Much is being made of the coming increase in Ontario’s minimum wage to $15.00 an hour. It got me thinking about the silent killer called inflation and how:
Back in the day, everything was cheaper.
In 1983-4, I landed my second job out of university and was paid $26,000 a year at a well-recognized, Canadian blue-chip company. That was a salary, though it worked out to $13.33 an hour. When I left that company in 1989, I was making $36,500 a year or $18.70 an hour.
I had completed a 4- year honours commerce undergraduate degree from 1978-82. Tuition, books, board and costs totaled $16,000 for four years. I could make $1,000 per month for the four summer months, earning $4.30 an hour in my job at a local pool to pay for my school. I graduated with no debt.
In 1984, newly-married, we bought our first home for $55,000 with 10% down. It was a 3 bedroom, 1.5 bathroom single.
Today, everything costs so much more.
The minimum wage is poised to rise about 12.5% from my 1983 starting wage, to $15.00, 34 years later. Wage increase: 13%
That 4 year honours undergraduate commerce degree today looks to be about $92,000. Education cost increase: 575% And the average Canadian graduate gets their diploma with a $25,000 student debt target pasted on their back.
That same home apparently now averages $481,000 and requires either 20% / $96,000 down or a higher insurance premium of 3-4% of the borrowed amount, adding to the price. House cost increase: 875%
- Inflation affects you, or someone you know and love.
- It’s TOUGH out there. And a lot harder to get ahead, no matter what they say. That’s not likely to change either.
- Flat, real wages and rising costs for the same products and services ultimately mean more debt, among other things.
Financial advice today needs to be very practical and realistic; and maybe even a little revolutionary. When navigating these nearly-impossible realities two heads are better than one. Solutions with your money need to be creative, provide enjoyment for the harder and longer journey; and succeed, on your terms.
The worst thing to do is to pretend otherwise, remain in the dark or be caught off guard. Never really knowing why more of us aren’t ‘making it’ the way most used to. Subscribe to our Lamp Post Blog. It’s where we lay out knowledge, information and great facts that everyone can use in their planning. And, working together delivers better experiences.
Peter Fraser, RFP CFP® CIM® FCSI®
HollisWealth, a Division of Industrial Alliance Securities Inc.