Spending Trend over a Century
In rich countries like America, one of the big changes over the century has been the amount of money spent on food & clothing has declined significantly. In contrast, in many poor countries, the average person still spends a huge chunk of their income on food & clothing. The amount spent on housing/shelter has increased slightly in America to 25% (as of 2002, based on a select sample).
Overall, it's amazing that food, clothing and housing, which was about 80% of a typical household's budget in 1901 has declined to about 50% (in 2002 but probably same now). I don't think anyone living in 1900 could have imagined such a thing. The increased savings on food & clothing has generally gone to leisure activities (such as travel and entertainment). The big beneficiary in rich countries have been the leisure sector. Only the wealthy used to travel in the early 1900's but now almost anyone can.
From a business and investment perspective, one of the biggest opportunities in developing countries is the leisure sector. Industries such as airlines, tourism, media, and so forth will likely grow spectacularly.
For developed countries, I wonder what the future holds? Living in Canada, I feel like we are already "maxed out" on tangible "stuff." People just have too much of the basics. In contrast, healthcare is one area where developed countries are spending a fortune and I am almost certain we will spend less (as a % of total income) in 50 years than now. I also wonder what new societal developments await that we can't even imagine...
(source: "100 years of Family Spending in the US," Visualizing Economics, Dec 5 2013.)Tags: personal finance, Sunday Spectacle