For many people, earning more than £100,000 a year can conjure images of sports cars, designer shopping and financial freedom.
But for Cheryl Laidlaw, a 42-year-old business owner from Buckinghamshire, the reality is far less glamorous.
Despite earning over £100,000 through her website design and branding agency, alongside AI training, business mentoring and networking events, Cheryl says she is a classic example of a HENRY.
A HENRY stands for high earner, not rich yet. They are people with a high income – typically over £100,000 – who have substantial cash flow but are yet to accumulate significant wealth.
Those in this category say that often their high salaries are quickly absorbed by inflation, which is currently 2.6 per cent in the UK, high taxes, expensive housing, student loans, and childcare.
Cheryl said that running her own business for the past 16 years has brought flexibility and opportunities but it has also taught her that earning a high income is very different from building long-term wealth.
She said: “I’m fortunate enough to earn what many people would consider a high income, but as a business owner my earnings fluctuate from year to year. It is always over £100,000 though.
“Like many entrepreneurs, what I invoice isn’t the same as what I actually take home after tax, business costs, and reinvesting back into the company.
“I genuinely love what I do. However, I’ve realised there’s a huge difference between earning a good income and building long-term financial security.”
Rather than spending freely, Cheryl, who lives on her own in a flat she bought and has no children, says she remains careful with money and rejects the stereotype that high earners stop worrying about their finances.
The £100,000 tax trap explained
People in this earnings category are hit by what is known as the £100,000 tax trap, where some high earners find themselves pushed into an effective income tax rate of 60 per cent. This 60 per cent rate applies to income over £100,000 but less than £125,140 – those in the higher rate tax band.
This is because for every £2 you earn above £100,000, you lose £1 of your £12,750 personal allowance – the amount you can earn each year without paying any tax at all. By the time you earn £125,140, that allowance has been tapered away to nothing.
It means anyone caught in the trap effectively pays 60p in tax on that part of their earnings, plus 2p of additional national insurance contributions, so they lose the majority of any increase to their pay between £100,000 and £125,140.
As a result, people on higher incomes have to think carefully about whether accepting a salary increase would be beneficial to their financial plans.
‘My car is 12 years old – I’m still conscious of where my money goes’
Cheryl said she doesn’t live the lifestyle some assume she would.
“I don’t think ‘struggle’ is quite the right word. It’s more that I don’t live the lifestyle people often assume comes with being a high earner.
“I don’t drive a luxury car. In fact, my car is 12 years old and still going strong. I love shopping on Vinted, browse budget shops and I’m always looking for good value. Just because I earn well, doesn’t mean I’ve stopped thinking carefully about what I spend.”
Money is something she always thinks about and is still “very conscious” about where her money goes and whether she’s making sensible financial decisions every day.
For her, the challenge is not paying the bills but creating lasting financial security and she believes many people misunderstand what a six-figure income actually looks like in practice.
A significant proportion of Cheryl’s income is reinvested into her business through technology, software, marketing, insurance, tax, accountants and travel.
She said she focuses on paying her mortgage, saving for the future and spending on experiences rather than possessions, while maintaining a financial buffer because self-employment does not come with the certainty of a monthly salary.
She also feels there can be pressure to project success, particularly as someone whose work involves public speaking, networking and social media.
“People see the awards, speaking engagements, travel and social media posts and assume I’m living a very glamorous lifestyle.
“What they don’t see is that much of that is business investment. Many of the events I attend are opportunities to learn, network or raise the profile of my business. They’re investments, not signs of unlimited disposable income.
“There’s definitely pressure as a business owner to look successful, but I’d much rather be financially sensible than spend money trying to impress people.”
Despite years of hard work and business growth, there have still been moments when she has questioned why financial security feels elusive.
She said: “There have been times where I’ve looked back over the year and thought, ‘I’ve worked incredibly hard, so why don’t I feel further ahead?'”
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