I update readers each month on my personal wealth, but I’m sure many readers would be much more interested in how they’re doing. Often the problem in assessing our wealth situation is we can’t help but to compare ourselves to others – to drive that point home, consider the most popular posts on this blog are my personal wealth updates.
With that minor disclaimer out of the way, here are the goods on income and net worth of your fellow Canadians as determined by MoneySense magazine using 2011 Stats Canada data.
These figures don’t take into account regional cost of living, income tax and other deductions, but should provide a bit of an indication where you sit in regards to others.
So often we equate wealth with income but they are two very different numbers. I recall it was an especially hot topic as I was coming out of university and looking for a job. I must have scrolled through a dozen job postings looking only for that magic compensation amount without paying any attention to the actual job itself. As I get older and my priorities change from beer money to a family, the importance of salary is increasingly diminishing. This type of outlook has been a growing trend with employees placing a higher emphasis on work-life-balance.
Often absolute wealth is determined by your net worth, which is calculated as everything you own LESS everything you owe. Below are the net worth national bracket averages for Canada:
It would be interesting to know how much of this net worth consists of real estate/home equity. It’s safe to assume the upper-middle and highest 20% would own a home or two, which likely would have increased drastically in value over the last few years. It’s common for families to be “house poor”, where all of their money and net worth is tied up in an expensive house leaving them unable to enjoy things outside of their place of living.
To assess your true wealth, numbers and dollars are required, but an equally important qualitative factor is your desired lifestyle. If you think the good life is kicking back in your million dollar mansion (for people who live in Toronto, make that a $10 million mansion), driving a Bentley and spending $5k at the Cheesecake Factory per week (a la former NFL Quarterback Vince Young), you’re going to need a whole lot more scratch. Conversely, if you’re geared towards a simpler life you’ll probably need a lot less. For these qualitative reasons it’s not accurate to compare your absolute wealth figure to others, but these can be important metrics to assess your financial progress.by