The 4th Industrial Revolution
It’s interesting how our world works. On the one hand, we admire success, yet on the other we often dismiss it. For example, many thought Jeff Bezos’s Amazon would be just another book retailer. Now, he and his company are considered revolutionary and an enormous success. However, as Einstein once said, “It’s all relative!” And Aristotle was known to start his arguments by stating “Let’s define the definitions!”
I’m fascinated by the whole idea of success. It is, for sure, relative, as illustrated by this story: A young man comes upon a very well-dressed older man crying on a park bench. He asks what the matter is: “Are you poor? Do you have a family? Have you lost someone?” Through tears, the older man replies, “I am very wealthy, my children love me, as do my grandchildren, and my wife is supportive and loving and my best friend. I have a happy life.” The young man asks, “Sir, then why are you sad and crying?” To which he replies, “I don’t know where I live.”
So what is success? It seems that today one’s financial status and fame are the key elements for most who try to define “success.” All you need to do is go to the magazine rack and see all the beautiful, rich, and famous people on the covers who seem overwhelmingly successful and admired. However, from what I can conclude from my own life experience working with successful and happy people, it seems that “rich and famous” are not the things pursued by most people whom I consider successful. Instead, good relationships, friends, family, enough financial resources to be comfortable (plus perhaps a little bit extra), happiness, and health appear to be the elements that most people I know would list as making up a successful life.
But does success imply happiness? In this essay I’m simply trying to explore the idea that “things, they are a changin’.” Amazon’s smart-guy-in-charge, Jeff Bezos, remarks, “If you want to build a successful, sustainable business, don’t ask yourself what could change in the next 10 years [that could affect your company]. Instead ask yourself what won’t change, and then put [all] your energy and efforts into those things.”
I’ve been contemplating this statement for quite a few days, off and on. And a quote from Albert Ellis keeps coming to mind: “Happiness depends on our interpretation of events.” In other words, it’s how we perceive success, and that is always subjective.
The four boys who keep our house messy and loud are very verbal and often argue, fight, and tease. Basically, they are at the stage when they are developing and are learning conflict-resolution skills. They can all be quite happy playing with the smaller soccer ball, until an older or younger brother walks by holding the big new green soccer ball that a friend from England brought a few weeks ago for all four boys to share. “I want that ball! He should share!” soon goes the cry. Every parent, sibling, or grandparent reading this knows what happens next. In our home, we listen to our kids and help them develop their communications skills. We don’t want them to assume that it’s the job of their parents, teachers, preachers, or governments to create peace. Instead, it’s their job to reconcile the differences so that they can learn the requisite communication, cooperate, and team-oriented relationship skills while young. Still, we frequently must intervene – to remind them that hitting, grabbing, or name-calling are not allowed.
The point I am making is simply “We are happy till we find something better – or something that we perceive is better.” I cringe as I write this, because many readers obviously possess emotional intelligence and are more mature, balanced, thoughtful, and adept at reasoning than most, otherwise you would not be hiring FIM Group to manage your wealth. You are less likely to care about the new, green ball when the old, smaller one works just as well. And when your friend shows you his zippy new car, you admire it but climb into your own, perhaps older, car and think “This works just fine.”
Economics is about the behavior of people: how they act. And, while you and I are “people,” we are not the market. We are the 1%. If you make over $32,000 annually, which is below what almost every wage earner in the U.S. makes, you are in fact in the 1% of global top income earners. The net worth number for the global 1% is more than $770,000, which includes a home, pensions, investments – everything. So, if we wish to watch where the world is going, squinting at the 1% doesn’t tell us a whole lot.
Instead, we should leave our bubble-world and see what’s really going on.
In America and the rest of the developed world, we are buying less consumer goods. We are spending but find we are happier traveling, having a nice meal with family or friends, and hanging out with our friends and kids; we really don’t care if the shirt they are wearing was bought in the last 15 years. Most clients reading this letter would likely look at their lives and agree they are buying less and paying more for experiences that nurture relationships, healthy living expenses, kids’ education, philanthropy, and they don’t feel that more is needed.
So, what won’t change? We will still want to be healthy and happy. We will still want our families to be healthy and happy. We will want our children and grandchildren and those we consider our responsibility to be educated. We will want economic security, to be safe, and to have the income to support our desired lifestyle (and a bit extra, to boot). We will want to have a roof over our heads and be able to eat, have running water, electricity, and other basic needs.
The Huffington Post listed the top 10 things in life that people want more of but can’t seem to get enough of: Happiness, Money, Freedom, Peace, Joy, Balance, Fulfillment, Confidence, Stability, and Passion. If this list is true, we in the U.S. and the rest of the developed world need to look at what our fellow citizens truly will want. And it seems that it isn’t stuff, but rather entertainment, food, healthy living, good health care products and services, more time of our own, the capacity to communicate easily with loved ones, the ability to travel for good experiences and to see friends and family. As investors, those are the areas we are looking at.
The developed world is much different than the world of African countries and developing countries throughout Asia. The median annual wealth per capita in India is $608 and in Africa it’s $411 – not a lot of money to buy cars, refrigerators, books, pots and pans, food, education, health care, cooking oil, or charcoal. These countries are a market, and we are telling their people that they should want cigarettes, beer, sugary drinks, and KFC. Thankfully, many of them already realize that having skills and education, plus opportunities to express those skills, are the way out of poverty. So, education is a huge business, but it is in dramatic, gut-wrenching change as we move from printed books to digital ones and from teachers who tell you what to memorize to ones who help you become a self-directed, confident learner.
The changes we are seeing are huge areas of opportunity. Change, after all, is the only constant. There will be winners and losers, as the world we live in moves to what Klaus Schwab, founder and chairman of the World Economic Forum, calls the 4th Industrial Revolution. As he states in the opening paragraph of his article about this revolution, “We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope and complexity, the transformation will be unlike anything humankind has experienced before.” (We have a link to the article at FIMG.net; or just Google “4th industrial revolution” to find the article.)
The world will always be a’changin’. What will still exist 10 years or 1,000 years from now is our desire to care for each other, for relationships, for health, for happiness, for food, for safety, for positive enjoyable experiences, for meaning, for resources and sufficient income to support the life we desire. We at FIM Group will continue spending our time being future-oriented, searching for what will be next. As we move through the 4th Revolution, we will encounter many opportunities – but we will not overpay for them, nor will we invest in the overhyped areas. Instead, we will stay the course.