The curse of rich parents

My instinctive reaction to this sob story from Sebastian Cresswell-Turner is that you'd need a heart of stone not to laugh out loud. But it also raises two serious points. Tim makes one. The other is that having rich and respectable parents can be curse. He bleats:

Even though my friend and her husband – both professionals like their parents – earn the considerable joint salary of £140,000 a year, the bourgeois ease of their youth seems unthinkable. In spite of their undisputed professional status and more-than-respectable earnings, they are downwardly mobile...
A headhunter who is often asked by his friends how they are meant to get by on, say, an MP’s salary of £60,000 a year, has no answer. “I just don’t want to think about it,” he told me.

A household income of £140,000, even with two children, is more than 97% of the population gets. Even on £60,000, you're doing better than 75% of people in the UK.
So how can someone in such a position think themselves  poor?
This is where the curse comes in. Coming from a rich family raises your expectations; you expect to have (as Seb does) second homes, expensive meals out and private schools for your kids. And you often feel the need either to compete with your father, or to live up to his high expectations for you.
The upshot is that even if you do very well economically, you feel bad.
By contrast, those of us from worse backgrounds are freed from such desire. All I got  from my dad was glaucoma and a bad temper.  The upshot is that even though  I earn much less than £60,000, I feel I'm doing well. I don't have to worry about the leccy bill or the rent-man and I can afford all I want. Nor do I feel any need to compete with family and neighbours; my reaction to other people living in Belsize Park is like that of Sammy Davis Jr when he moved into Beverly Hills: these people can't be doing that well - they've got me for a neighbour.
This is why - as I've said before - I don't envy public schoolboys. I have something many of them don't have - the freedom that comes from low expectations.

Comments

[tom s.]

That column - it is a joke isn't it?

Isn't it?

[dearieme]

Interesting the way that "professional" has changed its meaning.

[Blissex]

«Even on £60,000, you're doing better than 75% of people in the UK.»

£60,000 is now barely the entry point into the ''middle class'.

«Interesting the way that "professional" has changed its meaning.»

More the way "middle class" has stayed the same, as it is in those in the top 20% to 5% of the income spectrum.

The story to me seems the lament of those who thought that a degree can still have the same "middle class" earning power when 45% of young people go to University as when when less than 5% of young people did.

To be middle class nowadays takes at least an Oxbridge degree, thus the obsessive fight over Oxbridge places.

[Andy Cooke]

Hmm.
Following my upcoming promotion, I'll be on £44k per year.
According to the IFS, as the sole earner, with 3 children and a fairly normal council tax bill, I'm actually below the average on earnings (48the centile).

So why do I pay top rate tax!?!?
(And yes, I've taken Child Benefit and Tax Credits into account)

[dearieme]

"So why do I pay top rate tax!?!?" In large part because The State spends far too much of our money.

[Dave Cole]

"So why do I pay top rate tax!?!?"

Because people earning many multiples of what you do pay at the same rate as you do.

[Mark Wadsworth]

Andy Cooke, what you have uncovered is how the tax and welfare system discriminates against single-earner couples. You have to pay top rate tax as you are in the top ten of earners (by salary) but your household's equivalised income is quite low (because your salary is supporting five people), and the cash benefits your household receives are presumably minimal as they are based on your salary.

Bring on a universal benefit/flat tax system, say I! You'd pay a bit less tax and your non-working spouse would be entitled to benefits.

[jameshigham]

Puts a teacher's £20,000 salary in perspective.

[Andy cooke]

dearieme - can't argue with that.

Dave Cole - I actually don't have an issue with that - they still shoulder a greater proportion of the overall tax burden than I do, so I'd actually like many more millionaires to come and live here and pay tax at 40% - my public services might improve. It's a pragmatic fact that further "progressive" taxation at higher rates has in the past shifted the tax burden, counter-intuitively, towards the poorer (well, less counter-intuitively when we consider that the richer segments of society are the most mobile)

Mark Wadsworth - I fully agree. I actually have a copy of a document suggesting that - written by you, I believe. Sadly, when it was released by the Bow Group, all anyone ever seemed to do was go on about the Land value Taxation replacement for council tax - which seemed to utterly miss the main point of the document!

jameshigham - Oh, I fully agree. I personally would prefer a system like in Sweden where all schools are independent of the government and schools can value teachers as they should be valued, rather than have their salaries manipulated as a political football.

[Igor Belanov]

Teacher's aren't really poorly paid at all, especially for a part-time job. Many headteachers these days earn £100k plus, a sum that means they're very well off. Even £20k a year is good for someone who has recently graduated. I earn well under that, but, even so, would hardly consider myself on the bread line. Some people commenting here could do with entering the planet earth once in a while.

[Igor Belanov]

Teachers aren't really poorly paid at all, especially for a part-time job. Many headteachers these days earn £100k plus, a sum that means they're very well off. Even £20k a year is good for someone who has recently graduated. I earn well under that, but, even so, would hardly consider myself on the bread line. Some people commenting here could do with entering the planet earth once in a while.

