# There are 118,000 millionaires in Toronto



## Sherlock (Apr 18, 2010)

422,000: millionaires in Canada.

198,000: millionaires in Ontario.

118,000: millionaires in Toronto.

1,184: multimillionaires in Toronto.

5: billionaires in Toronto.

All numbers exclude value of primary residence.

Article: http://www.thestar.com/news/gta/2013/05/09/toronto_has_118000_millionaires.html

It really makes me feel pathetic by comparison.


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## meddlesomemarmots (Feb 16, 2011)

Sherlock said:


> It really makes me feel pathetic by comparison.


It shouldn't - there are many measures of a man, as they say. I'd rather be a broke saint, than a 'rich' sinner.

That said, I'd _love_ to be a billionaire saint...:apathy:


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## m3s (Apr 3, 2010)

I was going to say that sounds unbelievably low... but they didn't count the primary residence :stupid:

Millionaire doesn't have the meaning it used to when a condo alone costs about a million there...


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## donald (Apr 18, 2011)

If it makes anybody feel better i bet there is close to a million people in toronto living under the poverty line(think i read somewhere toronto has the largest % of poverty in canada---33% or something close like that)The other half of the poll.


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## fraser (May 15, 2010)

And over the past 7 years, the number of children living in homes with incomes below poverty level incomes has increased. Not something that we can proud of.


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## uptoolate (Oct 9, 2011)

I wonder how they decided that a multimillionaire was someone with 30 million dollars or more. I would have thought that 2 would have qualified as a 'multi' millionaire. Guess we'll just have to keep plugging along...


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## GoldStone (Mar 6, 2011)

Sherlock said:


> 422,000: millionaires in Canada.
> 
> 198,000: millionaires in Ontario.
> 
> 118,000: millionaires in Toronto.


10 times more (at the very least) if you count the value of DB pensions.

Two married teachers are multi-millionaires. So are a nurse and a firefighter. Or two married federal bureaucrats.


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## uptoolate (Oct 9, 2011)

Very good point about the DB pension holders.


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## MoneyGal (Apr 24, 2009)

Full CPP alone is worth about $250K at age 65, add OAS and you now have a half-million in government pensions before any DB pensions. How many millionaires now? :chuncky:


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## My Own Advisor (Sep 24, 2012)

Good point MG. I wonder what the numbers would be if they just included portfolio investments? Not CPP, OAS, primary residence or any work pensions.

I would think if most investors ever had $1 M excluding government benefits (CPP, OAS, etc.), primary residence or any work pensions that would be impressive.

I recall saving about $500 per month for 35 years, with 7% average return yields about $1 M. Give or take.


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## Cal (Jun 17, 2009)

But if you have half a million in your RRSP, and half a million in a non RRSP account, do you really have a million dollars when you factor in the taxes when you withdraw from your RRSP.

Goldstone - 2 married teachers are millionaires when you factor in pension plans, crazy isn't it.


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## BigMFfan (Feb 23, 2013)

I understand the discussion of DB pensions here, but am wondering does everyone agree that they should be included in net worth calculations? After all, when the pensioner dies, the value often disappears, or is drastically reduced if there's a survivor benefit. One really has no control over the "principal" or asset here, just the income, when and if it is received.


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## Sherlock (Apr 18, 2010)

To me, net worth should only include assets that you can liquidate at any time you choose. A DB pension might pay you a million over the years but it's not like you can ask them to give you the entire million right now.


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## My Own Advisor (Sep 24, 2012)

I'm with you Sherlock. 

A retired teacher with no (need for an RRSP or) other investments, who owns their home is not quite the same millionaire as another person with $ 1 M+ investment portfolio, who owns their home.

I don't like including pensions into the net worth equation because they are not liquid.

@Cal, fair point. So you consider true millionaires after taxation in mind?


