Your future as a worker looks bleak.
Technology's impact will not be an immediate end of jobs, but an increasing stress on wages and work environment. You will continue to be paid less for doing more.
Owning income-producing assets (real estate, businesses, IP, etc) is key.
Your future as a worker looks bleak!
http://www.theepochtimes.com/n3/2176159-technology...
Agree? Disagree?
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Okay, 25+ year veteran of the tech industry. Was in before the first website existed and have done the bubble and burst.
If I wanted to take the time, I could probably find you this same scare story written in the 1980s, 1990s, and 2000s. The AI and robots are going to take our jobs theme has been around a long time but in 40 years . . . the impacts has been rather subdued.
And while AI has many practical applications, the predictions of the mass extinction of need for humans tends to forget we still have so few actual needs for AI at the moment. I mean, look at this story citing a single example of the burger bot over and over again to stress how easy it is to kill 3 million jobs. But the number of people who cook only burgers is not 3 million. It's not an article written to give one a realistic look at the potential impact of AI and bots, rather it's purpose is to scare you.
There really are a lot of holes in this story. Like noting that there was an economic shift in the 1970s but back in the 1970s computing was a negligible blip in terms to contributing to that change. Yet it then quickly forgets all of the other economic factors which lead to wages being flat vs. productivity and somehow attributes nearly everything to technology after that.
Not that I'm saying that AI won't change our lives or that many jobs will be automated. But someone here suggested we're not that far away from computers being able to write sophisticated applications . . . I don't see that. Right now, AI can barely write very structured copy like stock market reports and sports scores where it's mostly MadLib style plugging in of data. "The market [rose] today [75 points] on [strength in industrials]." Writing quality consumer oriented software would be like extrapolating this neat little copywriting trick into writing a novel. That, I'm fairly confident, won't happen in my lifetime.
But should computers take the job of somebody who was writing market recap reports like a mindless machine anyway? I don't see any harm in that for the job market other than we really should be taking a very close look at how we educate people for the future. Probably 60% of college majors should be done away with or at the very least, no public funds (student loans) should be put towards funding educational paths that will lead to people with skills that have near zero value to society.
I've hired hundreds of college grads over my career and it's so sad to see someone dump tens of thousands of dollars and four years of their life into a degree that makes them less qualified for an entry level job than someone who at least has held a job at McDonald's for four years.
In the past just having a piece of paper from a four year university was enough to guarantee middle class membership. But that's not true anymore. Train people to move up the value ladder so they can get jobs that aren't easily replaced by AI or robots.
One of the causes of income inequality (but far from the only cause) is that there's a shortage of labor in the highest paying fields (which is why they're the highest paying fields). We keep graduating people with degrees, and charging them tens of thousands of dollars, that are over saturating the market with college educated people who aren't prepared for a career path that will lead to middle class incomes. Those that actually get a degree in a field with high demand end up making magnitudes more income than everyone else.
I also find it amusing that the theme of this post was that jobs are going away so invest in RE. Except, evaluating deals is a pretty automatable job. Even property management can be highly automated. Why can't you have a self-serve, totally automated system to place ads, screen tenants, collect rents, and file eviction notices?
If the OP's thesis is correct then the ultra wealthy will simply employ an army of AI bots to scour the market for deals 24/7 and purchase it the same way that bots trade the stock market with little human input. The market will become highly efficient and spreads will become so thin that you'll be lucky to be making $1 a door.
Sorry, you can't have it both ways. If bots are going to automate us all out of jobs your job is just as automatable as everyone else's.
I would disagree that these are the only places. That's where a lot of the tech jobs are and where a lot of the money to finance startups is, but you can startup your own company in Iowa if you want to. If you want to work for a company that will go from startup to $10 billion in valuation in 2 years, yes, you probably need to be in one of these places. If you want to create an app that nets you $1 million a year, you can be anywhere in the world.
But tech is just SO SEDUCTIVE! It was FUN, NEW, EXCITING!!!
Until you realize you were in over head and the two solutions were BK or continue.
I (family & kids) would have been happier if I were a carpenter along side Joseph :grin:
#2 General Landlording & Rental Properties Contributor
Tech change began in the very early 90s so it has been around a long time and is nothing new. For at lease the past 15 years tech has produced very little of any value beyond toys like phones that do everything but.
Jobs of the future of true value will be in the trades. Upper school educated office workers will be less and less required and their wages will continue to drop as their will be far too many of them.
