How does the average person afford so much? - 1

Ok the recent census showed the national average salary is 27 600 across Canada. I think this number would be low for our city, as I have heard figures such as 50k. My family is making a few hundred thousand a year, yet we don't even seem 'that' rich. My mom drives a Honda Odyssey, and my dad has an 8 year old infinti, as well as a 1997 porsche. Lots of my university friends' parents bought them cars and parking passes, while I take transit. Our House is worth only about 25% more than the city average. Literally most people I see can afford $5 starbucks drinks and iphones. We have lots of luxuries, but we're not sipping champagne at the yacht club.

So what I'm wondering is how a very large part of the population can afford so many expensive things when they don't make much money. I think the reasons are:
1. Those with more money don't necessarily spend more, they can just save more.
2. People live out of their means

But can any of you answer my question?

I presume people's ability to live within their means is no better in Canada than the US. While you see people buying things your family doesn't feel are wise purchases, what you don't see is their bank statements and credit card bills.

There are lots of people who owe more than they could ever afford to pay back, and who have nothing saved for future expenses you know are coming (balloon mortgage payments, insurance bills, taxes), emergencies, college for their kids, or retirement. I bet your family does, though.

While it does matter how much you bring in, how much you spend is just as important. If you have a lot of debt, your income is used to cover that debt and you have less to spend.

My guess would be people are maxing out their credit cards (living beyond their means - as you said) to keep up with their neighbours or friends who seemingly have more money than them (although are probably in the same situation as they are)

My mother raised me as a single parent earning 40k a year and I never went without, but there weren't too many "extras" like if I had a phone, I'd have it for a few years instead of trading it in each year for the latest model.