@steephie: The richest 1% of people in the world earn €26,000 euro a year. €30,000 would hardly be basic living since you would technically be in the 1%. :P
That said, as of 2005, 45% of the world population lives under $2 (adjusted for purchasing power). Since most people aren't well off, being in the 1% is meaningless.
@Draugnar (actually after typing this out this turned from me responded to Draugnar to me actually calculating the costs of everything in my life, to estimate how much I could live on being as frugal as possible. Although 17k is considered poverty, it can go a long way if your frugal. Below I justify all my costs but really I could survive on 14k if I was incredibly frugal.
If we use my current situation, I attend university, so ignoring costs associated with school (textbooks, tuition etc.), here are my total costs:
Rent is $600 a month, includes water and electricity. I have no idea whether the government subsidizes renting or if the government has price controls of some kind. I am a student and it was through my university that I applied to rent my place. As a result I wouldn't be too surprised if this was subsidized. On top of that, I know every non-economist supports price controls for renting, so I wouldn't be too surprised if this was also subject to rent controls. This is also mostly based on city to city, it may be higher or it may be lower depending on where you live. But I've been doing where I live so far.
Grocery bills have totaled $2680 since September, however I also eat fast food a lot and it doesn't count when I'm staying in Toronto. That said I'm not that frugal when it comes to food, I could probably lower the price if I shopped at costco rather the sobeys, for instance. I could also reduce costs if I was more cautious of sales and eating more left overs rather then throwing them out. Overall lets assume $5,000 a year for a nice round number.
So where I live, rent+food=~12,200 a year. This gives you ~$5,000 to spend on other items. Other items:
Clothing, I am very frugal when it comes to clothing, looking at my past visa bills its totaled $474 in the last year. I have enough clothes to wear a new shirt, underwear and socks every day, and changing geans once every 5 days. This allows me to go 3 weeks without needing to do laundry. I also have 6 polo shirts and 3 button up shirts, 2 ties and 2 pairs of smart pants. So I can look nicely dressed if I need too. That said most of the casual clothes I own are too small for me, but I don't give a shit, most days the only person who sees me is my roommate, and while they are a little tight on me, only if I flex or stretch does skin actually show (ie if I raise both my hands above my head, my shirt will lift enough so you can see a little skin between the top of my pants and the bottom of my shirt). I only own 2 pairs of shoes, dress shoes and runners. My runners are 2 years old and have some holes in them so I may replace them soon.
Now that I have stopped growing, clothes will no longer be a yearly expense. The expenses to clothing have been mostly because of growing: I needed a new coat and I bought those poloshirts were the dress code of my summer job. I also stockpiled on underwear and socks because I had enough shirts to go 3-weeks without doing laundry but only 5 days for socks and underwear (mostly because my brother who moved out stole a lot of mien). Starting next year, the only clothes I'll need to buy on a regular basis is socks ans shoes, because they seem to have short life expediencies.
Overall lets assume $300 a year on clothes.
So far we have:
Rent: 7,200 a year
Food: 5,000 a year
Clothing: 300 a year
Total: 12,500 a year.
Next is transportation:
Cars are expensive and honestly unnecessary. Even a small city as small as waterloo (97,000 people) has a pretty decent public transportation system.
Granted the Kitchener-Waterloo area has a population of 270,000, so its pretty big comparec to many places, and the GRT covered Kitchener, Waterloo and Cambridge, the 3 largest surrounding towns/cities. A monthly pass is $68, or $816 a year. Lets round up to $900, mainly because we like easy numbers, but also because public transportation fares increase every year, mostly due to inflation. That said technically I could spend less if I really wanted too, if I didn't have a job, I probably wouldn't use public transportation enough to justify getting a monthly pass. However lets just assume I do.
So far we have:
Rent: 7,200 a year
Food: 5,000 a year
Clothing: 300 a year
Transportation: 900 a year
Total: 13,400 a year.
Over the last year I have spent an average of $175 a month of entertainment: movies, computer games, that one leafs game I went too and that one raptors game I went too. Lets assume $3000 a year on entertainment, so we can include eating out at restaurants if we want to go on the occasional date. Though if dinner and drinks $~60, your going on only ~15 dates a year.
Alcohol:
Like most college students, a major expense is the alcohol we consume. I spent ~$1200 in 2012. However so far in 2013 I've spent ~$80, so have really cut back on this, and I haven't had a drink since reading week (mid-February). Its not that I hate drinking, its just I never found it to be worth the cost so I thought this was the easiest place to cut back on, my other entertainment costs have gone up since then, but not nearly as dramatically as alcohol as gone down. Because most of my university friends don't live in Toronto, I'll probably go sober all summer.
I guess Alcohol is down to personal preference. Are you going to drink a lot with friends or do you like drinking alone? If no then theoretically you could spend almost no money on alcohol. Lets give us a simple $600 a year. Half of what I was spending at the end of highschool.
So far we have:
Rent: 7,200 a year
Food: 5,000 a year
Clothing: 300 a year
Transportation: 900 a year
Entertainment: 3,000 a year
Alcohol: 600 a year
Total: 17,000 a year.
Coffee: I don't function well without the stuff. I've spent ~$300 on coffee so far this year. However that said I never drink coffee on weekends or on non-school days. The irony is normally I go to starbucks, get a coffee (or latte/cappuccino), start drinking it, spend the next 3 hours in starbucks on my laptop (on a side note I am currently in starbucks "stundying" for finals) and miss half of my classes that day.
Over the summer I only drank coffee on days I was working, and when I went 3 weeks without Coffee while in England visiting family, I didn't suffer from any caffeine withdrawal (however my brother did), so while I do enjoy coffee, I'm not addicted and can easily remove it from my life.
Lets reduce coffee to only $200 a year. $4 a week is easily attainable if I'm frugal, while lattes are nice, if I'm drinking regular coffee, $2 a day twice a week isn't hard. Since its assumed I don't have a job, I wont need coffee often, but may choose to occasionally enjoy some.
Overall, we're on a budget of $17,200 a year. However as Draugnar pointed out, inflation is a concern.
In Canada, the CPI has averaged 1.81% over the last 20 years and 1.79% over the last 10. It average 2.27 over the last business cycle (March 2000-October 2008. The last full boom to bust to boom we have had)
Lets use 2% as a nice round number. If we're assuming a nominal interest rate of 5% then our real interest rate (interest rate adjusted for inflation) is 3%.
To get $17,200 a year at 3% real interest, one would need $573,333.34 in savings to survive forever.
gmo gene silencing?
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