Have a high-paying job for the first time - what to do with excess income??

Billycock

csgohan4 said:

flopsy1973 said:

Just out of interest what job do people do to go from earning average income to 200k plus, do people mind sharing 

you don't have to have a blue collar job to have 200k, builders can easily earn that amount if they wanted. Really depends on your own skills and how motivated you are to upskill e.t.c

Did you manage the achievement yourself then?
From experience, it's not always what you know, but it's often who you know. 

Albermarle

flopsy1973 said:

Just out of interest what job do people do to go from earning average income to 200k plus, do people mind sharing 

The thread title is misleading . The OP had a high part time income and now has a very high full time income .

csgohan4

Billycock said:

csgohan4 said:

flopsy1973 said:

Just out of interest what job do people do to go from earning average income to 200k plus, do people mind sharing 

you don't have to have a blue collar job to have 200k, builders can easily earn that amount if they wanted. Really depends on your own skills and how motivated you are to upskill e.t.c

Did you manage the achievement yourself then?
From experience, it's not always what you know, but it's often who you know. 

Depends what sector. Obviously if you were friends with Hancock you would have got a job if you gave favors to him

My earning are increased from when I finished Uni, after 14 years now. So you would expect increases with promotion e.t.c

whether you earn 20k or 200k is all relative to be honest. 

thegentleway

flopsy1973 said:

Just out of interest what job do people do to go from earning average income to 200k plus, do people mind sharing 

All my friends that earn over £200k are either bankers or lawlers. They started on significantly more than average income though. 

nobler

You could invest in property (standard rental, students or holiday) and pay agents to manage it for you if you don't have the time or inclination yourself. A holiday cottage that you would use sometimes yourself but rent out the rest of time might be a particularly attractive option. Also it ought to be possible to put money in trust til your kids are older than 18. My husband and I specified funds to be held in trust til our child is 25 in our wills.

Nebulous2

MaxiRobriguez said:

You're never going to have financial difficulties from here regardless of what you do if you have even a modicum of common sense - you'd be putting >£100k into investments annually. You'd probably end up with a million in investments even if you started from £0 on that trajectory after 7 years or so.

I think you underestimate how much pressure there can be to keep up with other people in your circle. The Micawber principle applies to high earners as well as the rest of us. I spent a miserable year as a financial adviser in the early 90s. I met a couple who were earning £120k between them, him £80k full-time and her £40k part-time. They found themselves unable to live on it. The big house, the school fees, the cleaner, the expensive cars all sucked money away. Then there were the treats. If we were in need of a boost we would go out for a meal. They would have a weekend in Paris. They appreciated they were fortunate, and shouldn't be in the position they were in, but they couldn't find a way out of it. 

When I left school a family friend told me, its not what you make that's important, its what you do with it. That was one of the best pieces of advice I ever received. While its easier to save if you are earning a lot, it certainly isn't a given. 

sammyjammy

Cancel child benefit!

Mature-Student

Please do find an IFA you can work with. Especially as your income is so much higher than your partner's, you need to ensure you have appropriate income, illness and life protection in place. Also to ensure you don't inadvertently pay too much tax e.g. exceeding annual or lifetime allowance for pension pot (with additional restrictions on annual allowance for high earners which you may fall into), putting benefits from protection policies into Trust, etc. NB Employer pension contributions count towards the annual allowance. And to put plans in place to minimise inheritance tax. 
I hope if you've been a higher rate taxpayer for some years and making your own pension contributions you've been claiming back the additional 20% tax relief via self-assessment as the government only pay the basic 20% to the pension provider. Exception is if the contributions are deducted from your salary before tax is calculated.
Other options include:
- Starting pension savings for the kids. You can pay in £2,800 pa for each (£3,600 after addition of tax relief), and even if you just do that until after Uni, say 15 years, with 40 years returns that may well be over £100k each. Which under current rules 25% will be available tax free.
- Put interest bearing savings not in ISA type accounts into husbands name to reduce tax on the interest
And make memories both as a couple and as a family.

squirrelchops2

Nebulous2 said:

MaxiRobriguez said:

You're never going to have financial difficulties from here regardless of what you do if you have even a modicum of common sense - you'd be putting >£100k into investments annually. You'd probably end up with a million in investments even if you started from £0 on that trajectory after 7 years or so.

I think you underestimate how much pressure there can be to keep up with other people in your circle. The Micawber principle applies to high earners as well as the rest of us. I spent a miserable year as a financial adviser in the early 90s. I met a couple who were earning £120k between them, him £80k full-time and her £40k part-time. They found themselves unable to live on it. The big house, the school fees, the cleaner, the expensive cars all sucked money away. Then there were the treats. If we were in need of a boost we would go out for a meal. They would have a weekend in Paris. They appreciated they were fortunate, and shouldn't be in the position they were in, but they couldn't find a way out of it. 

When I left school a family friend told me, its not what you make that's important, its what you do with it. That was one of the best pieces of advice I ever received. While its easier to save if you are earning a lot, it certainly isn't a given. 

This is so true nebulous2. I haven't ever earnt that kind of money but I have earnt double what I am earning now (I am part time and in a lower role). However, I have more money left each month despite earning half as I now have no stress and hence am not spending my wages each week on things to make me feel either better or because I feel I deserved it just for surviving the week. 

Luckily I have never been part of that circle and by my job and earnings I'll never be in it. However what I love and what people don't know if that I may only earn £20k a year but I own outright the house I live in,  I have a rental property, own land and am in the process of  building housing on it and have £100k in the bank - all the while I drive about in my 11 year old car and just do my day to day stuff. I am blessed but have never felt the need to flash it or keep up with anyone else. 

MaxiRobriguez

Nebulous2 said:

MaxiRobriguez said:

You're never going to have financial difficulties from here regardless of what you do if you have even a modicum of common sense - you'd be putting >£100k into investments annually. You'd probably end up with a million in investments even if you started from £0 on that trajectory after 7 years or so.

I think you underestimate how much pressure there can be to keep up with other people in your circle. The Micawber principle applies to high earners as well as the rest of us. I spent a miserable year as a financial adviser in the early 90s. I met a couple who were earning £120k between them, him £80k full-time and her £40k part-time. They found themselves unable to live on it. The big house, the school fees, the cleaner, the expensive cars all sucked money away. Then there were the treats. If we were in need of a boost we would go out for a meal. They would have a weekend in Paris. They appreciated they were fortunate, and shouldn't be in the position they were in, but they couldn't find a way out of it. 

When I left school a family friend told me, its not what you make that's important, its what you do with it. That was one of the best pieces of advice I ever received. While its easier to save if you are earning a lot, it certainly isn't a given. 

Again, the "common sense" bit applies here. The OP has £100k that can be invested annually. If the OP blows that on frivolous things in lieu of getting any sort of safety net then that is their personality failure, not a failure of the plan.

I have absolutely no sympathy for people on six figures who are unable to put themselves in a comfortable position when so many others scraping by day to day will never be in a position to save for their future.