Most people, aside from the trades, will be employed in the low paying service industries or white collar office workers.
Manufacturing is global and will shift from country to country until we move away from individual country economies to a accepted world economy with a recognised single world government.
I respectfully, do not agree.
Do you currently own properties? Have you ever managed any properties yourself? If so, for how long? Do you believe you were successful at that? If so, why?
I guess I just found my answer. You state that you own no investment properties on your profile. So let me tell you automating the most valuable components of property management are not or at least not very easily done. It involved empathy and human relationship management (tenants, contractors, brokers, sellers, etc)...
Even if you can automate property management, real estate has innate value. Human beings have to live and work somewhere.
You could paint the same dire outlook for any job/career. You seem to be glossing over the physical toll many trade jobs can take on the body.
That said, I do wish I was better with my hands. Especially investing in RE, I regret not having done a lot more hands-on stuff so I understood how a house works a little better :-)
Tech jobs can be anything you want them to be though. I never moved to any of the places you mentioned, was with one company that went from 32 employees to 1200 in two years, did an IPO, and then, unfortunately, watched the stock go to $0 in the dotcom crash. Loved living in SoCal. Other companies came out of SoCal too, Geocities (sold to Yahoo! for $5 billion) - played pool with the founders a few times when they were still struggling. Had a few friends who started up companies and cashed out for 8-figure paydays.
But I consider those days, the period when I was paying my dues. I had to work my butt off but after that, I worked for companies and lived in Europe for a few years, took some time off and worked remotely from Asia for a few years, and pretty much know I have a skill set I can go anywhere with.
That is not always true for the trades though. Try muscling in on the local carpentry scene in a country where you don't look like the locals.
Sadly, many think they have the skills to be the owner/entrepreneur - - actually very few really do. It's far easier to be ON a payroll than it is to CREATE and support one.
Enough fun for today :-) grin
I know you don't agree. You created a thread titled, "Your future as a worker looks bleak" and then promoted the fact that as a RE investor you never have to worry about being automated out of a job. :-)
But you linked to an article that I've read 100 times over the last 25 - 30 years written by different authors in different publications that have all claimed the same thing. All I'm pointing out is that if AI and robots can do everything these article say they can do, you are not safe either.
I'm not saying that it's going to happen. I'm saying that if things are as dire for everyone else as the article makes out, you are far from safe yourself. Remember, anything that you can turn into a process, in theory, can be automated by software or a robot.
And so what if RE has an innate value? Nobody was arguing that assets would become worthless. You seem to be trying to convince yourself that you've picked the greatest job in the world by making up some really incongruent analogies.
So let me boil this down:
1. If computers start taking over everything it removes the very inefficiencies in the market by which many RE investors make money. Would you agree or disagree that margins shrink when a bunch of investors all come into one particular market? If you set an army of AI bots loose on the MLS and combine that with databases of crime rates, job growth, construction permits, rental listings, etc, how difficult will it be fore institutional investors to buy up all the easy money making opportunities before you've even gotten out of bed in the morning?
I'm not saying that you won't be able to buy RE. I'm saying that you'll only have a choice of what the big money decides isn't worth their time which ultimately means you have to work that much harder to keep up.
2. Most of the large property management companies are already pushing automation as hard as they can. I lived in an apartment in Irvine for 2 years and only saw the manager when I signed the lease and when I turned in the keys. Everything else was online. You claim it's all about personal touch but that is not the direction the property management industry is heading. The vast majority of property management can be automated. And what can't be automated will be of somewhat limited value compared to what it is today, if for no other reason than AI has put everyone out of a job and labor costs will be extremely low.
3. None of the above two points mean that you can't carve out a niche or find a way of making money in RE. When there's a will, there is a way. But you absolutely cannot tell me that the entire world will change around you, and RE investing will go on completely unchanged because of the "personal touch" aspect. Either things aren't as dire as the article makes out or RE investing will also undergo major changes. RE doesn't exist in a vacuum nor is the personal touch factor so unique that it can withstand the forces going on around it.
Bottom line? The article is pie in the sky wishful thinking that is highly unlikely to manifest itself on the scale the article suggests in the next 30 - 50 years. And if it does happen, RE investors will have to deal with a very different world that likely will not be as friendly to them as it is today.
