Toronto's Almost Rich

[Matt85]

Hi guys,

I'm new here, but I specifically had to sign in to share this article.

It's the pinnacle of NonBadassity. Just read it and laugh.

http://www.torontolife.com/informer/features/2012/02/15/almost-rich/

Cheers!

[MgoSam]

This argument is like a man eating a hearty meal, licking his plate clean, then turning to a starving person and saying, "Look, we're in the same boat. My plate is empty too!"
-Gawker.com's Hamilton Nolan

[frugalecon]

I loved the last family. "Vitamins, creams, and lotions: $400"
That is a lot of lotion!

[PeteD01]

I guess none of them could afford an interior designer - it's a must if one lacks taste.

[EricL]

Thanks for making me feel a little better about 'Merica. 

[The Hamster]

"They’re all comfortable, but no one is living large".

What the?  What on earth would the author consider to be "living large"?  From the photos of their homes and furniture, they are living in the lap of luxury.

I wonder if they realise they will always be "almost rich" if they keep spending everything they make.





       

[slugline]

So, what's the likelihood they're still living the same way in the year 2014?

[tarantoga]

I'm especially astonished at the amount of money that goes into wine for several of them.

Wine: $800. (“I’ll spend anywhere from $15 on a Rhône to $100 on an Amarone, and I open a bottle almost every night."

that sounds very borderline alcoholic to me?

[pom]

"Doug spends up to an hour every day on the phone with his broker."

That is a huge red flag for me. How much do you think that his broker is charging him (indirectly) for this? To make this worthwhile, I would think that the broker needs to make $200 per hour x 200 days a year = $40 000.

It says "up to an hour" so maybe it is half of that but this is still ridiculous .... grow your own brain!

[MgoSam]

"Doug spends up to an hour every day on the phone with his broker."

That is a huge red flag for me. How much do you think that his broker is charging him (indirectly) for this? To make this worthwhile, I would think that the broker needs to make $200 per hour x 200 days a year = $40 000.

It says "up to an hour" so maybe it is half of that but this is still ridiculous .... grow your own brain!

Sadly I think that was her attempt to show that the guy is actually working really really hard! Aside from being silly earlier in life, I have avoided the stock market, and when I did try to play with stocks I used Schwab, is there any real advantage from having a live broker? I imagine that you will need to pay for their time and 'expertise''

[dude]

thanks for sharing this!  That was some of the funniest, most un-self aware shit I've ever read!  Loved it!  This author is either a total fkng idiot, or just pulled the wool over everybody's eyes with a piece that would make the folks over at The Onion proud!

[Chaplin]

Yes, lots blindness to what's in one's control and what's not.

My situation is similar to these people, except for my savings rate. I grew up in Toronto and now live in Vancouver which has a very similar or worse housing cost situation. Our household income is about $200K base before tax ($170K after tax for 2013 - some variable compensation and max tax sheltering). I briefly feel poor when looking at other people's lifestyles, but rich when I look at the lifestyle we have while still maintaining a 56% savings rate (after tax).

You would be right wonder why our savings rate is only 56% with that income. That's one reason I'm on this site and will probably start a journal to track improving it. On the other hand, I would rather take home $170K and save 56% than take home $40K and save 75%.

Of course, one could and should argue that the second scenario means FIRE faster because expenses are lower. In our case though, expenses in retirement will be considerably lower than current expenses. We have some expenses that will go away in five to six years: mortgage interest and day care. With that money going into savings, our savings rate would be 69%. That's just a complicated way to say that our current savings rate doesn't fully reflect our progress towards FIRE. I imagine that's true for many people at our stage in life (kid in elementary school, mortgage).

Bottom line: it's not because it's Toronto or Vancouver that an income of $200K doesn't seem like quite enough.

[AJDZee]

LOL   PhD ... "papa has dough"
 

[4alpacas]

I love the breakdown of their spending.  If I saw a case study like this, I would fall out of my chair laughing.

Monthly expenses | Mortgage payment for a three-bedroom house: $2,500.
Utilities: $500.
Gas for their Jeep Commander and Ford F-150 truck: $440.
Street parking and two parking permits: $200.
Home and car insurance: $300.
Cleaning lady: $160.
Groceries: $1,000. (“We like Whole Foods and try to eat organic as much as we can. We love the new Leslieville store Hooked for fish. For everything else, Loblaws.”) B
aby supplies and toiletries at drugstores: $75.
Wine: $400–$500. (“We try to get the better $11 bottles, but they go fast.”) 45 $11 bottles/month, ~1.5 bottles/day (WTF?!)
Eating out: $400.
Home phone, cable, Internet and two cellphones: $280.
Dry cleaning: $50.
Haircuts, nails and waxing: $170.
Gifts: $200. (“You have kids, you spend money on toys for other kids. That’s how it goes.”)
Daycare for both kids: $2,500.

Annual expenses
Property tax: $3,800.
Upgrades and maintenance on their house: $5,000.
Clothes: $3,000. (“When you have young kids you really cut back on stuff for yourself.”)
RRSPs and investments: $0. (“Ha! We live month to month. When we have money left over, we go out.”)
Savings accounts for the kids: $1,500. (“We put money in on birthdays and special occasions.”)
Hockey league fees for Thomas: $500.
Gym classes for Suzanne: $900.
Swimming and music lessons for the kids: $900.

[4alpacas]

This article has been discussed before http://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/almost-rich-an-examination-of-the-true-cost-of-city-living-and-why-rich-is-neve/msg2122/#msg2122