Capital Investment Advisors

Demographics Can Help Shape Your Retirement Destiny

With such a challenging year in the market, I relish every opportunity to report good news — the world economy continues to grow at an astounding rate. The global population is nearly eight billion people and rising. We’ll come back to that number in a minute.

Any isolationists out there might want to put politics aside and focus on the financial impact of global expansion. As the demand for goods and services continues to rise industry-wide, so does the potential growth of our retirement dollars as companies find ways to harness the massive demographic trends. After all, the more hot dog stands you own, the more hot dogs you can sell.

This positive news contrasts the tone and tenor of the content you’ve seen debated ad nauseam on various media outlets. Just because fear adds eyeballs to television ratings doesn’t mean yours can’t avert their gaze. Sure, scary things can happen, but life has a way of balancing out. It doesn’t do any good to your bottom line or mental health to dwell on bear market bottoms and bounces, bull market head fakes, the Fed, peak inflation, or the rise and fall of interest rates.

Too much of that puts anyone on edge.

On a recent episode of CNBC’s Fast Money Halftime Report, host Scott Wapner argued with three different fund managers about a bevy of stock trends. Next week could be a disaster! Stock multiples are too high! Earnings are flattening! It was all so hyperbolic. I’m not dismissing Wapner and his ilk, but I am asking you to put their discussions into perspective. Wapner and other media personalities have a priority to entertain, not advise. That’s not to say he doesn’t hope to educate and inform, but at the end of the day, he and his bosses probably care more about viewership than viewer portfolios.

To be fair, many daily financial news shows aren’t speaking to the people I am — the happiest retirees on the block (HROBs). Their target demographic is the fast-money crowd of day traders and short-term investors. While this may not describe you, fast-money folks are part of the overall market, and their presence is beneficial because they create liquidity opportunities for longer-term investors. If everyone were as patient as Warren Buffet, withdrawing funds when necessary would be much more difficult.

Population Perspective

Now, let’s add some context to the unbelievable news that the world population has reached nearly eight billion. In the United State alone the population in 1800 was 6 million people.  By 1900 it had increased to 78 million, then to 150 million in 1950, and  to 330 million by 2020. So it took one hundred and fifty years to go from 6 million to 150 million and then only another seventy to go up roughly 180 million! That growth is, in large part, responsible for the surge in U.S. and global markets.

Population Growth + Wealth and Prosperity = More Longevity & Continued Economic Growth

Mortality has dropped, and in general, we are living longer. A higher standard of living has increased this longevity — clean water, sanitation, healthcare, nutrition, etc.

Between 1990 and 2019, life expectancy for humans increased. Even after accounting for COVID deaths, the global average is up at seventy-one years of age. So for our kids and grandkids born in the coming decades, let’s say 2050, life expectancy is projected to increase to seventy-seven. That’s an almost 10 percent increase in longevity!

This blossoming of human durability has contributed to a population explosion. And, although the meteoric rise might have slowed, the US is projected to reach almost 375 million by 2040. Moreover, by 2060, the number of folks sixty-five and older could grow over 90 percent, while the eighteen to sixty-four age group could be down near 15 percent.

These analytical movements mean the job market should continue to have massive demand with an aging retirement population and a continued shift to healthcare, medicine, travel, and recreation.

There’s a reason Lebron James just bought a major league Pickleball team. Imagine a more exciting version of ping pong without as much tennis elbow or knee pain. People of all ages can play, which is perfect for everything from youthful competition to retirement recreation. It’s the fastest-growing sport and perfect for our demographic trends.

Looking Ahead

Although the growth rate is slowing as families reduce the number of children they have, the United Nations projects the population should reach about 10.5 billion in the 2080s and remain at that level into the 2100s.

Just eight countries could make up half of the world’s population growth by 2050. They are primarily concentrated in Africa and South Asia: The Democratic Republic of the Congo, Egypt, Ethiopia, India, Nigeria, Pakistan, the Philippines, and Tanzania.

The two most populous regions of the world in 2022 were South and East Asia, and China and India accounted for the majority of people in these regions at 1.4 billion each. However, though China has more people than any other country, but its population could start declining as early as 2023, and India should surpass it.

That means plenty of opportunities for more hot dog stands.

Bottom Line

As investors, we’re fascinated by the latest and most dramatic market activity. It’s normal and human. What will the market do this week, this month, or this year? What governmental policies will affect it? Will inflation ever end?

Every day global markets swing by hundreds of millions or even billions of dollars. Yes, it all matters, and it impacts our psyche. But, a trend that towers over the daily machinations of market news is the silent and powerful march forward of world demand. More people means more demand, more earnings, and more income from more sources.

Focus on these demographics’ positive effects on your retirement options as you plan your financial and social goals. Keep your chin up and limit the doom scrolling. That’s what the happiest retirees on the block do.

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