Earning £100.000 per annum.
Discussion
From feature on the BBC Website:-
BBC News Magazine
It has become the benchmark for a generous salary. So why do its recipients complain that earning £100,000 a year is an expensive business?
In those idle daydreams about the perfect job, that fantasy promotion, it is a wage that - for the overwhelming majority of us - will do very nicely indeed.
An annual income of £100,000 is enough to put a recipient comfortably within the top 2% of all earners, and the figure has become a key indicator that the recipient is a high-flier.
The BBC's Panorama survey of the best-remunerated public servants took £100,000 as its yardstick - and it found that some 38,045 state employees take home that amount or more each year. Going by official figures, that leaves about 545,000 privately employed people earning £100,000 or more per year.
It is a sum that puts one within touching distance of the prime minister's earning power - David Cameron having taken a a 5% pay cut upon assuming office, bringing his salary to £142,500.
But what is it actually like to earn such an amount - generous beyond the imagination of most Britons, more than sufficient to guarantee a comfortable lifestyle, yet scarcely enough on which to fund an early retirement?
One of those who knows, and found the experience wanting, is Geraint Anderson, 38, who was earning a base salary of £120,000 and a bonus of £500,000 by the time he left investment banking after 12 years in the City.
Anderson, who documented how he became disillusioned with his lifestyle in an anonymous newspaper column and his book Cityboy: Beer and Loathing in the Square Mile, indulged in many of the cliches for which the sector has become notorious.
But he says earning such figures skews one's expectations of what is a normal lifestyle, and ultimately robs high earners of the freedom they believe money will bring.
"It's like a gilded cage," he says.
"They earn huge amounts but they have the massive mortgage, they have the high-maintenance trophy wife, they have the kids at Harrow - then they wake up on their 50th birthday and think, 'What a waste of a life.'
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.
"They get into this culture where their worth is valued by how much they earn, so they work ridiculous hours. I'd rather earn £25,000, have the kids at a local school and not owe anyone anything."
Interesting piece,
bearing in mind many premiership footballers earn this and MORE per WEEK, although in their case it is a short career.....
BBC News Magazine
It has become the benchmark for a generous salary. So why do its recipients complain that earning £100,000 a year is an expensive business?
In those idle daydreams about the perfect job, that fantasy promotion, it is a wage that - for the overwhelming majority of us - will do very nicely indeed.
An annual income of £100,000 is enough to put a recipient comfortably within the top 2% of all earners, and the figure has become a key indicator that the recipient is a high-flier.
The BBC's Panorama survey of the best-remunerated public servants took £100,000 as its yardstick - and it found that some 38,045 state employees take home that amount or more each year. Going by official figures, that leaves about 545,000 privately employed people earning £100,000 or more per year.
It is a sum that puts one within touching distance of the prime minister's earning power - David Cameron having taken a a 5% pay cut upon assuming office, bringing his salary to £142,500.
But what is it actually like to earn such an amount - generous beyond the imagination of most Britons, more than sufficient to guarantee a comfortable lifestyle, yet scarcely enough on which to fund an early retirement?
One of those who knows, and found the experience wanting, is Geraint Anderson, 38, who was earning a base salary of £120,000 and a bonus of £500,000 by the time he left investment banking after 12 years in the City.
Anderson, who documented how he became disillusioned with his lifestyle in an anonymous newspaper column and his book Cityboy: Beer and Loathing in the Square Mile, indulged in many of the cliches for which the sector has become notorious.
But he says earning such figures skews one's expectations of what is a normal lifestyle, and ultimately robs high earners of the freedom they believe money will bring.
"It's like a gilded cage," he says.
"They earn huge amounts but they have the massive mortgage, they have the high-maintenance trophy wife, they have the kids at Harrow - then they wake up on their 50th birthday and think, 'What a waste of a life.'
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.
"They get into this culture where their worth is valued by how much they earn, so they work ridiculous hours. I'd rather earn £25,000, have the kids at a local school and not owe anyone anything."
