Have you noticed how the world seems to accelerate and decelerate at the same time?
You have access to human kind's collected knowledge in your pocket (but you use it for Candy Crush Saga) and it's difficult to find a job even with an impressive and hard-earned degree; or keeping the job you've had for several years for that matter.
Ordinary people are turning into zombies, hooked on sugar, multimedia and loans, while the super rich are getting super richer-er. Politicians are promising change but their policies only accelerate the process.
What is going on?
Technological progress and New World Order go hand in hand to destroy your future
On the one hand technological progress is speeding up, governed by Kurzweil's Law of Accelerating Returns (of which Moore's Law is a small subset). On the other hand, the average individual worker is not getting anywhere at all, while the cost of higher education and healthcare is increasing much faster than wages. Increased leverage is the only "solution".
These developments are connected in a sinister New World Order kind of way, that I will address below. Unfortunately, you can't stop it, so put that issue in the virtual drawer where you keep and forget issues that you can't do anything about; the SOP-drawer (Somebody Else's Problem).
The more pressing issue is what you can and must do to position yourself the coming 25 years.
You Must Make Yourself Change Resistant
Companies as well as jobs are disappearing faster and faster.
In the ten years between 1998 and 2008, six companies dropped off Financial Times's top ten global list. In the following five years, seven out of ten fell off FT's list. This partly reflects globalization and increasing competition, which actually is a good thing and net positive for the number of jobs and level of prosperity available. However, it's also an effect of digitalization and automation, which means a company requires less people and material to grow, and reaches clients globally at the push of a button. Old and slow companies with many employees disappear and new nimble companies like Google and Apple take over - with much less use for employees of flesh and blood.
When the steam engine was invented, it needed handlers and coal shovelers etc. It created more jobs than it threatened. The steam engine simply meant humanity could do so much more. Also, the change was quite slow, not least due to the time it took to manufacture the steam engines, educate operators, set up supply for coal and water and so on.
However, when Amazon sells e-books, Apple sells apps or songs and Google automates business after business (translation, oncology, maps, advertising), the change is almost instant on a global scale. In addition, a software can be copied and distributed without effort or delay, and the need for "handlers and coal shovelers" is much less pronounced.
You should still learn to speak automata, i.e., you should learn to "program" a computer in a wider sense of the word. Code is becoming the fabric of everything. "Programming" means you can create valuables from nothing. Not knowing programming or "handling" our new computer overlords, you risk becoming unemployed with no means of creating value. Robots will clean, cook, take care of ill and old, invest. They will be doctors, lawyers, traders, construction workers.
You must create value for other people (or be self-sufficient), with the help of computers to make a living the coming 25 years.
An obsolete university degree and face time at the office will not do in the future. My generation was the last one that could get away with that. Actually, not even people born in the 1960s or 70s are safe.
Learn to invent and build your own "steam engines" or bolt-on technologies (apps). If you learn the basics of instructing and using the new software tools, you can make use of whatever human creativity you possess to create unique stuff that can be used for barter no matter what happens. If not, you are left alone on the outside of the Brave New World.
Merge with technology, use it instead of being used
When Kasparov was considered unbeatable in chess, both for computers and other humans, even a mediocre chess player with a computer could beat him - even if Kasparov also had the help of the same computer program. The trick was to be good enough to realize when the computer had the better idea, as well as trust the computer to never make easy mistakes, thus freeing up the brain's creative abilities.
That is how you must position yourself the coming 25 years. The current school system is not going to be of much help there - it's mostly a waste of time. Just learn to read and write and some basic math; then get out of school as soon as possible.
Spending four years locked up at a university will get you nothing but debt and lost time. Instead you should find out what is valuable, and find the best way to attain that skill with the help of technology. It might be actual coding, even designing computer chips and it might be project management for creating payment and ad solutions for the Internet of Things. Your choice is individual but must still have a few basic characteristics. It should be AI and automation resistant and you must be somewhat interested and able and willing to learn the required skill set.
Become part machine by both controlling and interfacing with technological tools to stay ahead of both unenhanced people and more and more advanced AI tools.
In a way you already are a cyborg - more or lessed fused together with your phone and the internet. Without it you would be just as handicapped as if you lacked a limb or was seriously intoxicated and couldn't think straight.
Continue along that path but be systematic and productive about it. Instead of checking or updating Facebook or playing Candy Crush, learn to make an app at Khan or Codecademy. Use search engines or your own life to find out what apps are missing, or see what features you can improve on the most popular apps. Then get to it, learn by doing, by trial end error. You have 4 years' head start vs. the university boys.
Most important of all, you need to make yourself change resistant. You have to understand the changes and how they will affect you, you must be prepared for change, embrace it, make sure you continuously develop your skills, enhanced by computers, in areas (presently) unreachable for the forces of automation. Design, leadership and technology are promising areas to focus on.
Unintended consequences of killing volatility
First they stopped producing inflation for a while (good), then they managed business cycles by running large budget deficits during recessions and smaller deficits during expansions. They said they would balance the budget over the cycle, but always found excuses not to when things looked good (bad choice, since debt kept expanding and the economy became more and more sensitive to interest rates).
