Friday, March 16, 2018

Relatively Rich

Felix Dennis, the publisher who was one of the richest men in Britain, famously suggested someone with assets of £1 million ($1.8 million) to £2 million would count as "comfortably poor" on his wealth scale, and would need £5 million to £15 million to be considered "comfortably wealthy". 

Last May Labour pledged to introduce an extra tax for the richest in society – those with an annual income of more than £80,000, said shadow chancellor John McDonnell.

Almost half of respondents to a YouGov study in 2017 said that people who earned £45,001 a year, the starting point of the higher tax bracket, were wealthy. And 86 per cent considered those with an income of at least £150,001 as rich. 

But ask high-earners themselves and you'll find a third don't consider themselves well-off, according to new research by Caxton Premier International Services, the currency transfer firm. These respondents have an income of at least £100,000 a year and are in the top 5 per cent of earners in the UK. 
More than a third own an international property.  The research found that this was especially prevalent among older respondents; 61 per cent of over-55s would not describe themselves as wealthy.

More than two-thirds of these high-earning respondents still shopped around for the best deals on everyday essentials such as food, flights, and insurance. 
Douglas Meakin, a business consultant, describes himself as "comfortably wealthy". The 55-year-old, who used to work for a Silicon Valley technology firm, still calculates his income in dollars. He estimates it is between $US600,000 and $US700,000 in a good year.  "But if you are supporting a family and you're living somewhere expensive like London with few assets, that £100,000 income isn't going to go very far. Wealth isn't about income; you need to turn that income into wealth."
Income has little to do with feeling wealthy, according to Hilda Burke, a psychotherapist and life coach, because we continue to raise the bar as our salary increases.
A salary of £40,000 seems huge when you're earning £20,000, but when you get there you realise it doesn't feel as you imagined, she said. At £40,000 we could then tell ourselves an income of £80,000 could be life-changing. But once this is achieved, we find it's not.
Dimitrios Tsivrikos, consumer psychologist at University of College London. Dr Tsivrikos said wealth was relative and how rich we felt depended on who we're comparing ourselves with.
Even a person at the top of their social circle could feel like a pauper. In a world that gives us increasing access to those with "lavish lifestyles", such as the Kardashians, Dr Tsivrikos said we're never going to feel "wealthy enough".

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