[Beefeater]

Funny, was discussing this with the Ms. yesterday. She read the article and concluded that we were unlucky because even on our combined income (similar to that of the article family), we can't have two homes, four kids and ponies.

I read it and concluded that the Times journalist was a plonker. We're renting a lovely apartment already, we neither need nor want four kids, and both of us hate ponies.

It's all in the perspective. Didn't a US CEO say a couple of years back that as far as he was concerned, the entry point to the middle classes was US$350k/annum? Give me a nice home and a happy family any day, and you can keep the pony.

[ChrisA]

Chris's comment on the need to have low expectations to have a happy life, sounds very Tory like, I mean isn't this the argument for a class bound society, where everyone knows their place. I thought he was supposed to be left wing....

Actually reading this article made me finally appreciate what all this handwringing about increasing inequality was about. For most people whether the top 0.1% is 100 or 400 times richer than them is irrelevent (as in whichever scenario there is a huge gap between them and the top 0.1%). The bleating is from the 98th or 99th percentile people who could have been contenders for the 0.1%.

[Dipper]

Nassim Taleb had something to say on low expectations and happiness in the quite good "Fooled By Randomness"

[Matt Munro]

ChrisA: I think most of the bleating is from people in the middle, who under the guise of "social justice" have seen the real value of their incomes dwindle as their taxes are siphoned off to support a burgeoning underclass who are now enjoying a lifesytle comparable to the employed masses and making a nonsense of the notion that poverty exists in this country. (Try telling a starving, drought afflicted African that you are poor, sitting on sofa, getting fat on sky TV and McDonalds).
At the same time the wealthiest 10% have seem the real value of their wealth increase, meaning the gap between rich and "poor" is, incredibly, now wider than it was under Thatcher.
What's the point of getting a degree and building a career (with all the sacrifices that go with it) if it doesn't buy you much more than the benefit classes get for nothing ? Now that I've had kids it's really starting to piss me off.

[Mark Wadsworth]

Matt, you and millions of others.

[Chris P]

It's nice to see that the brutalist New Labour view of a university degree is so warmly endorsed in these enlightened days! On a historical note the old fashioned middle classes used to wait until they were 'established' (i.e. had large secure income + capital) before they got married and had lots of children. Galsworthy's 'Forsyte Saga' is quite instructive on this point.

[Dipper]

I've noticed, but only in a non-statistically significant way, that a lot of my wealthy colleagues in the city have large families.

Combined with the fact that the underclass also appear to have large families, I think this shows that when there are no fincnancial penalties for additional children (either because you're rich, or because the state funds them), that people like to have more children. It's the people caught in the middle, for whom additional children would produce a significant reduction in quality of life, who have small families.

But I have no proper stats to back this up.

[Mark Wadsworth]

Dipper, your anecdotal evidence is spot on. The last time I saw these stat's for the UK was in "The Price of Parenthood" by Jill Kirby, Centre for Policy Studies. It's not available on line any more as far as I can see, but it backs up what you just said.

[Lennox]

I sit and have dinner with my successful middle class Dad everyday. I hate it. He has a huge house, a new conservatory. Recently he bought a new gold watch for about 3k that he doesn't even wear.

Recently, after a split up with my girlfriend and redundancy I had to move back.

I'm younger and smarter than my dad. I have been made redundant 4 times, 3 times illegally. The women I meet (here in the UK) are generally selfish, lazy tyrants.

So I sit there at dinner in my Dad's beautiful country house in the knowledge that I'll never have a wife (divorce rates are up, marriages down), or a home (house prices are just ridiculous), or a stable job (FOUR TIMES, THREE TIMES ILLEGALLY?? I mean, come ON!!).

I really do not know what my future is. If I have one at all.

Everybody lied to me about my education, history, nobody told me about money. Banks have lied to me, loans companies have lied to me, companies employing me have lied to me.

And I sit there across from my father: the new generation. 4 A levels, a degree from the university of London, a career in IT spanning almost ten years and I have less than when I started out at 21.

Rich parents, the whole expectations thing: I think he's right.

I f#cking hate this BS life I have to lead (paying a third of my salary to rent a room in a shared house) so people my Dad's age can get even richer than they already are.

I'm 35 years old but as far as society is concerned, I'm still 18.

[Blissex]

«a career in IT spanning almost ten years and I have less than when I started out at 21.»

Phenomenally bad choice. The voters and the government have rigged the game in favour of asset owners and people with established careers about to retire, not idiots who have chosen a trade where they compete with Indians and Chinese on much, much lower living costs.

[Gary]

Rich parents...perhaps that would have helped the teens on Baby Borrowers, that show on NBC. I mean, if the on-call paramedics and nannies arent enough, than maybe a little extra cash flow could direct these hapless teen parents

[Child Custody Agreement]

I recently came across your blog and have been reading about Child Custody. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

[Sofie]

I have upper middle class parents, and I wouldn't have it any other way. :p They have a joint salary of $132,000 after taxes, and I like it like that. However...I have never been to a public school before, university has been mostly an expectation for me, and my parents went to really prestigious schools. I don't actually feel pressured (they're not strict,) but I would love to provide my children with the privileges that I have received.