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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Wealth Work

Your Pay Just Got Cut: Now What?

Your boss just told you and your colleagues that you’re all getting 30% pay cuts.

What do you do? How do you react?

First of all, look at it from your company’s perspective. This was probably the better of two shitty choices.

If the company needs to slash costs in a recessionary environment it has few options and little time to make those choices. Often, an impending debt payment puts a hard deadline on the need for cash. Missing a debt repayment risks the life of the entire company.

A pay cut doesn’t mean you’re getting screwed.

Often, one of the easiest ways to free up cash is to cut salary expenses. To do this, a company can either cut headcount or reduce pay per worker.

While a 30% pay cut feels like you’re getting the shaft, it is actually a sign your boss is trying to save jobs.

It might work, it might not. But either way, keeping your job during the Covid-19 recession should be top priority. A steady paycheque keeps you solvent and it buys you time to build up emergency savings. It also buys you time to build skills, network and prepare for the possibility of eventual unemployment.

Longer job tenure means a bigger severance if laid off.

Another big upside to keeping your job is you retain tenure. A longer tenure means more severance if you are eventually laid off.

In good times, a 30% pay cut would send you immediately searching for another job. But in bad times, that would be a risky strategy. This is not the time to let pride drive decisions. Unless you’re independently wealthy, you still need an income to pay your bills and feed your family.

Quitting for a new job is risky because it means your tenure resets to zero. A company can have the best of intentions when hiring, but changing circumstances could force them into cutting staff (or salaries). Who gets cut first? The new guy – because it costs the company nothing in severance. A recession is not the time to walk away from job tenure.

A 30% paycut is usually temporary.

As the economy eventually normalizes, salaries should be returned to their previous level. If this doesn’t happen, then consider your options. But it could take 2 or more years until the labour market is strong enough to give labour a fighting chance. Until then, it’s a buyers’ market.

Job seekers today are competing against millions of other job seekers for jobs that don’t exist. This is not a labour market you voluntarily enter. So accept that 30% paycut, as painful as it is, because the alternative could be a lot worse.

(Free Guide) Survive the Coronavirus Economic Catastrophe:

The Covid-19 economic crisis is gripping the world. After 20 years in the asset management business, it looks like we are fighting through unprecedented territory.

This is war. I created a 17 step, 47 page guide to help DumbWealth subscribers get through this.

I originally planned on printing the guide and selling copies for $20+. Instead I’m giving this away free because I think we all need to help each other during these difficult times.


You’re Richer Than You Think? City by City Median Income in Canada

Feb 14, 2020 Update: I originally chose a sample of cities across Canada so not every single one is in the chart below. Due to popular request here is the data for Ottawa-Gatineau and Edmonton: Ottawa-Gatineau median salary is $40,128. 90th percentile is $97,713. Edmonton has a median income of $56,058. 90th percentile is $134,997.

If you’re like me you probably compare yourself to the people within your industry or social group. In particular, you look at the people you admire as the benchmark for your own success.

If you work in a high paying field like law or finance you are comparing yourself to a small elite group. This group is not representative of society in general. By comparing yourself to the upper echelon of society you likely feel like you are falling behind. However, even the worst paid surgeon makes more than most of the general population.

Reality Check: How Does Your Income Actually Compare?

I dug up some data on incomes in various Canadian cities, from Calgary to Victoria. I then calculated the 50th and 90th percentile incomes for each city for male workers. (The 50th percentile means 50% of the population is below that number. The 90th percentile means 90% of the population is below that number.)

I displayed the data below for worker salaries in each city. As you can see, 50% of the working population in each Canadian city makes less than a fairly modest income. For example, 50% of workers in Halifax earn less than $40,000.

My point: before worrying about how shitty you’re doing or how you are falling behind, take a look at how the rest of the population is faring. You may be surprised by your own relative success.

Note 1: this data is from 2015 so the Alberta figures may have fallen since due to the challenges in the oil patch.

Note 2: part time student and senior workers likely pull the data down, but this doesn’t change the point.

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