# "Almost Rich"



## MoneyGal

Toronto Life (print magazine) does a "money issue" every February. This February, they profiled "the one percent" - people with household incomes of $196K. 

Here's the article and the profiles from their website. It's gonna drive the frugalistas wild.

http://www.torontolife.com/daily/informer/from-print-edition-informer/2012/02/15/almost-rich/


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## financialnoob

Hahahah I saw that. My wife and I were cracking up about it. I loved the first couple who invested exactly $0, but they have a weakness for designer furniture, spending $5K on a table and chairs, which I really hope aren't the ones they're using in the photo...


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## MoneyGal

I went and calculated my spending ratios based on the spending of various profiled households. "So if ONE guy is spending $800/month on wine and his income is $165K, what's *my* monthly wine budget?"

My favourite part is when the article claims that "no one is living large." O RLY. To me, this really speaks volumes about how how "normal" spending that much has become - such that the writer would say that, and (presumably?) the profiled people would think that.


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## MoneyGal

financialnoob said:


> Hahahah I saw that. My wife and I were cracking up about it. I loved the first couple who invested exactly $0, but they have a weakness for designer furniture, spending $5K on a table and chairs, which I really hope aren't the ones they're using in the photo...


"But those are investment pieces! Those ARE our investments!"


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## brad

Everyone's values, goals, priorities, aspirations, etc. are different, so while it can fun to take potshots I suppose it's ultimately futile to judge others' financial and lifestyle choices based on our own views. It's hard to know whether these people experienced lifestyle inflation as their incomes grew, or whether this is the way they wanted to live all along and they're making the most of it.


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## MoneyGal

Brad, I hear you - but every day I also hear reports about the national savings rate, the number of people who are worried about not having enough to fund their retirement savings, etc. 

(And because I work in the financial field, people actually tell me money stuff. Like, their personal money stuff. All the time.)

It is very very hard for me to reconcile the idea that "there's a crisis" (I'm not sure there is, at all, but I keep reading about it) and "I make $165K per annum as a single, unmarried person but I'm only saving $20K." That's a savings rate of 12%.

And the framing around the article - "no one is living large" I find particularly troublesome. I know LOTS of people who could have been profiled in that piece. Heck, my family could have been profiled. But we don't fit that mold which is, presumably, why we'd never be featured. We wouldn't underscore the implied messages that "the 1% are not quite rich" and "we don't have enough money to save" (one couple "laughed" at the idea of saving for retirement - although presumably the husband's professional practice is their form of retirement saving). 

I just...it just kind of breaks my heart to read this stuff, which is why I would go to a place of poking fun at it. What breaks my heart is not these people, but the people who come up to me and whisper that they're never going to get their head above water, and they find themselves taking longer showers so they can cry and no one will hear them. Because somehow they thought that $1,000 strollers (or whatever) are not optional, but necessary, and now they're so deep in debt they don't even know how they might possibly get out. 

And if you think those stories are rare, I'm going to suggest they're not. I fly around the continent talking to people about retirement planning and from place to place and person to person I hear a huge mix of stories, from extreme success to a lot of fear and pain.


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## jcgd

See, I don't understand. If I go to buy something, like a stroller, and I only have $200 in my account is say to myself "0h, I guess I'm only getting a $200 stroller. 

And if people can't practice self control, why are we able to to leverage ourselfs so much? I get bend out of shape when I have a dental bill on my visa while my refund is in the mail. 

One guy I work with has his entire nest egg in wine. To each his own I guess.


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## brad

MG I hear you too, and I didn't mean to imply that you were being snarky, I was more anticipating the onslaught of judgment from others.

It's clear that most of these people truly are "living large," with Mercedes, housekeepers, and mind-boggling wine budgets (what is it with the wine?). And it's true that, for example, my own household income is higher than that of any of the famlies in the profiles but we spend a fraction of what they spend (and save far more). But our situation is different -- we only have one car and don't need to drive it much; no kids living at home; we like to cook so we rarely eat out; not much into entertainment (no cable, rarely go out to movies or concerts); we do our own cleaning, snow shoveling, gardening, etc. We like to live simply and abhor clutter, so we're resistant to acquiring new things. But not everyone is like us or shares our priorities.

I agree that it's frustrating to see these families portrayed as "normal" spenders, which effectively gives permission to others to emulate their lifestyles and fall into the same financial traps.


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## lb71

The author of the story, Jonathan Kay, is also a writer for the Post. Gawker picked up on the article and skewered him for it. He wrote about it today.

http://news.nationalpost.com/2012/02/16/gawker-debt-1-percent/


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## donald

The couple that own a hvac company are "likely" soild-advantage of business ownership,although maybe some would'nt see that as "bond" like.Sounds like he is established and probably has a firm network in place,just my opinion but having employees are the "ultimate" dividend- the income stream and profit margins made off "employees/business" are a better roi than anyone investments will ever offer on the big board in a longtime frame._and im sure he will have a stake and control of it well past retirement(or could sell)that is a form of a rsp & putting away 20k a yr is nothing to sneeze @.


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## Montrealer

Wow, thank you for this! It's an excellent article and I am slowly going through all the profiles about how people spend their money.

It's amazing! This is another reason why I have not followed 80% of the people I know and moved from Montreal to Toronto or Vancouver, Montreal is cheap to live in and the car insurance here is peanuts compared to Toronto.


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## MoneyGal

lb71 said:


> The author of the story, Jonathan Kay, is also a writer for the Post. Gawker picked up on the article and skewered him for it. He wrote about it today.
> 
> http://news.nationalpost.com/2012/02/16/gawker-debt-1-percent/


Oooh, nice find.


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## Ihatetaxes

MoneyGal said:


> Because somehow they thought that $1,000 strollers (or whatever) are not optional, but necessary, and now they're so deep in debt they don't even know how they might possibly get out.


I bought a $1000 Bugaboo stroller 5 years ago (actually $988 US). Best piece of equipment I have every used. 5 years of heavy use, 20 plane trips, over 1,000 kms of walking through all kinds of weather and terrain. Sold it on Kijiji a few weeks ago for $600, still looking pretty much brand new and will likely get another 5 years of trouble free use.

Not that MoneyGal is calling out people buying expensive strollers (I know she just used it as an example in her post) but every article or blog post criticising self-important yuppy urban parents with screwed up values always refers to $1,000 strollers and it makes me laugh.

Like most things, you get what you pay for. My house is filled with things that cost more money than average but are great quality, last a long time and I love using them. My Global kitchen knives, Weber BBQ, Specialized mountain bikes, etc, etc, etc.

At the end of the day, I'm not a consumer buying crap that ends up in the landfill after a year of substandard use. And hell, my house is paid for and I am putting a lot of money away every month so I don't feel too bad for the odd higher end purchase.


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## MoneyGal

What you said. The example that drives me nuts personally is "the latte factor."

I LOVE coffee. I spend A LOT on coffee (well, "a lot" in my world...still a tiny, tiny fraction of the wine budgets in the article). But because I bring my lunch to work and cycle there, my spending on coffee is irrelevant.


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## jamesbe

Wait they bought the house for $419,000 in 2007 and their mortgage payment is $2500? Something doesn't add up there!


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## brad

jamesbe said:


> Wait they bought the house for $419,000 in 2007 and their mortgage payment is $2500? Something doesn't add up there!


Depends on their downpayment and also the mortgage term (15 years, 30 years, 40 years), how often they pay (monthly, twice-monthly), regular or accelerated, etc.


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## jamesbe

I suppose, but seems high to me.