Interesting piece,
bearing in mind many premiership footballers earn this and MORE per WEEK, although in their case it is a short career.....A vacationing American businessman standing on the pier of a quaint coastal fishing village in southern Mexico watched as a small boat with just one young Mexican fisherman pulled into the dock. Inside the small boat were several large yellowfin tuna. Enjoying the warmth of the early afternoon sun, the American complimented the Mexican on the quality of his fish.
"How long did it take you to catch them?" the American casually asked.
"Oh, a few hours," the Mexican fisherman replied.
"Why don't you stay out longer and catch more fish?" the American businessman then asked.
The Mexican warmly replied, "With this I have more than enough to support my family's needs."
The businessman then became serious, "But what do you do with the rest of your time?"
Responding with a smile, the Mexican fisherman answered, "I sleep late, play with my children, watch ballgames, and take siesta with my wife. Sometimes in the evenings I take a stroll into the village to see my friends, play the guitar, sing a few songs..."
The American businessman impatiently interrupted, "Look, I have an MBA from Harvard, and I can help you to be more profitable. You can start by fishing several hours longer every day. You can then sell the extra fish you catch. With the extra money, you can buy a bigger boat. With the additional income that larger boat will bring, before long you can buy a second boat, then a third one, and so on, until you have an entire fleet of fishing boats."
Proud of his own sharp thinking, he excitedly elaborated a grand scheme which could bring even bigger profits, "Then, instead of selling your catch to a middleman you'll be able to sell your fish directly to the processor, or even open your own cannery. Eventually, you could control the product, processing and distribution. You could leave this tiny coastal village and move to Mexico City, or possibly even Los Angeles or New York City, where you could even further expand your enterprise."
Having never thought of such things, the Mexican fisherman asked, "But how long will all this take?"
After a rapid mental calculation, the Harvard MBA pronounced, "Probably about 15-20 years, maybe less if you work really hard."
"And then what, señor?" asked the fisherman.
"Why, that's the best part!" answered the businessman with a laugh. "When the time is right, you would sell your company stock to the public and become very rich. You would make millions."
"Millions? Really? What would I do with it all?" asked the young fisherman in disbelief.
The businessman boasted, "Then you could happily retire with all the money you've made. You could move to a quaint coastal fishing village where you could sleep late, play with your grandchildren, watch ballgames, and take siesta with your wife. You could stroll to the village in the evenings where you could play the guitar and sing with your friends all you want."
"How long did it take you to catch them?" the American casually asked.
"Oh, a few hours," the Mexican fisherman replied.
"Why don't you stay out longer and catch more fish?" the American businessman then asked.
The Mexican warmly replied, "With this I have more than enough to support my family's needs."
The businessman then became serious, "But what do you do with the rest of your time?"
Responding with a smile, the Mexican fisherman answered, "I sleep late, play with my children, watch ballgames, and take siesta with my wife. Sometimes in the evenings I take a stroll into the village to see my friends, play the guitar, sing a few songs..."
The American businessman impatiently interrupted, "Look, I have an MBA from Harvard, and I can help you to be more profitable. You can start by fishing several hours longer every day. You can then sell the extra fish you catch. With the extra money, you can buy a bigger boat. With the additional income that larger boat will bring, before long you can buy a second boat, then a third one, and so on, until you have an entire fleet of fishing boats."
Proud of his own sharp thinking, he excitedly elaborated a grand scheme which could bring even bigger profits, "Then, instead of selling your catch to a middleman you'll be able to sell your fish directly to the processor, or even open your own cannery. Eventually, you could control the product, processing and distribution. You could leave this tiny coastal village and move to Mexico City, or possibly even Los Angeles or New York City, where you could even further expand your enterprise."
Having never thought of such things, the Mexican fisherman asked, "But how long will all this take?"
After a rapid mental calculation, the Harvard MBA pronounced, "Probably about 15-20 years, maybe less if you work really hard."
"And then what, señor?" asked the fisherman.
"Why, that's the best part!" answered the businessman with a laugh. "When the time is right, you would sell your company stock to the public and become very rich. You would make millions."
