Personal Finance

1.1B Disposable income

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  • Sep 19th, 2018 9:01 am
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Dec 13, 2016
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1.1B Disposable income

So, while sitting inside Subway eating my sandwich I was forced to listen some rather pretentious radio station with an interesting advertisement.

Basically, advertise with us and reach millions of Canadians who have 1.1b in disposable income. "That's right, 1.1 Billion.

So, what I did was what any 2nd grader would do. Divided that sum with 36 million people that live in Canada and came up with a sum of just 30 bucks per person.

2 things:

It's a really dumb advertisement.

Are Canadians really that broke? I understand most of the money is tied to the mortgage and some other debt, but I would be interested to know what other countries "disposable" income is and where did they come up with these numbers.
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Feb 9, 2018
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That radio station is likely not reaching whole Canada and even if it is, not everyone knows or listens to it. So the millions of Canadians they are talking about are likely in one city like Toronto or 2-3 cities at the most where they reach geographically. I think they would know on average how many people listen to them. Regardless, even if its exactly a million people, that $1.1 B number is wrong. According to statscan website, Personal disposable income per capita in Canada in year 2002 was 22,268. They likely stopped publishing it since?

https://www150.statcan.gc.ca/n1/pub/13- ... 07-eng.htm

These are Quebec specific numbers:

http://www.stat.gouv.qc.ca/statistiques ... v06_an.htm
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BiegeToyota wrote:
Sep 15th, 2018 3:36 pm
So, while sitting inside Subway eating my sandwich I was forced to listen some rather pretentious radio station with an interesting advertisement.

Basically, advertise with us and reach millions of Canadians who have 1.1b in disposable income. "That's right, 1.1 Billion.

So, what I did was what any 2nd grader would do. Divided that sum with 36 million people that live in Canada and came up with a sum of just 30 bucks per person.

2 things:

It's a really dumb advertisement.

Are Canadians really that broke? I understand most of the money is tied to the mortgage and some other debt, but I would be interested to know what other countries "disposable" income is and where did they come up with these numbers.
I think you misheard, because I heard a commercial and they were saying 1.1 trillion of disposable income. 30,000 per person is the correct amount, after you pay taxes. But as far as it being disposable, no. We pay mortgage/rent/utilities/insurance/groceries/transportation/telecommunications, etc. More like $3,000 per person, if that.
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How much of that disposable income is on credit cards and LOC and HELOC as oppossed to actual savings in the bank?

Brokeass Canadians are living on mostly borrowed money and using their house as a big ATM card with HELOC.
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May 15, 2013
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What I find interesting is that in 2018 there are people listening to the radio in the subway.
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jenrossy wrote:
Sep 15th, 2018 9:37 pm
How much of that disposable income is on credit cards and LOC and HELOC as oppossed to actual savings in the bank?

Brokeass Canadians are living on mostly borrowed money and using their house as a big ATM card with HELOC.
That's an interesting thought. I kind of makes sense because I doubt that the average Canadian has $30,000 in disposable unless they use LOC's and CC's to pay all of their bills.
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jeff1970 wrote:
Sep 15th, 2018 10:00 pm
That's an interesting thought. I kind of makes sense because I doubt that the average Canadian has $30,000 in disposable unless they use LOC's and CC's to pay all of their bills.
I know a brokeass Canadian who drives a fancy car and has a decent house, but he has no intention of paying his mortgage off.

Evertime he has a decent equity in his house, he borrows against it and refinances it and the game continues..lol. But he lives for today and lives well, so I guess it is working for him.
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iamthebest wrote:
Sep 15th, 2018 9:44 pm
What I find interesting is that in 2018 there are people listening to the radio in the subway.
By subway he means the sandwich store, not the train ( metro ).
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jenrossy wrote:
Sep 15th, 2018 11:04 pm
I know a brokeass Canadian who drives a fancy car and has a decent house, but he has no intention of paying his mortgage off.

Evertime he has a decent equity in his house, he borrows against it and refinances it and the game continues..lol. But he lives for today and lives well, so I guess it is working for him.
Makes sense especially if you have no children or don't want to leave inheritance. Take out all the equity and use it to its full potential. When you die, you can't take your wealth with you anyways.

