Self-Education and Self-Investment

[The video version of my interview on the Hannah Frankman Podcast is above. Here are the audio versions on Apple Podcast and on Spotify.]

In the age of AI, traditional education is OUT, and self-taught AI skills are IN…

Within a year or two, the office job market will look radically different than it ever has, as AI washes over most workplaces.

How should young people change their plans for education as this AI tsunami crashes over the workplace?

In my interview with Hannah Frankman–a rebel maven of alternative education–I make a controversial claim:

In the age of AI, going to college will be a massive financial and career harm for most students, particularly those taking on significant debt.

(The exception is students who want to go into a field like law, which requires an academic credential and/or licensure, such as law, engineering, or medicine–though these fields are being upended by AI as well.)

Why?

Colleges have already demonstrated that they intend to keep young people away from AI either partially or fully, saying that using AI tools is “cheating.” Overpaid college deans correctly see AI as a threat to their business model.

(And yes, colleges are for all intents and purposes businesses–and ruthless ones at that–despite their fig leaf of non-profit status.)

Point blank: any young adult who has been kept away by their teachers and professors from learning about AI tools urgently, will be irrelevant to the job market next year, let alone in four years.

Students simply do not go to college (and take out large student loans) to become economically irrelevant, and they should not. So education needs to be rethought from the ground up as AI dominates every area of our economy.

What Young People Should Do Instead…

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On Oct 8th, with ~7 hours notice, I–along with much of Northern California–learned that electricity would be going out for possibly a week. It was a preventive power-outage to avoid catastrophic climate-related wildfires like the ones in the last few years. 

This highlighted for me why, of the myriad things I procrastinate on, disaster prep was not a good one. (Especially because I also live directly on top of the Hayward faultline in Berkeley.)

The Pacific Gas and Electric Company site was down due to all the people frantically checking for info. (Hey PG&E, maybe investing in more bandwidth during emergencies would be a cost-effective move?)

From the spotty information (rumors?) I could get online I learned water could go out during this time as well. 

Frantic trip to Home Depot for flashlights, batteries, candles, water jugs, first aid kits. Shopping carts full of non-perishables at El Cerrito Natural Grocery (oh God so Bay Area!)–prepping for Armageddon, gluten-free.

Filling car gas tank (could serve as a generator for devices.) Filling up bathtub and every container in the house with water. Making last-minute calls saying I may be out of touch (info online said cell towers would work, but ya never know.) 

Seeing how much my life seemed like it could upend with the possibility of ~7 days without basic civilizational utilities, and the degree to which I was reduced to a nervous ninny, brought to mind a series I wrote a while ago but never published on topics related to the end of civilization as we know it. Now seems like a good time to share it! 

Social Survivalism:
Cultivating High-Trust Networks Before Disaster Strikes

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When I say the “secret” of grounded confidence, I mean both that there’s a secret to gaining it (which I’ll be sharing below)… but also, that grounded confidence itself is a secret!

What do I mean?

Well, when you hear the phrase “gain confidence,” what comes to mind?

Maybe you think of some kind of pep-talk, from a mentor, coach, “motivational speaker” or “transformational leader.”

(Those in latter two groups sell expensive seminars where you jump in chairs all weekend, scream in groups, and hear inspiring stories about other people who took the upsell seminar and now live on yachts, etc…)

These forms of “confidence” are like jolts of coffee… good for a few hours, or even days (hey, that’s some strong coffee!) But then the crash comes… and you need the next external fix.

In contrast, grounded confidence is based on:

A back-and-forth dialogue between inner confidence, and improvement in external results.

(The last part–external results–is where the “grounded” part comes in.)

Let me tell you a little story about grounded confidence, and how to gain it.

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Most people who haven’t already “made it” are lucky to have a few people who truly have rock-solid, investible faith in them. Maybe their parents (if they’re lucky!) Maybe a few really close friends, or a mentor they’ve been lucky to find.

But in a typical lifespan–before you’ve “made it,” however you define that– the main person who is going to have faith in you is you.

That means, before you’ve reached the level of success you desire in life, investing in yourself is a form of contrarian investing. (Investing that goes against the crowd.) And a form that I think is much more doable, valuable, and safe than contrarian investing in the markets.

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If you’re wondering how you will provide for you and your family’s financial security in the future, you’ve probably considered saving money in your IRA or 401(k), and investing it in broad mutual funds tracking the US markets. Or you may have already done this.

If so, you’ve probably been lulled in by the personal finance industry’s PR that, “in the long run, the US stock market has gone up 7% per year annualized, after inflation.”

Sounds great, right? 7% per year is a doubling of your assets roughly every ten years. Just stick that money in there, don’t touch it again (“buy and hold,” or “passive investing”) and watch your wealth double every 10 years! (That’s a 12-fold increase over 40 years!)

The problem is, there’s a dirty secret to the investment business–one that the people selling you this BS advice don’t want you to know, because it would put them right out of business.

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The key to fool-proof investing is truly internalizing the implications of the following unsettling fact.

Most people are fools when it comes to evaluating their own talent in many of their own skills. (Including, as we’ll see in a moment, investing.)

Unfortunately, chances are, that includes us.

Studies show that 95% of people believe they are “above-average” drivers.

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There’s a strong case to be made that the two sentences I’m about to share with you are the most influential in the entire history of Western philosophy.

They were uttered during the trial of Socrates for “corrupting the youth” in Athens, 399 BC–according to the version recounted by his disciple Plato.

According to Plato, Socrates said–while commenting on a negative run-in with a supposedly wise man of Athens:

“Although I do not suppose that either of us knows anything really beautiful and good, I am better off than he is–for he knows nothing, and thinks that he knows. I neither know nor think that I know.”

A basic reformulation of this, is that a fool can become wise, simply by knowing that he’s a fool. For he is then wiser than the most other people, who are also fools, but don’t realize that they are.

What does all of this have to do with investing?

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The most valuable urinal the world has ever known was created in New York City in 1917.

It had no diamonds in it, nor any precious stones at all. It was not made of gold or platinum, but of porcelain, just like every other urinal. In fact, in every respect, it was just like every other urinal, into which the common men of the time were relieving themselves in the public bathrooms around the world.

In 1917, an artist calling himself R. Mutt signed his name to such a urinal—said to be a Bedfordshire model bought at a foundry showroom on Fifth Avenue—and submitted it to an exhibition organized by the Society of Independent Artists, paying their $6 fee. Even though it was a nonjuried exhibit, open to anyone who paid the fee, the Society’s board took the extraordinary step of exercising jury powers. They turned down Mr. Mutt’s submission as not being art and returned the urinal to him with a rejection slip.

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