"Millions? Really? What would I do with it all?" asked the young fisherman in disbelief.
The businessman boasted, "Then you could happily retire with all the money you've made. You could move to a quaint coastal fishing village where you could sleep late, play with your grandchildren, watch ballgames, and take siesta with your wife. You could stroll to the village in the evenings where you could play the guitar and sing with your friends all you want."
I think the above has been discussed at length previously on here. The basic premise is the more you earn, the more you spend. People who are earning £100k are often not the types to have a low-key lifestyle, they will be quite materialistic and money-driven and will tend to have a lifestyle to match.
I totally agree that you need around £50k these days to feel comfortable, in London at least.
I totally agree that you need around £50k these days to feel comfortable, in London at least.
Plotloss said:
A vacationing American businessman standing on the pier of a quaint coastal fishing village in southern Mexico watched as a small boat with just one young Mexican fisherman pulled into the dock. Inside the small boat were several large yellowfin tuna. Enjoying the warmth of the early afternoon sun, the American complimented the Mexican on the quality of his fish.
"How long did it take you to catch them?" the American casually asked.
"Oh, a few hours," the Mexican fisherman replied.
"Why don't you stay out longer and catch more fish?" the American businessman then asked.
The Mexican warmly replied, "With this I have more than enough to support my family's needs."
The businessman then became serious, "But what do you do with the rest of your time?"
Responding with a smile, the Mexican fisherman answered, "I sleep late, play with my children, watch ballgames, and take siesta with my wife. Sometimes in the evenings I take a stroll into the village to see my friends, play the guitar, sing a few songs..."
The American businessman impatiently interrupted, "Look, I have an MBA from Harvard, and I can help you to be more profitable. You can start by fishing several hours longer every day. You can then sell the extra fish you catch. With the extra money, you can buy a bigger boat. With the additional income that larger boat will bring, before long you can buy a second boat, then a third one, and so on, until you have an entire fleet of fishing boats."
Proud of his own sharp thinking, he excitedly elaborated a grand scheme which could bring even bigger profits, "Then, instead of selling your catch to a middleman you'll be able to sell your fish directly to the processor, or even open your own cannery. Eventually, you could control the product, processing and distribution. You could leave this tiny coastal village and move to Mexico City, or possibly even Los Angeles or New York City, where you could even further expand your enterprise."
Having never thought of such things, the Mexican fisherman asked, "But how long will all this take?"
After a rapid mental calculation, the Harvard MBA pronounced, "Probably about 15-20 years, maybe less if you work really hard."
"And then what, señor?" asked the fisherman.
"Why, that's the best part!" answered the businessman with a laugh. "When the time is right, you would sell your company stock to the public and become very rich. You would make millions."
"Millions? Really? What would I do with it all?" asked the young fisherman in disbelief.
The businessman boasted, "Then you could happily retire with all the money you've made. You could move to a quaint coastal fishing village where you could sleep late, play with your grandchildren, watch ballgames, and take siesta with your wife. You could stroll to the village in the evenings where you could play the guitar and sing with your friends all you want."
I have heard that story befor but it still makes me smile each time I hear it."How long did it take you to catch them?" the American casually asked.
"Oh, a few hours," the Mexican fisherman replied.
"Why don't you stay out longer and catch more fish?" the American businessman then asked.
The Mexican warmly replied, "With this I have more than enough to support my family's needs."
The businessman then became serious, "But what do you do with the rest of your time?"
Responding with a smile, the Mexican fisherman answered, "I sleep late, play with my children, watch ballgames, and take siesta with my wife. Sometimes in the evenings I take a stroll into the village to see my friends, play the guitar, sing a few songs..."
The American businessman impatiently interrupted, "Look, I have an MBA from Harvard, and I can help you to be more profitable. You can start by fishing several hours longer every day. You can then sell the extra fish you catch. With the extra money, you can buy a bigger boat. With the additional income that larger boat will bring, before long you can buy a second boat, then a third one, and so on, until you have an entire fleet of fishing boats."
