Accounting for Sherlock
Esquires are considered part of the upper class of British society but they do not hold peerages (i.e. a title such as Earl/Duke). It’s very difficult to generalise on the wealth of esquires. Traditionally they were landowners - having obtained their land not from the monarch as title peers would, but through commerce, trade or inheritance as cadet branches of titled families.
Esquires range from large landowners with fortunes to rival Earls and Dukes to much more modest holdings only a few rungs removed from wealthy farmers. In the Victorian era - vast new fortunes were being made in industry and commerce. Agriculture as a generator of wealth was declining. Traditional esquires who relied on their land holdings would have seen their income comparatively fall.
Translated into the modern era - if the Holmes family managed to retain their land holdings and properties throughout the turbulent 20th century - agriculture is still a poor generator of wealth compared to commence. However property and subsequently land prices have exploded in the last two decades particularly in and around London.
I personally think the house we see Mycroft in during ASIB is the country seat of the Holmes Family. Given Mycroft is able to get to Barts morgue within the same night as being phone at his house - I would say that the Holmes family estate is within the limits of Greater London. I suggested in Holmes Family fortunes that the Holmes family are currently generating the bulk of their income from their property portfolio in London. They probably own a great deal of land in what was once the outskirts of London and benefited greatly from the Victorian and then post-war expansion of the suburbs.
First come, First Serve
I doubt, as some fanfiction writers like to believe, that Sherlock has a small personal fiefdom plus a fortune in the bank and Mycroft is restricting his access. Firstly, as a competent adult Sherlock is fully entitled to managed his own financial affairs and he would accept nothing short of full financial independence just out of pride. He has the law on his side.
Secondly, would Mycroft really restrict his brother’s material circumstances given how much time and attention he expends on Sherlock throughout the series? Restricting Sherlock’s supply of disposable income is not going to stop him smoking or taking drugs. When you are plagued with substance addiction you will sacrifice everything to fuel that addiction. Cutting Sherlock’s income will just make him eat less, sleep rough and possibly resort to crime.
It is much more likely that Sherlock refuses his brother’s offers of material help as frequently as he rebuffs his concern. If Mycroft has to resort to bribing a complete stranger to report on Sherlock, I doubt he is able to get Sherlock to accept any form of help from him, financial or otherwise.
As a thirty something year old man with a self proclaimed profession, the last thing Sherlock wants is to be supported in any sense of the word by his older brother.
Thirdly, if you were Mr Holmes Snr. would you really entrust half your family fortune to Sherlock?
Traditional estates are very hard to divide up because they were not meant to be portioned out. The reason huge estates and grand country houses can exist in the first place is because all the inheritance says in the hands of one heir - the eldest son. Families often have binding legal contracts to prevent the splitting up an estate. If this were the case, Sherlock would only be entitled to the liquid assets (i.e. cash) but nothing else that is tied in with the estate such as land, the house or the property portfolio.
If Mr Holmes could legally split up his estate, would he want to? Although Sherlock is a genius he shows little/no interest in procuring and managing wealth. Whatever inheritance he would have received is probably still lying dormant in the bank, rather than shrewdly invested in property or stocks. Allowing him to manage half the Holmes family estate would be leaving half of it to wither away.
If the estate is currently managed by commercial agents - one might be more inclined to let Sherlock have a share of the dividends. However that is assuming the estate actually makes enough money - the rental income from their property portfolio may be used to maintain the manor house and any farms that they still own. The remaining profit may be enough for Mycroft to keep up appearances (and he also probably has his own independent wealth) but would it be enough to for Sherlock as well?
In the same way companies benefit from economies of scale, so do family fortunes. The more capital/land one person controls the easier it is to make more money. Splitting the actual estate would not make it more profitable. In fact holding it together might be the difference between keeping afloat and terrible debt.
If Mr Holmes couldn’t financially split up the estate, it’s not a mystery which son he would choose to leave everything to. Even if Mycroft wasn’t the elder brother, I think Mr Holmes would have found some way to make sure it didn’t go to Sherlock.
However, this doesn’t mean his parents didn’t love Sherlock as much as Mycroft. The main preoccupation with country estate owners in the present day is making sure they preserve the family fortune and heritage for future generations. They need to make some tough decisions about the best way to preserve what they have. If these decisions mean the younger son receives comparatively little inheritance then it is a sacrifice they have to make.
Sherlock did get the same high standard of education and home life as his older brother. He has every chance of making a success of his life with less of an inheritance. His parents are not leaving him empty handed.
Money, Money, Money
From Wear Sherlock, we can see that Sherlock’s wardrobe is fairly expensive. He doesn’t shop at Primark but given what he puts his clothes through, I think he should. Also he does enjoy performing a whole host of scientific experiments in his kitchen. The consumable scientific resources and clothing may be two biggest expenditures apart from rent that Sherlock has to contend with.
Currently from watching all six episodes, I can be forgiven for concluding that Sherlock has about five different shirts, one scarf, an expensive coat, and enough socks to index.
