Question for the wealthiest 10%... how?

jackyann

What I am a bit unclear on is how they work out what pensions are worth. According to some on this board, my final salary NHS pension would take £500,000 if I were to buy it as an annuity. Although adding my house & savings still wouldn't take me in to the top 10%, I really wouldn't be far off it (!)
However, I don't think of it like that, just that I have my house & savings and an income. Also - how do they calculate the worth of the State Pension?

darkvader

As many have pointed out, the easiest way to wealth if in employment all your life is good education. Most youngsters getting into the big firms start earning £30k and above from day 1. Starting at 21/22, by the time they reach 30, they are already earning north of £50k and only growing their career and skills.

To make more you have to give up more of your personal life. Colleagues earning over £100k work 60 hour weeks regularly, travel a lot and stay away from their families for weeks together - those who really want to enjoy life shy away from such work opting for lower income

That said, even on median incomes, it is not difficult to get those numbers. Take a married couple both working in good jobs, earn £5-6k a month tax free and end up saving just £2k every month - with the rest going for mortgage and a really good lifestyle, you are looking at saving £24k a year!!!

10 years gives you £240k. If you factor in couple of kids, it may take 15/20 years to get to £300k which together with the property they own puts them in the top bracket. I am not evening counting the pension pot growing alongside for the salaries they earn. I know many people in their early 30s earning in excess of £80k and on their path to good savings in 20 years time.

Our story - We are a married couple in our 30s with about £100k savings if I count everything in and busy planning our future - home, kids, car, dogs, nice lifestyle and yearly holidays. If we both have/stick to a job long term, we can definitely look to save £20k a year thus giving us a shot at having a decent pot in 20 years time - roughly £400k savings in cash/equities, a £350k property and a combined pension pot in excess of £250k - it is doable with proper planning and decent paying jobs. I could've gone into working for companies paying 6 figures but I'd rather not sell my soul to the devil and stick to enjoying my life with less stress and more smiles

DV

atypical

darkvader wrote: »

As many have pointed out, the easiest way to wealth if in employment all your life is good education. Most youngsters getting into the big firms start earning £30k and above from day 1. Starting at 21/22, by the time they reach 30, they are already earning north of £50k and only growing their career and skills.

Around 787,000 students graduated in 2012. The firms which you mention recruited around 11,000 graduates in 2012, or less than 1.5% of graduates.

It's near impossible without a good education, but you need a lot more than that!

gadgetmind

jackyann wrote: »

According to some on this board, my final salary NHS pension would take £500,000 if I were to buy it as an annuity.

That's about £28kpa at age 65 without anything for spouse on death or escalation.

You clearly do understand this, but many with generous final salary pensions (with linking and 50% (?) for spouse) don't realise how much capital it would take to afford this elsewhere.

My in-laws used be teachers and are now millionaires. They don't believe me regards the latter bit but it's true!

darkvader

atypical wrote: »

Around 787,000 students graduated in 2012. The firms which you mention recruited around 11,000 graduates in 2012, or less than 1.5% of graduates.

It's near impossible without a good education, but you need a lot more than that!

I dont disagree at all - it is a very small percentage but I gave it as an example. Gone is the time you can graduate in any course and expect a high paying job so along with education, choosing to study the right course and graduating with skills in demand is even more important - no longer the good old days where students can graduate merely on the course of their interests and land up with a high paying job or a lucrative career. Its either stick to what you love doing and not get the big bucks or get into a career and degree that holds sway in the market

Taking a more realistic example, even individual earnings of £40k in your mid 30s can help you get into the easy life bracket but it gets difficult when you marry up and require both partners to work in well paid jobs to make the moolah - not as easy as it used to be 15 years back but not impossible either.....

DV

gadgetmind

darkvader wrote: »

it gets difficult when you marry up and require both partners to work in well paid jobs to make the moolah

It's even more difficult when your partner won't go back to work because she's "too busy"!

squirrelchops

gadgetmind wrote: »

By historical standards we are all rich, wildly rich, with roofs over our heads, food in our bellies, and health care for free.

However, Maslow missed a trick, and the next level up seems to be booze, fags, Sky subscriptions and nail extensions.

http://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs

Fantastic!! I shall forever think of this when considering different theories I use in my job. By adding this next level you have helped answer a lot of questions I had about human behaviour!

jamesd

But you didn't click on the thanks button, so how can others see gadgetmind's thank count and provide appropriate levels of respect?

black_taxi_2

All of us cant be millionaires we can make decisions to achieve things we like.

A smaller flat---so you can eat at nice restaurants

A large home--so u can accommodate your family in later years--an when there children grow up--so your never lonely

mon-fri job lower wage---but u will always have time for family nights/weekends

Single/like to work long hours---for richer lifestyle

pay off debt/mortgage--so you have more disposable income an work less hours(that's what I'm planning)

atush

1 very negative factor for ppl without money behind them is jobs where they are expected to work for free for a while before they actually get paid. there's nothing wrong with being paid a low amount for a while when you have a good chances of progressing. but not being paid enough to live off will shut a lot of ppl out.

if you go back a few decades, i believe accountants had to pay a little during their training, though it then switched over to them being paid (and by now, it's a decent amount, even in training).

the only jobs I can think of there don't require pay are internships in media/fashion where it is too popular therefore too full of trust bunnies.

And my OH is a chartered acct who trained 4 decades ago and never paid a bean (and was paid). Now my oldest is a trainee and is paid a fair old whack for his age (plus pension and benefits).

Sorry,but you may be 50 years out of your time frame perhaps?