The Average Average
Posted July 30th, 2012
I find averages a bit annoying. Particularly when used to describe people and the things those people do. If I were to introduce you to the average British male he would be:
- 38 years old
- Will live till he is 79
- Has an A-level standard education
- Works 39 hours a week
- Earns £28,270 pa
- Is 5’9” tall
- Weighs 13.16 Stone
- Will have married at 30.8 years of age and divorced at 36.9 years of age.
Interestingly, the average length of a marriage in Britain is 11 years and 6 months. So what do we glean from this? Nothing. Averages in this sense tell us nothing!
When you want to calculate your fuel costs for a weeks driving it is wise to ask yourself on average, how many miles you drive in a week. When you’re adding up your grocery bill, and wish to plan for the month ahead, how much on average do YOU spend in a month on groceries. Even then though, we’re only using averages to give us a ball park figure.
Averages are poppycock when it comes to human beings and behaviour. We’re too diverse to be boxed in to these sorts of parameters. The average British citizen, compiled by adding everyone together then dividing by the population. What if we looked at the average meal in a restaurant in the same way. Took 20 dishes, mixed them all up together then divided it in to 20 portions. I can tell you, it wouldn’t taste very good!
Yea I know, a little naïve, but the question stands, what do averages actually tell us?
There is also no such thing as the average investor. As an investor, you have as much diversity as the next (average?) investor. We’re all different and accordingly, have different values, goals and priorities.
Right at this moment my trainee paraplanner and I working hard to put together an investment strategy for a client that doesn’t want to invest in tobacco or armaments anywhere in their portfolio. That sounds straight forward, but it’s actually quite a challenge. These particular clients underline the fact that there is no average. There may be what we might term “most people”. In fact, everybody exhibits certain “average” qualities to some extent, but then you could ask “how average is the average person?”
The Office of National Statistics has a job to do. And I suppose, in a broad sense they do give us a snap shot of modern life in Britain. However, that snap shot though will tell us nothing of an individuals hopes, dreams and wishes for the future. It won’t tell us if that individual has just been promoted at work, or had an argument with her husband, or is overjoyed at his children’s progress at school. It doesn’t indicate what that “average” person wishes to do with their retirement and how they wish to provide for their family in that event.
That’s information I am vitally interested in capturing from you. You may come to me believing you’re just an “average” investor with an “average” plan for your future. But after a consultation with me, you will be able to see that in actual fact the only thing you have in common with everyone else is that you aren’t average at all.