How Wealthy are you?

dividendhero

ProDave wrote: »

do 10% really nave a net worth of under £3?

Sounds feasible. A fifth of the UK population live in rented accomodation, debts worth more than your personal possessions but you under £3 net worth

MaxiRobriguez

dividendhero wrote: »

Sounds feasible. A fifth of the UK population live in rented accomodation, debts worth more than your personal possessions but you under £3 net worth

AKA mostly young people.

MaxiRobriguez

ProDave wrote: »

do 10% really nave a net worth of under £3?

And according to that I might just scrape into the top 10% which I find astonishing, given that I hardly have 2 pennies to rub together at the moment.

I've got £24 in the current account which is what I use day to day. I feel bordering on broke.

But then I've got an offset mortgage I can withdraw from, which covers almost all the equity in the house, plus S+S ISA, plus employee pension, which puts me comfortably in the top 25% of all and probably in the top 0.1% of my age range - I just don't want to consider those assets as cash/day-to-day things.

This forum is likely an echo chamber - we're all relatively smart here and do financial planning. Most people scrape by without any sort of idea on what they're doing or how they could change their situation. Money is there to be spent, not once considered an asset to most.

Albermarle

do 10% really nave a net worth of under £3?

I imagine the bottom 5% have negative wealth .
If you look at the background info for the bottom 10% , they have no property wealth , negative financial wealth ( in debt , no savings or pension) ) but they have a small amount of physical wealth ( car , furniture, wedding ring , TV etc ) .

eskbanker

MaxiRobriguez wrote: »

This forum is likely an echo chamber - we're all relatively smart here and do financial planning. Most people scrape by without any sort of idea on what they're doing or how they could change their situation. Money is there to be spent, not once considered an asset to most.

Not everyone here is on the same page!

I was posting on another thread yesterday evening in response to a poster who contended that a 28 year old earning six figures was 'odd' for saving more than half of it ("Not much point having £2 mil in the bank if you only need £1k a month to live"):

https://forums.moneysavingexpert.com/discussion/comment/75993234#Comment_75993234

DairyQueen

Audaxer wrote: »

I can understand that, but I've been wondering how you run down capital without the risk running out of money if you live longer than expected?

Use a variable withdrawal rate strategy. Hold cash in reserve to suspend drawdown if necessary. Increase withdrawal in good years. Have sufficient guaranteed income to cover all basic expenses.

We will do out utmost to empty the coffers. Property equity will be the last to be accessed - for care home fees if necessary, or to provide additional capital (equity release/downsizing) if the nasty stuff really hits the wall markets-wise, or if one of us is sufficiently (un?)lucky to see our 100th birthday.

DairyQueen

MaxiRobriguez wrote: »

Your children face much harder challenges than you will ever have done is the unfortunate truth.

I was using poetic licence as I don't have children. However, OH has two (both in their late 20s) and I have two minor nephews on whose behalf I have been investing since the eldest was born. The latter will receive a chunk of cash when they reach 18. This will be sufficient (I hope) to pay for something significant to help them toward independence.

OH's children have benefited from their father's hard work and sacrifice. Each has received the very best start in life that he could provide. Each has been privately educated and has been funded through university. The eldest also received support through two-years of post graduate education. The youngest received the equivalent as a deposit on her (and fiance's) first home. We are also paying a significant sum toward youngest's wedding. Neither have student loans. Both live in London and have established good careers.

This has been achieved at significant cost to OH's pre-retirement lifestyle, and willingly given.

OH and I had no such financial start in life. Our house deposits were financed by ourselves. We worked throughout first degrees and OH worked full-time whilst studying part-time for several years to achieve his post-grad qualifications.

I doubt very much that my stepds will ever face the financial challenges that we faced. Their challenges will be different but they are starting from a much better financial position than we did.

Their dad decided that their 'inheritance' would be better invested by him providing a significant leg-up throughout their teens and 20s. That leg-up has supported them into decent careers and property ownership in the most expensive area of the UK. That leg-up has been achieved at a much-reduced standard of living during OH's peak earning years.

We will, of course, provide help for stepds and nephews when/if they experience financial crisis. Other than that, nephews are foremost the responsibility of their parents, and it's high time that OH began reaping some personal benefit from all of those decades of slog.

Stepds are aware that any inheritance they receive will be a bonus. They are fine with that. They cannot rely on inheritance to protect their retirement and that should incentivise them to save.

The reality is that there is likely to be property equity when the last of us dies. Anything left will be split four ways. However, who knows what challenges we will face in retirement? If we both end-up in a care home then it could exhaust our assets to almost zero. Bottom line is that we will not be ring-fencing money to provide inheritance.

capital0ne

Albermarle wrote: »

Property is included - physical possessions means cars, furniture , jewellery etc
Here is a link to the original ONS report
https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/wealthingreatbritainwave5/2014to2016

Okay I stand corrected - thanks and I'm wealthier by about £200k - in top 5% now :-)

Sir_Robin

rnj wrote: »

"The wealthiest person is the person who wants the least, not the person who has the most"
Said by a poor person presumably, although I try to take comfort in that quote.

“Wealth consists not in having great possessions, but in having few wants”. -Epictetus 2k years ago. Ex-slave.

OldMusicGuy

MaxiRobriguez wrote: »

Your children face much harder challenges than you will ever have done is the unfortunate truth.

Don't disagree with that when it comes to getting on the property ladder. Which is part of the reason that we are using our property wealth as part of our retirement planning. We are downsizing now (aged 62) to release equity from our current place. We will give 50% of the equity to our son to help him get on the property ladder, the rest goes into our retirement funds.

We have told him to expect nothing when we die as we plan to spend everything that is left and run our capital to zero. Partly that will be achieved by annuitizing savings/pensions as we get older.