Anyways, what is with the wine? I spend $0 on wine  My monthly LCBO budget is $10 and I rarely spend anything.


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## Square Root

i haven't read the article yet but what I don't understand is why people would submit themselves to ridicule by disclosing this stuff. Maybe their lack of financial acumen is matched by their lack of other smarts. This certainly makes them unrepresentative if perhaps somewhat common. You don't see any senior execs disclosing how they spend their multi-million dollar comps, but I would guess they save quite a bit. I certainly did. Smart savers don't sell magazines either.


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## brad

@jamesbe: We bought our house in 2007 for $375K, $75K downpayment, and our mortgage payments are $2,600/month. That's because we took out a 15-year mortgage with accelerated bimonthly payments; we're currently on track to pay it off in 10 years instead of 15.

As for wine, hey some people like it. I live with a French woman who knows her wine, but we save it for the weekend when we can appreciate it more fully. If we need to unwind during the week we might drink a beer. We spend about $80/month on wine.


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## m3s

This thread made me thirsty. I'm glad my taste buds don't differentiate $100 bottles of wine from $5, and I can only drink a half dozen cases a year.

I wish I could manage these people's money for them. I'd happily do it for free but if they gave me even 1% of what I saved them in 20 years - I'd be laughing.


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## jamesbe

@brad, yes but I don't expect these people are on track to pay off their house in 10 years if they can't save a dime. But hey maybe they are being smart about one thing!


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## Ihatetaxes

Square Root said:


> Smart savers don't sell magazines either.


+1

They do sometimes get profiled in the Globe's Financial Facelift, pissing off the masses who can't stand anyone with a 7 figure net worth.


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## CanadianCapitalist

Maybe it's because I'm an engineer and like most engineers I can get away with wearing casual clothes for work ($15 Kirkland jeans, which will easily last an year) but I'm curious how anyone can spend $1,000 _per month_ on clothes. That's 12 grand a year!

Overall, I didn't bother to tally up the monthly spending, but it seems to me that it is hard to argue that most of the people profiled here (perhaps with the exception of Lewis-Koonings) are financially irresponsible. We can quibble that $20,000 RRSP contribution isn't very much savings but it is at least something. Many of these families own businesses, so it's possible that they are accumulating cash within the corporation.

I do agree that the tone of the article that these poor people making $200K per year and are unable to "live large" is frankly insulting. All I can say is: suck it up Princess!


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## jamesbe

Haha I was thinking the same. I can't recall the last time I bought any clothes.

Usually my wife goes out and buys me a shirt at wal-mart or something for $20. And every 3 years or so I'll splurge and buy 2 pairs of jeans for like $50


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## brad

Although as with strollers, you can end up saving in the long run if you buy good-quality stuff (the clothing equivalent of "buy and hold"). I buy clothes rarely, but when I do I buy them to last. I still have several Patagonia shirts that I bought in the 1980s, and they're all in great shape; I've also taken advantage of Patagonia's lifetime guarantee several times with jackets; they either repaired or replaced the jacket with a new one for free. My first Patagonia winter coat lasted me 22 years; I'm currently 8 years into my second one.


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## peterk

I really liked the situation the old retired couple were in. I hope to be living like that when I'm 80.
The two families with children had sickening priorities though... I supposed we can expect the majority of the under 40 crowd to act like that, and their children as soon as they get a bit of money (line of credit) ?

Scary times ahead... I'll be buying bank stocks!


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## the-royal-mail

CC, I think one of the issues also is that when people move up in income they also move up to a higher standard of living. I am living today quite similarly to how I was after I graduated and moved into my own place, even though my income is higher after many years' experience in my field. It's been said here in CMF many times that we should live below our means and this is something I definitely subscribe to. This is (IMO) the way to increase your savings. But as long as young people keep moving into these overpriced city houses they'll never be able to increase those savings. I think the world needs more people like Suze Orman to talk some common sense into people and to get them to gear-down their expectations. No one wants to do without, and this applies to every facet of their lives. Thus the result we see today.


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## lb71

CanadianCapitalist said:


> Maybe it's because I'm an engineer and like most engineers I can get away with wearing casual clothes for work ($15 Kirkland jeans, which will easily last an year) but I'm curious how anyone can spend $1,000 _per month_ on clothes. That's 12 grand a year!


I've got a closet full of Kirkland shirts and pants. I know you can dress for a lot less than $1000 a month. However, I also can tell the difference between a $20 costco shirt and $200 Armani shirt. I just can't justify spending $200 on a shirt. Some people put a premium on fashion. They need the latest fashion, and would not be caught dead in last year's line. That's their prerogative.


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## CanadianCapitalist

lb71 said:


> That's their prerogative.


Absolutely. I'm not judging someone spending $1,000 per clothes per month. I was just curious what these people are buying for that much money.


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## donald

About the guy that spends 1k a mth on clothes.In fairness and slightly in defense for him one could argue that it is very much a "tool" of his trade-He is on the frontline and represents td,would his clients judge him if he wore kirklands to the office?would that even be acceptable?He likely has to follow corporate culture.I understand why he "has" to-its a fixed cost of doing business in his line.No different than a plumber who needs high-end power tools as a fixed cost.I understand why he shops @ harry rosen.


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## uptoolate

Great articles MG and LB71. The link to the Gawker piece is at the bottom of Jonathan Kay's rebuttal. Life is all about choices. It is true that you can go through quite alot of money if you decide to go that way. 

I think again that the true 1% is really more the net worth 1% rather than the income 1%. There is a world of difference and the Venn diagram has a surprisingly small overlap in this day and age.


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## BigGuy

uptoolate said:


> I think again that the true 1% is really more the net worth 1% rather than the income 1%. There is a world of difference and the Venn diagram has a surprisingly small overlap in this day and age.


+1. Completely agree with the true 1% being about net worth.


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## crazyjackcsa

The one guy was going through a bottle of wine a night! Seems excessive, and I'm sure that's why the article was written. To elicit response. Find 5 subjects whose situation is all out of wack, present it as normal, sit back and watch the commentators.

And if that family bought that home for 417, with 5% down and took a fixed rate around 5% the payments make sense.


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## Daniel A.

Well my wife and I were in the 1% club till I retired early.
First the money being talked about is gross not net.
For those that can't appreciate this consider that when I worked an income of 127,000.00 had 44,000.00 in deductions. These are real numbers not guesses.
The wife had 28,000.00 deducted on 80.000.00

So 72,000.00 worth of deductions still we lived well, always bought quality products nothing just make due.
Yes there were times I looked at what the wife bought and thought it's a waste of money but if that's what she liked to do than she can.

Why would we settle for less!


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## Ihatetaxes

uptoolate said:


> I think again that the true 1% is really more the net worth 1% rather than the income 1%. There is a world of difference and the Venn diagram has a surprisingly small overlap in this day and age.



Where does 1% start for net worth? >$1M?


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## MoneyGal

Toronto Life does a "money edition" every year. The very first one I read - years ago, now - showed different households with the same average Toronto income. 

So they had a family of nine, a working couple without kids, a singleton, a single parent family, etc. -- and you could really see how the same amount of money looked very very different when needs vary widely (as CC just pointed out, in the "savings rate" thread, about how bare numbers or percentages are useless).


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## RoR

Whoa, $400-$500 a MONTH on wine? They need to start saving for a liver transplant. Hope they're saving the wine. If they are, that's one heck of a collection that will probably be hard to unload one day. And another one with a $800 a month on wine? 

Our mortage was for 185 000 and we pay 2200/month (including taxes). I want to up that to 2500/month this summer when my better half gets a raise. Bye bye mortgage! 

