AI (Artificial Intelligence) is taking over the world. In the worst case scenario, it will start a nuclear holocaust (Terminator anyone?) but at the very least, it’s poised to take over many jobs and industries.
Morgan Stanley analyst Brian Nowak forecasts that 44% of the labor force will be affected by AI in the near term, with the economic ripple effect speculated to be around 4.1T dollars. Crowley, Martin & Ferreira, Arturo (October 3, 2023) 44% of the labor force affected by AI in next 3 years, AI Tool Report. It seems that the AI impact on jobs will be exponential. The latest projection by Morgan Stanley underscores a major leap from the current impact of AI – which stands at 2.1T dollars, affecting 25% of labor – thereby indicating a significant uptick in AI integration across sectors.
The list of jobs AI is poised to take over is extensive and it’s just getting started. It’s poised to make the most inroads into the following jobs with more in sight: data entry clerk, telemarketer, factory worker, cashier, driver, travel agent, bank teller, accountant, customer support, paralegal, radiologist, librarian, market research analyst, journalist, retail salesperson, stock trader, human resources, mortgage underwriter, and translator.
AI is also threatening entertainment as we know it. Pretty soon we won’t be able to tell the difference between songs sung and performed by machines and ones done by humans. It will be the same with movies, where computer-generated actors will be indistinguishable from real ones. Even the stories we read and watch on screen will be written by AI.
AI is threatening to not only take over jobs but entire industries. AI threatens to affect your retirement in more ways than one. What if AI replaces your job? Will this push out your retirement timeline if you have to learn new job skills to take on a new job? Your 401(k) is not safe either. If AI shakes up certain industries, the stocks of companies in those industries won’t be secure and neither will 401(k)’s invested in those stocks.
There is one sector that AI will not affect – housing. It cannot create housing and it will not replace residents. People will always need housing just like they will always need food.
AI may threaten to take over jobs, but it will never compete with humans for housing and food.
How do you protect your retirement from the threat of AI? By not relying on your job and by protecting your investments from AI.
True wealth is not being tied to a time clock. Professionals who make half a million a year but are tied to their jobs are not wealthy. If they stop working, their financial house of cards built on mortgages, credit cards and bad will come tumbling down. The wealthy – the financially independent – are free of the time clock and time constraints. If they work, it’s because they like to work. If their job went away or if they walked away, they would be OK because they have other income. Therein lies the secret to wealth.
You are wealthy and financially independent when you have enough passive income to continue your current lifestyle even if you lose your job. Wealth isn’t about having expensive things or big houses, it’s about having the freedom to not have to work. How do you achieve that freedom? By modeling your investment habits after the wealthy.
Have you noticed that everyone with a 401(k) is still working or has to work up until retirement age? 401(k)’s and traditional investments like stocks and bonds are not the key to retiring early. No matter what age you are, if you want to bulletproof your retirement from AI or whatever other threat lurking out there threatening to tank your retirement, you need to take control of your investments.
Ignore what Wall Street tells you about retirement.
Model the wealthy and you’ll find that they’re not heavily allocated to stocks and bonds like the middle class but two alternative assets: private company investments (i.e., private equity or private debt) and commercial real estate.
Why commercial real estate and why private investments? Because these assets, unlike stocks, offer to generate the type of passive income needed to displace the current income from your job. The passive income from one investment can be reinvested to magnify current income streams or to create additional income streams. Multiple streams of cash flow along with underlying appreciation and significant tax benefits combine to create the ideal investment strategy for creating and growing wealth.
Passive income is how you protect your retirement from AI. You may not be able to protect your job, but you will be able to protect your income through reliable investments providing consistent cash flow. Not only can you protect your income, but you can also protect your portfolio by investing in something as essential as housing, which will always be in demand and where AI can never replace humans.
Investing in private real estate protected from the volatility and fluctuations of the stock market from the AI threat is a sure way to protect your portfolio in retirement.
Don’t let AI happen to you. Prepare now and feel safe and secure in your retirement.
Kyle Jones is a co-founder and Key Principal of TruePoint Capital, LLC. Kyle is responsible for the company’s strategic planning, investment decisions, asset management, and overseeing all aspects of the company’s financial activities, operations, and investor relations.
Kyle obtained a Bachelor of Science degree from Texas State University – San Marcos, where he also played Division 1 Baseball.