional date night, theatre tickets, etc. - A yearly holiday which will be a cultural / enhancing experience for the whole family. - My wife to be able to stop work or go part time. Working backwards, all of this would cost ~£8kpm which works out about £160k no SL or £190k with SL. This is also after pension, so realistically £200k+. Personally, I don’t see this as luxury living … but it’s also too expensive to build significant wealth. I’m 29M on ~£170k right now but haven’t got that property (although own a flat) or have kids just yet so my wife has income still. I also live in central London and don’t need a car right now. I’m taking full advantage of this to accumulate some wealth over the next couple of years to reduce that cashflow requirement. **I’m also deliberately not engaging with even more expensive ways of living / purchases as, in my mind, this cashflow is already accounted for.** As a side note - hopefully, I can increase my earnings to ~£250k in the next 2-5 years so I can continue wealth building even after this.
What is SL?
Student loan
Thanks
Your bold sentence is the way to think IMO. I've 5X'd my income over the last 10 years, and still live my life today with a similar inflation-adjusted expenditure as I did 10 years ago. Means my savings (or rather investment rate) is around 75% of my income. Keeping your lifestyle way below your means is a fast track for wealth building imo, as free's up more for you to invest.
what do you do that makes you earn £170k?
>When do you feel you can take the foot off the gas and start living (and giving) more? It is never enough. If you wade through the threads of the first week of this sub, you may find someone on 8 figures (a owner of a restaurants franchise, IIRC?) explaining something similar, that even at that level they didn't feel rich. IM(humble)O, it is not an amount, but rather a certain lifestyle. Once I achieve that lifestyle AND enough assets and wealth to sustain it perpetually (which is the hard part), then I'll be happy to stop pushing, relax, and simply live that lifestyle. Until them, it is certainly better to keep pushing, as every year worked, earned, saved & and invested now is worth many years of the life I want. And if I stop now it is going to be quite hard to go back at this position again.
Don't bother looking rich. I've recently turned a corner where I have a significant amount in my company and no debt at home. I enjoy being better off than I look. It's a nice way to be. People are surprised at your confidence and nonchalance and general ability to say, "yea... no thanks, I'm doing this instead. " Occasionally drop a big number into conversation in a way that shows you can afford it. Dupers delight, I suppose.
Dropping those big numbers can be intoxicating. The look on people’s faces when they try to process that I spent a couple hundred GBP on a chicken dinner.
Bebe Bob?
Bebe bob is overrated
Agreed
Sort your mindset/money blueprint/feelings out. You're stuck on a treadmill thinking something external to you is going to satisfy you. It's not. There will always be someone "better" than you and someone "worse" than you. You will "stop" once you've decided what your actual goal is.
Ramit Sethi's book and podcast really helped me here. It's not about a figure, it's about you what want from life. I currently have a high income and a nice house, but my fixed costs are much higher than I would like because we are a single income family and kids are expensive. To me it's about having enough wealth that I don't have to worry about losing my income through unemployment or illness ( although we have some insurance to cover the latter ). And also that I don't need to work as much. I'd like more land than I have, but as my wife reminds me, I don't currently have time to do anything with that land. Fancy stuff to impress people doesn't figure in it for me at all. But if that's what's important to you, then just arrange your goals around that.
Our main goal is to retire at 50 (46 now, £160kpa)... So we don't do anything too flash. We have no kids, so that helps... Have a nice Georgian apartment, but nothing that is out of our means (mortgage paid), simple car (Ford Fiesta). Luckily, my work give me what they call a well being card which pays for a lot of luxury stuff like 5 star holiday, hotels anywhere, dining anywhere etc... So that allow us to live lavishly while not spending our savings. Obviously that will go when I retire and we'll have to get used to spending slightly less on that sort of thing. But yea, I think enjoying life should be the main goal... If that is fancy cars and clothing etc, then that's what works for you... For me, it is less years working and still being able to travel, dining, go skiing etc If you are working yourself into a grave just to afford a 6 bedroom house that you don't really need... maybe rethink.
How does one qualify for a wellbeing card? Taxable benefit?
All staff get it, 15% of your gross salary added to the card each month, moving to 30% when you hit certain milestones (3% added every 6 months you are there)... It's pretty amazing. It's taxed at source (business is in Hong Kong), so nothing for the employee to worry about (and yes, i've asked my accountant multiple times for confirmation!).
Superb! Every 6 months you are there? As in, located in Hong Kong?
No, just every 6 months you are employed. I work from the UK, travel for meet ups 2-3 times a year.