Then they lowered interest rates to zero and started printing money, to manage not only the business cycle but the stock market volatility as well. This was made possible by weak growth and low volatility, which lured all parts of society to take on more debt. The latter made low interest rates a necessity to avoid a Minsky moment and economic cleansing through market crashes and economic recession.
In addition they started saving banks and car manufacturers that should have gone bankrupt, thus causing widespread moral hazard (when you know you will be saved you can afford to take foolish risks with other people's money). With risks and rates around zero and the central bank and government as role models, the rest of society also accumulated debt and used it to speculate on financial assets (including housing which has made a slight recovery attempt lately).
Employees accept lower wages since they can use loans for consumption. Companies profit from low interest rates and the market's search for yield, by borrowing cheaply to buy back shares to enhance their key ratios, instead of investing and innovating. The latter is deemed too risky, due to low economic growth and stretched consumers living on debt. Governments run deficits to help the poor, as well as to kickstart" the economy. Central banks buy the debt issued by governments, to keep rates low to avoid squeezing consumers' already dismal disposal income. Consumers turn to speculation (loan funded) to enhance their income in a zero rate world. And old or retired return to the job market at any wage rate available, while younger people are laid off and stop applying for jobs altogether.
The monetary madness temporarily plasters over structural cracks in society. Zero interest rate policies (ZIRP) enable a zombie-like existence for overindebted companies, governments and people. However, interest rates can never normalize since that would tip the first domino in a very fragile economy. Consumers would have less to spend after interest costs, house prices would fall, corporate profits would be squeezed by lower sales, higher interest costs and higher wage demands, and would lay of even more people. The general economy would grow slower and deficits would increase (before higher interest costs).
Once leverage has reached a certain point, the current point, rates can't be raised without the whole house of cards crashing down.
The longer ZIRP is prolonged the worse it gets, as savers and companies are forced to speculate in a zero sum game, instead of creating value through productive investments. The central banks are forced to print more and more money and governments need to run larger and larger deficits, in what is tantamount to putting band aid on an Ebola victim. In the end any little straw will break the camel's back: a natural disaster, a failed ponzi scheme, a couple of profit warnings and a small correction on the stock or house market that topple's the weakest hand which in turn topple's the next one and so on.
Worst of all, as ZIRP drains investments and fuels speculation, the economy grows weaker through lack of investment and through misdirected and ultimately lost malinvestment. Exactly in a time when the development of nanotech, strong general artificial intelligence, biotech and robotics calls for unhindered creative destruction, the powers that be do all they can to siphon off riches for themselves, while making matters worse for the average man. ZIRP reduces investments and subsidies misdirects them while disguising that the world has changed and the need to adapt is more acute than ever.
Weak and obsolete companies and irrational and irresponsible banks are allowed to continue, thus increasing the costs and risks of moral hazard. Meanwhile Netflix and YouTube turn us into mindless drones and distract us from what's going on. Instead of benefiting from technology, you are conditioned to only utilize it for entertainment and advertising, keping your mind off your debts and the shrinking but ever richer class of the super-elite - the politicians, the CEOs and owners of subsidized companies deemed too large to fail.
The wheel, printing press, steam engine, combustion engine, transistor, nanotech, biotech, robotics AI, quantum computing etc promise a better world for all. Due to ZIRP, however, technological progress isn't used productively to make life more fulfilling for all. Rather technology is used as an opium to hide the truth from you; the truth that politicians are stealing your wealth through economic repression (zero interest on savings, forcing speculation, leading to asset price increases for the rich. When bubbles finally burst, your tax money is used to save the system, central banks print even more money making everything more expensive while redefining inflation measures, and make it even worse the next time round)
Computer Enhanced Human Creativity Is Change Resistant
This process kills off old jobs without creating new ones. Politicians know this but they want to pretend everything is under control to be re-elected. What they might not understand is that the development is progressing faster and faster, according to Kurzweil's LOAR. That's why you need act as an entrepreneur, learning to create real value in sought after areas, rather than hoping for an employment. Even money might become unreliable due to the mad printing ambitions in the US, Japan and Europe, and then you need something to barter with - and there is nothing more change resistant than computer enhanced human creativity.
Invest in yourself, not in the market
Right now, there are no good alternatives for an investor. Everything is expensive and set to produce no real return for decades. Stocks and bonds, even junk bonds, promise zero or negative real returns. My advice to anybody with money to invest (after investing in yourself and your own business) is to bide your time. If you want to be better off 25 years from now, there is no need whatsoever to rush in like a fool when markets and valuations are at all time highs.
The Great Moderation has made people take on more risk and more leverage than ever. The same process (through deficits, loans and low savings) has made profits and earnings per share look much better than they actually are (check sales instead or historical average normalized profit margins). The underlying risk, lower profitability and warranted valuations manifest themselves sooner or later, and have already caused two major downturns (around -50% each) just the last decade (2000 and 2007). It's about time again now. Perhaps not in 2014 or 2015, it's impossible to tell. However valuations are already 100-150% above sustainable levels.
