Categories
Life Work

The Half Life of Knowledge

The following chart by Marc Rosenberg illustrates historical estimates and future predictions about the rate of growth in humankind’s collective knowledge.

Note: Pre-1982 estimates were by futurist R. Buckminster Fuller. The 2020 prediction was made by IBM.

IBM predicted by 2020 total human knowledge would double every 12 hours, as the Internet of Things expanded. While this is difficult to accurately measure, we all recognize that in 2020 we are drinking from a fire-hose of information. 

Knowledge today is growing rapidly as every click, search, purchase becomes a data point that forms the tapestry of our digital identity. Data aggregators have claimed to have over 5000 data points on every US voter, from which countless insights and predictions can be made. Every day, data is being collected across numerous digital platforms. However, this information is concentrated in the hands of the few.

IBM predicted by 2020 total human knowledge would double every 12 hours

For the few with access and computational power, knowledge is power. But those without access must run faster to keep up, as the half-life (the time it takes for half the knowledge in a particular area to become stale) of knowledge shrinks. This divide will grow as the ability to leverage information is powerful and profitable.

Those with power are unlikely to give it up voluntarily. Thus, the useful application of knowledge will consolidate even further into the hands of few. The majority of humans will simply remain overwhelmed by information and the inability to fully capture, interpret and analyze it to their advantage.

This has implications across many fields and industries. For example, how is an individual investor or even a boutique professional portfolio management team meant to out-store massive databases and outperform the computational capabilities of algorithms to fully exploit information?

We will need to be more humble about our abilities by recognizing the sheer volume of unknown unknowns. Unfortunately, the competitive nature of various segments of society and the economy will leave the average person behind.

So how do you as an individual compete? Continuous learning seems like a fruitless task as there is more to learn than is possible to ever grasp. Yet, it is still imperative if one is to outrun other individuals.

However, there are other ways to create value that might not be captured by the algorithms.

While computers are able to monopolize measurable bits of information (clicks, data points, dollars, etc.), humans still retain an advantage when identifying, analyzing and interpreting intangible cues. I’m talking about emotions, gut instinct. That feeling you get when the hairs on the back of your neck stand up is your brain analyzing millions of immeasurable pieces of information to warn you of danger.

Humans possess the ability to synthesize new information not captured by computational models. This is what we must exploit if we are to survive as individuals.

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Categories
Wealth

Death of the Middle Class Dream

As world leaders (aka the 0.01%) fly into the exclusive economic forum at Davos to discuss how to run the world, numerous activist organizations are releasing data to show how the world is circling down the toilet.

These are depressing stats. The world is not in great shape and it’s getting worse. This could all lead to growing social conflict all over the world.

So why am I telling you? Because the traditional middle class dream is dead. That game is over. You need to understand how the system is rigged if you want to win at the new game.

I know this sounds like some conspiracy theory bullshit but it’s not. The fact is the world is not a nice place. It’s not a fair place and none of us can rely on others to make it fair. We have to fight to break past the trappings of the current system because the system doesn’t care about us and isn’t here to look after us.

It’s all up to you. And me. That’s why I’m doing this.

I know I’ll never be a Bill Gates or Monty Burns. Neither will you. But that shouldn’t stop us from trying to NOT be the guy that is one missed paycheque away from bankruptcy. Or that doesn’t have time to play with his kids.

So here we go with the depressing stats:

  • IMF says the outlook for the global economy ‘remains sluggish’ as it cuts growth forecasts.
  • 78% of respondents to Edelman’s Trust Barometer agreed that elites are getting richer while regular people struggle.
  • 56% of general population respondents to a study by consultancy Edelman agreed with the statement: “Capitalism as it exists today does more harm than good in the world.”
  • In the U.S., 43% of people believed they would be better off in five years’ time, a 7 percentage point drop on a year ago.
  • In the U.K., only 27% of people thought they would have more money in the same time period, a drop of two percentage points.
  • 48% of the general population said the “system” is failing them, relating to how governments behave. More than half (57%) said governments serve the interests of only the few.
  • The world’s 2,153 billionaires have more wealth between them than a combined 4.6 billion people.
  • Someone who saved $10,000 a day since the construction of the Egyptian pyramids would still be 80% less wealthy than the world’s five richest billionaires.
  • Nearly 40% of the world’s 195 countries will see civil unrest during 2020.

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So here’s the gist:

Since the dot com bust, real economic growth has slowed > competition for resources intensified and those with economic or political power consolidated wealth > wealth inequality widened > the masses became increasingly disenfranchised by missing out on all the “economic gains” (i.e. stock market gains) the news keeps raving about > now, animosity is growing, feeding the possibility that a seemingly unrelated catalyst will thrust the masses into rebellion.

Or something like that.

This is the fragile framework we have to play within if we want to build personal wealth or simply realize the middle class dream.

How do you do it when the world is becoming more politically polarized, many people can’t pay their rising bills and most feel they can’t trust the system? Wealth creation is still the game but the rules have changed.