$1400 a month on food for one person, that's A LOT. Oy, and the last family of 4 who spend over $2000 on groceries and eating out. Man. 

Agree with crazyjack that the article is for gawking purposes only. I'm also surprised people would open themselves up like that. I sure as heck wouldn't.


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## kcowan

CanadianCapitalist said:


> Absolutely. I'm not judging someone spending $1,000 per clothes per month. I was just curious what these people are buying for that much money.


We have a friend who has over 200 pairs of black slacks. It can be done but it takes commitment!


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## donald

The 2 business owners have the distinct advantage thou over the course of there liftime keep in mind re:taxes-The banker is the one that gets the most squeezed in the system,depending on how they pay themselfs(dividends/bonus)The business owners are leeps and bounds way ahead....assuming it is done right there is no way they are paying over 40k taxes on drawing 120k...so they fall out of the norm when you start looking @ taxes/rate....like 99%of mostly all 1%ers.(that is kinda a different conversation thou,but it applies)


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## marina628

The banker needs a meeting , he goes to vegas to go to dive bars


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## marina628

I spend about $1400 a year on clothing and I do at least 4 international trips and one cruise a year.My walk in closet is full and I have costume jewelry to match everything.Probably the retail prices are close to $5000 ,I have coats for all weather and all colors ,there are smart ways to shop and save loads of money .


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## Daniel A.

donald said:


> The 2 business owners have the distinct advantage thou over the course of there liftime keep in mind re:taxes-The banker is the one that gets the most squeezed in the system,depending on how they pay themselfs(dividends/bonus)The business owners are leeps and bounds way ahead....assuming it is done right there is no way they are paying over 40k taxes on drawing 120k...so they fall out of the norm when you start looking @ taxes/rate....like 99%of mostly all 1%ers.(that is kinda a different conversation thou,but it applies)


What makes you think 99% of the 1% are business owners


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## donald

Of course not all are-But it is a fair guess there is quite a few of them and they would be the majority in the group....don't you think so?Daniel im guessing your boss with with you in the 1% and im sure most who work for private corps reconize there boss qualifies.


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## marina628

Business owner and in 1%.Anyone else?


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## ddkay

Wow how do people manage to spend $1000/month on clothes, I only replenish my supply once a year and a couple of good suits last a lifetime.

People spend a lot of money on wine too for some reason, there was another thread where some person was drinking a bottle a night. That's crazy. It is possible to invest in wine if you know how to choose them and have proper storage. It's still a gamble though.

Anyway kudos to these self-employed/business owners, that's hard work and like donald says if they managed to get this far it will probably pay off even more in the long run.


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## Causalien

Current definition of 1%?


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## Sampson

This article is brutally biased.

For every case like the 4-5 families listed, how many >$150,000 household income earning families have savings rates of 30-50%? I'm also very surprised that $200k is the threshold for _household_ income, I always thought that was individual income. I'm sure many CMF's fall into the 'high income, high savings' category.

While I don't downplay statistics on high debt and savings rates, these types of articles only serve to push people into thinking high income earners blow their money on crazy indulgences and 'deserve' to be in a tough situation.


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## Ihatetaxes

marina628 said:


> Business owner and in 1%.Anyone else?


Yup.


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## donald

One thing that has to be a big misprint is the last family has season tickets to the leafs for 2k?that can't be!! where the heck is he sitting-behind the hot dog cart in the basement.....I thought leaf tickets for a season were north of @ least 8k,that can't be right.It costs like 6k a yr for average seats for a winnipeg jets ticket holder if i remember correctly.


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## Guigz

Maybe they get the leaf tickets at a discount from the clothes shop? I am sure spending 1000$ per month there would qualify for it!


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## Sampson

He probably shares the Leaf tix with other people?


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## Daniel A.

donald said:


> Of course not all are-But it is a fair guess there is quite a few of them and they would be the majority in the group....don't you think so?Daniel im guessing your boss with with you in the 1% and im sure most who work for private corps reconize there boss qualifies.


I was a union member and know many who easily fit the profile.

Oil patch workers, longshoreman, coupled with their wife's income 200,000.00 
Take any cop that has a spouse as a nurse that couple can fit, that couple does not need to put in many extra hours to make it. 
I worked in private industry and had a high school education.
128,000.00 plus 16 weeks vacation all benefits paid including pension the company is very profitable.


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## Plugging Along

marina628 said:


> Business owner and in 1%.Anyone else?


 We were at in the one 1% being not owning a business from employment income. We are just higher as a business owner now.


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## Plugging Along

Daniel A. said:


> I was a union member and know many who easily fit the profile.
> 
> Oil patch workers, longshoreman, coupled with their wife's income 200,000.00
> Take any cop that has a spouse as a nurse that couple can fit, that couple does not need to put in many extra hours to make it.
> I worked in private industry and had a high school education.
> 128,000.00 plus 16 weeks vacation all benefits paid including pension the company is very profitable.


I think years experience makes a big difference too. I do think that its harder to be in an union position in the one percent when you are just starting in your 20s. I am assuming your salary of 128k was not in the first 10 years of your career. I do know more business owners in their twenties and thirties making this kind of money than employees. 

The percentages don't mean as much and Its with your age that I can be a closer comparison.


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## jamesbe

I think I like this quote the best..
The Jeep was a mistake. We shouldn’t have bought it; we could have used the extra money for travel.”

OR maybe you could have saved the extra money? Maybe sell it? LOL


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## Ihatetaxes

jamesbe said:


> I think I like this quote the best..
> The Jeep was a mistake. We shouldn’t have bought it; we could have used the extra money for travel.”
> 
> OR maybe you could have saved the extra money? Maybe sell it? LOL


Ever try to sell a used Jeep? They have the most expensive (and least popular) model that Jeep has ever sold. Probably lost 50% of its value in its first year.


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## donald

I'm not saying a cop/nurse can't make 200k+ a yr,i'm just saying that most of the wealthy people that i know of are'nt cops/nurses most are business owners very much like the 2 families profiled.Both those guy are still(youngish)and they may not have hit there stride yet or have peaked.10 yrs from now the hvac guy could of expanded more and the family could be making 500k a yr,you know what im saying?cops and nurses have barriers and ceilings.Then you start entering the accounting/accountant working for the owners and things really start adding up.


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## Daniel A.

Plugging Along said:


> I think years experience makes a big difference too. I do think that its harder to be in an union position in the one percent when you are just starting in your 20s. I am assuming your salary of 128k was not in the first 10 years of your career. I do know more business owners in their twenties and thirties making this kind of money than employees.
> 
> The percentages don't mean as much and Its with your age that I can be a closer comparison.


Yes I worked a senior position, I just don't know any business owners in their twenties or thirties that take 16 weeks vacation.
I'd look at buying a business but I don't think I'm up to putting in the time.
I may look again as it could be a way for my kids to get ahead.


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## donald

Also most young business owners are'nt counting down the days to retirement and they don't view "it" as putting in time,most are engaged and have a lot of satisfaction working/building something there creating and it is not purely about making $$ it is just a by-product from what there doing ie:its more fun making business deals than sitting on a beach-that is why most business owners are cut from a different cloth....just my thoughts.(they don't want 18 weeks of holidays)not built that way.


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## Plugging Along

Daniel A. said:


> Yes I worked a senior position, I just don't know any business owners in their twenties or thirties that take 16 weeks vacation.
> I'd look at buying a business but I don't think I'm up to putting in the time.
> I may look again as it could be a way for my kids to get ahead.



