“Dear Gary, In response to you message on Where to Invest Now? Three Paths to Real Wealth. Granted that people who have a lot of “stuff” may not feel the need much additional. They have the luxury of wishing for a home without a phone, but there are billions who still want “stuff”. “Stuff” isn’t going out style for a long, long time.
Gary, you have been secure for so long, you have lost touch with the average person’s material and investment wants/needs.
You “pooh pooh” both the average person’s concern with “stuff” and the small investors’ concern with being ripped off by government. It’s great that you have the connections, money, and flexibility to go to Ecuador or wherever. The average person is stuck at home and is stuck by his government.
My reply to this member is important and I want to share it with you as well.
Dear International Friend, Thank you for this input on the three issues you broached here.
The first issue is the fundamental of all markets, the needs and desires of society. These desires are fairly predictable having been classified many years ago in Maslow’s Hierarchy of Needs. This hierarchy of needs are the physical, security, social, acknowledgement and self-realization needs. A starving, cold person does not care how fancy his clothes are, how much his car impresses friends, etc. He just wants food. He will ignore brand names, insignias on his clothes and not worry too much in the neighborhood he is in. Once these physical needs are met he then turns to security, to assure that he can keep his home, stay warm etc. Only when he feels safe and has spare time does he start to think more about family, friends and being social. Eventually he’ll want to impress these friends. He’ll want to be important. Once this is achieved he’ll have to prove to himself he is as good as his friends think he is.
The World Bank considers a country with an average income of $11,000 of purchasing power per capita to be a high income country (the US average is $27,000 and Europe’s $21,000). The 25 countries in this category have a total population of about 800 million and it is these places where the main markets for more service and less stuff will grow. These people are at a stage where they are able to realize that just having more and more is not the answer to happiness. You are correct that billions will continue to want stuff. In a global population of six billion there must be about 5.2 billion to be exact.
Yet the rich 800 million portion of the global population account for more than half the wealth. Their huge spending will lead the trends. The way these wealthy people live will affect the world. These people, baby boomers, Jonesers (those born just after baby boomers ) and even more so, generation xers are feeling that services and non material things are more fulfilling than stuff. My son, (a gen xer) for example I am proud to say turned down a job working for a real estate developer and went to work for the National Wildlife Federation at half the salary. Saving animals in the everglades is more important to him building more golf course developments in Florida. People are recognizing that a clear lake in an unspoilt woods can be more gratifying (and better for the environment) than a golf course development. I cannot speak for how all baby boomers feel, but as one myself, I know that new cars, big houses, and all that stuff seem more and more of a burden. I see the world cannot continue to live as it has, fouling the air, killing the woods and spoiling the streams with gas, oil, carbon dioxide and other pollutants. I believe this type of thinking will affect how the wealthy segment of the population (and you are included in this) and that as has always the case the rest of the world (the poor) will follow this trend.
This rich market is also where the profits lie. Manufacturers do not make money on small compact pickup trucks used by poor farmers in the third world. The cash comes from big SUVs, etc. There is not much to be made building low cost homes. Profits are in the deluxe markets. I believe these profits will spill into this process of de materialization. Eco tourism will replace shopping tours for example and will be profitable, etc. Trips to visit and save jungle tribes will be expensive etc. This is how I feel and based on the Golden Rule of Simplicity, I follow my feelings believing that others feel this way as well. I have been following these feeling quite profitably as well.
I believe you have some feeling, some knowledge, albeit different than mine, that can also be profitable regardless of what happens to the economy, government or whatever. All you have to do to cash in this idea is get in touch with it and use the evolutionary cycle of business and investing. Let the idea build enthusiasm. Use the enthusiasm to gain expertise in that field and then let the knowledge you gain lead to action. This action will bring either financial profit or loss, but will also generate more ideas to follow through the cycle again. Take the same time you use watching TV, reading newspapers (if you do) and apply it to this cycle instead. You can overcome any economic doldrums in the world.
The second issue is security. This is an internal matter that has nothing to do with one’s balance sheet. I have found some of my richest clients are the least secure. I feel secure, not because of my wealth, but because I take care of my health and get up and work every day, usually seven days a week doing what I enjoy in a way that serves society. I hope that doing this instead of watching television and being a beer guzzling football fan has not caused me to lose my common roots. Last year Merri and I spent the winter living in a ten by ten tin roof shack without hot water or electricity. We know what it means to feel excited just having a hot bath. But we feel even more secure because of how blissfully happy we can be living in circumstances so humble that one of our neighbors (a retried professor) offered his used furniture thinking we could not afford our own. We have been fortunate to have learned how to generate substantial amounts of income, but even luckier to realize that financial wealth can be a burden if it is taken personally or seriously. We feel more fulfilled living simply and giving this money to educate others who have been less fortunate and to preserve forests. I believe more and more others in similar situations are and will begin living this way. Finding this type of security will affect the world and investment trends.
The third issue is freedom. Since I wrote my first book “Passport to International Profit” in 1979, I have preached the idea that we are citizens of the world and free to travel, live and work where we choose. I have stated over this time that the sun always shines somewhere! Merri and I are free to do this only because wherever we go we work, serve and pay our way. We have learned the principles of running an international business so whenever we take a trip it is a tax deductible expense that earns more than it cost. No one is stuck living in a place or stuck with a government unless they choose to be. Thousands of my readers have proven this. Despite the normal mundane challenges of life, the mortgages, kids to feed and educate, taxes, car repairs etc., they have chosen to become international and have mapped out plans that gradually help them learn to be free through global service. I recommend my course International Business Made EZ as a first step towards attaining this freedom. You can obtain the course here at the site at International Business Made EZ.
I hope this helps outlines my thinking better, clears up any misunderstandings and wish you good health and great global businesses and investing!