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

Albermarle

MaxiRobriguez said:

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. 

I agree . although they do not all waste it on obvious frivolous things ,like  weekends in Paris etc . With some people money just seems to run through their hands like water . Not checking bills , being unaware of personal finance issues, chaotic lifestyle, needy friends/kids/relatives . Booking last minute holidays . Taxis everywhere . Etc Etc

MoJoeGo

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. 

I must have been the exception then as I never felt the need to keep up with the Joneses, or for that matter even ask what the Joneses were spending in the first place! 

Yes I'm aware that for others who work at a senior level in my industry (banking) that flash cars, big houses, private education, expensive holidays and meals are rife. But our kids have always been state schooled, the house has been paid off gradually over time, I've never had a flash car (at least by my definition!), and our meals out tend to be reasonably priced at local restaurants. 

Shaking my head a bit really at those that feel the need to conspicuously consume their wealth and then end up working till they drop. Life's short enough as it is...

EDIT: ok, you have me on the holidays (not that there have been many recently) - they are a weakness! But even then I try to use Avios to upgrade rather than pay cash, and haggle for the best deal.

Albermarle

MoJoeGo said:

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. 

I must have been the exception then as I never felt the need to keep up with the Joneses, or for that matter even ask what the Joneses were spending in the first place! 

Yes I'm aware that for others who work at a senior level in my industry (banking) that flash cars, big houses, private education, expensive holidays and meals are rife. But our kids have always been state schooled, the house has been paid off gradually over time, I've never had a flash car (at least by my definition!), and our meals out tend to be reasonably priced at local restaurants. 

Shaking my head a bit really at those that feel the need to conspicuously consume their wealth and then end up working till they drop. Life's short enough as it is...

EDIT: ok, you have me on the holidays (not that there have been many recently) - they are a weakness! But even then I try to use Avios to upgrade rather than pay cash, and haggle for the best deal.

Exactly the same for me .I think it also relates to your background . If you were not brought up in a family climate of conspicuous consumption , private schools etc and do not really socialise in that group , maybe you do not feel the need to follow that way of living , even if you could probably actually afford to .
Probably aspire more to a nice house in a nice area and a big pension/bank balance instead ! 

MaxiRobriguez

Albermarle said:

MoJoeGo said:

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. 

I must have been the exception then as I never felt the need to keep up with the Joneses, or for that matter even ask what the Joneses were spending in the first place! 

Yes I'm aware that for others who work at a senior level in my industry (banking) that flash cars, big houses, private education, expensive holidays and meals are rife. But our kids have always been state schooled, the house has been paid off gradually over time, I've never had a flash car (at least by my definition!), and our meals out tend to be reasonably priced at local restaurants. 

Shaking my head a bit really at those that feel the need to conspicuously consume their wealth and then end up working till they drop. Life's short enough as it is...

EDIT: ok, you have me on the holidays (not that there have been many recently) - they are a weakness! But even then I try to use Avios to upgrade rather than pay cash, and haggle for the best deal.

Exactly the same for me .I think it also relates to your background . If you were not brought up in a family climate of conspicuous consumption , private schools etc and do not really socialise in that group , maybe you do not feel the need to follow that way of living , even if you could probably actually afford to .
Probably aspire more to a nice house in a nice area and a big pension/bank balance instead ! 

And the same for me too.

I doubled my salary in the last three years but expenditure has stayed the same. Pension contributions went up 300% instead.

MoJoeGo

Well at least I'm on the right forum then. Interestingly though, my upbringing was much more happy-go-lucky with regards to money. When my father had it, we spent it. When we didn't, we hid from the milkman. I remember him once buying in cash, a brand new XR3i (I know, oozing class, right...?   ). Definitely an aspect of, if you spend it quickly enough, the taxman will never know...

I'm nothing at all like my parents!

Coveredinbees!!!!

If you want to do something for your kids that they won't be able to waste when they are 18 start them a pension. If I had the money that is 1 of the things I would do.

eskbanker

Coveredinbees!!!! said:

If you want to do something for your kids that they won't be able to waste when they are 18 start them a pension. If I had the money that is 1 of the things I would do.

OP hasn't been active on here since two weeks before the thread's last update five months ago!

Albermarle

eskbanker said:

Coveredinbees!!!! said:

If you want to do something for your kids that they won't be able to waste when they are 18 start them a pension. If I had the money that is 1 of the things I would do.

OP hasn't been active on here since two weeks before the thread's last update five months ago!

Interestingly the last poster 5 months ago has also been banned for some reason.

barnstar2077

Several people from this thread have been banned.  Are accounts being hacked, or are people just not getting along these days?

Merry Christmas everyone! :  )