Budgeting for the ‘Wealthy’

[mc2fool]

Somewhere in this thread someone mentioned Primark. Well, what a store. Wife has very small feet and needs a bally type shoe and visited the Westfield shopping Center near Shepherds Bush. Never been there before. What a fabulous place! Anyway, sauntered in and to cut a long story short, walked out with 7 pairs of great looking shoes that fit her perfectly and damn comfortable. Price. £4.00 each. Are you kidding me! And then when I looked at the bill, they gave me an extra 50p off on two pairs( I have no idea why). Place was packed and saw many other items not suitable for where we live, but couldn't believe the displays, presentation and in many cases, the quality for quite frankly, ridiculous prices.

So impressed that 2 weeks later jumped into a taxi from where I was staying and went to their Oxford Street branch at 8.30 a.m in the morning. The place was already busy, mostly with middle Eastern clients buying as if there's no tomorrow. So, brt another 7 pairs of shoes, leggings and bits and pieces plus a wheelie with rotating wheels(£29.95 WTF! great quality) to store just the shoes and stuff for the plane.

But what really was the icing on the cake when at Wilton's(not your cheapest restaurant but one of my favs) a lady came up to my wife and commented how expensive her shoes looked and where did she get them from? I was just about to shout out, "Primark" when I received a dirty look from the wife. Think she mumbled something.
Too funny.

Do they sell pyjama bottoms?

What they don't sell are track suit tops and bottoms that match. Oh yeah, they have black, blue, grey, etc, tops, and black, blue, grey, etc, bottoms, but different shades of black, blue, grey, etc...

[AsleepInYorkshire]

Somewhere in this thread someone mentioned Primark. Well, what a store. Wife has very small feet and needs a bally type shoe and visited the Westfield shopping Center near Shepherds Bush. Never been there before. What a fabulous place! Anyway, sauntered in and to cut a long story short, walked out with 7 pairs of great looking shoes that fit her perfectly and damn comfortable. Price. £4.00 each. Are you kidding me! And then when I looked at the bill, they gave me an extra 50p off on two pairs( I have no idea why). Place was packed and saw many other items not suitable for where we live, but couldn't believe the displays, presentation and in many cases, the quality for quite frankly, ridiculous prices.

So impressed that 2 weeks later jumped into a taxi from where I was staying and went to their Oxford Street branch at 8.30 a.m in the morning. The place was already busy, mostly with middle Eastern clients buying as if there's no tomorrow. So, brt another 7 pairs of shoes, leggings and bits and pieces plus a wheelie with rotating wheels(£29.95 WTF! great quality) to store just the shoes and stuff for the plane.

But what really was the icing on the cake when at Wilton's(not your cheapest restaurant but one of my favs) a lady came up to my wife and commented how expensive her shoes looked and where did she get them from? I was just about to shout out, "Primark" when I received a dirty look from the wife. Think she mumbled something.
Too funny.

I bought a pair of Doc Marten shoes in 2015. "Shoes for Life" they were called. When they wear out I can take them back, pay £35 and get another pair. They cost £140. They haven't worn out and I have worn them frequently. I find them good for my workplace as I am often sat in a site office somewhere.

I did some work for a company recently that builds bespoke executive homes ranging from £800K to £1.8m. One of the customers surprised me. He wanted an outside bar area where he could cook BBQ's, have a drink and enjoy summertime. He spent over £70K on it. Whilst it looked great I just couldn't work out why anyone would spend that sort of money on what appeared to be nothing more than a form of outward display. A statement. It wasn't connected to business in any way as he goes abroad to carry out most of his business deals. He's a hard working man and is welcome to spend what he has earned how he wants. I have no truck with that. I just felt he'd worked himself into a corner of life where he feels the need to display. That aside he was a humble kind person and always found time to speak to me. And perhaps that's something I should embrace.

AiY(D)

[stewamax]

I usually associate the term "wealthy" with assets and net worth, rather than income....
Again without wealth there is always the risk of a job loss and a sudden fall in income with no reduction in costs.

Agreed - but 'assets' need categorising.
If I lose my job, a buffer of short-term investments can be realised to tide me over.
But my hypothetical 5-storey house (with parking) in Chelsea would otherwise need to be liquidated very quickly and 'quickly' may mean 'at a big loss'.
Even the legendary king of the bond market John Meriwether ran into the lack-of-liquidity buffers with LTCM.

[Dod101]

Somewhere in this thread someone mentioned Primark. Well, what a store. Wife has very small feet and needs a bally type shoe and visited the Westfield shopping Center near Shepherds Bush. Never been there before. What a fabulous place! Anyway, sauntered in and to cut a long story short, walked out with 7 pairs of great looking shoes that fit her perfectly and damn comfortable. Price. £4.00 each. Are you kidding me! And then when I looked at the bill, they gave me an extra 50p off on two pairs( I have no idea why). Place was packed and saw many other items not suitable for where we live, but couldn't believe the displays, presentation and in many cases, the quality for quite frankly, ridiculous prices.

So impressed that 2 weeks later jumped into a taxi from where I was staying and went to their Oxford Street branch at 8.30 a.m in the morning. The place was already busy, mostly with middle Eastern clients buying as if there's no tomorrow. So, brt another 7 pairs of shoes, leggings and bits and pieces plus a wheelie with rotating wheels(£29.95 WTF! great quality) to store just the shoes and stuff for the plane.

But what really was the icing on the cake when at Wilton's(not your cheapest restaurant but one of my favs) a lady came up to my wife and commented how expensive her shoes looked and where did she get them from? I was just about to shout out, "Primark" when I received a dirty look from the wife. Think she mumbled something.
Too funny.

I no longer hold shares in ABF, the parent of Primark, but it sounds as if you ought to be considering buying some of their shares.

Dod

[Urbandreamer]

I usually associate the term "wealthy" with assets and net worth, rather than income....
Again without wealth there is always the risk of a job loss and a sudden fall in income with no reduction in costs.

Agreed - but 'assets' need categorising.
If I lose my job, a buffer of short-term investments can be realised to tide me over.
But my hypothetical 5-storey house (with parking) in Chelsea would otherwise need to be liquidated very quickly and 'quickly' may mean 'at a big loss'.
Even the legendary king of the bond market John Meriwether ran into the lack-of-liquidity buffers with LTCM.

Not if you sold your hypothetical stock portfolio first, or for that matter if hypothetically your stock portfolio produced enough income to live upon and you only worked for the fun of it.

That's the trouble with hypotheticals, they don't match individual real world situations. I have decided to retire soon, hence will be losing income from work. Others on this thread may have already done so. Yet others have not yet amassed the funds to allow them to give up work.

I suspect that is the distinction that Lootman was making. The "wealthy" have no need to work, those with high incomes from work may not yet be wealthy, because they have not built up the funds.

Personally, I think that some form of budgeting is required, regardless of income or wealth. Just like, some form of diet is required if you are not to die of starvation.

How you do these things depends upon what you chose. I chose to decide what I wish to spend on and invest the rest. I evaluate the "utility" of what I spend and make choices. I resoled a pair of boots at the weekend. Not because it made financial sense to do so myself, but for the entertainment that I got.

Of course, some people's idea of budgeting is to spend until they can't spend any more, while others find themselves short of income and with limited choices.

Ps, It's a while ago, but we budgeted for children. Yes, including lost income and nursery fees.

[scrumpyjack]

https://money.usnews.com/money/personal ... re-defined

In the US a survey indicated that you needed $2.2m to be considered wealthy, but this article says, and I agree, that being wealthy is in the eye of the beholder. One's view of what it means is coloured by one's own experiences and views.

But certainly 'wealthy' is considered in terms of net assets, not income.

[servodude]

Somewhere in this thread someone mentioned Primark. Well, what a store. Wife has very small feet and needs a bally type shoe and visited the Westfield shopping Center near Shepherds Bush. Never been there before. What a fabulous place! Anyway, sauntered in and to cut a long story short, walked out with 7 pairs of great looking shoes that fit her perfectly and damn comfortable. Price. £4.00 each. Are you kidding me! And then when I looked at the bill, they gave me an extra 50p off on two pairs( I have no idea why). Place was packed and saw many other items not suitable for where we live, but couldn't believe the displays, presentation and in many cases, the quality for quite frankly, ridiculous prices.

