Financed lifestyles
Discussion
It was only a couple of weeks ago I was standing in my local Bentley dealer having a similar conversation to this with my 74 year old father about some Old Bentley they'd got in there that was supposedly "worth" £1.5mil.
My generation (I'm 37) just isn't interested in these cars...they're nice and all but certainly nothing I'd spend even 6 figures on (I bought a 54 something or other a few years back for 15k and sold it after a year as I hadn't driven it once). I drive a new Bentley, my father has a collection of classic Bentleys, spends his whole life doing things with other very old Bentley Drivers Club folks and to top it all off, I've been bored to death about these cars since I was tiny.
I should be the kind of person who lusts after one.
I just don't. And I don't know a single person my own age who does either.
It's the same phenomena as the houses being discussed here except I think that it will be a brutal price correction for anything but the most absolutely exclusive classic cars.
My mother loves bragging to me and my siblings about how clever they were to buy a house and a few old Bentleys for no money at all 30 years ago haha.
My generation (I'm 37) just isn't interested in these cars...they're nice and all but certainly nothing I'd spend even 6 figures on (I bought a 54 something or other a few years back for 15k and sold it after a year as I hadn't driven it once). I drive a new Bentley, my father has a collection of classic Bentleys, spends his whole life doing things with other very old Bentley Drivers Club folks and to top it all off, I've been bored to death about these cars since I was tiny.
I should be the kind of person who lusts after one.
I just don't. And I don't know a single person my own age who does either.
It's the same phenomena as the houses being discussed here except I think that it will be a brutal price correction for anything but the most absolutely exclusive classic cars.
My mother loves bragging to me and my siblings about how clever they were to buy a house and a few old Bentleys for no money at all 30 years ago haha.
I think there'll be a correction on a lot of valuables.
Who bothers buying expensive antiques these days? Probably hoping on foreign buyers because a lot of new money just wants the next newest thing.
@berlinchris, you're at the same age point, similar location and a similar financial position I was when I bought my first house nearly 15 years ago. That same house hasnt increased much in value but I've moved since then. Still in a very similar position financially now. Mortgage is a bit bigger but much smaller proportionally to the size of the house due to the early footing I put myself on. If you can ever overpay a bit in, then do it but not at the expense of living like a hermit. Get your pension sorted now if not already and you'll reap the benefits. Time goes very fast!
Who bothers buying expensive antiques these days? Probably hoping on foreign buyers because a lot of new money just wants the next newest thing.
@berlinchris, you're at the same age point, similar location and a similar financial position I was when I bought my first house nearly 15 years ago. That same house hasnt increased much in value but I've moved since then. Still in a very similar position financially now. Mortgage is a bit bigger but much smaller proportionally to the size of the house due to the early footing I put myself on. If you can ever overpay a bit in, then do it but not at the expense of living like a hermit. Get your pension sorted now if not already and you'll reap the benefits. Time goes very fast!
anonymous said:
[redacted]
Oh I’m fully aware of these companies and industries. I was a grad in one - so rode that train! My point was that it’s a complete detachment - sure in an MBB consulting company >50% of the office will be earning £100k+, and you’ll easily have 50 partners earning 7 (or perhaps 8) figures. It’s easy to normalise high salaries in that environment. But the combined grad classes of those places is perhaps 200.
Meanwhile Teach First alone recruited 1,500 new graduates last year.
If I look at the ~200 people I know from my time at Oxford, I’m aware of perhaps <20-30 who are earning 6 figures as we approach 30. That was a pretty select group to begin with.
Those earning big numbers is actually a very small pool. There aren’t enough of them to pay the headline mega house prices if/when those houses actually came to market.
Chicken Chaser said:
I think there'll be a correction on a lot of valuables.
Who bothers buying expensive antiques these days? Probably hoping on foreign buyers because a lot of new money just wants the next newest thing.
Yup. Old brown wooden furniture is cheap for a few reasons. It tends to rise in demand/value during less affluent consumer times as the trend evolves as people have less money to ‘investing’ in furniture. Everyone can buy new at the moment because everyone is fantastically rich with endless supplies of zero interest credit and much of the mega spending is by people who are frightened of clapped out old furniture because that’s what poor people and losers have. But when money tightens then you start to see a shift away from renting shimmering tat from Dwell and consumers bragging about how their newly acquired Victorian dining table was a bargain and that it has already gone up in value etc. Who bothers buying expensive antiques these days? Probably hoping on foreign buyers because a lot of new money just wants the next newest thing.
But there is also a fashion element at play and old brown furniture is definitely very far out of fashion.