I think it depends on the type of business and industry. As a business owner, there can be a lot more flexibility, but it really depends. I know my spouse (fiancé at the time) when he was 28 or 29, he did have the ability to work what he wanted, but of course he wasn't always getting paid. He would work 6 months like a dog, and then would take a few months off. He took off a year to get his masters, and picked some short contracts in between. He actually made more back in his twenties than now because he was willing to travel at a time. 

I think as Donald said when you are in it for yourself, it is much different. Often the owner can take off the time, but really, they don't want to.


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## The_Mechanic

I agree with the Gawker on this one. Sure you dont feel rich if your up to your neck in debt no matter how much you make. But that doesnt mean you arent rich. Being in the top 1% of richest poeple in Canada would make me feel like a freaking god. But then again, I dont use credit, dont spend 800$ a month on wine, and 1000$ on shoes...so yea I would have tons of cash left over.

Living in the GTA gobbles up a big portion of your 196k? Move!! I mean seriously in my current city of approx 180,000 poeple, less than 500 individual poeple make 200k a year. And the ''rich'' part of town has some insanely huge houses with ferraris and lambos, and porsches sitting out front.

Its all about where you're living. If you cant live off of 200k a year, you're doing something wrong, no matter what canadian city you live in.


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## Daniel A.

Try Vancouver !!
Toronto is cheap for me. LOL


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## Four Pillars

crazyjackcsa said:


> Seems excessive, and I'm sure that's why the article was written. To elicit response. Find 5 subjects whose situation is all out of wack, present it as normal, sit back and watch the commentators.


Bingo.

Lots of great comments in this thread.

All I can say is that Toronto Life has the ability to find the biggest morons possible who will be interviewed and end up with an entertaining article.

Here's an article I wrote about 2 morons profiled in a TL parenting article:

http://www.moneysmartsblog.com/why-are-some-parents-morons/

This is yet another entertaining article from TL on mortgage slaves:

http://www.torontolife.com/features/sinking-feeling/


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## Plugging Along

I just read the whole article. I have not admit I have med feeling. I think the people that they used are over the top in what they spend their money on. However, I feel that way too at times. Even though i am in the one percent, i feel fortunate, butby no means do I feel wealthy or rich. 

I know ultra wealthy people who dont ever worry about finances or money and spend whatever they want, and I am not in that category.

I am fortunately that my spouse and I make decent incomes, I don't even feel they re that high, so m stunned when I see the stats. I live in a upper middle class area, and it seems like everyone has much more money than we do. We live in an older 30 year old house, amount newer areas. Our house is modest by most of the houses in the area. There is a high concentration of private schools here, and every one is driven a new Mercedes or luxury vehicle, especially the teenagers. I got cut off by a teenager driving a new hummer the other day :. I am constantly fighting the urge to renovate or upgrade our home. I am just trying to enjoy our mortgage free home. I have to admit it is hard though. When your kids want to go to other houses because the other houses are nicer.

Many of my kids classmates go on multiple vacations a year, often an overseas trip for weeks, and somewhere else for Christmas and spring real. The kids are in designer clothing along with the moms. They all drive nice vehicles, and have their multiple kids in he higher grade private schools. I really can't believe that all of the are in debt. They are extremely educated, drs, dentist ,lawyers, CAs, business owners, etc. We often wonder an everyone be doing that much better?


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## Plugging Along

Four Pillars;11441
Here's an article I wrote about 2 morons profiled in a TL parenting article:
[url said:


> http://www.moneysmartsblog.com/why-are-some-parents-morons/[/url]
> 
> url]


FP I am now thinking that. Maybe one of those morons oh listed. 

I have brought my children to some very fine restaurants. They have eaten in some of the top restaurants in NA. I see nothing wrong with that, as long as they behave. We have modeled what the expected behaviors is, and know they are able to do it. I don't see why kids shouldn't be n those restaurants IF they behave. There was once, for my first mothers day, m hubby tried to take me to one of my favorite fine restaurants with a 5 month old. She started to fuss, and we prompted took her right outside Neil get went backed to sleep. Other than the time it took us to walk outside the restaurant, no one would have heard a thing. I think that kids need to learn what is acceptable if that's part of the family lifestyle. Dont get me wrong, I still get annoyed wit poorly behaved kids. When we go somewhere nice, we do always have a plan and are willing to leave if necessary to not disturb others.

In terms of the stroller, have done the same thing. I had to bring a double to our NY trip. We were there for months., and there was no way I could take both m little ones b myself without it. I tried to not ride the subway during peek times, and find a spot off to the side, but really, wha is one supposed to do. I actuall looked for a smaller double when I arrived in NY, but some of them were over $1000 for the really small ones. 

I do try to be conscientious of others when out and about, but sometimes the kids take precedence.


----------



## brad

Plugging Along said:


> I live in a upper middle class area, and it seems like everyone has much more money than we do.


Same here, but in a perverse way I kind of like the fact that everyone thinks of us as the poor kids on the block; we're the only ones who do our own lawns, paint our own house, have a rusty eight-year-old Toyota parked on the street (we have no driveway or garage), use public transporation and our bikes to get around most of the time. Let them think what they will, it doesn't matter; we can't be bothered with the "keep up with the neighbours" thing. We have our own standards and we live by them, not someone else's.


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## Four Pillars

Plugging Along said:


> FP I am now thinking that. Maybe one of those morons oh listed.


Rest easy PA - I am 100% confident that you are not a moron or anything close to one. 

Nothing wrong with bringing a kid to a restaurant as long as they behave. That applies to all patrons - not just kids.

As for the stroller lady - she was a moron because of her attitude about payback for people not giving her a seat when pregnant. The stroller size had nothing to do with it.


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## uptoolate

Ihatetaxes said:


> Where does 1% start for net worth? >$1M?


It looks like these days, a net worth of 1 million puts you in the top 10% in Canada.


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## Jon_Snow

I suppose my wife and I are very close to qualifying for this "1% club", yet our approach could not be any more different than these folks. I have referenced our extreme savings rate in other threads - yet I admit that a small (yet persistent) part of me would like to "live it up" like many in that profile.


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## arrow1963

These articles pop up online every so often, and the problem is that the 'I don't feel rich' crowd never bothers to provide definitions for their terms.

If 'rich' = having a lifestyle that is more expensive than 99% of Canadians, then you're 'rich' at 196K, regardless of whether you've been mentally ruined by running full tilt on the hedonic treadmill, or whether you're silly enough to set your standards based on everyone around you that's wealthier than you are.

If rich = financial independence, then no, being in the top 1% for income doesn't mean that you're 'rich'. It does mean that you're a really good candidate to be 'rich' in the near future, and you could probably be 'rich' if you wanted to be. However, I do think it's hypocritical to choose rich=lifestyle in your own life, and then say to the world: rich=financial independence, I'm not financially independent, thus I'm not rich.


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## ddkay

Rich

To most people, financial independence is all that matters, for me its that plus the occasional splurge on iThings.


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## Daniel A.

