If you consider the baby boom generation, they are getting older and many are or will be in retirement years. The wave of people which is wonderful if they have a good retirement including dividend producing income, also comes with the reality that as a person ages, hopefully wonderfully, their body will break down. It may be physically, it may be mentally, but at some stage the body tends to break down.

In China, the country had a one child allowed for a number of years, the upside of the policy is that many Chinese are getting older quickly and what will they need as they age – retirement home living or home care. In an article by Alexandra Stevenson of the New York Times News Service, China’s looming elder-care crisis provided an opening for fraudsters and Ponzi-like investment schemes. By 2025, more than 300 million people in China will be 60 or older, according to the Chinese government. By 2050, that number is estimated to rise to half-billion.

Traditionally, Chinese families have take care of elderly parents (if you only watched the Disney movie Mulan – the ancestors song). However in the wake of the one-child policy and mass migration to the big cities, fewer people can care for the greying population. The most vulnerable are known as the “3 nos” – no family, no financial support and no ability to work.

What is the government to do? one would think as a Communist government the government would subsidize housing, but the government is not that communist. The government has turned to the private sector to build retirement housing, however the month bill averages $1,500 a month, but the average income to pay is $535 a month. There is a short fall.

The result of the shortages is numerous schemes to pay monthly to secure a spot in an retirement home. The problem has become so widespread, Chinese top judicial bodies have labelled the retirement industry one of the sectors hit hardest by what they call illegal fundraising. China Central TV, the state broadcaster, recently called retirement investment funds with high returns a “fairy tale”.

Linking to dividend paying stocks, the reason to invest in them is to increase wealth over time or when you are ready for retirement or in retirement, you have options. Hopefully you have other income – private pensions and combined with the government pensions you have an ability to afford private care if needed. With money there is always the opportunity to have fraud, your task as an investor is to be skeptical with high returns, but expect consistent returns over a long period of time. Have relatively easy methods to ensure you can leave your money, are the companies profitable? can they pay their dividend? then you can sleep well at night and have money when you need it.

There are more questions than answers, till the next time – to raising questions.