What’s wrong with Eric and Ilsa?
Before we talk about Eric and Ilsa, we need to talk about Carrie and Mr. Big. In the third season of Sex and the City, the girls are at brunch partaking in a Sunday New York ritual – the reading of the New York Times wedding announcements. It’s all fun and games until Carrie finds her ex-boyfriend’s wedding announcement and the sideshow turns into a horror show.
While Toronto has a smaller scope when it comes to big-ticket weddings, I think it’s safe to say that most people here are more obsessed with real estate than the nuptials of slightly well-off Canadian heirs. I’d wager that people are more interested in the dirt about a property or a financial story even, maybe something like the Globe and Mail’s Financial Facelift series where we get to see the real dirt on (usually) well-off people who have troubling finances. Sometimes it’s about retirees trying to find the best way to live off their investments, or a young couple trying to figure out where to start, but they all usually pull in an excess of $100,000 a year, about $24,000 more than the median family income in Canada of $76,000 (and don’t even get me started on individuals.)
Which brings us to Eric and Ilsa. These two were a different breed of Financial Facelift all together. They pulled in approximately $400,000 annually between the two of them (Ilsa was on mat leave at the time of the article), and were quite literally part of the 1% (which is apparently those who make over $190k). The two are a doctor and a dentist with five children and a giant money pit threatening to swallow them up. Eric and Ilsa’s monthly net income is almost as much as the average individual income in Canada, yet they were still somehow spending $6000 a month beyond their earnings to keep up with their lifestyle (Maybe $3000? Maybe more? Talk about that in a bit).
They live in Vancouver and had the brilliant idea to buy a hole in the ground worth $1.1 million that they intended to build their dream home on. Unfortunately they didn’t think too hard about how they could pay for it. They live with a ‘relative’ and pay the property tax and utilities, yet also have a live-in nanny and send the children to private school. It turns out that being smart and making money doesn’t always mean you’re the best at spending it. But this type of financial intelligence seems to run in the family as Eric and Ilsa’s parents are willing to get a line of credit on THEIR houses to help the couple afford the cool $1 MILLION required to actually BUILD on the property they currently own, making this whole silly situation even more risky & complicated.
The real piece that stuck with readers in the Globe and Mail’s initial write-up was the declaration that Eric only worked 1-2 days a week at his TWO jobs, yet all the while complaining about his income not matching his lifestyle. Cue the internet going wild. There was mad speculation about what KIND of doctor he was, if he was receiving kickbacks or how entitled he was to expect (and receive) to make that kind of money with so little work. Ooops, turns out the writer was mistaken. He generally works around or in excess of 80-100 hours a week (something which is still contested in the comments, when does he sleep/commute/put food in his belly?) But really, that’s a huge discrepancy.
It also turns out that their “$6,000 monthly associations” were really annual fees. Aaaaand a few things were wrong too and were corrected, and corrected again. But regardless of the Globe’s awful fact-checking in this piece, there is no doubt that this couple is in trouble.
But why was this Financial Facelift the straw that broke the horses back? The story simmered for a few days, making waves on my social feeds here or there, but it truly erupted the night BEFORE Oxfam released a report that the richest 1% of the world will own half of the world’s wealth by 2016. And was this how they were spending it?
I know, it’s unfair. Why should we judge Eric and Ilsa so harshly about their finances, say, any different than we would dissect the budget of a single parent making $50,000 a year?
Is it because their purchase of property that even THEY can’t afford, property that is threatening to upturn their entire financial situation, is so reminiscent of the problems plaguing average earning Canadians all across the country? While people who make a ‘median’ income struggle to purchase homes in major cities, near to where the jobs are, as the houses climb to the high $700Ks, a couple who makes that in two years can’t even manage to properly secure their own home without needing a cash injection from their parents?
Some of it is bitterness, I’ll admit it. But I think more of it is a general sense of rage at the current state of the Canadian economy. The patron saint of Canada, our sainted oil industry, has just lost 1,000 jobs from big employer Suncor. Now the new kid on the block, Target, is moving out and clearing out 17,000 retail jobs in the process. It’s not an easy time and articles like this just really dig it in that even those who REALLY should be doing ok in our current climate still have the ability to self-sabotage, something the average Canadian wouldn’t be able to do and get back from.
But I think the thing that bugs me the most about Eric and Ilsa is that for a couple that made their fantastic wages through hard work in school and in practice in their careers, I see no real savings for the future, or RESP funds for the kids. Why send them to private school without a secure way for them to continue their education and pick a similar path?
For everybody’s sake, I hope one of those five kids becomes a CPA.