The Expert Podcast

Over the next 12 to 18 months, it's going to be crucially important for consumers to start retaining capital. If you look at your monthly budget, you may be just a conduit for money flowing upstream—up the food chain to larger corporations. When you get your income from your employer, your side gigs, or whatever source of income you have, if all you are is just a valve to send all the money to larger corporations, to Wall Street investment firms, or hedge funds, then you're really nothing more than just a method for the economic system to harvest capital from consumers.

If you want to break that cycle and be more secure yourself, now is the time to start retaining money—not just being a pipe for money to go to larger companies. Here's the reason why: there's a lot of talk about layoffs and unemployment. You might think, like this article does, "If the job market is so good, why are there layoffs happening?" Well, part of it's because employers have come to look at the reality that there may not be the availability of a really good workforce.

There are a few factors at play. One is the whole "quiet quitting" phenomenon, where people are actually quitting but just not telling their boss. They're not really doing work; they're just kind of going through the motions—maybe just showing up the minimum amount of time they have to at the physical location of the company, working from home, working remote, and really not putting in an effort. Companies know this. They can tell from productivity numbers, but they know that at the moment, they can't really do anything about it.

The other part of it is there's a big push for higher pay—for higher minimum wage, for raises—and in some cases, companies are looking at alternatives. So they're not really going to put more people on the payroll if it's going to cost more. So what is their alternative? Well, here's what it is right here: an army of robots coming to fill in for scarce workers. There's significant technology that's this close to being deployed to where automation—whether it's physical manufacturing, data processing, or other workflows—can be done by automation. Call it a robot, call it an electronic assistant; these will take the place of many employment work types.

It doesn't take much. You know, if these robots or these automation machines can take over 20 or 25 or 30 percent of the jobs, that may not seem like a lot. But if you had 30 percent unemployment, that would be a catastrophe. What is the thought process for companies on this? Well, it says right here: Business leaders are more eager to welcome these than ever. Hard-pressed employers, technological leaps, and improved cost-effectiveness are driving a rapid expansion of the robot army. A half million industrial robots were installed just last year—that’s a pretty big number.

So you're going to find that adoption of these types of assistance is going to happen at a higher rate than ever before. It's not going to gradually increase—it’ll be an exponential increase. And that's going to put workforces at risk, and even pay scales at risk.

What could be the result of this? Well, according to some experts, there might be 175,000 jobs lost per month starting next year. So every month, there'll be another 175,000 jobs reduced from the payrolls. What does that do for you as an employee? Well, you might not think that your job is at risk of being automated—and maybe it's not, initially—but it's a domino effect.

If the support jobs for your role—let's say you're a manager and nobody can do your job as a manager—but if the employees that you manage, your direct reports, are automation, you don't need a manager for that. Or if your role is in some consumer discretionary spending—let's say food service, entertainment, any type of consumer services—you know, nail salons, haircuts, those kinds of things, those are the last dollar spent and the first dollar saved.

So as consumers start to be put under pressure of their finances because their jobs are being automated, they're going to have less discretionary money to spend on your particular service or your particular industry. So you may find that even though you're not directly in the crosshairs for automation of your job, the people who spend money at your business are being affected by automation. They're going to have less money to spend at your business. Your business may kind of deteriorate.

And even if you're not an owner of a business, if you're an employee, the business that you're in may not be able to support that higher level of staffing. So this automation and this reduction in workforce is going to be pretty significant. And there's going to be some cultural changes from it.

The only thing you can do right now is, if you are in a role where there may be automation that can affect you directly or indirectly, try to reposition your role to have less of an exposure to that. More importantly, start retaining capital. You know, for most budgets, there's a stat that's out there that says 60 or 70 percent of people—sometimes 80 percent—live paycheck to paycheck.

What that means is every dollar that comes in goes out. You're just basically a conduit—a pipeline—for money that flows upstream to corporate giants, to large corporations. And if all you are is a pipeline, then what is your role? They're just harvesting your productivity.

So you want to start retaining capital—even little bits. You don't have to save thousands. Save ten dollars, fifteen, twenty, thirty. What you'll find is, as you start to create the habit of retaining some money—you have fifty dollars in a bank, a hundred dollars in the bank, five hundred, a thousand, ten thousand—you'll find that the skill and the habit of doing that will become more instinctive. And you'll do it more regularly.

Then at some point, when you have a certain amount saved up, you can use that capital to do something—maybe launch a business, maybe purchase something that's income-producing. Worst case scenario: you're at least slowing down the flow of those funds to the system, which may have an effect.

So be very wary of this. We'll look back at this maybe six or eight months from now, so keep an eye on our channel to see where it's going. But expect—if 175,000 or 200,000 or even 100,000 jobs are lost every month—that’s a million jobs per year, plus sometimes two million that could be taken from the workforce. And that can have a big effect on discretionary spending, GDP, and individual consumers’ budgets.