• September 22, 2018

Don’t Bank on a Growing Population

Don’t Bank on a Growing Population

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growing population

A cornerstone of the wisdom of the Rich Dad, Poor Dad books, was real estate is a good investment because the population will always grow.

More people will need more places to live and property will be more valuable.

The turbulent economy over the recent past has taught many that always never happens.  So what if the US has a declining population?

Fewer people will need fewer places to live and property will be less valuable.

In the book, The Next 100 Years, by George Friedman, he predicts a declining population in the 2030’s and 2040’s.  Venturing a hypothesis that the US will have to incentivize immigrants to come in and people will earn very high salaries because there will not be enough workers.

Friedman’s supports his theory by explaining changes in financial incentives for children over the last century.  People used to have a lot of kids because they needed them to work on the farm or in the factory, contributing income to the family.  Now kids go to school until they are about 25 years old.  The shift from income to expense gives financial reasons to have fewer children.  Add in the Great Recession and your birth rate plunged to historic lows.  The U S recently had the lowest birth rate in over 100 years.

When looking at a long-term investment strategy, don’t bank on always.

For expert property management you can depend on, contact Relevé Real Estate and Property Management

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