Question for the wealthiest 10%... how?

racing_blue

I was reading the Office for National Statistics report about household wealth in England and Wales.

The median value for household total wealth (which includes pensions) was £232,000, i.e. half of all households had total
wealth less than this and half of all households had total wealth more than this. Belonging to the wealthiest 10% of households required total wealth greater than £967,000.

Without wishing to ask anyone to be too indiscrete, I'd be very interested to hear advice from people in this higher bracket. On your journey, what did you do right, what didn't you do wrong, and what would you have done differently?

A hard-working and smart guy in his 30s who currently sits somewhere between the 50th and 90th centiles- what should he do maximise his chances of joining this club in the future?

General advice from personal experiences would be gratefully received. Hope this doesn't sound too cheeky!

innovate

How do they define 'wealth'? And what's a 'household' in this stat?

I wouldn't personally give a flying saucer about where I stand in some statistic - what counts for me is that I can afford a comfortable (by my standards) life, until the end of my days.

This would be my recommendation to anyone else - define to yourself what you want, then work on achieving it. Break down the total project into smaller, manageable pieces - but keep your overall goal in mind always.

caveman38

Some people will fall into this 10% "elite" group without feeling wealthy. They may arrive at this magic £1M figure by having bought a house in a nice part of London say, in the 70's. That may now be worth £700K and that person may be in his 50's. a middle manager on £50-60K and have a pension pot of £300K.
That person although he had £1M in assets (a term used in your article) yet live just a modest life.
Others in other parts of the country without pension pots and houses of less value may have a lot more expendable income and feel quite flush.

Lokolo

You should read The Millionaire Next Door.

racing_blue

caveman38 wrote: »

Some people will fall into this 10% "elite" group without feeling wealthy. They may arrive at this magic £1M figure by having bought a house in a nice part of London say, in the 70's. That may now be worth £700K and that person may be in his 50's. a middle manager on £50-60K and have a pension pot of £300K.
That person although he had £1M in assets (a term used in your article) yet live just a modest life.
Others in other parts of the country without pension pots and houses of less value may have a lot more expendable income and feel quite flush.

That's what I'm interested in really, the story.

My guess is that, just as you say, many (most?) in households this group will be professional couples in their 50s-60s who have accumulated large pensions and benefited from in increase in value of their home. Which on the face of it is quite a dull story, but then we are talking about people who have accumulated a LOT of economic clout- which I do find interesting.

I also wonder about the fast track stories out there: people who built and sold a business, or worked as investment bankers, or inherited a large amount, or maybe robbed a train...

I'd just love to hear some anecdotes of routes taken, & maybe to hear where the quicksand and blind alleys wait too.

Lokolo: I second that, having read that book. It is excellent. It is very centred in the US pre-2000 - which is not a criticism as many of the themes are timeless I suspect - but I'm particularly interested in the UK in the current day

caveman38

Lokolo wrote: »

You should read The Millionaire Next Door.

Adopting the practices of that book would be contrary to your signature.

iltisman

Why join that club, inflation is going to rip to reduce the UKs debt and interest on £1million is a bog cleaners wage.

Lokolo

caveman38 wrote: »

Adopting the practices of that book would be contrary to your signature.

Not neccessarily. My signature to me is more towards enjoying a life without having to overspend or spend frivolously.

I have a great life and love every second of it, but it doesn't mean I have to spend money to have it.

Milarky

The view from 1986:

Consider the career of someone now retiring from a senior position on the board of one of Britain's largest 100 corporations. Such a person would probably have begun his managerial career just after the Second World War and might in the late 1940s have been earning £200 per year. Moving rapidly ahead of his contemporaries he might twenty years later have expected to earn £15,000 per year; with promotion to the board and inflation in the 1970s this figure increases rapidly and he earns £40,000 or more for six or seven years before retiring with a peak salary of perhaps £80,000. Few people are as successful as this: there are perhaps twenty people starting work this year who can aspire to these heights.

Our hypothetical manager has fairly frugal tastes, and throughout his lifetime has reckoned to save around a quarter of his after-tax income. On retirement, the accumulated wealth of such a man would approach £200,000. Feeling, with some justice, that he has been unusually fortunate in his career and unusually thrifty in his actions, he may be somewhat surprised to discover that there are at least 100,000 people richer than he is, and that they control almost 20 per cent of all personal wealth. The example illustrates a central, but poorly realised, effect of the British tax system - but one which is an inevitable consequence of a system in which higher rates of tax on earned income are seen as a major redistributive device. There are a large number of very rich people in Britain, but the proportion of them who became rich as a result of personal savings from their own earnings is negligible.

Kay and King, The British Tax System 4th Ed OUP pp63

'Wealth' [I prefer the term 'economic inequality'] comes from the opportunities to self-enrich. Certain groups in society are particularly good at it.

racing_blue

Milarky wrote: »

The view from 1986:

Kay and King, The British Tax System 4th Ed OUP pp63

'Wealth' [I prefer the term 'economic inequality'] comes from the opportunities to self-enrich. Certain groups in society are particularly good at it.

Now THAT's what I'm talking about! Excellent bit of reading. Have you any more like this?? "Opportunities to self-enrich"- love it. Edit: PS that book is selling for 1p on amazon. Worth a flutter methinks.

Innovate wrote:

I wouldn't personally give a flying saucer about where I stand in some statistic - what counts for me is that I can afford a comfortable (by my standards) life, until the end of my days.

Point taken, however I'm pretty confindent that the households with the top 10% of wealth can choose a standard of life that I would find comfortable! It's a financial goal of sorts. I think perhaps a less fickle goal than "an income of £30k PA in retirement" and perhaps more measurable than "a detached house somewhere leafy near Waitrose"? Just musing, not really thought this right through

atush

we made it in by accident mostly. We built a large home, bigger than we could afford and paid as much as possible into pensions. The home appreciated dramatically, first due to the uplift from self build/conversion and then house prices rocketed from when we built in 1996. :j

we were so broke I had to buy carpets 6 months interest free and had to tile all the bathrooms myself.

But given we still live in the house, we haven't realised any gain.

So, buy a wreck and fix it up, or self build something grand.