Issue: 181
Sent: 06-10-2009 12:16:01
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The Chinese are Coming or Maybe Not!Email Marketing Business Opportunity - Helen BairstowWe need more power cuts - Baby Boomers and the Ageing Population!The Easiest way to do a Client NewsletterWhy Warren Buffett won't buy a NewspaperAnti-detriment Augmentations and the Contributions Cap
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We need more power cuts - Baby Boomers and the Ageing Population!

Click here to buy - A How To Book of SMSF's by Tony Negline
Lester Wills

We are all aware of the fact that the population of much of the world is ageing. This has come about due to the fact that the mortality rate has fallen significantly, life expectancy has increased markedly and the birth rate has fallen dramatically.

As a result, Baby Boomers now represent more than 20% of Australia's population. They account for approximately 25% of all spending, more than a quarter of all consumption, virtually 40% of all total wealth and well over half of all financial assets.

Several milestones regarding the Baby Boomers are rapidly are approaching. In 2012 large numbers of this group will attain the age of 65. As a result, from that year, the proportion of people over 65 will grow much faster than the rest of society. In some parts of Europe such milestones have already been reached. In Germany for example there are already more people aged over 65 than there are aged below 16. That will occur in Australia sometime around 2020.

Back in 1950, the average male who retired at 65 could expect to live around 10 - 12 years in retirement, the average woman, perhaps 14 years. Today the average male is likely to face 18 - 20 years and the woman even longer.

Whilst it is a combination of these factors that has led to this situation, the single most important factor in determining future population is the total fertility rate (TFR). The TFR is the average number of babies born to women during their reproductive years. A TFR of 2.1 is considered the replacement rate; as once a TFR of a population reaches 2.1 the population will remain stable. When the TFR is greater than 2.1 a population will increase and when it is less than 2.1 a population will slowly but surely decline.

Australia's fertility birthrate is currently less than 1.8, in Europe it is below 1.6 with the lowest rate in the Ukraine at less than 1.2. However, Australia's population is still growing as immigration is having a significant impact and without it our population would be shrinking. The following illustrates this perfectly

I found an article under the banner "Japan fertility hits record low". The article went on to explain that "Japan's fertility rate has sunk to a record low. The rate was 1.25 in 2005, down from 1.29 in 2004". Not only that, the 2005 rate was the lowest since the government began keeping records in 1947. As a result, Japan is likely to see its population shrink by up to 25% between now and 2050.

The other piece of news I found was in stark contrast and was under the banner, "Fertility rate at 26-year high". The article went on to explain that the fertility rate in the UK has hit its highest level since 1980 as more women in their late 30s and 40s have babies. The figures revealed women in the UK are having 1.87 children on average, up from 1.8 in 2005. Not only that the fertility rate in England and Wales has been rising since the all-time low in 2001 of 1.63 following an almost continuous fall since the late 1980s.

However, as you will notice, it is still below the replacement rate and what's more, experts predicted it was unlikely to keep rising as the upturn has been largely driven by increasing birth rates among older women. The highest percentage increase for any age group was for women from 35 to 39 which rose by 7% in a year. Fertility rates have also doubled for women aged 40 and over in the last 20 years.

So, not such good news after all.

Which brings me back to my title for this piece. No one should be surprised to discover that when there are prolonged power cuts, the birth rate tends to rise.....

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