It’s not necessarily an extensive wardrobe and it can easily be afforded on Sherlock’s salary over a period of years. Given he’s not growing wider or taller; the only attrition on his clothing is the spritely activity of chasing down criminals.
I can’t imagine Sherlock spending hours shopping for clothes. He probably just buys his shirts and suits from the place where his father and brother normally do, not because he particularly likes Spencer Hart. He’s not so interested in saving money that he’d expend energy shopping around for a bargain. If he’s never seen James Bond, there’s no reason to believe he’s heard of Primark.
Alternatively, I can imagine that Mycroft buys stuff for him and just leaves it in his flat. As much as Sherlock hates being mothered by Mycroft, there’s no reason to let good clothes go to waste. I have mentioned before ( Explaining Sherlock's Sherlockness) that I do not think Sherlock has any personal hatred for Mycroft. His needling comments about his brother’s diet are positively benign when you compare them to what he says to Sally and Anderson. Sherlock dislikes the fact that Mycroft wants to control his life - he doesn’t particularly dislike Mycroft anymore than the next person.
We are never told how much Sherlock gets paid for his cases. He helps out the police in a sort of pro bono arrangement but I would be surprised if his private clients do not offer him expenses and a fee. People who employ private investigators are usually relatively well off, Henry Knight for example. In The Blind Banker, the bank offered Sherlock in the order of tens of thousands of pounds to solve their particular problem and Sherlock appears to be unfazed by the figure. He rejects the money out of principle because he doesn’t want to be “employed” by Sebastian Wilkes, and I can’t blame him.
Sherlock’s earnings could fluctuate wildly but he does have a constant need for stimulation. When he doesn’t have a case, the world around him suffers almost as much as he does. Therefore I doubt there are many days in the year when Sherlock isn’t working. From the episodes so far: a significant proportion of his cases are not from the police but private clients be it the Royal Family or multinational banks. Of course six cases are not enough to extrapolate a lifestyle but if Sherlock derives income from half of his cases, he could make a decent living.
I have once inquired about the fees for a private investigator. As this industry is poorly regulated and most operators are self-employed the rates vary greatly. We have never seen Sherlock pull out a spreadsheet of prices and ACD Holmes does not have a fixed charge only what the client wants to give, so it’s very hard to say.
I personally speculate based on the income of a private investigator in my region that within an average year Sherlock earns in the range of £30,000 - £40,000. This is a conservative estimate. I believe Sherlock would be able to make more money (some private investigators do) but he’s not running a business. He cares little for profit margins, publicity or pricing.
Amendment: Several people have pointed out that ACD Holmes was often paid large sums of money for his work. One particularly example is the Adventure of the Priory School for solving a kidnapping but ACD Holmes lived in a very different world from today.
The modern police force are a much more organised, professional body compared to their Victorian counterparts. For serious crimes such as kidnapping, murder, disappearance and loss of valuable artefacts citizens almost exclusively go to the police. The police have specialist units that rapidly respond to serious crime. They also have access to databases, equipment and forensic expertise that private investigators do not. In the Victorian era Lestrade would not have been any more equipped than Sherlock but today the police have a distinct advantage over a private investigator.
Therefore BBC Sherlock's cases involving serious crime are almost exclusively from the police, and as Sally says Sherlock doesn't get paid for his police work. Given how Sherlock really only likes serious perplexing crime (e.g serial kills)- I would say that the majority of his cases are not paid. Clients of private investigators are usually people with problems that the police do not get involved in, for example: cheating spouses and human ash that might not be human ash. It is probably only once in a while when a particularly interesting private case like Henry Knight's gigantic hound problem comes up for Sherlock.
In TRF - Sherlock starts to get public recognition for his work. The scenes we see are publicity stunts set up for the media as Sherlock is the current internet sensation and noticeably Sherlock is given gifts of gratitude rather than money. These cases all involve serious crime and would have been reported to the police if only for formality reasons. You cannot claim a priceless work of art is stolen without a police incident number. Sherlock was probably not directly employed but was merely being acknowledge in public for his contribution. Hence why the victims gave him small (but valuable) tokens of thanks rather than presented him with cheques.
Given his clients usually value discretion, I would not be surprised if Sherlock was paid secretly by cash-in-hand or private cheque and therefore his income is not taxable unless specifically declared. Whether Sherlock bothers to fill in a self-assessment for the Inland Revenue is debatable. If he refuses he is technically committing tax fraud but the consulting detective has never really been a stickler for legality. His type of completely below the radar evasion is hard to track down particularly if he’s never paid any tax in his life or claimed any benefits.
Amendment: As one commenter has pointed out - Sherlock might find doing a tax return far too boring but Mycroft is certainly not eager for his brother to be caught committing tax fraud despite the very low likelihood of this happening. I think it is more likely that Mycroft fills in his brother's tax return and then pays his taxes for him, allowing Sherlock to keep his income and helping Sherlock financially in a very round-about way. I personally wonder whether Sherlock even keeps track of how much he earns - or if he can be bothered to learn how to negotiate the maze of self-assessed tax forms.