And the other big issue is how many furniture makers of old were making furniture for people who lived in small houses and flats? Not many and the modern home is steadily getting smaller and a lot of this old furniture is simply too big for modern homes.
The shrinking of the family home is also an issue when it comes to storing classic cars. And like old furniture, a lot of people don’t seem to want old cars anyway as they advertise that you are poor and can’t afford new cars.
If we look around the consumer market place at the moment you will notice a massive new trend of non ownership and fractional purchasing. On PH you can see more and more talk of using cars by the day or week, in the investment market firms are pitching the concept of tiny investments. All around us everything is having to be broken down into much smaller payment amounts because people behind the current pensioner generation simply have much less money and much bigger consumer habits.
Assets that are not marketnor geographically specific like watches or exchange traded products can find buyers elsewhere but items which tend to be geographically restricted such as larger property, RHD classic cars, furniture etc simply aren’t going to find enough buyers at current asking prices when their supply increases.
GOATever said:
hyphen said:
Got a letter from AMEX this morning, would have chucked in bin as on full DD but for the thread:
Notifying they are changing interest rates (from fixed to variable tracking BOE Rate) and also how they calculate minimum payments.
- min payment that can be made goes from £5 to £25
-previously min monthly was 2.5% of total balance, now Interest charges + 2% of balance
Their illustrative example says that if you have £4k outstanding @ 22.9%, your min monthly goes up from £100 to £150 (plus any repayment protection insurance).
So a bit more cash to find each month for these debtors.
Also noticed that their cash withdrawal rate is 27.9%! I imagine that is plus a fee to withdraw form ATM too.
The piper wants paying quicker.Notifying they are changing interest rates (from fixed to variable tracking BOE Rate) and also how they calculate minimum payments.
- min payment that can be made goes from £5 to £25
-previously min monthly was 2.5% of total balance, now Interest charges + 2% of balance
Their illustrative example says that if you have £4k outstanding @ 22.9%, your min monthly goes up from £100 to £150 (plus any repayment protection insurance).
So a bit more cash to find each month for these debtors.
Also noticed that their cash withdrawal rate is 27.9%! I imagine that is plus a fee to withdraw form ATM too.
Edited by hyphen on Friday 2nd August 09:17
brickwall said:
Oh I’m fully aware of these companies and industries. I was a grad in one - so rode that train!
My point was that it’s a complete detachment - sure in an MBB consulting company >50% of the office will be earning £100k+, and you’ll easily have 50 partners earning 7 (or perhaps 8) figures. It’s easy to normalise high salaries in that environment. But the combined grad classes of those places is perhaps 200.
Meanwhile Teach First alone recruited 1,500 new graduates last year.
If I look at the ~200 people I know from my time at Oxford, I’m aware of perhaps <20-30 who are earning 6 figures as we approach 30. That was a pretty select group to begin with.
Those earning big numbers is actually a very small pool. There aren’t enough of them to pay the headline mega house prices if/when those houses actually came to market.
And you’d still be amazed at how many of those select high earners in all the City professions are still running debts and have their parents paying the school fees for them while they haemorrhage monthly income keeping up with everyone in the office. My point was that it’s a complete detachment - sure in an MBB consulting company >50% of the office will be earning £100k+, and you’ll easily have 50 partners earning 7 (or perhaps 8) figures. It’s easy to normalise high salaries in that environment. But the combined grad classes of those places is perhaps 200.
Meanwhile Teach First alone recruited 1,500 new graduates last year.
If I look at the ~200 people I know from my time at Oxford, I’m aware of perhaps <20-30 who are earning 6 figures as we approach 30. That was a pretty select group to begin with.
Those earning big numbers is actually a very small pool. There aren’t enough of them to pay the headline mega house prices if/when those houses actually came to market.
Joey Deacon said:
A few weeks ago I overheard a group of 19/20 year olds talking about their cars and most of them seemed to have Audis. One girl mentioned her 60 plate Fiat 500 and one of the group asked her why she drove such an old car. Thinking back to the very early 90s when my friends all passed their tests everybody had a rusty old heap that needed constant maintenance to keep going. Now it seems that youngsters will turn their noses up at anything that is more than a few years old.
The point is that when I was that age, there's no way I'd have qualified for credit. Essentially if you wanted any credit whatsoever you had to convince the lender that you didn't need it before they'd give it to you. RTB said:
Joey Deacon said:
A few weeks ago I overheard a group of 19/20 year olds talking about their cars and most of them seemed to have Audis. One girl mentioned her 60 plate Fiat 500 and one of the group asked her why she drove such an old car. Thinking back to the very early 90s when my friends all passed their tests everybody had a rusty old heap that needed constant maintenance to keep going. Now it seems that youngsters will turn their noses up at anything that is more than a few years old.