So impressed that 2 weeks later jumped into a taxi from where I was staying and went to their Oxford Street branch at 8.30 a.m in the morning. The place was already busy, mostly with middle Eastern clients buying as if there's no tomorrow. So, brt another 7 pairs of shoes, leggings and bits and pieces plus a wheelie with rotating wheels(£29.95 WTF! great quality) to store just the shoes and stuff for the plane.

But what really was the icing on the cake when at Wilton's(not your cheapest restaurant but one of my favs) a lady came up to my wife and commented how expensive her shoes looked and where did she get them from? I was just about to shout out, "Primark" when I received a dirty look from the wife. Think she mumbled something.
Too funny.

I no longer hold shares in ABF, the parent of Primark, but it sounds as if you ought to be considering buying some of their shares.

Dod

...or at least their shoes?!

[mc2fool]

https://money.usnews.com/money/personal ... re-defined

In the US a survey indicated that you needed $2.2m to be considered wealthy, but this article says, and I agree, that being wealthy is in the eye of the beholder.

He who knows he has enough is rich. Lao Tzu.

[Lootman]

https://money.usnews.com/money/personal ... re-defined

In the US a survey indicated that you needed $2.2m to be considered wealthy, but this article says, and I agree, that being wealthy is in the eye of the beholder. One's view of what it means is coloured by one's own experiences and views.

But certainly 'wealthy' is considered in terms of net assets, not income.

I suspect that many Americans with a net worth of $2.2 million might not consider themselves to be wealthy, especially if they lived in an expensive place like New York City or San Francisco.

Perhaps a clue is to look at the nil rate band for estate tax in the US, on the basis that that is supposed to be a tax that applies only to the rich. For 2022 it is $12 million for an individual.

Of course by that argument you are wealthy in the UK if you have just £325,000 to your name.

[scotview]

Where does a Defined Benefit pension fit into the calculation ? Thanks.

[Adamski]

Where does a Defined Benefit pension fit into the calculation ? Thanks.

DB valuation can be anything from 20 times annual income, to 30 times. Lucky if you've got one!!

[bungeejumper]

I did some work for a company recently that builds bespoke executive homes ranging from £800K to £1.8m. One of the customers surprised me. He wanted an outside bar area where he could cook BBQ's, have a drink and enjoy summertime. He spent over £70K on it. Whilst it looked great I just couldn't work out why anyone would spend that sort of money on what appeared to be nothing more than a form of outward display. A statement. It wasn't connected to business in any way as he goes abroad to carry out most of his business deals.

Maybe it was a statement intended for his own ears and eyes? "I've always promised myself that if I achieved [my life goals, my second million etc] I'd splash out some stupid money on something that didn't have to do anything except make me feel good".

I can relate to that. Five years after I cut loose and went freelance, I did a little trophy buying of my own. It reminded me of all the reasons why I'd worked so bloody hard to go solo. Others buy fast cars, I guess? Or else they take up with expensive women?

Or, like one of our neighbours, they build a full cinema in the basement so that they can sit all alone in the dark, pretending they're living it up somewhere else.

BJ

[Adamski]

I'm on about average UK earnings £25k pa pre tax, so £1600 per month net. Have DDs £500, leave £1000 for the month. Which is plenty for me, but... I don't have a mortgage, kids or holidays, so outgoings low. Just cut cloth according to your income.

[UncleEbenezer]

https://money.usnews.com/money/personal ... re-defined

In the US a survey indicated that you needed $2.2m to be considered wealthy, but this article says, and I agree, that being wealthy is in the eye of the beholder. One's view of what it means is coloured by one's own experiences and views.

But certainly 'wealthy' is considered in terms of net assets, not income.

I suspect that many Americans with a net worth of $2.2 million might not consider themselves to be wealthy, especially if they lived in an expensive place like New York City or San Francisco.

Perhaps a clue is to look at the nil rate band for estate tax in the US, on the basis that that is supposed to be a tax that applies only to the rich. For 2022 it is $12 million for an individual.

Of course by that argument you are wealthy in the UK if you have just £325,000 to your name.

You only need £250k to be legally a High Net Worth individual.

Your entitlement to the basic state pension is worth well over £250k.

Therefore we are all wealthy. QED.

[Alaric]

Where does a Defined Benefit pension fit into the calculation ? Thanks.

DB valuation can be anything from 20 times annual income, to 30 times.

Reducing with age though. The same applies to the State Pension.