If he doesn’t personally pay tax this makes him significantly better off than John who does have to pay about 40% of his earnings in tax because he would earn more locum GP. Sherlock’s disposable income is therefore equivalent to someone earning £36,000 - £61,000 on paper.
To get an idea of how much tax people in the UK pay and what it is used for visit this webpage. The median wage is £22,000/year of which £8700 is paid in tax - i.e. around 40%.
This range of earnings I have given is purely speculative but it would enable Sherlock to live in a discounted shared flat in central London. Baker Street today is prime location with prices for two bedroom flats being excessive of £1000 per week at a conservative evaluation. We do not know how much Mrs Hudson decided to discount for her favourite detective but I personally think it would be around half to two thirds.
Rents in central London were always higher than the rest of the country but it is only in the last ten years that they have really reach ridiculous proportions due to rise in house prices. If Mrs Hudson bought her house several decades ago, she probably took out a comparatively small mortage and has managed to pay it all back by now.
A rent of £330-£500/week would enable her to make a tidy profit (provided she is no longer paying mortage on the house) and also compensate for some of Sherlock’s wilder activities. It is still quite a steep price to pay and John actually struggles to pay it soon after moving in. I imaging the money from the bank tide him over until he got a job as locum GP.
(Side note - Sharing a flat: the situation is somewhat different in ACD canon. A single gentleman of means usually lives in the arrangement we see Holmes and Watson in. The arrangement is due to Mrs Hudson’s decision to rent out rooms in the house, rather than Holmes actively looking for flatmate. It was very common for matrons to rent out their houses to single gentlemen and provide the domestic services that wives normally do. Sherlock and Watson would have individually paid a flat fee for the rooms and room service, not split the rent like they do today. Baker Street in Victorian times was a desirable address but not out of reach of the well-heeled middle class, whereas today most central London properties for sale are only in the reach of millionaires).
A match made in heaven…
As one commentor pointed out - Sherlock had already moved his stuff into 221B. I personally believe that Sherlock would have moved into 221B whether he found a flatmate or not. It was an incredibly good bargain as properties in central London go and Sherlock knows the landlady has the patience of a saint. She would tolerate his mood swings and erratic rent payments.
Sherlock’s speculated income is probably enough to cover the discount rent and allow him some disposable income. If at a conservative estimate Sherlock earns £30,000 a year untaxed - and Mrs Hudson is kind enough to rent out the flat for under £2000/month. Sherlock still has around £500 - £600 pounds a month just for himself. That is not very much when you really get spending. Sherlock is human enough to realise that there are plenty of things he could do with extra money in his bank account if he got a flatmate.
Also as trillsabells points out - Sherlock's income is not fixed monthly salary. He may not have any income for months and then receive several enormous payments within days of each other. It's very much a feast and famine lifestyle. Therefore it always helps to have someone else share the financial burden of the rent.
But Sherlock is so anti-social how can he tolerate a flatmate?
I want to point out that Sherlock’s anti-social tendencies mostly affect other people. He is definitely not anti-social in the sense that he takes efforts to avoid people - even people he doesn’t like. He has chosen a job where there is a great deal of contact with people.
Sherlock strikes me as the kind of person who just does not care whether you are there or not because he lives most of his life inside his own mind. In the beginning of the series Sherlock sees interaction with people as a means to an end. When it suits him, Sherlock goes off into his mind palace and completely ignores John for days - he doesn’t even realise his flatmate had spent a few nights in Dublin until weeks later. It does not make him embarrassed or upset when John finds a head in the fridge or lab equipment on the table. Even from episode one, Sherlock hasn’t been particularly bothered about personal space. He appears quite comfortable with John’s presence and thinks nothing of invading his privacy or taking over the communal areas. He lives pretty much as he would if John didn’t exist - he does not ever inconvenience himself for his flatmate’s sake.
The presence of a flatmate simply does not bother Sherlock.
The question is not therefore how Sherlock can tolerate a flatmate, it is how flatmates can tolerate Sherlock.
Sherlock knows all the personality quirks that make fellow flatmates homicidal - he pre-empts this by listing the problems to John on their first meeting. This behaviour makes it more likely that he has shared with other people before (and then got kicked out after they couldn’t tolerate him any longer). He specifically doesn't mention his intent to keep body parts in the fridge because it is highly illegal. Sherlock might not understand why people dislike having a severed head next to their milk but he knows that they do and it's best not mention it to a man he's trying to convince into taking a flatshare.
Sherlock and John’s first meeting is very businesslike. They size each other up and Sherlock gets straight to the point - it’s over in a matter of minutes leaving John utterly baffled. What John doesn’t realise is that Sherlock already decided he was the perfect flatmate within a few seconds. A returning soldier mostly likely estranged from his family was more likely to tolerate Sherlock’s behaviour simply because he would have no alternatives. Additionally, I think Sherlock already had an eye out for an assistant and John, an unemployed army doctor with a taste for adrenaline, was looking like a good option.
List of Other Metas