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The next crisis of our time. Will you be prepared?
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2008 Financial Crisis
A devastating event that has affected us all
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Increased longevity
Technological and medical innovation means we’re now living a lot longer:
•In 1950 in the US, 590 deaths out of every 100,000 deaths were attributable to heart disease. In 2010 that number was 180, a decrease of 70%.
•In 1950 in the US, 180 deaths out of every 100,000 deaths were attributable to stroke. In 2010 that number was 39, a decrease of 80%.
Source: http://valueofinnovation.org/power-of-innovation/#ref1
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Global increase in longevity
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Increases in developing & developed markets
45
50
55
60
65
70
75
80
85
1960 1972 1985 1998 2012China Turkey UAE Egypt Japan UK
Source: http://countryeconomy.com/demography/life-expectancy
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Increased longevity: key stats
Office of National Statistics: UK women aged 65 can expect to live 20 more years on average; men 18 years1
1: 2014, UK Office for National Statistics, http://www.ons.gov.uk/ons/rel/lifetables/national-life-tables/2010---2012/sty-facts-about-le.html
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Increased longevity: key stats
They also project that up to 2/3 of UK babies born in 2013 will live to 1002
2: 2013, UK Office for National Statistics projections, http://www.telegraph.co.uk/news/health/news/10511865/Two-thirds-of-todays-babies-could-live-to-100.html
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Increased longevity: key stats
Society of Actuaries: There is a 50% chance that one member of a US 65-year-old couple will live to 923
3: 2013, Society of Actuaries IAM 2000 mortality tables, updated to 2013 with Schedule G Adjustments. Figures assume a person is in good health. https://www.fidelity.com/viewpoints/retirement/protect-your-retirement-income
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Longevity should be a bliss, not a burden
Increased longevity =
many outliving retirement savings
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Longevity’s effect on retirement
More retirees +
Longer lives =
More stress on pension and welfare systems
Potentially disastrous economic effects
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According to Larry Fink, CEO of BlackRock — the largest asset management firm in the world, which manages $4.5 trillion in assets:
“Longevity is the defining challenge of our age.”
The traditional mix of retirement funding from pensions and personal savings is in the grip of “a systemic crisis that is threatening not only our retirement systems but also our economic futures.”
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When will the crisis hit?
The crisis to begin in 8-10 years, when the generation born between 1946 - 64 is largely retired but largely unprepared financially
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Crisis timeline
Multigenerational — perhaps continuing with people currently in their 20s and 30s
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Solution
Must build as big a “nest egg” as possible
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Mindset
Must become investment hunters
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Strategy
Must have an aggressive investment strategy that seeks investments across a number of asset classes
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Average person
25%
15%60%
Real estate
Cash
Public equity
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More Sophisticated Investor
25%
15%
15%
22%
22%
Public equities
Early-stage equities
Real estate
Fixed income
Cash
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Sophisiticated portfolio — overweight equities
20%
10%
10%
30%
30% Public equities
Early-stage equities
Real estate
Fixed income
Cash
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High-return investments
Kauffman Foundation study of early-stage business investment in found that1:
•There was average 2.6 times return on the initial investment•It took 3.5 years from investment for an exit•There was an average of 27% internal rate of return*
* Must have a diversified portfolio of at least 25-50 early-stage business investments
1: 2007, Kauffman Foundation, http://sites.kauffman.org/pdf/angel_groups_111207.pdf
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Investment hunting made easy
Crowdfunding investment options:
1. Equity based 2. Debt based 3. Real estate based
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Call to action
Become an investment hunter now. None of us have any time to waste.
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Thank you for participating