Plugging Along said:


> I just read the whole article. Even though i am in the one percent, i feel fortunate, butby no means do I feel wealthy or rich.
> 
> I know ultra wealthy people who dont ever worry about finances or money and spend whatever they want, and I am not in that category.
> 
> I am fortunately that my spouse and I make decent incomes, I don't even feel they re that high, so m stunned when I see the stats. I live in a upper middle class area, and it seems like everyone has much more money than we do. We live in an older 30 year old house, amount newer areas. Our house is modest by most of the houses in the area. There is a high concentration of private schools here, and every one is driven a new Mercedes or luxury vehicle, especially the teenagers. I got cut off by a teenager driving a new hummer the other day :. I am constantly fighting the urge to renovate or upgrade our home. I am just trying to enjoy our mortgage free home. I have to admit it is hard though. When your kids want to go to other houses because the other houses are nicer.
> 
> Many of my kids classmates go on multiple vacations a year, often an overseas trip for weeks, and somewhere else for Christmas and spring real. The kids are in designer clothing along with the moms. They all drive nice vehicles, and have their multiple kids in he higher grade private schools. I really can't believe that all of the are in debt. They are extremely educated, drs, dentist ,lawyers, CAs, business owners, etc. We often wonder an everyone be doing that much better?



The area I live in and raised my kids in is the same. The problem with looking at generic stories is there usually is much more going on in the back ground than said. I know of a few that depend on family trusts to support the extras. A friend that works in the bankruptcy field once told me that until you see the true facts as she does everyday, don't believe what you read or see. 
Look up bankruptcy filings in the court listings shocking cases. You come to realize your better off than you believe.


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## Square Root

It's easy and fun to criticize how others spend their money. After all each of us believes they have the best possible spending plan. Many of these people are fairly young and it would not be too surprising if they weren't very far along their retirement savings plan. I didn't really start to save significant amounts until my early 50's. 
People spend their money in many different ways for better or worse. After all we live in a capitalistic democracy where freedom of choice is the key premise. Having said that I think most here would agree that many people are ill prepared for retirement. Of course that would not include us.


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## donald

That is a good point.If some of us frugal types were profiled(not in a finance section,but in "mainstream"media)Alot of people would think were off our rocker and on the "fringe" It's far from normal to be saving 30/40/50 % of net income.Im highly disciplined myself with savings and i know some of my friends/peers that know me and they have a good idea im a high saver wonder why im so ridged....a unability to ''enjoy" and let "go" almost like i feel i don't deserve things i could easy acquire.You could argue that esp if your under 45 people will view frugal as hoarding/ocd.Anybody know what im saying?it is kinda a bit rouge compared to "mainstream".


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## MoneyGal

I know exactly what you mean, but I would not agree with the characterization of my savings habits as "OCD" or any way problematic. I have big legacy goals. I'd love to die with lots of unspent money (just not any time soon).


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## donald

It's not,but from the "outside" looking @ it some might/could view it that way(not that it matters because it is a personal choice)I'm sure some of your friends/girlfriends would KILL to have your nest egg moneygal and they would do things differently if they were in your shoes?Or if they knew.I'm sure you could spend thousands on wine/yr if you Really wanted to and you would still be way far ahead.


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## uptoolate

Yes I agree with you Donald and MG. It would be interesting to know the 'truth' and what the real picture is. Means and even medians can be deceiving. I almost get the feeling sometime that there are actually two distinct populations out there and that the savings curve is anything but a 'normal' curve even when one is comparing people of similar ages or incomes. Some people just seem to have the 'frugality' trait while others have the 'living large' or 'keeping up with the Jones's' trait. Whether the former group had more exposure to parents or grandparents who experienced the Great Depression or some other factor (like they were Scots - lol). 

It is clear from research like Stanley and Danko's (The Millionaire Next Door) that modest income is not a huge impediment to high net worth and in Stanley's subsequent research it looks like hanging out with the 'big hat, no cattle' crowd can be very detrimental to one's ultimate net worth.


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## Daniel A.

moneygal said:


> i know exactly what you mean, but i would not agree with the characterization of my savings habits as "ocd" or any way problematic. I have big legacy goals. I'd love to die with lots of unspent money (just not any time soon).


lol


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## financialnoob

MoneyGal said:


> "But those are investment pieces! Those ARE our investments!"


LOL



Square Root said:


> i haven't read the article yet but what I don't understand is why people would submit themselves to ridicule by disclosing this stuff. Maybe their lack of financial acumen is matched by their lack of other smarts. This certainly makes them unrepresentative if perhaps somewhat common. You don't see any senior execs disclosing how they spend their multi-million dollar comps, but I would guess they save quite a bit. I certainly did. Smart savers don't sell magazines either.


I totally agree with this post. I intended to cut down the quote to the most relevant parts, but the entire post is right on the mark.

I mean I get what others are saying about how we are not exactly the norm or how we shouldn't pass judgment on how people choose to spend their money. 

At the same time, I don't see what gain there is to being featured in an article like this. It's not just a story; these people invited someone into their homes and disclosed all this information for reasons beyond any comprehension. It certainly doesn't invite much sympathy when these couples spend more on wine than many others even make in a year.

There's nothing wrong with living well. But it's certainly questionable why one would want to flaunt it in this manner, while some go one step further and expose their complete lack of savings or safety net.


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## humble_pie

i just whizzed through the profiles. Not going to read the article.

strong overall thought was those people aren't spending anything like reasonable amounts on their kids. The profiles w kids, that is.

where were orthodontia, really serious after-school & saturday lessons, weekend ski camp, specialized summer camps like horse camp, music camp. Clothes & equipment to get kitted out for all of these. Has anybody priced a quarter-size or a half-size violin lately. Riding boots size 3.

plus the biggest ticket of all, la grande, which is private. school. tuition. Can easy set a parent back $10-20k per child per annum. Up to $45k if he or she goes away to boarding school.

those neglected kids are living in poverty hell lol. Their parents are even spending more on their own personal cars, clothes & accessories ...


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## uptoolate

Good point HP! Poor little dears... may even have a chance at growing up to be normal!


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## olivaw

The 1% argument made in the article was silly, but the author does make one fair point. It is so expensive to live in certain Canadian cities that household income doesn't tell the whole story. $1,500 for child care and a $2,500 mortgage eats up 48K per year in after tax dollars. Add in food, clothing, maintenance, utilities, automobiles, child rearing and a vacation and you can easily hit 70K to 100K without getting ludicrous. 

Unfortunately, the author profiled BMW driving, expensive-wine drinking, Armani wearing yuppies. Not exactly a group that deserves public sympathy.


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## humble_pie

late let us not be sarcastic ... i know so many ordinary middle-class parents who sacrifice a lot to procure a few of those benefits for their kids.

i know working-class parents - she's a hairdresser, he's a gardener/snow removal contractor - who bust their *** to send their 2 daughters to private school. The girls are thriving. The mother began her search for the right school when the oldest was only 8 or 9.

what i saw in those profiles is that kids appeared in the budgets like household pets. Or worse. Inanimate objects like furniture. Tables, chairs. Little things to be acquired & dusted off now & then.


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## BigGuy

Somewhat off-topic, but are most people here in favor of private schools? Do you think your kids are getting the benefit from it? I've alway felt that if you have good public schools in your area that it is not really worth it. For the record I was in public school until 1 year of prep school in NH after high school and then university.

edit: fixed stupid spelling mistake, thanks brad....


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## Daniel A.

Don't you know the private schools are an early start on networking


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## brad

BigGuy said:


> Somewhat off-topic, but are most people here in favor of private schools? Do you think you're kids are getting the benefit from it?


I don't think there's a generic answer to that question: it depends specifically on the quality of your local public schools and the quality of the private-school alternatives. (Maybe if you'd gone to private school you would have written "your kids" instead of "you're kids" in the sentence quoted above. Just teasing...)