The point is that when I was that age, there's no way I'd have qualified for credit. Essentially if you wanted any credit whatsoever you had to convince the lender that you didn't need it before they'd give it to you. When we were in our 20s we were just as dumb as they are but we didn’t have the pressure of needing to publish pictures of everything we were consumer in the global press and no one in the planet was dumb enough to arm us with easy credit with which to run off and indulge ourselves with.
But, look through the armynof consumer credit victims and spendaholics and there are huge numbers of 20somethings who are driving around in 10/20 year old bangers and not spending everything they earn on pointless tat which they then photograph and publish for the world to judge them.
There is just a lot more noise from the Kevin and Sharons of their generation and they are all invasive but the exact same future lies in wait for them as it always has but the the only real question is whether they will Instagram their metamorphosis into being one of those people who finance Whetherspoon’s morning and afternoon weekday trade.
DonkeyApple said:
brickwall said:
Oh I’m fully aware of these companies and industries. I was a grad in one - so rode that train!
My point was that it’s a complete detachment - sure in an MBB consulting company >50% of the office will be earning £100k+, and you’ll easily have 50 partners earning 7 (or perhaps 8) figures. It’s easy to normalise high salaries in that environment. But the combined grad classes of those places is perhaps 200.
Meanwhile Teach First alone recruited 1,500 new graduates last year.
If I look at the ~200 people I know from my time at Oxford, I’m aware of perhaps <20-30 who are earning 6 figures as we approach 30. That was a pretty select group to begin with.
Those earning big numbers is actually a very small pool. There aren’t enough of them to pay the headline mega house prices if/when those houses actually came to market.
And you’d still be amazed at how many of those select high earners in all the City professions are still running debts and have their parents paying the school fees for them while they haemorrhage monthly income keeping up with everyone in the office. My point was that it’s a complete detachment - sure in an MBB consulting company >50% of the office will be earning £100k+, and you’ll easily have 50 partners earning 7 (or perhaps 8) figures. It’s easy to normalise high salaries in that environment. But the combined grad classes of those places is perhaps 200.
Meanwhile Teach First alone recruited 1,500 new graduates last year.
If I look at the ~200 people I know from my time at Oxford, I’m aware of perhaps <20-30 who are earning 6 figures as we approach 30. That was a pretty select group to begin with.
Those earning big numbers is actually a very small pool. There aren’t enough of them to pay the headline mega house prices if/when those houses actually came to market.
I know £250k is great money by any sensible measure, but a lot of your lifestyle expectations are driven by those around you.
DonkeyApple said:
And you’d still be amazed at how many of those select high earners in all the City professions are still running debts and have their parents paying the school fees for them while they haemorrhage monthly income keeping up with everyone in the office.
Someone in my office probably earning 180k to 200k was telling me he couldn't wait till payday as he was in his overdraft. Really shocked me. DonkeyApple said:
I think that’s the reality. 20 year olds today are not mystically and genetically separate from any other group when they were in their 20s it is just that this time they are all armed with easy credit and spending addictions and global peer group pressures.
When we were in our 20s we were just as dumb as they are but we didn’t have the pressure of needing to publish pictures of everything we were consumer in the global press and no one in the planet was dumb enough to arm us with easy credit with which to run off and indulge ourselves with.
But, look through the armynof consumer credit victims and spendaholics and there are huge numbers of 20somethings who are driving around in 10/20 year old bangers and not spending everything they earn on pointless tat which they then photograph and publish for the world to judge them.
There is just a lot more noise from the Kevin and Sharons of their generation and they are all invasive but the exact same future lies in wait for them as it always has but the the only real question is whether they will Instagram their metamorphosis into being one of those people who finance Whetherspoon’s morning and afternoon weekday trade.
Completely agree, my next point was going to be that given easy credit I'd have been swanning about in the most expensive car I could convince someone to give me at that age, especially if it had electric windows..... When we were in our 20s we were just as dumb as they are but we didn’t have the pressure of needing to publish pictures of everything we were consumer in the global press and no one in the planet was dumb enough to arm us with easy credit with which to run off and indulge ourselves with.
But, look through the armynof consumer credit victims and spendaholics and there are huge numbers of 20somethings who are driving around in 10/20 year old bangers and not spending everything they earn on pointless tat which they then photograph and publish for the world to judge them.
