To me, Toronto Life magazine is a brief and entertaining glimpse into my city’s more well-off citizens. What weighs heavily on their minds? If the articles are any clue it’s often pressing issues like where to buy the rarest gourmet foods, how to throw extravagant parties, what neighborhoods have the poshest real estate, and where to invest those gobs of money they have laying around.
For example, the January cover story “Where to Get Good Stuff Cheap” is full of practical shoestring shopping tips. Why pay full price for a an exquisite bubinga wood, gold leaf custom designed room divider when you can get a reduced floor model with hand-made paper in mahogany and redwood marked down from $3,200 to only $2,560? (Page 40-41.)
In the new February issue, an essay called “Almost Rich” by Jonathan Kay laments the hardships being at the bottom of the so-called 1% with an income of about $196,000.
In an increasingly pricy city like Toronto, where we pay a premium for everything from milk to car insurance, $196,000 can seem positively middle class….Thousands go into the mortgage. For those with young kids, daycare can cost upwards of $1,500 a month. There are the car and RSP payments, wardrobe refreshes, utility bills and something to set aside for when the furnace inevitably conks out. Plus the cost of the sushi, pad Thai and butter chicken that we order three nights a week – because we’re all too tired to cook by the time we get home from work.
And the debt! Oh the debt!:
Relative to income, in other words, homes are now about 65 per cent more expensive than they once were: the Moor Park gut-job semi is selling for $1.5 million instead of $900,000. The result of this unreasonable amount of debt is that even those who earn $196,000 live hand to mouth, hoping that next week’s payday will cover this week’s overspending.
Then there’s the constant pressure to keep up with the increasingly wealthy Joneses:
On my block [Playter Estates], Chevys and Toyotas have given way to BMWs and Saabs. Fancy new foodie shops save us the trip to Summerhill Market. Out with Dollarama, in with the Riverdale Mac store and about a thousand espresso bars.
The article then goes on to profile 5 Toronto households with an income of $160,000-$200,000 and a breakdown of how they spend it.
One family of four barely scrapes by once they’ve paid their cleaning lady and spent $400-500 per month on wine:
At the end of the month, after all the bills are paid, they usually find they have nothing left. “We have a weakness for designer furniture,” says Suzanne.
Needless to say, my perspective is a bit different. I may not live in the depths of poverty – I live simply but comfortably on one modest income – but I can see what’s going on around me.
In my Toronto, people struggle to find and keep a job that will cover their rent and food. Many live in the outskirts of the city – the only safe, affordable housing available – and commute to one or two part-time jobs on an increasingly overcrowded and unreliable transit system. They have roommates, and can’t get their landlord to fix what needs fixing. They live with mice, mould, bedbug infestations, and can’t afford insurance. They spend their last dime on child care. They don’t get any benefits through work and can’t always afford the medication they need. They go into debt, not to buy a luxury house, but to buy their kids a few Christmas presents. They have no retirement savings.
Perhaps someday I’ll find myself with a house full of nice things, a crushing debt load and a new appreciation for the hardships of the “almost rich.” Apologies to Jonathan Kay, but for now, it all seems pretty simple to me: It’s time to downsize.
If you spend more than you make, you’re going to have money problems – no matter how much you earn or what the markets are doing. And if your biggest concern is keeping up with the Joneses, you’ve got a very nice life indeed.
[Edit: It’s live! You can now read the full essay with pictures on the Toronto Life website: Almost Rich: an examination of the true cost of city living and why rich is never rich enough]