“How long do you think you will live?” Since the middle of the last century, life expectancy has been increasing rapidly. On average, it has been increasing by one year, every five years. Babies born today in 2017 can expect to live to over 100, or in other words, they will live to see the year 2117. While increased longevity is generally view positively, this change has a profound impact on the traditional make-up of our societies and the social protection systems that are designed to support us in our old age.
In Japan, which has one of the world’s most rapidly ageing populations, retirement can begin at 60. This could result in a retirement of over 45 years for those who will live to the current life expectancy of 107. One obvious implication of living longer is that we are going to have to spend longer working. The expectation that retirement will start early-to mid-60s is likely to be a thing of the past, or a privilege of the very wealthy.
No one can deny that living on the planet is expensive even for the rich and richer today. The cost of living poses a big challenge especially the lower income group as they spend close to half of their income on items such as food. This makes it increasingly difficult for them in this income bracket to save as the cost of food has been increasing due to inflation.
Increased longevity can have a significant impact on investing. By living longer, we are much more likely to experience a series of investing cycles in our lifetimes. Having an understanding of the big picture and how these long-term market cycles play out is important as it positions us in a better perspective to benefit from them – minus our emotions reacting to the short-term ups and downs of the markets. Yeah, attempting to predict a market crash is a fool’s errands.
With over billions of cell phones spanning the planet, sensational news headlines travel from one end of the world to the other in a blink of an eye. Give yourself more rooms to win. You need to re-examine traditional investment practices and harness the latest investment solutions as part of the risk or volatility management in order to preserve purchasing power and grow real wealth in the long-term. Inflation can erode purchasing power over time. Have you heard of shrinkflation?
No doubt, you will receive a wealth of ideas from your other sources and the financial media. The increasingly challenging economic and market conditions mean we need to think out of our cocoon to make our money works harder for us.