By Dale S. Lam, CPA / PFS, CFP®
April, 2015, Excerpt from Quarterly Client Commentary
I recently attended an investment conference where one of the keynote speakers was Peter Diamandis, a self-proclaimed “futurist” and author of the best-selling book “Abundance: The Future Is Better Than You Think.” Diamandis does not claim he can predict the future, but concentrates his efforts on observing major trends that are impacting the world. Listening to Diamandis and reviewing his work is a refreshing exercise that provides a stark contrast to the gloom and doom that we often hear through today’s media.
Diamandis sees a bright future. Will there be problems, ups and downs, wars, tragedies, etc.? YES, but he sees a global population that is growing in what he calls abundance. Lifestyles are improving in much of the world, driving new economic opportunities and “Abundance”.
The concepts are simple and hard to refute. He highlights six major areas that are improving as evidence for a growing abundance: (1) Global Income, (2) Lifespan, (3) Food, (4) Energy, (5) Transportation and (6) Communications. A commentary could be written on each topic, but the primary takeaway is that improvements in the areas noted above are greatly enhancing the economic standing of much of the world’s population.
The United States is by far a wealthy country. We certainly have room for improvement and we all know of those in need, but our needs in the United States pale in comparison to many other countries. As Diamandis notes, of those that are classified as poor in the U.S., 99% have electricity, water, indoor plumbing and a refrigerator; 95% have a television; 88% have a telephone and 70% have a car and air conditioning.
We certainly hope that the U.S. will continue its prosperity, but the most drastic changes will be in the rest of the world. The simple growth in the world population over time provides an opportunity for businesses to deliver their goods and services to a larger client base over time. I have written in the past about the expected
growth in the world population and the increasing number of consumers that results from both the larger population and the rise of much of the world’s living standards from poverty to middle class.
Diamandis echoes the trend, and highlights a staggering improvement in communications that is underway. Consider the following graph from his presentation:
The growth in the world population to approximately 7.5 billion people by 2020 is impressive in and of itself. But look at the growth in internet users as a result of our ever improving communications. In the decade from 2010 to 2020, an additional 3 billion people will gain access to the internet. That’s approximately 40% of the total population. While simply having access to the internet does not make one instantly wealthier, it certainly has the power to enlighten and educate much of the world far and above their current living standards.
As Diamandis summarizes, that revolution will result in what he calls “3 Billion New Minds”. What those minds will discover, create, invent, consume and desire will be significant when compared to where those people have been historically. Only time will tell if his numbers and timing are correct, but if Diamandis is even somewhat on target, we are in for ever increasing innovation and a growing “Abundance” around the world.
Past performance is not a guarantee of future results. Any indices referenced are unmanaged and cannot be invested in directly. See Disclosures.