Proud of his own sharp thinking, he excitedly elaborated a grand scheme which could bring even bigger profits, "Then, instead of selling your catch to a middleman you'll be able to sell your fish directly to the processor, or even open your own cannery. Eventually, you could control the product, processing and distribution. You could leave this tiny coastal village and move to Mexico City, or possibly even Los Angeles or New York City, where you could even further expand your enterprise."
Having never thought of such things, the Mexican fisherman asked, "But how long will all this take?"
After a rapid mental calculation, the Harvard MBA pronounced, "Probably about 15-20 years, maybe less if you work really hard."
"And then what, señor?" asked the fisherman.
"Why, that's the best part!" answered the businessman with a laugh. "When the time is right, you would sell your company stock to the public and become very rich. You would make millions."
"Millions? Really? What would I do with it all?" asked the young fisherman in disbelief.
The businessman boasted, "Then you could happily retire with all the money you've made. You could move to a quaint coastal fishing village where you could sleep late, play with your grandchildren, watch ballgames, and take siesta with your wife. You could stroll to the village in the evenings where you could play the guitar and sing with your friends all you want."
Miss Streetrod and I earn well in excess of that £100K figure but we are still broke at the end of each month, somewhere along the line we are doing something majorly wrong
Love the Mexican story.
Retiring in 20 years on £100k salary is wishful thinking imo.
I don't get this bit:
Retiring in 20 years on £100k salary is wishful thinking imo.
I don't get this bit:
Wacky Racer said:
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.
I thought that the average uk worker earned £30k gross? Perhaps this explains the debt problem.shamrock said:
Wacky Racer said:
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.
I thought that the average uk worker earned £30k gross? Perhaps this explains the debt problem.Original Poster said:
Dr_Gonzo said:
How can the average person spend 32k per year when the average salary is around 25k?
Exactly my thoughts...The other two earn £50K each.
They each spend £40K a year
Average salary £33K
Average expenditure £40K
Scale this up to a macro level and the ones who are independently wealthy also spend a LOT more than earners by comparison.
For everything else, there's finance.
Really depends what kind of person you are. I know lots of people in this bracket, some have a nice house and a family and a reasonable car. By the time you throw in a few familiy holidays, they probably don't save that much, and they're not living a flash lifestyle.
Others have taken it as a ticket to lease an R8 / 911 and spend all they get. Fair play to them.
Others still have hardly changed their lifestyle (normally no kids) and have paid the mortgage off in their mid 30s and are looking to retire in 10 years. Except most of them won't because they usually quite enjoy their work, and will be loathed to turn down the possibility of earning even more!
I'd say the most common mistake among high earners is assuming (consciously or otherwise) that it will continue indefinitely. Maybe it will, but on the off-chance that it doesn't, it makes sense (at least in my cautious mind!) to live at a burn rate which you are confident your next job is likely to support, and save the rest.
Cheers,
FT.
Others have taken it as a ticket to lease an R8 / 911 and spend all they get. Fair play to them.
Others still have hardly changed their lifestyle (normally no kids) and have paid the mortgage off in their mid 30s and are looking to retire in 10 years. Except most of them won't because they usually quite enjoy their work, and will be loathed to turn down the possibility of earning even more!
I'd say the most common mistake among high earners is assuming (consciously or otherwise) that it will continue indefinitely. Maybe it will, but on the off-chance that it doesn't, it makes sense (at least in my cautious mind!) to live at a burn rate which you are confident your next job is likely to support, and save the rest.
Cheers,
FT.
The Mexican story sounds like my life. 
I should have bought a bigger house years ago - but my mortgage interest payment (low cost endowment, which is looking OKish) is £29/mth. I could buy a flashier car, but my 6 yr old Merc is just fine. Etc.
I'm sure if I'm taking it easy or I just can't be arsed! It's a very fine line.
I should have bought a bigger house years ago - but my mortgage interest payment (low cost endowment, which is looking OKish) is £29/mth. I could buy a flashier car, but my 6 yr old Merc is just fine. Etc.
I'm sure if I'm taking it easy or I just can't be arsed! It's a very fine line.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff