Where do Wealthy people keep their money ?

sourcrates

I refer to the previous post from the forumite who has over 1Million in cash assets, but does not consider himself to be wealthy, I had to read that again a couple of times to let it sink in, I suppose it`s all about perspective, where you live, what you do for a living etc.

In the small east coast fishing village in which I was brought up, you were considered wealthy if you had curtains in your windows or wore clothes without holes in them.

I must say wealth of that magnitude has never graced my door, I`ve worked hard all my life, but never reached the upper echelons where my work has allowed me to save anywhere near that kind of money.

My sister on the other hand invested wisely, both in career, and in the Leeds property market, she recently sold her old town house for over 1Million pounds, that combined with salary for herself and her husband, both with Government jobs, has seen them retire pretty comfortably, and as far as I am aware, savings are spread out using ISA`s and other such saving plans, and of course cash in the bank.

Of course, the more super rich you are, the more diverse your financial planning must be.

VWPolecat

Follow what the Sunaks do, put your money in US Dollars. 

Albermarle

My sister on the other hand invested wisely, both in career, and in the Leeds property market, she recently sold her old town house for over 1Million pounds, that combined with salary for herself and her husband, both with Government jobs, has seen them retire pretty comfortably, and as far as I am aware, savings are spread out using ISA`s and other such saving plans, and of course cash in the bank.

Probably the money they have in ISA's and other savings/investments, pales into insignificance compared to the value of their government pensions. Although these will not have an actual value, they have a notional value. A typical middle ranking government worker, with 30 years service is sitting on a pension probably worth around three quarters of a Million Pounds ( and they have two) + property proceeds. So probably they are more in the Couple of Million league

So for a couple who do not have  public sector pensions, then a Million Pounds is the 'necessary' amount to have a good , but not luxurious retirement.

It is all relative - the average Premier Footballer earns a Million Pounds every 6 weeks, and some a lot more.

Millyonare

Albermarle said:

Once one gets into the private banking world, of £1m liquid cash and above, excluding pensions, it tends to follow roughly the old mantra of "a third, a third, a third".
Cash = 34%
Property = 33%
Stockmarket = 33%

Presume this also excludes the family home, so only money in excess of the family home and pension? 

Yes, excluding the "core" family home and pension.

Grumpy_chap

bostonerimus said:

Millyonare said:

Once one gets into the private banking world, of £1m liquid cash and above, excluding pensions, it tends to follow roughly the old mantra of "a third, a third, a third".

Cash = 34%
Property = 33%
Stockmarket = 33%

As my net worth has increased the proportion of cash has gone down as I've kept it at being able to cover 2 or 3 years of spending. There was a time when 6 months spending in cash was 33% of my net worth, now 3 years of cash spending is a tiny percentage.

It would seem as though there is potential for you to increase your spending to rebalance with your net worth...

There is possibly also a point where increased spending also increases net worth.  

A couple of months back, I saw a lovely watch in the local jewellers - it was a brand that I don't like as I generally associate the brand with rather "bling" and "in your face" money, but this watch was absolutely truly lovely (and more subtle). 
Knowing I could not afford it, I went in to ask the price anyway only to be told that the watch had only gone on display that morning and already sold, but the price was £50k.
That watch will hold or increase value.
My Garmin watch is worth zero once I unpack it.

Albermarle said:

So for a couple who do not have  public sector pensions, then a Million Pounds is the 'necessary' amount to have a good , but not luxurious retirement.

Yes, this is the cruel irony of the LTA.  It is set at barely more than a £1M (because we must punish "the rich", yet that will result in an income around £50k which is far from "rich".

bostonerimus

Albermarle said:

Raveloe said:

It is a good question and I agree with most of the posts here. My own experience and back-of-envelope calculations lead me to think that there is a point around the £5m net assets mark where it can become worthwhile to employ a wealth manager to preserve what you have and achieve future financial goals. Up to that point the wealth manager's nose in your trough consumes a disproportionate amount of what you have. Not a question that burdens me at the moment, but I am working on it.

As a related point, I have seen comments on the forum before, that your local IFA should be comfortable handling clients with up to two, or even three Million Pounds in assets. (excluding the family home ) Presumably because they can be mainly handled via conventional, fully regulated means. However when assets go above that then someone more specialised in true wealth management is probably needed, probably more familiar with unregulated investments, investing offshore etc.
 Not something though that worries me either !

When the numbers start to have many zeros after them, then taxation and legacy become big factors and those are specialized areas where professionals can be useful.

bostonerimus

Grumpy_chap said:

bostonerimus said:

Millyonare said:

Once one gets into the private banking world, of £1m liquid cash and above, excluding pensions, it tends to follow roughly the old mantra of "a third, a third, a third".

Cash = 34%
Property = 33%
Stockmarket = 33%

As my net worth has increased the proportion of cash has gone down as I've kept it at being able to cover 2 or 3 years of spending. There was a time when 6 months spending in cash was 33% of my net worth, now 3 years of cash spending is a tiny percentage.

