Comparing Incomes – Location

Compared with other nations, developed countries are the best places to live for anyone who wants an equal opportunity to become successful. Yet some people in these countries like Canada and the US are still upset about income inequality, a lack of proper health care, education, and a poor standard of living for the minority, despite the fact that the same problems exist everywhere else in the world but much worse. I think it’s all relative. People generally compare themselves with their friends, families, and neighbors. Of course they never feel like they make enough, because there will always be someone they know who makes more than them. Maybe they should try comparing their income to the national median instead. The typical Canadian living alone only makes about $30K a year.

img source: cdn.runt-of-the-web.com

I try not to compare my finances with others. But in reality, my quality of life depends on the wealth of others around me. The reason I don’t feel rich is because I live in one of the most unaffordable cities in North America. In the 4 years that I’ve been saving and investing, I have built up a net worth around $100K. By the time I’m 30 years old I plan to reach $400K. The average household net worth here is over half a million dollars. So $400K wont buy me a lot here. Once I pay off my mortgage, I will have enough money left over to maybe provide 10 years of living expenses for myself.

But what if I moved to Florida, and had the same $400K. Well I can get a 2 bedroom condo with similar amenities as my current home, and similar strata fees (HOA) for just $100K. Since I won’t have a mortgage, my yearly expenses should be below $15K. This is because my total living expenses now, minus my current mortgage is below $15K a year. Plus isn’t everything in the US cheaper? Which means I can invest my remaining $300K into inflation protected securities (i bonds perhaps) which will take me 20 years to use up.

Even better, I can take my $400K and move to somewhere like Mexico or China where the average salary is less than half of what the average Canadian or American makes. I can go for 30 years or more without running out of money. Of course I can always go broke buying luxuries, anywhere in the world, but as for basic living expenses, the less fortunate people are around me, the richer I will feel. That’s why we’re lead to compare our lives to others, not just other people, but other people in our immediate surroundings. Sounds kind of shallow and narcissistic but is this just a part of human nature?

Macleans has an income comparison calculator.
If you’re making more than $30K then you’re probably already making more than most Canadians. What I plan to do one day is move to a smaller city when I retire, where my money can go further. In short, want to feel rich? Don’t live in expensive places.

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Daisy
03/28/2012 5:37 am

I live in Vancouver – it’s one of the less affordable cities in the entire world. I definitely second that notion to not living in expensive places! Haha.

Not Working
Not Working
03/28/2012 6:18 am
Reply to  Daisy

I live and Montreal and life is pretty darn expensive, can’t imagine living in BC

Liquid
Admin
03/28/2012 8:47 pm
Reply to  Not Working

Montreal is awesome. That’s where the Assassin’s Creed games are made. With rising inflation, affordability for the working class will soon be a problem in every Canadian city.

Not Working
Not Working
03/29/2012 5:24 pm
Reply to  Liquid

Your a gaming fan too ? Nice ! Yeah we got pretty big video game developments firms in Montreal ! Wish i was working for one of them!

Liquid
Admin
03/28/2012 8:43 pm
Reply to  Daisy

@ Daisy. True, everything from housing to transportation is expensive here.

Sleepydad
Sleepydad
03/28/2012 9:35 pm

We had some friends come visit from London, UK, and they felt that everything in vancouver was very expensive (food, transport, hotel etc..) When i lived in London, I felt London was very expensive. However, once I started working there and making the english pound, I didn’t think that it was that bad there. Its just different perspectives…

Liquid
Admin
03/28/2012 9:44 pm
Reply to  Sleepydad

Exactly, it depends if we’re spending through the pockets of a tourist or a long time resident. After a few years of living in Vancouver I have figured out how to have a great lifestyle without breaking the bank. I’m sure people around the world adapt to their own cities as well.

Cassie
Cassie
03/28/2012 11:26 pm

When I look at the prices some of the American bloggers are paying for their homes, I look at the cost of mine and sigh because I know my home will cost me more in the long run. Then I look at the prices in Vancouver and New York, and suddenly I don’t feel so bad. While my region isn’t cheap, and the area I live in within that region isn’t cheap, there are also plentiful opportunities for employment and decent wages. Every region has its pros and cons, it’s just a matter of finding the balance of the two that works best for you.

Liquid
Admin
03/29/2012 9:16 am
Reply to  Cassie

Especially now, Saskatchewan is one of the fastest growing provinces with one of the lowest levels of unemployment.

Katie
Katie
03/29/2012 3:16 am

I live in a small town in the US. The cost of housing here is inexpensive, we paid $80,000 for a pretty nice house but the jobs here also do not pay much. I think that’s a big factor to weigh in.

Liquid
Admin
03/29/2012 9:27 am
Reply to  Katie

That’s a great point. I use to live in a close knit community when I was little. The price of local real estate is determined by demand of the local economy.