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## MoneyGal (Apr 24, 2009)

Cal said:


> But if you have half a million in your RRSP, and half a million in a non RRSP account, do you really have a million dollars when you factor in the taxes when you withdraw from your RRSP.


I always calculate investable wealth as if all taxes are due today, but I don't know a lot of people who do that.


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## GoldStone (Mar 6, 2011)

My Own Advisor said:


> A retired teacher with no (need for an RRSP or) other investments, who owns their home is not quite the same millionaire as another person with $ 1 M+ investment portfolio, who owns their home.


The teacher is in better position.

NW is just a number on a piece of paper. Lifestyle is more important than NW.

An investment portfolio can be decimated in a market crash or eroded away by inflation. The investor has to be very careful about safe withdrawal rate or they risk outliving their portfolio.

Government pension eliminates those risks. The pensioner can spend to the last penny. It allows a carefree lifestyle.


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## Echo (Apr 1, 2011)

I contribute 10% of my salary toward my defined benefit pension so, psychologically, I want to account for that somewhere in my net worth. Each year I get an annual statement that gives me the transfer value of the pension.

"Had you left the plan on December 31, 2012, your termination benefit of $64,691.83 would have been transferred, subject to tax limits, to a retirement vehicle (such as a LIRA)."

That's the number I'll use in my net worth statement. I can't pretend it doesn't exist, right?


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## BigMFfan (Feb 23, 2013)

Echo said:


> I contribute 10% of my salary toward my defined benefit pension so, psychologically, I want to account for that somewhere in my net worth. Each year I get an annual statement that gives me the transfer value of the pension.
> 
> "Had you left the plan on December 31, 2012, *your termination benefit of $64,691.83 would have been transferred*, subject to tax limits, to a retirement vehicle (such as a LIRA)."
> 
> That's the number I'll use in my net worth statement. I can't pretend it doesn't exist, right?


Yes, I'd say that it would be fair to include the termination benefit as part of your net worth. At least you have some access/control over this amount, if you don't end up retiring with the same company.


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## mind_business (Sep 24, 2011)

My Own Advisor said:


> I'm with you Sherlock.
> 
> A retired teacher with no (need for an RRSP or) other investments, who owns their home is not quite the same millionaire as another person with $ 1 M+ investment portfolio, who owns their home.
> 
> ...


I guess it depends on what you do with your DB when you retire. In my case, I would definitely take the commuted lump sum at retirement. I'm in the private sector, and quite frankly don't want to rely on a company's well being over 40 years to maintain my benefits. Therefore I've always included it into my networth. 

For me it's a mute point now since my company announced it will be converting our DB to a DC in a couple more years. Definitely I would include a DC valuation in my networth.


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## Cal (Jun 17, 2009)

Mark - MG - Yes I only consider a true millionaire after taxes have been considered. There are lots of self percieved millionaires out there with a million dollar home and no $. lol.

Although when I calculate my personal net worth I don't consider the tax consequenses of my RRSP like MG does. I don't really figure it in that much, but as a generalization, I count it for half of what its value is for simplicities sake.


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## My Own Advisor (Sep 24, 2012)

Thanks for clarifying Cal. For what it's worth, I do the same thing for my RRSP value; I own about half give or take. Kinda depressing actually.


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## MrMatt (Dec 21, 2011)

fraser said:


> And over the past 7 years, the number of children living in homes with incomes below poverty level incomes has increased. Not something that we can proud of.


What is the "poverty level income"? Most Canadian advocacy groups use LICO, which isn't the poverty line. 

"Statistics Canada has clearly and consistently emphasized, since their publication began over 25 years ago, that the LICOs are quite different from measures of poverty. "


Now I'm not saying that poverty isn't a problem or anything like that, but I don't trust people who use misleading or bogus data to promote their agenda.


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## MrMatt (Dec 21, 2011)

MoneyGal said:


> I always calculate investable wealth as if all taxes are due today, but I don't know a lot of people who do that.