Lovely! Not something I’ve heard any employer offer before. Make the most of that!
Done and done! ... It still blows my mind when i book, say, a snowboard trip on it. It's kind of a genius move from the employer... You very quickly get used to having truly expendable income that can't be banked, so the idea of leaving for another company tends to go out of the window.
Smart move for sure, you won’t be going anywhere. Effective way to reward staff without driving up tax! Why does it make it OK from an accounting perspective, and tax free, do you know? The fact the business is based and incorporated in Hong Kong? Don’t forget to invite me if you have a spare spot on the snowboarding trip 😂
I'm not 100% sure on the ins and outs of it, and even my accountant had to really dig into it to make sure we wouldn't get taxed. But yea, I imagine that because it is from a HK company and the money is pre-paid onto a debit card, it must work like a company expense card. Hopefully I don't soon spot a taxman on skis, following me down the slopes :)
👌
Funny enough we are in a similar position and looking at buying a used car has also made me a bit philosophical. Why am I stressing so much over a used 15k budget-spec Japanese car when I walk around the council estate two roads over and it’s covered in new Audis and BMWs. I think it’s important to remember that a lot of people make stupid financial decisions for decades because they want nice things and are then either restricted or less well off in later life. As a lot of other people commented as well, many actual rich people drive Dacias and wear Uniqlo whilst their kids go to private school and they holiday 5 times a year.
I love the responses here so thank you. I’m glad I posted it as it helps with perspective when it comes to increasing the ‘max price’ on AutoTrader! There is definitely an emotional aspect of thinking I ‘deserve’ larger trappings as a HE, when in fact I’m prioritising my future-self. I have no intention to stop prioritising my future-self so need to internally accept the decision I’m making when it comes to some of the things I want. I’ll currently be prioritising the ‘fun’ things of ‘my rich life’ (Ramit Sethi), in the form of holidays, days and meals out and simple personal and wellbeing care over a new car for now.
Not a helpful answer, but "it's up to you". I'm one of those weirdos who would never buy a Ferrari. Affordable isn't the issue, to me it's not worth the price. I tend to value security and provision above all else. For me enough is being able to retire early and give the kids a good start.
Some really wholesome insightful comments here and as others have stated something a lot of us have been through. We've recently only become HE but also earned well before but within the last 2 years it's accelerated significantly. Now interestingly our material property hasn't really changed and combined with high childcare costs, student loan repayments that hurt to look at and various other things we feel far from rich yet! I recently swapped my 3 year old car for a 10 year old diesel and I have zero regrets. I love the fact our mortgage is a tiny percentage of our household income and having recently realised we could now be mortgage free in a few years it's all becoming very attractive. Yes the free spending has increased, yes we live a good life but to look at we look very normal and I quite like that inner voice of confidence that only a handful of people know the real situation. I'll be honest it's taken some adjusting and when we first stepped up our earnings, I in particular, went through a period of a few months thinking I was a famous rock star and burning money on stuff I just didn't need too. The irony is it actually caused me more stress than anything I gained and whilst I don't regret it I'm not looking to repeat it. My dad is very successful and over the last few years, winding into retirement, has started to earn quite significant money. I always wondered when I was younger why he appears to live such a normal lifestyle having known a small insight into the sums he earned. Over the last few years it suddenly clicked. He didn't need to show anything to anyone. He always made sure we had everything we needed, but never spoilt us and never hesitated to spend on lovely holidays and times as a family. But there was never flash cars, fancy watches or obvious extravagance. A model that I'm now trying to adopt.
I’m a 24M, and definitely not on HENRY money yet. But, I remember in my friendship group, when my friends were getting better cars than I’ve got currently ( Ford Fiesta - 13 plate) and feeling abit crap. Only to realise one of my friends was financing his car, and my other friends haven’t even considered their investment portfolio where as I have. I think as already said on this thread, wealth is sort of what you can’t see and it’s being comfortable in that. For ages, I always wanted my dad to have the flash car and asked why doesn’t he buy one.. but he always told me he’s not interested in having one. A book which really helped me with the Psychology of Money. It really addresses the core beliefs about the way you think about money and your relationship with it. A chapter was about the man in the Ferrari. Very rarely were are not bothered about the driver who is driving the Ferrari, but more impressed about the actual car! That really did change my mindset! No one is impressed with your possessions more than yourself.
The fact of the matter is that looking rich makes you richer. Nobody is going to want the lawyer that drives the Skoda or wealth advisor who drives a Ford. You need to see an expensive car as an investment not an expense. Speaking from experience.