Maybe this was brought up already, too many posts for my ADD to handle, but if everyone's jobs are being automated, shouldn't that concern investors too? If people aren't working how do they afford rent?
its probably true, its almost impossible to automate good property managers but much like many jobs already see the automation takes out the mediocre and also the support staff. In part this is good almost Darwinian but the problem is once you remove the "unnecessary" support staff where do the good ones come from? Either you assume they are good from something like school or breeding or in many cases you just don't hire them anymore at all. You are seeing this in places like Wall street where you can automate out a lot of jobs quickly and see the drop into the bottom line. Already people are talking about brain drain and/or too many people just like everyone else.
The second point I would make is that as @Bill R. points out this is not new. Maybe the scale is new but people have been worried about this for a long time. Computers (or code, AI etc.) have fairly consistently shown themselves to be subject to breaking down during 6 sigma events (which because of a feedback loop really aren't 6 sigma anymore). Also, in general geeks have a terrible history when given too much control just look at the mortgage crisis, LTCM, flash crash etc. etc. etc.
When that happens it sets everything back for various reasons (govt regulation, investors flee etc. etc.). I find it highly unlikely that we are in for a straight shot from here to AI taking over everything (i.e. the end of jobs more or less). Its almost a certainty that reliance on
code will have a very negative impact somewhere along the way (markets, driving, automated home, etc etc.), an impact most people won't be able to easily live with despite the fact that its just part of the path forward. There is almost no historical precedent for a straight shot from here to there. What is clear is that our lives could be very different 10 - 20 - 30 years from now.
Lastly, I am unsure how this is good for RE. How will people pay for things if they have no job? Where do you think tax revenue will come from? How long do you think it will be before govt raises property taxes from those who "have money"? How do you think property rights would be impacted? Its easy to forget that while the industrial revolution undoubtedly led to a better world it also led to wars, a complete rethinking of govt and its role, revolts and many would argue the various isms that came to dominate the late 19th century and 20th centuries. My opinion, the world you describe would be just as likely lead to disaster for RE investing as being good for it esp considering how RE is not portable and almost impossibel to get out quickly compared to other assets.
On another point what I think is exceptionally interesting is the possible opportunities this could bring forward. Just look at co-working/co-living, talk about a rethinking of RE and a great success or look at micro apartments or airbnb.
Excellent point. Everything is interconnected. You can't just look at one facet of something and think it can change in isolation of everything else.
That said, I do not fear the burger bot. :-)
Jon S. This is a heavy subject! While I do not share your sentiment that tech and AI advancements equate to the demise of the "worker" there are many impacts that can negatively effect those that are not adapting.
In my trade, I am certainly not working more for less. It is the exact opposite; I, along with millions of other workers, am adapting and leveraging tech to do exponentially more work while growing my wage.
Even in real estate, investors and workers are exploiting tech to their advantage. Many of the tech tools are becoming the new norm in workers' tool chests, but they are not the demise of the worker themselves.
One leading figure in this area worth studying is Peter Diamandis. Peter wrote a book titled Abundance that spins a very positive outlook on humans' future cohabitation with tech. He has a website www.diamandis.com with links to the book, blogs, etc. Definitely worth a read and recommended by Elon Musk, Richard Branson and others.
Speaking of the burger bot I talked to what i think is the same company many years ago when I was doing more startup investing type stuff and they told me they would be doing a number of things that took a lot longer. Great to see them get traction I think its a cool idea but even just to make burgers it took a lot longer. Same thing with cars and many other things.
Also, could zap the resources from the world changing stuff very quickly. Like the famous quote goes (I maybe off a little), "we wanted flying cars and we got 140 characters".
Yes, look how long it has take to get a burger bot. And how many millions of dollars have been poured into that over the years? It adds up to a lot of brain power and a lot of capital to achieve a rather modest goal.
And in the end, consumers may refuse to buy burgers made by the burger bot so the whole prediction of displacing 3 million fast food workers - even if every fast food worker was currently only making burgers - is due some skepticism.
And every robot, every piece of AI, is going to need to have similar amounts of capital and brain power invested into it.
And to be blunt, there simply aren't that many smart people available to solve so many complex problems over such a short period of time. Real AI, not just MadLib style parsing text intelligently, is hard stuff. And many of those people are already allocated to stuff like predicting the stock market and creating other predictive modeling.
That's one of the reasons I can't believe that eventually some of that brainpower wouldn't eventually be unleashed on the RE sector. Funding is going to go first to the things with the highest ROI.
Micro units...live/work- coworkibg/coliving...,It's already being done all over the Bay Area.
There were 4-5 micro unit developments completed in Berkeley and SF over the last 3 years.