I was public school all the way: elementary, high school, and university (State University of New York); my father paid less than $1,000 total for my four years of university because I had a state scholarship. I feel like I got a good education, but I happened to live in an area that had good public schools. I worked at Harvard University for three years, and employees get big discounts on courses so I took courses every semester; I didn't feel like the instruction I got there was any better than what I got at my state university; instead the differences boiled down to the quality of students. They were there to learn, most were overachievers, and they worked very hard and were engaged in the topics we were studying. That kept everything at a very high level, and as a student I worked harder to keep up with them. That gave me a sense of the value that could be offered by private schools.


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## nathan79

The only profile that struck me as remotely reasonable was that of the retired couple in their 80's. So I added up all of their expenses, and lo and behold, they're only spending $59,000 a year. Now, I don't know how much their 160K income is taxed, but it's clear they're living well below their means. So then, what is point in profiling them as if they're barely scraping by? Hilarious.

The other profiles are hilarious as well, but in the sort of the way they're so bad at money management, that all you can do is laugh.


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## brad

The other thing I noticed is that only one family mentioned giving anything to charity, and that was a paltry amount (about $1,500) compared with what someone at that income level could afford to give if they stopped for a minute to consider the impact their money could have if they put it to use to improve something other than their own little worlds.


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## humble_pie

yup i noticed that too ... no donations.


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## Square Root

Private schools are very expensive all right. We sent our daughter to them for her entire schooling. We were happy with the results but I'm sure she would have done well in the public system too. Was it worth it: don't know. they do provide smaller classes and more individual attention. Outings are better, skiing, camps, travel,etc. Would I do it again( grand kids) probably.


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## peterk

When I was 10 this family down the street won a few hundred thousand in a group lottery, as a result the kids got moved to private school. They were some of the most trouble making and trouble getting-in kids at the school.
I didn't keep in touch after the lottery win, but looking now, according to facebook, they are enjoying the finer things in life such as: tank tops, fatness, canned macklay's beer, recycling bin end-tables, and seemingly a girlfriend of 6 months who is pregnant...

Myself, just now finishing university, and trying to remember back at all my schoolmates over the many years, I would probably attribute success in school (as The Man defines success of course) as 30% smartness, 30% curiosity, 30% hard work, and 10% teacher inspiration.
When trying to remember times of inspiration in the past, I can't remember specific events, but I sure as hell am sure that it had everything to do with the teacher's desire to teach and inspire, and nothing to do with what resources they did or didn't have access to.

So my thoughts of private schools would be that if they somehow manage to get inspirational teachers to work for them, it could be helpful. But just because they have more resources? Not a chance.


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## Square Root

The one advantage of private schools is that it is generally easier to expell problem kids as they can revert to the public system. Trying to expell a problem kid from the public system is much more difficult I think.


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## Sherlock

I don't buy the argument that it's so expensive to live in Toronto. It's only expensive if you choose to live a certain lifestyle. There are many families that do just fine on very modest incomes.


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## Dmoney

I think living in Toronto is expensive. 

Living in the GTA not necessarily. 

The difference between Toronto and most other cities is that in most cities a 5 minute drive out of the downtown core will get you into areas where housing is much more affordable.

In Toronto, you'd have to drive 45+ minutes to get to affordable housing. 

Granted most of the stuff these people are spending money on would cost the same anywhere. Wine, food, sports, daycare etc.


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## ddkay

I could spend $12,000 a year on my children's education or I could spend it on a new Fendi purse every month. Tough choicez. I really think they interviewed the wrong people.


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## olivaw

Sherlock said:


> I don't buy the argument that it's so expensive to live in Toronto. It's only expensive if you choose to live a certain lifestyle. There are many families that do just fine on very modest incomes.


Young parents with children can barely get by on the median income in some cities. Taxes, housing and day care are very expensive.


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## kcowan

I went to Lawrence Park. In those days, it was competitive. My kids went to Richmond Hill High and Unionville High. They both found the experience appropriate. Then Queens and Western respectively. I was a UofT grad.

My friends that went to UCC mainly benefitted from the networking opportunities when they got out to work. But I just worked harder at developing my network.

I agree that lack of charitable contributions is an obvious omission. Must be part of the Me Generation?


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## Ihatetaxes

Why do people challenge the amount of charitable contributions that other people make? How do you know those people aren't donating hours of time every week at a local foodbank or soup kitchen? I don't give a ton of money away either. I did though, spend a lot of time to raise over $3,000 for the Becel Ride for Heart and Stroke last year, gave a ton of stuff to the local animal shelter recently including food, dog beds, etc. (without asking for a tax receipt) but people would still call me selfish if I was profiled since I don't put aside a certain percentage of my income for charity.


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## brad

Ihatetaxes said:


> How do you know those people aren't donating hours of time every week at a local foodbank or soup kitchen?


Your donations of time and goods are admirable, no question. Most of us start out with more time than money, but if we're lucky as we grow older the balance shifts the other way. When you look at the lifestyles these people live and the stuff they spend money on, I'd be surprised if they're donating hours of their time to charities. But you're right, there's no way to tell.

But I think the rich bear a greater financial responsibility because they have the resources to make a significant impact. The $80,000 that the one couple spends every three years on a new Mercedes could save thousands of lives in a developing country, or build hundreds of schools in the poorest parts of the world. 

Peter Singer's book "The Life You Can Save" is an eye-opener in this regard. He makes a very compelling and ironclad case that, given the fact that more than 20,000 children die every day around the world for easily preventable causes, spending money on things we don't really need instead of giving that money to charity is the moral equivalent of walking past a drowning child in a shallow pond because you don't want to ruin your expensive new shoes. And he discusses every one of the common arguments against giving to organizations that work in developing countries: he dismantles each argument against giving and provides hard data and irrefutable logic to show why that argument is wrong. Reading Singer's book has made me considerably less wealthy (in dollars) than I was before I read it, but it has sure made me feel a lot happier and more fulfilled.


----------



## Karen

> ...I agree with the Gawker on this one. Sure you dont feel rich if your up to your neck in debt no matter how much you make. But that doesnt mean you arent rich. Being in the top 1% of richest poeple in Canada would make me feel like a freaking god. But then again, I dont use credit, dont spend 800$ a month on wine, and 1000$ on shoes...so yea I would have tons of cash left over.


The reverse is true, too. I think that being "rich" can be a state of mind. I am very far away from being rich in the technical sense of the word, but I feel rich because I have a mortgage-free house and enough money in pensions and GIC savings to last me the rest of my life, probably with a fair bit left over for my family. What more can we reasonably ask of life?

The people in the article have many times more income than I do, but, hard as it is to believe, they don't have nearly as much in assets. And, as much as they're younger than I am, I doubt whether they will have by the time they're my age, considering the material things they deem to be essential to their lives.


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## andrewf

I donate blood rather than (more) money. It seems more meaniningful, to me. It also helps that I am O negative.


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## Dmoney

brad said:


> Peter Singer's book "The Life You Can Save" is an eye-opener in this regard. He makes a very compelling and ironclad case that, given the fact that more than 20,000 children die every day around the world for easily preventable causes, spending money on things we don't really need instead of giving that money to charity is the moral equivalent of walking past a drowning child in a shallow pond because you don't want to ruin your expensive new shoes. And he discusses every one of the common arguments against giving to organizations that work in developing countries: he dismantles each argument against giving and provides hard data and irrefutable logic to show why that argument is wrong. Reading Singer's book has made me considerably less wealthy (in dollars) than I was before I read it, but it has sure made me feel a lot happier and more fulfilled.


