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Definition of 'Demographics'

Demographics are the characteristics of a population, such as age, gender, race, income, and education level. Demographics are important for financial planning because they can help you to understand the needs of your clients and to make informed investment decisions.

For example, if you are planning for retirement, you will need to take into account your life expectancy, which is based on your age and gender. You will also need to consider your income and expenses, which will be affected by your age and your family situation. If you are planning for a child's education, you will need to take into account the cost of college, which varies depending on the type of school you choose and the location of the school.

Demographics can also be used to make investment decisions. For example, if you are looking for a stock to invest in, you might want to consider the demographics of the company's customers. If the company's customers are growing in number and income, this could be a good sign for the company's future growth.

It is important to note that demographics are not static. They are constantly changing, which means that you need to keep up-to-date on the latest trends. By understanding the demographics of your clients and the markets in which you are investing, you can make more informed financial decisions.

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