Burgers will be made of veggie protein that bleeds or some other meat alternatives. We've got like 10 different ones now being worked on in the Bay Area funded by Khosla Ventures...along with the burger making robots.
I still think that if you want economic stability, owning income producing assets will be key. I suspect we're in for quite a bit of economic volatility.
The other reason that your future as a worker looks bleak is taxes. Workers are taxed heavily and prevented, unless you're an accredited investor, from investing in higher return LP investment opportunities...leaving options available....public funds and retirement plan high-fee racket also only allowing you to invest in public funds unless you self-direct.
Bill R.
Screen tenants? You can write something that crawls into every aspect of a tenants life and scores them for you. Isn't that what a credit score is anyway, except only on limited level. What if a bot would tell you about what they post on FB or Twitter about? Gathered up data on who they were friends with and gave you an idea of what kind of social circles they associated with?
This already exists in a beginner phase... https://m.youtube.com/watch?v=kSR8G8mfp84
How much Matrix, Terminator, and Sam Harris have you been watching. The earliest I even see a threat to my job is in 75-100 years, so my plan to retire in 5 or so seems plausible.
I absolutely agree.
I tend to agree with your entire take on the AI thing. People have been singing this same song since the 1980s.
How would you define "middle class income"?
@Jon Q. here too they are opening the micro units and a lot of stuff related to various new uses for space but those are based on an intersection of various trends.
I don't disagree with the sentiment expressed just the timing, predictable effects and outcomes. i just think there will be a lot of changes that make us look back and wonder how we didn't see it coming and how we ever lived differently (like the smartphone today for instance) but it won't be that predictable and the effect will certainly be big over time but not immediate and not as drastic as was implied.
Just because with past trends change came slowly, doesn't follow that these changes will. I don't know if I necessarily agree. Moore's law and thus technological innovation will grow exponentially. That means that you will likely see things begin to change very rapidly.
There has been more technological change in the last 10 years than in the previous 100 years.
Plan for the worst. Expect the best.
Moore's Law is only applicable to certain types of technological problems. If everything could just be boiled down to calculations per second, cancer would already be cured.
At a certain level AI is a people problem. As I stated previously AI is not easy. Even when it becomes more advanced and perhaps even more mainstream, there will be somewhat of an upper limit on the number of people working on problems. AI isn't a magic bullet that figures out how to do everything itself. It is a method of computing that allows a system to learn based on either massive amounts of data or via trial and error.
But ultimately, someone - a human writing the software - needs to understand what problem that they need the software to solve and to understand how to make the computer learn the best way to solve the problem.
Moore's Law would only be applicable after the above criteria have been met, the developer wrote the code, and the computer had to process through many computations to arrive at a solution.
Right now, the bottleneck is:
1. Not understanding the problem correctly.
2. Not understanding how to make the computer solve the problem autonomously.
3. Not enough smart people to solve #1 and #2
For instance, it took an entire team of AI students about 10 years to create a poker AI that could beat a world-class human poker player heads-up.
In the commercial world this exercise would have been entirely unprofitable. First off, the potential profit would be greatly eclipsed by the cost of hiring a team of some of the smartest AI people in the world for 10 years. Second, it would be far more easy and cost effective to teach someone over the course of a year to beat a world-class poker player.
And that was just to beat a poker player playing them one on one at a very specific game of poker. Add a second, third, or ninth player to the mix and they have to go back and and use an entirely different method to solve the problem because certain strategies work well in one environment but will be entirely wrong in a different environment.
Obviously, they will be better able to solve these new problems more quickly but not because of computational power, but because they know what path to take to solving the problem.
So the chance for exponential growth in AI is less tied to computational power and more towards figuring out an efficient method of teaching computers to learn that could be applied across multiple problems.
As @Charles Worth noted, this knowledge is likely to be at an incremental pace rather than an exponential one. Which is why even though people have been talking about AI for 30+ years, and computing power is astronomically greater than it was 30+ years ago, we've only seen incremental AI advancements. Only if there is a breakthrough in AI theory itself will growth become exponential.
Today I inspected a property I manage. The tenant moved out and I had the locks changed as required by law. As I was leaving and locking the front door, I noticed that the dead bolt works perfectly, but the doorknob lock does not. You can lock it from the outside using a key, but you can't lock it from the inside. So I had to call the locksmith to tell them to get someone out to fix it.
Can your proposed automated property management system do that? If so, knock yourself out. If not, STFU.