It's also why there's such a product called CHIP reverse mortgage.
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jeff1970 wrote:
Sep 15th, 2018 7:35 pm
I think you misheard, because I heard a commercial and they were saying 1.1 trillion of disposable income. 30,000 per person is the correct amount, after you pay taxes. But as far as it being disposable, no. We pay mortgage/rent/utilities/insurance/groceries/transportation/telecommunications, etc. More like $3,000 per person, if that.
Yep. Commerical says 1.1 trillion, not billion.
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bomber17 wrote:
Sep 15th, 2018 11:37 pm
Makes sense especially if you have no children or don't want to leave inheritance. Take out all the equity and use it to its full potential. When you die, you can't take your wealth with you anyways.

It's also why there's such a product called CHIP reverse mortgage.
Yes, yes...if you don't have kids, or kids are already rich or you don't give a crap about them.

Idea would have been, collect CPP 3 years early, invest all of that into an RRSP, get a CHIP at 65, and put that into a TFSA. You should have a good income until 80 years old..
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jenrossy wrote:
Sep 15th, 2018 9:37 pm
How much of that disposable income is on credit cards and LOC and HELOC as oppossed to actual savings in the bank?

Brokeass Canadians are living on mostly borrowed money and using their house as a big ATM card with HELOC.
The discussion would be more useful if a common definition of "disposable income" is understood. As it is "income" it has nothing to do with debt or expenses but earned income and mandatory gov't deductions. In short, the definition used by Stat's Can and the BoC is consistent with most other countries and is:

"Disposable income is defined as the sum of all incomes received by the residents of a given territory, minus current transfers paid by them to other institutional sectors, including governments (income tax and contributions to social insurance plans) and financial corporations (contributions to defined-benefit pension plans). Therefore, disposable income is the amount available to individuals for final consumption of goods and services and for voluntary savings." In other words, this is generally the same as or very close to the typical persons "take-home-pay".

Disposable income is not the same as "discretionary income", which I think is what several people are thinking about here, when you take out all the rest of the food, housing and basic need costs out of the income.
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robsaw wrote:
Sep 16th, 2018 10:55 am
The discussion would be more useful if a common definition of "disposable income" is understood. As it is "income" it has nothing to do with debt or expenses but earned income and mandatory gov't deductions. In short, the definition used by Stat's Can and the BoC is consistent with most other countries and is:

"Disposable income is defined as the sum of all incomes received by the residents of a given territory, minus current transfers paid by them to other institutional sectors, including governments (income tax and contributions to social insurance plans) and financial corporations (contributions to defined-benefit pension plans). Therefore, disposable income is the amount available to individuals for final consumption of goods and services and for voluntary savings." In other words, this is generally the same as or very close to the typical persons "take-home-pay".

Disposable income is not the same as "discretionary income", which I think is what several people are thinking about here, when you take out all the rest of the food, housing and basic need costs out of the income.
Yes, this is correct. However, the commercial is being disingenuous by stating "1.1 Trillion in disposable income", because, in layman's terms, most people think that this is free spending money. It is not, obviously. Had the commercial said "Canadians have $300 billion in discretionary income", their target audience likely would have been confused, and upset that the pot wasn't larger. Add the word "trillion" in there, now we're talking.
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BiegeToyota wrote:
Sep 15th, 2018 3:36 pm
It's a really dumb advertisement.
Welcome to the western world! Being forced to listen to an advertisement is still ok. But creating a thread when you listen to dumb ads is not worth the time.
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jeff1970 wrote:
Sep 17th, 2018 6:44 am
Yes, this is correct. However, the commercial is being disingenuous by stating "1.1 Trillion in disposable income", because, in layman's terms, most people think that this is free spending money. It is not, obviously. Had the commercial said "Canadians have $300 billion in discretionary income", their target audience likely would have been confused, and upset that the pot wasn't larger. Add the word "trillion" in there, now we're talking.
Well, the ad' is targeted at business people, not consumers, and we all know businesses are so much smarter and discerning than consumers. ; )

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