What's his defence for CEO salaries approaching $500K? 

http://www.squidoo.com/child-organizations
http://www.charitynavigator.org/__asset__/studies/2010_CEO_Compensation_Study_Revised_Final.pdf
http://list.moneysense.ca/rankings/charities/2011/aid/Default.aspx?sp2=1&d1=a&sc1=0

I hear all the arguments "we need top talent", "we're a huge international organization", "we coordinate hundreds/thousands of employees". But wait, those are the exact same arguments that CEOs of for profits use. And I guarantee it's the same people saying bank CEOs are paid too much and should be giving it to charity.


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## brad

Dmoney said:


> What's his defence for CEO salaries approaching $500K?


His advice is to use the GiveWell site (http://www.givewell.org/), which does extensive research to identify the charities that are most effective (i.e., where most of your donation will go to support direct activities in the field).

His book addresses all the usual argumens for why we shouldn't give (e.g., "we already give through our taxes," "charities take too big a cut of my donation," "why should we contribute to overpopulation by saving lives in developing countries," etc., plus about 15 other common arguments -- he has given his talk to thousands of people over the years and has heard all the counter-arguments. Instead of starting with the conclusion that the counter-arguments are wrong, he started with the assumption that they were right and explored them in depth to see if that was true. In every case he comes up with a soundly logical (backed up by data) argument for why, in fact, they are wrong. It's a dangerous book to read if you want to keep your money. ;-)


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## Dmoney

brad said:


> It's a dangerous book to read if you want to keep your money. ;-)


May risk giving it a read. I like how Givewell recommends only 1% of all charities it reviews. Makes you wonder how much of the money donated to the rest actually gets to the people the charity supports. 

I think I'll resolve not to give to any charity that uses third party fundraisers (harrassing people on street corners, since they personally get a good chunk of the donation for themselves) or that pays their CEO more than I make (I clearly need the money more than he/she does, he/she can make up the shortfall).

I had heard about the Anti Malaria Foundation before, looks like it's a pretty effective charity, might give it a closer look.


----------



## brad

Dmoney said:


> May risk giving it a read. I like how Givewell recommends only 1% of all charities it reviews.


Yes, it was an eye-opener for me, and it's causing me to revise the list of charities I give to (which I approach almost like I do investments, as a sort of balanced portfolio -- 80% in developing countries, 10% Canada, 10% in my specific community). 

Like you I hate getting harrassed, whether it's in person or by phone. A guy I met who's been working in international development for 30 years pointed out that the large charities have to focus on keeping themselves afloat, because they have all those salaries and expenses to support; the smaller charities tend to focus more on the mission. There's a great little charity I support here in Montreal that collects bikes and sends them to developing countries - they have a staff of about five people but they leverage it mightily with volunteers and partnerships with NGOs that are based in the countries they send the bikes to. It's amazing how much they can accomplish with so few resources.


----------



## MoneyGal

andrewf said:


> I donate blood rather than (more) money. It seems more meaniningful, to me. It also helps that I am O negative.


Ah, the valued Type O. Did you, by chance, see this fascinating article on the longest-ever chain of kidney donations? 

http://www.nytimes.com/2012/02/19/h...dney-transplant-chain-124.html?pagewanted=all

I was born before the advent of RhoGHAM and received a lifesaving complete blood transfusion at the age of 2 days. Thanks for donating blood!


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## andrewf

Thanks for that article, MG. I wasn't aware that the kidney registry worked that way.


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## MoneyGal

It didn't until a philanthropist, who made a lot of money, used his background as a quant to create something truly life-saving.


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## brad

MoneyGal said:


> It didn't until a philanthropist, who made a lot of money, used his background as a quant to create something truly life-saving.


It's funny, there's an organization based in Oxford, UK called 80,000 hours (which is the approximate number of hours we will spend in our careers), most of whose members are deciding to pursue high-paying careers with the express goal of being able to give much of their money away to charity and other altruistic endeavours: http://80000hours.org/

It'll be interesting to see how well they all stick to their pledges as they get older (some have promised to give 50% away, most are already giving away 10%). Most of them are university students.


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## andrewf

Sounds like a modern day nun/monk. And unlike spending 14 hours a day in silent prayer ('a wasted life'), these people will probably still have meaningful and self-fulfilling lives and help hundreds or thousands of others have a meaningfully better life.


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## Mall Guy

financialnoob said:


> spending $5K on a table and chairs, which I really hope aren't the ones they're using in the photo...


Unfortunately . . . they are . . . but heavens those are Eames plastic side chairs with the Eiffel tower base (circa 1948)


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## MoneyGal

(I have those same chairs in my dining room)


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## Daniel A.

I had to go back and look at the first page to remember what we were discussing.


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## Four Pillars

Daniel A. said:


> I had to go back and look at the first page to remember what we were discussing.


Does it really matter?


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## humble_pie

moneygal i'd have imagined you with the 1953 originals:













or possibly these:













or these:














one of these in a fantasy corner:


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## Mall Guy

MoneyGal said:


> (I have those same chairs in my dining room)


Yes, but you didn't brag about them (well here anyways)!!!

Side bar . . I'm simply terrible at decorating, so when I bought my condo, I hired a decorator . . . her store discount paid her fee x2 (its the chairs that brought that out) . . . does that make me the 'almost rich' hiring someone to shop for me?


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## Ben

The author of the article: "During my entire childhood, spent in a comfortable lower-upper-middle-class neighbourhood of Montreal....."

Lower-upper-middle-class. That is convoluted.


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## JimmyZ57

Long time reader, first time posting.

I find this discussion fascinating.

My wife and I are hitting our 40s, weve paid off our Vancouver area townhouse, have no car payments, our only major expense right now is daycare for our toddler.

Up to the point my wife pursued a career change (about 2 years ago) we were making about 25k less than those profiled in the article.

We have been socking away as much as we can for several years now. When we had the mortgage we were paying it down as much as we could.

Hitting middle age now im looking back, in retrospect, and wondering if we are too frugal and if we have missed out on really enjoying our lives.

Some of the spending habits of the families portrayed in the article are ridiculous, but i think that it is possible to be ridiculously frugal too. Do we sock away as much as we can, missing out on enjoying life, so that we can retire 5-10 years early and continue to be frugal?

I work with a guy who spends everything he makes. He flew to the stanley cup finals in Boston last year at a drop of a hat. He owns a condo downtown and pays a ridiculous maintenance fee on it. He has absolutely no clue as to where his paycheque deductions are going, no clue as to what his pension benefits are. Eats out almost all the time. Travels several times per year.

In the big picture am i really further ahead than him if for instance we both get a terminal illness during the next decade? Will he continue to enjoy the next 20 years while i keep socking away what i make so that i can be a little more comfortable in my 60s and 70s while i look back and wish i did buy a case of Bordeaux, travelled to Paris and NY more often, and had a nicer car?

Im in a job I hate right now, and have been for over a decade, because of the pay and because of the pension. Maybe I should be more like the families portrayed?

How do some of you view the balance between lifestyle and frugality? Anyone else view this as a dilemma?


----------



## Guigz

JimmyZ57 said:


> *Im in a job I hate right now, and have been for over a decade, because of the pay and because of the pension. Maybe I should be more like the families portrayed?*
> 
> How do some of you view the balance between lifestyle and frugality? Anyone else view this as a dilemma?


If you were more like the families portrayed, you would become a slave to your job. Maybe it would be time for you to re-evaluate your positions. Do you really need to work *there*?

I don't think most people are super frugal only to retire and then do nothing. Being frugal in order to retire early gives you way more flexibility to pursue interests of your choice.

There is nothing wrong with a little Bordeaux here or some Amarone there, the idea is to make choices that make you happy. Is the happiness of a case of Bordeaux worth working a few days at the office?