There is just a lot more noise from the Kevin and Sharons of their generation and they are all invasive but the exact same future lies in wait for them as it always has but the the only real question is whether they will Instagram their metamorphosis into being one of those people who finance Whetherspoon’s morning and afternoon weekday trade.
Just like the food market has provided us with large amounts of cheap unhealthy convenient food to make us fat, the finance industry has done the same.
RTB said:
Just like the food market has provided us with large amounts of cheap unhealthy convenient food to make us fat, the finance industry has done the same.
This is probably more accurate than most other analogies. Step into a fastfood chain and you'll see the family that goes there maybe once a month and looks sane ... you'll also see demographics that will be in different fastfood chains every other day of the week....
RTB said:
Completely agree, my next point was going to be that given easy credit I'd have been swanning about in the most expensive car I could convince someone to give me at that age, especially if it had electric windows.....
Just like the food market has provided us with large amounts of cheap unhealthy convenient food to make us fat, the finance industry has done the same.
Yup but both have regulators to curb the insidious side of them. There was a reason why we couldn’t borrow money and it wasn’t because the finance industry didn’t want to as we would have been an absolute goldmine, it was because our Government and it’s regulator didn’t allow the financial industry to do it. It’s no coincidence that the consumer boom began after the retail lending market was deregulated. The short of it was that we were remarkably well protected from our own financial foolishness and from the financial industry by our Government and the regulator. Just like the food market has provided us with large amounts of cheap unhealthy convenient food to make us fat, the finance industry has done the same.
Integroo said:
DonkeyApple said:
And you’d still be amazed at how many of those select high earners in all the City professions are still running debts and have their parents paying the school fees for them while they haemorrhage monthly income keeping up with everyone in the office.
Someone in my office probably earning 180k to 200k was telling me he couldn't wait till payday as he was in his overdraft. Really shocked me. And has been stated on here, if they have a family, could easily being doing that much - without living anything but an average style lifestyle compared o those peers - 3k mortgage / rent, 2k childcare / nanny / au pair / school fees, 1k basic food, bills, 1k nicer food, entertainment, lunch, 1k holidays / clothes, less than 1k cars / charity / gym, Netflix, IG index
Integroo said:
Someone in my office probably earning 180k to 200k was telling me he couldn't wait till payday as he was in his overdraft. Really shocked me.
I wouldn’t be at all shocked. Most people will grow their lifestyle to match their income, those who have always cut things a bit tight will continue to do that.DonkeyApple said:
brickwall said:
Oh I’m fully aware of these companies and industries. I was a grad in one - so rode that train!
My point was that it’s a complete detachment - sure in an MBB consulting company >50% of the office will be earning £100k+, and you’ll easily have 50 partners earning 7 (or perhaps 8) figures. It’s easy to normalise high salaries in that environment. But the combined grad classes of those places is perhaps 200.
Meanwhile Teach First alone recruited 1,500 new graduates last year.
If I look at the ~200 people I know from my time at Oxford, I’m aware of perhaps <20-30 who are earning 6 figures as we approach 30. That was a pretty select group to begin with.
Those earning big numbers is actually a very small pool. There aren’t enough of them to pay the headline mega house prices if/when those houses actually came to market.
And you’d still be amazed at how many of those select high earners in all the City professions are still running debts and have their parents paying the school fees for them while they haemorrhage monthly income keeping up with everyone in the office. My point was that it’s a complete detachment - sure in an MBB consulting company >50% of the office will be earning £100k+, and you’ll easily have 50 partners earning 7 (or perhaps 8) figures. It’s easy to normalise high salaries in that environment. But the combined grad classes of those places is perhaps 200.
Meanwhile Teach First alone recruited 1,500 new graduates last year.
If I look at the ~200 people I know from my time at Oxford, I’m aware of perhaps <20-30 who are earning 6 figures as we approach 30. That was a pretty select group to begin with.
Those earning big numbers is actually a very small pool. There aren’t enough of them to pay the headline mega house prices if/when those houses actually came to market.
You do the maths and realise they must be spending every penny of the basic salary (or more), and relying on the bonus for any savings/buffer or large expenses.
Say £250k basic (so £140k net), with £150-250k bonus.
Then spending:
Mortgage £40k
PCP car payments £15k
Other house costs (utilities, tax, cleaning, repairs etc.) £15k
School fees £40k
Food, clothes, entertainment, general keeping up with the Joneses ‘life’, etc. £30k
Total £140k
Before holidays, savings, etc. All fine when you include the bonus.
But then there’s a bad year, and bonuses are cancelled...
Oh and hardly any AVCs going into pension, so there’s an almighty shock coming down the tracks there too.
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