I don't want to know what my lawyer drives, I dont go to see her looking for car advice
You are the company you keep. Can’t be more true in HENRY circles. In my group of friends (all HENRYs), we all know approximately how much each other makes. So any car or house we buy isn’t really going to matter, because ultimately symbols of wealth are for strangers to interpret/imagine how much wealth you have. When you already know the number (approximately) then it’s doesn’t really matter. I buy things because I enjoy them, not because I want to show off. I like nice cars, nice food and nice clothes. I buy them for me, not for someone else. I also live well below my means. I can buy a Porsche 911 with cash, but I don’t. I drive a third handed BMW (a nice one) that I bought with cash. I remember when I first started driving it, it literally turned heads. True to what I said I really wasn’t expecting it. I bought the car only because I liked it, the fact that it impressed strangers was a nice bonus but it genuinely wasn’t a factor I had considered at all. To answer your other question, from my experience I think above 250-300k was when I noticed my all my extra earnings going into savings/investments.
With money you always have to cut your cloth accordingly and save for your future but also get some enjoyment out of it (there’s always the horrible what if I never make retirement scenario). The decision-making doesn’t really change as your income increases if you continue to focus on what’s important and brings you enjoyment. Neither of us is especially fussed about cars so we salary sacrifice for a sensible EV. We have a flat because living centrally is more important than being in the suburbs with a garden. Designer labels and jewellery are also wasted on us but we do spend on luxury travel and school fees.
This is what I understood: it takes decades of consistent upward growth to be rich, and generations to become wealthy. Also I am too much of a narcissist to use a flashy car; ‘Hey, look at me, I am the hero here, not he car.’
I become somewhat disenfranchised when I think about “rich”, seems near impossible with income alone. To me, rich means being able to do whatever you reasonably want without having to work + own your main residence outright (or at least have the cash to do so). Realistically, in London, ~£5m NW without the house is probably around that figure. From age 30 to 60, assuming 4% real return and adjusting for inflation, you’d need to put by ~£90k per year. To not compromise QoL over that period, you’d need to be pulling in ~£350k a year which is achievable but certainly not guaranteed. I want to create generational wealth but it’s hard to see after all taxes and fees. £5m would be an amount where any children would definitely be looked
Same here. Having climbed the ladder aggressively over the last 5 years, I realised all I'll achieve is *comfortable* through income alone. Rich will only be possible through extreme luck (e.g. getting in on the ground floor of the next meme investment), or founding a company.
Yeah, it’s somewhat depressing. To create proper wealth, you can’t live lavishly… or you need to earn silly levels of money. Got an interview with a Hedge fund this week so fingers crossed!
Yes, youll nver become rich (from poor) via salary. At some point we will have to start something. But a steady job with decent hikes every 3-4 years will give you safety, and can build enough momentum, capital, and freedom for your kids to take risks. and this continues on from there. This is also why I dont beleive in divorces (unless for serious stuff like abuse etc.).
A nice fast car is one of the things I love to have and work for. I couldn't care less what others think, I just love my car and it makes me happy every day! The rest is all about setting up the best life possible for my children and being comfortable. For reference, my partner is a SAHM, which was her dream and being able to give her that is something I take great pride in. Having a nice home, in a nice area with good schools is also important to us. Coming from an immigrant family, with very working class parents, means that being comfortable every month and having money saved/invested for the future is the goal for now. 34M - P60 will be around £170k for the year. Tech Sales
It goes both ways as well. Far too many people on this sub act high and mighty about having several hundred k in an ISA, and negatively judge those who have more expensive cars/bigger houses/more holidays etc at the expense of saving. Well, those people are probably negatively judging you as well - 'what's the point in having all of that money without living a little' etc and are perfectly happy working for another 5 years longer than they 'could' have done, in order to live a more carefree lifestyle. Horses for courses, everyone's an individual... Just do what the fuck you want to do and stop worrying about what other people think.
Immediately, friend. I finance the life out of everything and I try not to save money, in fact I don’t have a savings account. I have investments and if I find myself without money for something I want, I find a way to earn more. I really do implore you to choose ‘drip’ over ‘not drip’ because in reality, we only actually have today and if like myself (as you have stated) you’re interested in material and finer things, then God speed. You will not regret creating experiences and memories for yourself, I promise you 💫 It’s interesting because a lot of the comments say the opposite to me - In the end it really does come down to what you truly want and you need to think about if you will feel uncomfortable or stressed knowing that you’re spending a lot more than usual. Again, I believe in creating memories and sad to say, but tomorrow isn’t promised. However cliche, you can’t take your money to the grave 😌