December 17, 2013
According to a recent survey by the Pew Research Center, just 33% of Americans think their children will have a better life than they did. On the other hand, 62% believe their children will be worse off.
They’re likely to be right. The typical American family has seen its real income (adjusted for inflation) fall for 5 consecutive years now, and it earns less in real terms that it did in 1989.
According to the Census Bureau, median household income fell in 2012, and it languishes 8.3% below the pre-crisis peak in 2007.
The Brookings Institution, meanwhile, calculates that real incomes for working-age men in the US have fallen by 19 per cent since 1970.
(Of course, if you’re fortunate enough to be a member of the super-rich who, thanks in large part to central bankers driving up asset prices, saw their real incomes rocket by 20% in 2012.)
In Europe things look even more dire. Just 28% of Germans think their children will be better off than they were. In the UK it’s 17%, in Italy 14%, and in France just 9%.
In Britain, research by the Financial Times shows that those born in 1985 are the first cohort to suffer a living standard worse than those born 10 years before them.
Contrast this gloomy picture with China, where 82% think their kids will have it better than they did. In Nigeria, the number is 65%. In India, 59%.
It’s blatantly obvious that the West is in decline. And most people seem to understand this.
But this isn’t a bad news story. Wealth and power has constantly shifted throughout history. Five hundred years ago, it was the West that was rising and Asia in decline. Today it’s the exact opposite.
As Jim Rogers has said so many times before, if you were smart in the 1700s, you went to France. If you were smart in the 1800s, you went to England. And in the 1900s, you went to the US.
Today, it’s the developing world. That’s where the long-term opportunity is– Asia, Africa, and South America.
What’s happening in the developing world is nothing short of remarkable. One billion people are being pulled from the depths of poverty into the middle class… bringing with them untold possibilities for business, employment, and investment.
That’s one of the reasons why I travel so much, and why I spend so much time in Chile. I’m constantly amazed at the tremendous opportunities I come across in this country (which is still largely off the radar of most people).
It’s also what I encourage my students to do each summer at our entrepreneurship camps—seek out opportunities in countries that are rising suns, not setting suns.
If you have children, this is a great direction to influence them. Encourage them to learn another language, travel, and apply what they want to do to how the world is going to be in the future.
As Wayne Gretzky said, skate to where the puck is going to be.