When making a long-term investment–money, job selection, career choices, time, effort, education, career, geographic location, you name it– it is important to have an idea of the future landscape that will affect the outcome of that investment. Everyone has 20:20 vision AFTER a decision is made. “For hindsight, nobody needs to wear glasses.” (author unknown)
When it comes to investing for the long term, know your facts. These days it is difficult to know your facts when the media provides such distortions to smooth over bad news to help various candidates get elected every couple of years. It is also hard to know your facts about the economy when the government lies to the people with data that has been modified to shelter variables that may negatively affect the interpretation of that data. But in all of this I do have good news for you, pardon the pun.
If you look to STRUCTURAL BALANCE you can see right through all the deceptive reports and you can see well into the future. Part of structure involves understanding the country’s demographics and the behavior that results from the demographic curve. For example, as populations age, they save more by needing to buy and spend less, but they do need smaller homes, nursing homes, more medical attention, and so on. Know your demographic curve and consider that before investing.
Another component of “structure balance” is the environment. In this context I am referring to the health and robustness of everything surrounding the decision you are about to make. From geo-politics to geography, from culture to government, from job types to labor saturation.
If buying a home as an investment, rather than as a place to live, the demographic curve is important but the other structural factors must also align. Look at everything else that matters: city, the condition of the municipal debt, city council, policing and crime, the labor pool, the culture and language, and yes, anything that affects the future years for that home in that area. If investing in education, there too, look at all the factors that surround the decision to be certain there is structural balance. Call it “harmony”, if you wish.
Here’s a working example of knowing “structure balance” as it pertains to picking an educational curriculum. In Canada, for example, in certain provinces, Ontario, for example, because of the demographic curve and because the practise of hiring freshly-retired teachers is rampant in school boards and the schools themselves, and because universities make a killing by grinding out thousands of teachers each year many graduate teachers with high expectations are disappointed. In this case, the province of Ontario where there are way too many graduate teachers and far too few jobs to satisfy the huge demand by graduates of teaching colleges and Universities. The structural IMBALANCE between jobs and teacher graduates is drastically misaligned.
If the “structural balance” supports your decision, meaning that if the overall economy is booming, the geography and timing is ideal, and if the demographic curve is turning up either at the macro or micro level, then you are likely to succeed beyond your wildest dreams.
For more reading on demographics and how the demographic curve affects YOUR DECISIONS: Boom, bust & echo: How to profit from the coming demographic shift, by by David K Foot. First published back in 1996 when we should have been paying attention to it. You can also read current publications and updates by Harry S. Dent, such as The Demographic Cliff: How to Survive and Prosper During the Great Deflation of 2014-2019.