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## brad

It's a balance that hangs under a big cloud of uncertainty: there's always the possibility that you can scrimp and save now for retirement, only to die or become incapacitated before you even reach retirement age. But if you live only for today and you end up dying at 98, your last few decades could be miserable because you'll have barely enough to survive on.

You can guess at your life expectancy based on statistics and your family history, but in the end it's only a guess: you could get hit by a truck tomorrow or you could outlive your life expectancy by 20 years.

I try to take a "no regrets" approach: I donate money to my future self, in the form of retirement savings, but I reserve some for my present self to ensure that I get some joy today from the fruits of my labours. The key for me lies in being true to my own standards for what I need to be happy. Luckily for me it doesn't take much. A good book, a walk in the woods, an evening with friends...this stuff doesn't cost much but it makes me happy and fortunately I don't lust after more typical things like an expensive vacation, a fancy car, a big-screen TV, a second home, or a $400 bottle of wine. I do like my iPad, though. ;-)


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## dave2012

I sometime think like that too JimmyZ57. For us its more since the crash in 2008 which disrupted our plans and set us back about 4 years (we held on and have since recovered but lost those years in growth of our nest egg). I was hoping to retire earlier. We have become quite frugal, which has personally now become a hobby lol.

But I do often wonder now about balancing being frugal and travelling like we used to. We have 'stuff' and don't really need more (except maybe a 'New' iPad ). These days I enjoy going to HD, Future Shop etc and coming out empty handed while everyone else is loaded up. I like the comfort these days of knowing the house is paid for, we don't have car payments and we keep trimming our fixed expenses. Living within ones means can be pretty rewarding within itself. It is much easier sleeping these days than back in 2008. Thats worth a lot.

In your case you mention you are just arriving at 40. I'd say you are in pretty good shape and still have lots of years to enjoy the fruits of your labour! (you are more than a decade and a half younger than us). If you can, perhaps consider splurging on a trip or whatever you like once in a while.

Having a job you enjoy would probably add the most enjoyment to your life at this point.

I work for myself and have to balance between making $$$'s versus enjoying life. Living frugally means we get to enjoy more of the latter.


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## Jon_Snow

The lifestyle vs frugality topic has been foremost in my mind of late. I recently had a crisis of indecision on whether or not to buy a $1500 flat screen TV when my old one blew up. I decided to repair it for $200 instead. A good "frugal" choice, yes. But I really WANTED a new one.

My wife and I save 70% of our montly income - we sock away about $6500 monthly. We have in excess of 200k sitting in our HISA, lots in RRSP's and non-reg, own our vacation property outright. No car payments. Tiny mortgage. No kids. 1.5 million in net worth and I balk at spending $1500. Logically, it seems foolish.

The end game for all this saving has been to allow me to retire in my 40's. On our present course, certainly possible. But my recent inability to "treat" myself with a new TV has me wondering if I have lost my way.


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## ddkay

Better TVs are coming out, you want the amazing DLNA + Airplay support, IPS LCD with full LED backlighting, micro bezel. Just stave off the urge for one more year, you can do it!


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## marina628

Jon I was at Tiffanys in Las Vegas Monday night holding a $56,000 piece of jewelry which I had the cash to buy.I held it in my hand and must have spent an hour there admiring it ,my husband was slouched in the chair not giving a care if i bought it or not .I hate myself today lol


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## dave2012

ddkay said:


> Better TVs are coming out, you want the amazing DLNA + Airplay support, IPS LCD with full LED backlighting, micro bezel. Just stave off the urge for one more year, you can do it!


Boy do I have to do some reading. I'm still powering a plasma!


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## bayview

Jon: i think if u still feel cool abt it you are doing the right thing. And if u can retire with more than $1-2m net cash in your 40s you r in the top 1%. True we dont need to be absolutely miser and crimp on everything. Some claim life is short why shortchanged our enjoyment. However, I prefer the frugal way although i can afford most stuff. I dont watch tv, I dislike DIY so i dont have fancy for gadgets. I dont have a hi maintenance spouse, so it helps. I feel liberated because of some degree of financial indepedance. Im mindful of big bills ahead as we aged and when our aged parents succumbed to a major illness and we need to help care for financially. I can enjoy good music online or a cheapo radio or Mac coffee instead of starbucks. Since you have already repaired your tv, milk it till the end!


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## Four Pillars

Jon_Snow said:


> The lifestyle vs frugality topic has been foremost in my mind of late. I recently had a crisis of indecision on whether or not to buy a $1500 flat screen TV when my old one blew up. I decided to repair it for $200 instead. A good "frugal" choice, yes. But I really WANTED a new one.
> 
> My wife and I save 70% of our montly income - we sock away about $6500 monthly. We have in excess of 200k sitting in our HISA, lots in RRSP's and non-reg, own our vacation property outright. No car payments. Tiny mortgage. No kids. 1.5 million in net worth and I balk at spending $1500. Logically, it seems foolish.
> 
> The end game for all this saving has been to allow me to retire in my 40's. On our present course, certainly possible. But my recent inability to "treat" myself with a new TV has me wondering if I have lost my way.


Even if you have a lot of cash, there is something to be said for getting reasonable value for your money. In your case, you were able to do a cheap repair and got your "old" tv back. 

Given that your current tv sounds pretty decent, is the difference between between your dream tv and your current tv worth paying $1500 (minus repair cost)?

I would have done the same thing.

Now if the cheap repair option had not been available and you couldn't pull the trigger on a new tv, then you might have a problem.


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## kcowan

I think you should create list of regrets that you would have if you discovered you had a terminal illness. Then start working on making sure you would have no regrets on that list. I bought a colour TV after I had a detached retina because the thought of never seeing it shock me up. That was in 1968. Since then I have always maintained a readiness for unexpected bad news.


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## praire_guy

Square Root said:


> The one advantage of private schools is that it is generally easier to expell problem kids as they can revert to the public system. Trying to expell a problem kid from the public system is much more difficult I think.



Try expelling a kid from private school, after the familly donated a million or so for a new library, etc. 

Sometimes it's more difficult. 

Private schools have more drug problems too. 

Networking is the only advantage to private school. But that only gets you so,far. In the real,world you make your own way. 

Teachers are paid less in private school. You get what you pay for.


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## Square Root

@prairie guy I disagree with most of what you said. Have any data to back it up? pretty obvious that $million dollar donations are rare if not non existant. The quality of education at my daughter's private high school was superb. Would and probably will do it again.


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## brad

Yeah, I disagree with most of prairie guy's statements too, except that teachers in private schools do tend to be paid less, or at least they did when I was looking into working as a teacher (which truth be told was many years ago). But I think it's wrong to assume that the better teachers are going to chase after higher salaries and therefore work in public schools. In many cases I think you'd find that some gifted teachers want to spend more time teaching than filling out paperwork and dealing with the bureaucracies of a public school system, or they may be attracted to the better resources and smaller student-to-teachers ratios available at some private schools. That said, I had some truly gifted teachers in my public school and several of my friends and acquaintances are great teachers who work at public schools. I don't think either system is better at attracting the best.


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## Zeeshan Hamid

I adopted a formula when I first finished university (I was 23 I think) that has served me really well :-

~10% retirement (give or take)
~10% savings (big ticket necessities like car purchase, home upgrade etc. come out of this bucket). 
~10% charity (give or take)
70% to live on. Vacations etc. come out of this bucket too. 

If my income goes up, I can increase my lifestyle. If my income comes down, I can cut back on my lifestyle. But automating the savings part has made budget so much easier. As far as I am concerned, my income is 70% of what it actually is. Other 30% is off-limit to me.


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