The Perils Of Earning £100, 000 A Year

[guitarman001]

http://www.bbc.co.uk/news/magazine-11382591

Check out this side column - absolutely ridiculous. Average person spending £32k a year? £45k to break even? I've never heard so much rubbish, and from the Motley Fool!

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David Kuo, of investment advice website Motley Fool

The average person in the UK spends around £32,000 a year. This is made up of £25,000 on basic expenses (transport, food, clothing etc) and £7,000 on mortgage repayments.

The upshot is that the average household needs a gross salary of about £45,000 just to break even.

That is why, I reckon that the average person won't be happy unless they earn around £50,000 a year. However, it is may still be a hand-to-mouth existence.

A salary of £100,000 a year can make a huge difference. After tax, this works out at £65,310. And after average expenses, there should be around £33,310 a year left over.

Someone earning a salary of this size could retire in reasonable comfort provided they invest their disposable income carefully. They could amass a pension pot of around £550,000 after 10 years and almost £1.8m after 20 years.

Of course, this assumes that a person on £100,000 is prepared to live modestly, spend carefully and save diligently.

[schmunk]

I think it's not bad, actually.

I earn ca. £50,000, live in the South East and commute to London. My family pretty much leads a hand-to-mouth existence, as we're not currently able to save anything (except for my 5% pension contributions and £150/month for my children, which is funded by their child benefit).

schmunk

[ccc]

You need at least £100k per year to have a 'very well off' lifestyle in many areas of the UK.

To feel 'rich' ? I reckon £200k+ would be required per year.

[porca misèria]

You need at least £100k per year to have a 'very well off' lifestyle in many areas of the UK.

To feel 'rich' ? I reckon £200k+ would be required per year.

My, how things changed.

I felt rich when my improving fortunes saw me making £7k (gross) back in 2004 ...

And there's only one thing I want that costs more money than I have now I'm on approximately that £100k figure.

[fluffy666]

You need at least £100k per year to have a 'very well off' lifestyle in many areas of the UK.

To feel 'rich' ? I reckon £200k+ would be required per year.

Problem is, people tend to adjust their lifestyle up to match their income..

On the other hand, I doubt I'd want to travel to the moon more than a couple of times a year, so there is a limit to how much I could spend..

[JustYield]

I think 100K might be exactly the worst salary point of all.

[Executive Sadman]

Depends what they mean by hand to mouth. Many people seem pathologically incapable of going in a shop and not coming out with something, or walking past a starbucks without spending 6-7£ on some muddy water.

I dont have that problem.

[ccc]

My, how things changed.

I felt rich when my improving fortunes saw me making £7k (gross) back in 2004 ...

And there's only one thing I want that costs more money than I have now I'm on approximately that £100k figure.

All subjective I suppose. Depends on your defintion of 'well off' or 'rich'. For me 'well off' is someone who spends pretty much what they want but does have a think about the cost. 'Rich' is someone who can spend pretty much what they want and barely consider the cost.

I would consider someone well off as a person who could spend a lot on things they wanted, live very comfortably and save a good whack for the future every year without much concern or effort. I can't see anybody doing that without SERIOUS effort in this country for under £100k. Although I do live in a rather expensive area so that could be skewing things.

Problem is, people tend to adjust their lifestyle up to match their income..

On the other hand, I doubt I'd want to travel to the moon more than a couple of times a year, so there is a limit to how much I could spend..

Very true. All subjective. See above.

[Riedquat]

Apparently I need more than my income? I must be starving, yet the only big glaring overpriced thing that I can't afford is a house. Everything else that I want I seem to be able to get, and still save some of it, without going in to debt. Sounds like someone is ludicrously out of touch, and must be if they're spending 25k a year on food, transport, and clothing. Clothing, for heaven's sake? How much do you need for it to even make a noticeable contribution?

[19 year mortgage 8itch]

I think it's not bad, actually.

I earn ca. £50,000, live in the South East and commute to London. My family pretty much leads a hand-to-mouth existence, as we're not currently able to save anything (except for my 5% pension contributions and £150/month for my children, which is funded by their child benefit).

schmunk

Money goes a little further here, in the north, but broadly I'd agree, especially for a single income family.

The difference between those referred to in the article and someone like myself is that I lead the lifestyle I can afford rather than the one I want.

[Kyoto]

£100,000 sounds a lot but that's sliced to around £60k after taxes, NI etc.

£5k or £6k a month is nice and anybody should be able to live on it, but it doesn't put you on a different planet.

You still likely can't afford to buy a house, drive a brand new sports car, buy a place in the sun etc.

Whereas someone earning half as much who bought a stack of BTLs in 1990 is living like a lottery winner.

Hard work isn't worth it in our bubble economy, even if you climb the slippery slope to the top 1% or 2%.

[profitofdoom]

.

Of course, this assumes that a person on £100,000 is prepared to live modestly, spend carefully and save diligently.

And there's the rub.

[Pezerinno]

I live hand to mouth on £10k a year in the South East; do I win a prize?

[SNACR]

What's going to take a big chunk of any, even quite substantial, salary is kids in private education.

[porca misèria]

Apparently I need more than my income? I must be starving, yet the only big glaring overpriced thing that I can't afford is a house. Everything else that I want I seem to be able to get, and still save some of it, without going in to debt. Sounds like someone is ludicrously out of touch, and must be if they're spending 25k a year on food, transport, and clothing. Clothing, for heaven's sake? How much do you need for it to even make a noticeable contribution?

Exactly. The single person on £20k is not so different from the single person on £100k. Both can afford everything you want for regular life, except for a nice house. Clothes in particular are cheaper now even in £ terms than when average incomes were £5k/year.

Though I guess if you hit that £100k relatively early in life, you can save and eventually get that elusive house!

[guitarman001]

I've got to say I do like sitting down with a cider - I do like the taste of it. But the price is shocking.

[profitofdoom]

I say the same about £4.50 pints of fizzy amber shite.

That's maybe why pubs are failing.

A fortnight back a friend and myself shared an 18 pint pin from a local micro brewery.£29 (£1.60 a pint) for some of the nicest beer I have tasted.It lasted three sessions, so less than a fiver each per night.