Don’t save to retire
“Don’t Save to Retire”
Thundered the headline as I doomscrolled in bed on Sunday night.
“Trillionaire Elon Musk says AI will overtake human intelligence in five years, one billion robots will be doing your jobs, and money will be meaningless.”
Sweet dreams, Scottie!
Now, if you’re normal, here’s what’s going through your head right now:
Musk is a smart dude. A weird, sometimes sad, occasionally appalling dude. But smart. So even if he’s out by ten years, that’s still terrifyingly soon to be replaced by a robot, right?
Well, here’s my take.
Musk is undeniably the greatest salesman who has ever lived. In fact, he (briefly) became the world’s first trillionaire by creating the greatest sales pitch in history.
It goes like this:
He and the other AI companies have built a God in their garage.
It’s so powerful their machines might just kill us all … or take all our jobs … or if we’re lucky, deliver us a golden age of utopia where we don’t have to worry about boring stuff like saving for retirement or finding a girlfriend (hello sexy fem-bot).
Now that is one hell of a sexy pitch!
It’s certainly a lot sexier than the truth: that they’ve built a hugely expensive pattern-matching chatbot that guzzles an insane amount of power and water, regularly hallucinates on simple questions, and once spent fourteen minutes losing a fight with a drop-down menu.
Worse, I think these salesmen have gotten carried away with their own hype.
The boss of Claude puts the odds of civilisational collapse at “10 to 25 per cent”. In 2023 the heads of the biggest AI outfits signed a statement ranking “extinction from AI” right alongside pandemics and nuclear war.
I don’t know about you, but this doesn’t pass the sniff test.
If these men truly believed those odds, we’d treat AI like a contagious killer virus and shut it in a lab. Instead, they doubled down, and are now working incredibly hard at selling their loss-making businesses via the sharemarket.
My take?
They’re either liars or lunatics. Either way, I’m not taking retirement advice from them.
And look, I’m no luddite. I think AI will do amazing things in the future, especially teamed up with robotics. Yet this technology is about three years old. These are techno-toddlers. Musk is the pushy dad at the school gate swearing his three-year-old will run the world. Maybe, mate. Come back when the kid’s eighteen. Then we’ll talk.
For me the real question isn’t whether AI takes your job. It’s who owns the robots, the data and the technology, and the businesses that could become incredibly profitable by using it.
And the answer can be … you.
A sliver of every one of them, through a simple index fund: the chip makers, the software, the robot builders, the lot. If the machines really do mint trillions, the owners get rich.
Yet here’s what makes absolutely zero sense:
Musk is telling you that you don’t need a ticket to that owners’ club. That there’s no need to save, because the former trillionaire says “money will be meaningless”.
Uh-huh. Dial down the ‘special K’, Elon.
So whether this ends in utopia or a giant fizzer, your move is the same, and it’s gloriously boring. Get out of debt. Own a slice of the world. Keep your Mojo bucket full. And learn to drive these new tools instead of cowering from them.
The only people who get truly screwed are the ones who panic and stop backing themselves.
Tread Your Own Path!
Your Questions & Answers
ING Announces Biggest Change in 18 Years
We Have One Week to Get Rich
ING Announces Biggest Change in 18 Years
Hi Scott,
I hope you’re well. We’re going to announce the below today, so wanted to make sure you had a copy. It’s a new savings product we’ve called Savings Booster, and it’s the biggest change to ING’s savings products in 18 years. The product rewards customers with a bonus rate if they meet one straightforward condition: growing their balance by $100 or more by the end of each month. New-to-ING savings customers could earn up to 6.00% p.a. variable rate on balances up to $500,000 for the first four months when they grow their balance by $100 or more by the end of each month. Let me know if you have any questions.
Adrian
Hi Adrian,
Given you’re one of the Big Cheezles at ING, thanks for giving me the advanced drop on this.
You remind me of … me on a Sunday night.
I’m tired from a weekend of dad taxi-ing. It’s time for the final push of getting them into bed. So I lure them with a carrot.
“You can watch one episode of Octonauts”, I say, smiling.
If …
… you set the table. Eat all your dinner. Clear the table. Have a bath. Wash your hair. Brush your teeth. Set out your uniforms for tomorrow.
That is your new improved account, Adrian.
Your press release gushes that the Savings Booster will “make bonus interest easy to understand and deliver greater value for customers”.
Easy to understand?
You’ve created three separate rates stacked on top of each other. A Welcome rate of 0.60%, which only runs for four months. A Boost rate of 3.15%, which you only get if you grow your balance by $100 that month, excluding interest. And a Base rate of 2.25%, sitting underneath.
After four months the Welcome rate vanishes and your “up to” quietly drops to 5.40%. Same hurdle, one less sweetener. Miss that $100 hurdle once, because the car needed tyres or Christmas came, and you’re back on 2.25%.
Mate, like I said, you’re behaving exactly like me on a Sunday night. All these rules, dressed up as being for their benefit, are really designed to get me what I want.
And for a while it works. Until my kids run out of bandwidth. They get fed up, they turn on me, and the whole thing falls apart. I’m left with four ratty kids and no dinner eaten.
Because kids are smart. They wake up to the fact they’re being manipulated.
And so will your customers.
So here’s what I’m going to do. I’ll set up an automatic transfer the day after payday, clear the $100 hurdle without even thinking about it, and get on with my life. It’s a good rate, after all. But let’s not pretend you’re doing it in my best interests.
We Have One Week to Get Rich
Hi Scott,
We’re a couple in our early 30s, two little kids, combined income around $220k, and about $500k in equity. We worked our rings off for ten years to get here. Last week we paid $5,500 to get property advice from (NAME DELETED BY BAREFOOT LAWYER). They want to sell us an investment property. Their ‘portfolio fee’ is $40k over five years. We don’t fully understand what we’re buying, but they say they can only ‘hold’ the property for us for seven days, so we’ve got until next Friday to decide. We don’t know anyone else in our position. So I asked my old man, and Dad (bless him) told me to ask you. So here I am.
Brendan
Hi Brendan,
So here’s what I’m willing to offer: my advice fee is $40,000, and I can only hold your spot for seven days. After that it’s gone.
That’s the exact line these property salespeople used on you.
Brendan, the moment anyone puts a countdown clock on taking your money, you should hear an alarm. Real estate doesn’t evaporate. Nobody genuinely trying to make you rich needs you to decide by Friday.
Here’s what actually happened last week. You paid $5,500 to a company whose entire business is selling investment properties. And their advice was, ta-da, to buy one of their investment properties. Mate, I don’t walk into an ice-cream shop with my kids and come out holding broccoli.
And the $40k over five years isn’t a ‘portfolio fee’. It’s a commission dressed up in a suit, and a big chunk of it is almost certainly baked into an inflated price on the property itself.
Here’s the kicker: you already built $500k in equity in ten years. How did you do it? You bought a family home, and you lived there. Simple. No $5,500 advice strategy needed.
So let me give you my $40,000 advice for free.
Write off the $5,500 as tuition and never call these weirdos again.
Then just keep climbing the tried-and-true Barefoot Steps: Bump your super up to 15 per cent and put it on autopilot. Build your Mojo to three months of living expenses. Then, Step 7, get the banker off your back and throw everything at that mortgage.
Oh, and say g’day to your old man for me.
Thanks for reading,
Scott.