Close to half of the world's pop­u­la­tion is now de­fined as be­ing mid­dle class

Money Magazine Australia - - IN YOUR INTEREST - Paul Clitheroe is Money’s chair­man and chief com­men­ta­tor. He is also chair­man of the Aus­tralian gov­ern­ment’s Fi­nan­cial Lit­er­acy Board and a best-sell­ing au­thor.

You know, this “age 60” thing is re­ally pretty good. I am a bit sur­prised to find my­self say­ing this as I have all the ob­vi­ous prob­lems of what I am told is now called the “new mid­dle aged”. I thought I was old but I'll go with that.

Any­way, I can’t read a book, iPad or menu with­out glasses. This is a pain. I am fine with glasses but be­ing rel­a­tively new to them I tend to for­get them or just lose them. My solution is to buy loads of the cheap ones from a chemist or su­per­mar­ket and leave them ev­ery­where. That does help.

Next up, my hair is pretty much white, though in an at­tempt to be pleas­ant my hair­dresser does claim I have “traces of bronze”. Ap­par­ently I also look “dis­tin­guished”, which I think is hi­lar­i­ous.

I am reg­u­larly asked if I have a Se­niors Card to get dis­counts when I am shop­ping or go­ing into a mu­seum or what­ever, and peo­ple have started to ask if I would like their seat on the bus. For some rea­son this never hap­pens on trains, for which I am grate­ful, but it does on buses. Are peo­ple on buses just kinder? Be­cause of my love of ocean rac­ing on my boat and be­ing an ac­tive per­son, I work hard at stay­ing strong and fit, so I smile and say I pre­fer to stand. But all of the above is rather alarm­ing.

A real bonus, though, is that work is wind­ing down, our three kids are grown up and in a good place with study, work and re­la­tion­ships, so we have more time to travel by our­selves and with friends. I have al­ways spent a lot of time in planes, mainly for work, sur­rounded by work doc­u­ments. But now, apart from writ­ing for Money mag­a­zine, which is of­ten done on planes, I find I have more time to read.

It was with great in­ter­est that I was re­cently read­ing an ar­ti­cle in The Wash­ing­ton Post by Heather Long and Les­lie Shapiro (Au­gust 20, 2018) about the rapid change in global de­mo­graph­ics. Aus­tralians are great trav­ellers and if you are won­der­ing why our great global cities are chock-a-block in tourist sea­son, you would be right to think it is the grow­ing global pop­u­la­tion. But more im­por­tant is the wealth of this pop­u­la­tion.

It is well known that un­til the in­dus­trial revo­lu­tion in the 1830s the pop­u­la­tion was ei­ther a prince or a pau­per and the mid­dle class did not ex­ist. But to­day, very close to half of the world’s pop­u­la­tion, some 3.7 bil­lion peo­ple, is now de­fined as be­ing mid­dle class. This means the abil­ity to get by day to day with ad­di­tional in­come left over to eat out, have a TV and a car, ac­cess to higher ed­u­ca­tion or travel. Ap­par­ently, about 2.5% of the world’s pop­u­la­tion is “mega rich” and that means around 190 mil­lion peo­ple have buck­ets of cash.

The Wash­ing­ton Post has a cal­cu­la­tor that will show you where you fit on the global in­come spec­trum. But de­spite wages growth be­ing slow in Aus­tralia in re­cent years, ex­pect to be shocked. To make the mid­dle class in many coun­tries you need an in­come as low as $US4000 ($5600) a year. Even in wealthy coun­tries $US40,000 will get you there.

I re­ally en­joyed read­ing about Dol­lar Street, a Swedish non-profit or­gan­i­sa­tion that has pho­tographed the daily lives of over 250 fam­i­lies. It com­pares a fam­ily of five in Bu­rundi liv­ing on $US324 a year with the same-sized fam­ily in China on $US121,000. A young cou­ple in In­done­sia, the Yan­vars, were great to hear about. They are a teacher and so­cial worker and have two young kids. They have elec­tric­ity, a fridge and a mo­tor­bike. The kids are be­ing well ed­u­cated and have toys. They are sav­ing money from their in­come of $US12,000 a year to buy a car and one day a home. And, yes, they are happy and op­ti­mistic.

It is worth you tak­ing a look at the growth in our global pop­u­la­tion and in­creas­ing wealth. More peo­ple with more money mean more de­mand for goods and ser­vices. Where these peo­ple will live and what they will buy tells us a lot about where and how we should in­vest. Whether it is prop­erty or shares, in­creased de­mand is a vi­tal fac­tor.

I can un­der­stand us all feel­ing pretty neg­a­tive about the state of pol­i­tics and our planet in gen­eral. The me­dia bom­bards us with bad news. But, in fact, the planet is a pretty good place for many bil­lions of peo­ple who are liv­ing bet­ter lives than at any point in the past.

Aus­tralians can ex­pect to be shocked by the global in­come cal­cu­la­tor

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