It would seem as though there is potential for you to increase your spending to rebalance with your net worth...

There is possibly also a point where increased spending also increases net worth.  

A couple of months back, I saw a lovely watch in the local jewellers - it was a brand that I don't like as I generally associate the brand with rather "bling" and "in your face" money, but this watch was absolutely truly lovely (and more subtle). 
Knowing I could not afford it, I went in to ask the price anyway only to be told that the watch had only gone on display that morning and already sold, but the price was £50k.
That watch will hold or increase value.
My Garmin watch is worth zero once I unpack it.

Albermarle said:

So for a couple who do not have  public sector pensions, then a Million Pounds is the 'necessary' amount to have a good , but not luxurious retirement.

Yes, this is the cruel irony of the LTA.  It is set at barely more than a £1M (because we must punish "the rich", yet that will result in an income around £50k which is far from "rich".

I've never needed to spend money to be happy. I am considering buying a Grand Seiko, but my biggest expenses each year are giving money to my grand nieces and nephews. One grand niece used some of her money to buy tickets to see the RSC's production of "My Neighbour Totoro" at the Barbican and to pay for the hotel and train tickets...she's a star!

Grumpy_chap

bostonerimus said:

I've never needed to spend money to be happy. I am considering buying a Grand Seiko, but my biggest expenses each year are giving money to my grand nieces and nephews. One grand niece used some of her money to buy tickets to see the RSC's production of "My Neighbour Totoro" at the Barbican and to pay for the hotel and train tickets...she's a star!

I agree, giving to the Nieces and Nephews is a good way to spend as quite small sums can make a massive difference to them.

No need to spend to be happy, but why not do the things you would do to the best way you can - so best seats in the house rather than far away in the stalls?
There seem to be too many senior people that have managed to have a little bit left over, but still live rather miserly.

As for watches, in the price-point of the Grand Seiko, my choice would be the Cartier Santos.
The next step I'd make would be a Patek Phillippe Calatrava which I could look after for my Nephew.
Both are but dreams.

DoublePolaroid

bostonerimus said:

Grumpy_chap said:

bostonerimus said:

Millyonare said:

Once one gets into the private banking world, of £1m liquid cash and above, excluding pensions, it tends to follow roughly the old mantra of "a third, a third, a third".

Cash = 34%
Property = 33%
Stockmarket = 33%

As my net worth has increased the proportion of cash has gone down as I've kept it at being able to cover 2 or 3 years of spending. There was a time when 6 months spending in cash was 33% of my net worth, now 3 years of cash spending is a tiny percentage.

It would seem as though there is potential for you to increase your spending to rebalance with your net worth...

There is possibly also a point where increased spending also increases net worth.  

A couple of months back, I saw a lovely watch in the local jewellers - it was a brand that I don't like as I generally associate the brand with rather "bling" and "in your face" money, but this watch was absolutely truly lovely (and more subtle). 
Knowing I could not afford it, I went in to ask the price anyway only to be told that the watch had only gone on display that morning and already sold, but the price was £50k.
That watch will hold or increase value.
My Garmin watch is worth zero once I unpack it.

Albermarle said:

So for a couple who do not have  public sector pensions, then a Million Pounds is the 'necessary' amount to have a good , but not luxurious retirement.

Yes, this is the cruel irony of the LTA.  It is set at barely more than a £1M (because we must punish "the rich", yet that will result in an income around £50k which is far from "rich".

I've never needed to spend money to be happy. I am considering buying a Grand Seiko, but my biggest expenses each year are giving money to my grand nieces and nephews. One grand niece used some of her money to buy tickets to see the RSC's production of "My Neighbour Totoro" at the Barbican and to pay for the hotel and train tickets...she's a star!

Fantastic watches. Finishing that would put a Rolex to shame for a similar or lower outlay. Yet nobody will know except those who know. Do it. 

bostonerimus

Grumpy_chap said:

bostonerimus said:

I've never needed to spend money to be happy. I am considering buying a Grand Seiko, but my biggest expenses each year are giving money to my grand nieces and nephews. One grand niece used some of her money to buy tickets to see the RSC's production of "My Neighbour Totoro" at the Barbican and to pay for the hotel and train tickets...she's a star!

I agree, giving to the Nieces and Nephews is a good way to spend as quite small sums can make a massive difference to them.

No need to spend to be happy, but why not do the things you would do to the best way you can - so best seats in the house rather than far away in the stalls?
There seem to be too many senior people that have managed to have a little bit left over, but still live rather miserly.

As for watches, in the price-point of the Grand Seiko, my choice would be the Cartier Santos.
The next step I'd make would be a Patek Phillippe Calatrava which I could look after for my Nephew.
Both are but dreams.

I do get the good seats now, no student standby anymore. As far as watches, I like the Grand Seikos because they are a bit under the radar and understated. I like some of their dial finishes too and the Spring Drive is a real innovation. The wealthy would be looking at watches in a different league, but I think a lot of those look cheap and nasty.