Whatever new highs are made the following years will surely be erased in the coming downturn of most likely around -50%. Wait for that moment to invest. Use the interim to search for companies you would like to own but that are too expensive right now. And, no, a good company is not always a good buy. People tried those approaches in the 1960's and 1990's and lived (hopefully) to regret it.
Personally I am short the stock market (not advisable) and long gold and gold miners, as well as long USD vs SEK. I also have a sizeable investment in a private software company. I couldn't recommend any of my portfolio to anybody else. Either you have drawn the conclusions yourself to make exactly those investments or you haven't. You can't just take somebody else's advise for that type of contrarianism and risk level.
In short, my advise is to wait. Hopefully you won't have to wait more than two years and then you can start accumulate companies you believe have a sustainable future and at valuations that promise good risk adjusted levels of return (at least 10% per year). Remember though that you can't hope for a pension other than what you provide yourself. No state has a system that can cope with the current indebtedness and pension schemes - in particular not after the coming financial crisis.
Think about how much has already changed for you in 10 years
Make a 1 year plan, 5 year plan, 10 year plan... Plans are great. Just remember you will never follow them. The most important is to be change resistant and ready for whatever might happen for the rest of your life. Once you relax too much you are either inviting a low glide into oblivion or risk becoming obsolete and without value.
What did you do 1 year ago? OK, easy enough. What about 5 years ago? Or ten. It's easy to remember if you just lived with your parents back then. But if you are 35 years old, e.g., you may be surprised just by consciously thinking about how different you and your life are compared to just ten years ago.
Then imagine what might happen the coming ten years. Some things you can control, others not at all. Will you have the same girlfriend, the same dog, the same job, the same apartment/house, the same phone, the same computer, the same TV technology, the same friends...? Did you keep any of those things the previous ten years? No? Why would you expect to keep them the coming ten years?
In 1 year, focus on particular skills you want to attain. In 5 years, focus on learning to learn and to stay healthy, stimulated and alert, and to start saving for old age. All the time, prepare for change, for black swans, for not being knocked out by any first sucker punch. Strengthen that glass jaw and become Rocky Balboa: learn to roll with the punches and accept them for life. You may not actually experience difficulty and failure, but if you do, you should be prepared to brush it off and try again, instead of becoming depressed.
Live 25 years to live forever
In about 25 years it will probably be quite clear that humans can live forever, if they want. Up until now longevity has increased thanks to better food and healthcare. More and more people are pushing toward the natural maximum life span for human beings, which is set by the length of telomeres and the accumulation of DNA replication errors. That approach has soon run its course. We would just get older, more fragile and dim-witted.
Going forward, however, stem cell research, nanotechnology and AI promise to cure cancer and enable organ replacements (maybe even brains, a fraction at a time) in a way that year by year postpones the final expiry date. Once parity is reached and surpassed, the expected time left to live will start to increase with time instead of just decreasing slower. By then it is possible to live long enough to live forever. Not long after, I expect technological progress (not least AI-guided nanotechnology and stem cells) to be able to reverse the symptoms of aging.
How about looking like 23 when you are 100 years old? How about bungy jumping on your 150th birthday? Why not live to 250...thousand. Or 25 million years. How about becoming 25 billion years old? But then you probably have to move, since the sun will explode in "only" around 7 billion years.
If this sounds tempting, and I admit I might be wrong by a couple of decades before reaching the ultimate threshold, you should take extra good care of yourself the coming 25 years. I'm not talking about sacrificing this life for the next, just making smart and informed choices and creating (fun) habits that reduce the risk of leaving the party just before it starts. Your plan for the coming 25 years might just as well be a plan for the coming 25 billion years. Live long enough by taking the following simple precautions:
Support your natural lifespan
- train your immune system and
- avoid unnecessary pharmaceuticals.
- Make sure you are as anti-inflammatory as possible;
- eat enough Omega3 and
- vitamin D.
- Tan responsibly.
- Condition both your body and brain. The brain developed to manage motion.
- Exercise, even just a brisk walk, increases brain plasticity and postpones Alzheimer's, dementia and other age relatied brain issues.
- Challenge both the brain and body with strong emotions and novelty
Keep a will
If you fail to stay healthy, or if the technological breakthroughs decelerate enough to make you die before the singularity, keep a will.
Write one right away. It's not so much for the ones being left behind (you'll be dead and won't ccare anyway) as it is for yourself during your final minutes. You don't want to lie there thinking about how the wrong person will get the wrong things and rub it in before the more deserving friends and relatives.
If you die within 25 years and you are reasonably succesful, materially, until then, which I expect you to be reading this, You would want to kill yourself (sic) if you don't have your will in order in the time preceeding your death. If you do, you can be relaxed and feel just in your final hour.
Summary: speak computer, embrace change, live long and prosper, keep a will and prepare to leave the planet before the sun blows up
- Learn automata
- Make yourself change resistant - embrace change
- Wait for a better time to invest for old age, but then you must do it
- Live long enough to live forever - exercise and experiment to cultivate both your body and brain
- Keep a will anyway
- Leave the planet
Update: Check out this video from Peak Prosperity about how the coming 20 years will be COMPLETELY UNLIKE the last 20 years, regarding Energy, the Environment and the Economy