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It starts with a baby step

This article originally published in The Northern Daily Leader on 27 October 2012.

This week was another momentous one for the Baiocchi family, with the family expanding to four following the birth of Kate on Wednesday. The day of her birth was quite an event. The best analogy I can think of is like running a marathon. The nerves and excitement before the start. The relief when it finally gets underway. The pain and tremendous exertion of energy for hours and hours on end. And being urged on by cheers and good wishes as the finish line comes into sight and is eventually crossed after one more final mammoth effort. And that was just me. Heaven knows how Liz must have felt during the day.

At times during the birth I couldn’t see very clearly through the tears brought on by Liz attempting to break my fingers, but I did notice a large number of hospital staff involved in the day’s events. I counted four different midwives, one obstetrician, two doctors and a couple of other people whose roles were not immediately apparent. I think they could have been visitors who had simply gotten lost looking for the hospital canteen. Nevertheless, it was an impressive deployment of human labour by NSW Health to ensure Kate’s safe arrival, and a great job they did too. The cost to taxpayers would have been considerable of course, and goes some way to explaining why a substantial portion of Federal and state government budgets are directed towards health care. In fact, in 2009-10 we spent nearly $122 billion on health care in Australia, equal to nearly a tenth of our economy.

Of course Australia is not alone when it comes to health care spending. I recently saw an interesting statistic which claimed that in the United States 25% of a person’s lifetime health care spending occurs in the final year of their life. This finding seems obvious in many cases, such as serious accidents or illnesses; however it also leads to the question of whether or not we can reduce spending later in life by increasing spending on improving our health earlier in life. Prevention is better than cure, as they say. This approach is not too different from how you should manage wealth accumulation. You can’t accumulate wealth late in life in a hurry, you need to start early. There is certainly no cure for having insufficient assets when you retire, by then it’s too late. But by paying attention to your finances early, you can put yourself in the best position to enjoy thirty or forty years of retirement.  Or, if you have any little ones, money just to spoil your grandkids. Something Kate will no doubt be expecting her grandparents to do.