Why It’s Not as Bad as It Seems
Last week we talked about what a Trump presidency means for your money. While we don’t yet know all of the specifics, we explained how who is president shouldn’t affect how you handle your finances. Too many people change financial plans based on political feelings and later come to regret it. Building a mental wall between your political views and your financial actions is a wise skill to develop.
Today I want to back our claim up with some charts I find interesting. However, before diving in, please don’t misinterpret me. Despite what these charts show, I’m well aware that there is significant room for societal improvement, and this article doesn’t belittle the issues that remain — whether it be gender equality, racial equality, or whatever else you feel passionate about. My intention is to show that despite societal problems that still exist (and, in some ways, always have), forward progress is evident and times are actually better than they seem, especially when it comes to handling money.
Let’s not forget that we live in a unique time in history. For hundreds (thousands!) of years, humanity’s economic output remained relatively flat. It wasn’t until the industrial revolution that our species’ wealth and production abilities scaled to exponential heights. Thanks to democracy, free trade, and incentive-driven desires for improvement, we continue to grow humanity’s abilities and wealth to new levels.
As you can see, this abundant change is something that affects each of us. Sure, some benefit more than others, but even most of the poorest people in our nation today experience a higher standard of living than the wealthiest people did 100 years ago.
Keep in mind, that even though we have much room to improve, our historic climb is dwindling poverty at the fastest rate ever seen. Even as populations climb in less developed countries, the number of people living in poverty continues to shrink. This is always great to see.
At the same time, fewer infants are dying than ever before. Thanks to improved education and better medical assistance, infant mortality continues its inevitable decline…
…while at the same time, we continue to live longer and longer. Fewer deaths and longer lives, year after year, highlight the best of humanity. Given consistent medical breakthroughs and the new treatments and cures scientists keep inventing, it wouldn’t surprise me if average life expectancy extends its rise for countless more years.
Humans also continue to attain more education, perhaps the largest hurdle for creating individual and societal wealth.
Plus, the effort needed to generate even higher levels of output continues to drop. Our species is more leisurely than we’ve ever been before.
Our home sizes (and quality) continue to increase even though the average household size continues to drop.
Our reliance on the most environmentally damaging fossil fuels is beginning to trend down…
…as the cost per watt of solar energy continues its legendary descent. This will almost definitely be one of the most important trends of the 21st century.
We actually are using less energy per person than we used to…
…while the cost of energy continues to plummet. This is truly amazing once you think about how much this decline frees up incredible sums of money consumers now have to spend on other things.
Internet access, the gateway to education and economic relevance, continues to spread swiftly around the globe.
Travel is soaring to new heights.
And when we do hit the road, the number of fatalities has dropped significantly over even the past couple decades. As autonomous vehicles improve and become increasingly mainstream, this immense source of deaths will shrivel into almost nothing.
The cost of technology continues to fall at rapid speeds…
And even genomic sequencing has experienced exponential deflation. These cost drops empower scientists and inventors to push our technological abilities to new limits. We should expect ever more powerful computers (everywhere! — the internet of things) as well as the inevitable rise of personalized medicine (with an emphasis on prevention over cure).
Although there is much room to improve, gender attitudes are slowing hiking toward equality. Out of four questions that measure our nation’s view on gender equality, more and more people are answering the questions in a more equal way.
And perhaps the largest financial lesson here is that all of these changes occurred throughout dozens of different presidencies — both the good and the bad. While people were fretting about politics, economic and societal prosperity compounded at swift rates, and investors of all sizes benefited exceptionally well (as seen by the stock market chart above). As humanity continues its fight forward, I wouldn’t expect any less out of the next decades to come.
There is immense room for improvement along pretty much all measures, and for that reason there is still a need to fight for change and invent a future that’s better than the present. However, when it comes to your finances, I hope you can see that despite all the bad there still is in the world, good can and almost definitely will come. Progress has been our modus operandi for hundreds of years (granted, volatile for different groups), and I think, especially given our generation’s beliefs, progress will continue under our watch.
Keep up the good fight, but separate your politics from your finances. Both are important; both should be fought for, and they occasionally cross paths. However, never forget that you’ll almost definitely be better off fighting those fights independently of each other… not together.