I think you should consider either full, immediate taxation, or "reasonable" taxation, depending on what you want.

Comparing untaxed or sufficiently illiquid investments is just for bragging rights. At which point accuracy and practical impact aren't really your primary goal anyway.


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## MoneyGal (Apr 24, 2009)

People in Venezuela (where all salaries are described in after-tax terms) think it is hilarious that North Americans discuss salaries on a pretax basis. What's important is what you keep!


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## My Own Advisor (Sep 24, 2012)

I suspect you feel the same about investment returns eh MG? Meaning, only real returns matter?


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## MoneyGal (Apr 24, 2009)

I do; I'm kind of confused why nominal returns are discussed *by investors* (versus for benchmarking). Also because this: 

http://www.ctf.ca/ctfweb/Documents/PDF/2003ctj/2003ctj2_mawani.pdf

A B S T R A C T

This article examines 10 years of returns from 343 equity and balanced mutual funds
managed by Canadian companies to assess the impact of personal income taxes on the
funds’ relative performance and rankings. We propose an algorithm for computing
after-tax returns, which we use to generate after-tax mutual fund rankings. We also
compute measures for tax efficiency and tax overhang in the Canadian context and
highlight the assumptions made for the purposes of this computation.

*Our main and robust result is that the ranking of funds on the basis of their pre-tax
returns is significantly different from their ranking on the basis of after-tax returns.*
We also find a 46 percent probability that two funds whose pre-tax rankings are
adjacent will have their rankings reversed when the ranking is done on an after-tax
basis. Finally, we found that an investor with the highest personal marginal tax rate lost
approximately 135 basis points to taxes on fund distributions from the average annual
pre-tax return of 9.01 percent in our sample of funds.

These results should be of interest to the large number of Canadians who hold
mutual funds outside their registered accounts. *Investors who select mutual funds on
the basis of past performance may want to focus on measures of historical after-tax
performance, since fund managers do have substantial control over tax efficiency.*


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## BlackThursday (Apr 25, 2011)

MoneyGal said:


> People in Venezuela (where all salaries are described in after-tax terms) think it is hilarious that North Americans discuss salaries on a pretax basis. What's important is what you keep!


Because each person can have different tax deferrals, discounts, and/or credits, I would think an after-tax salary discussion is meaningless. But maybe everyone in Venezuela gets taxed exactly the same way 

People in England used to think (and perhaps still do) about how much income they earn each year from their assets, before tax, and not the total value of their assets.
This seems a bit more sensible.


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## fraser (May 15, 2010)

We are very much focussed on tax effective investments. The premium for not doing so can be a few points today depending on your financial and tax situation, or deferral to either a lower time value of money or marginal tax bracket. I found the article very interesting.

I also read Fred Vettesse's column in the FP regarding returns-annuities vs. RRIF's. I was a little surprised.


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## Toronto.gal (Jan 8, 2010)

MoneyGal said:


> People in Venezuela (where all salaries are described in after-tax terms) think it is hilarious that North Americans discuss salaries on a pretax basis. What's important is what you keep!


My South [not Central] American friends when visiting Canada, were not amused in the least, that advertised ticket prices in stores excluded taxes, but did love the snow, albeit not the freezing cold weather.


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## kcowan (Jul 1, 2010)

Yes in Mexico the 16% sales tax is included in the prices of everything. When we return to Canada, we have to adapt to adding the extra in our heads before deciding on a purchase.


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## liquidfinance (Jan 28, 2011)

Toronto.gal said:


> My South [not Central] American friends when visiting Canada, were not amused in the least, that advertised ticket prices in stores excluded taxes, but did love the snow, albeit not the freezing cold weather.


This frustrates me here. I hate how the price advertised is never the final price. Look at a restaurant menu. You can't avoid paying the tax so the price should be included.


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## fraser (May 15, 2010)

If that bothers you, then try buying an airline ticket.


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