It’s been a number of months since we returned from Hawaii, and surprisingly, my FOMO concerning the AI tech growth has pale. Positive, I nonetheless don’t have a job paying me gobs of cash as AI CapEx surges greater, however that’s OK. As an alternative, I’ve allotted sufficient cash to AI investments to the place I not really feel the necessity to chase the business from the within.
You see, my actual concern isn’t lacking out on one other AI unicorn. It’s elevating youngsters in a crueler and harsher world—one the place, partly due to their identities, they get rejected from each top-50 college they apply to. Then, by the point they graduate from a so-so college, entry-level jobs have largely been automated away by AI.
This isn’t some far-off dystopia. CEOs of each main firm are overtly exploring or adopting AI. They’re implementing hiring freezes, slashing jobs, and lowering headcount by the hundreds. Accenture chopping 11,000 jobs and Lufthansa chopping 4,000 jobs attributable to AI aren’t outliers, they’re harbingers. Anybody paying consideration can extrapolate how dire issues might be 15–18 years from now, when my youngsters are getting into the workforce.
As an investor, it’s key to forecast the longer term. As a father or mother, it’s key to forecast potential distress in your youngsters. In each instances, for those who forecast even midway correctly, you’ll doubtless find yourself wealthier, calmer, and higher ready.
Jobs Are Vanishing Due To AI
Check out the S&P 500’s latest efficiency in pink in comparison with Whole Job Openings in white. Discover the inflection level: investor optimism as AI guarantees profitability attributable to elevated productiveness, whereas job openings proceed to crater.
As an investor, my hope is the S&P 500 retains climbing—historical past suggests it can over the long term. As a father or mother, my concern is that Whole Job Openings will proceed to break down to 2009 ranges or worse. I clearly keep in mind the 2008-2009 World Monetary Disaster—that’s once I launched Monetary Samurai after the seventh spherical of layoffs at Credit score Suisse. Worry was my motivator then too.
On the tempo we’re going, by 2032 we may simply see a state of affairs the place the S&P 500 is at a document excessive, however job openings match the lows of the final disaster.
And but, after privately consulting with dozens of readers this 12 months, I don’t assume most Individuals understand what’s coming. Positive, I’ll sound fatalistic, however a big a part of my wealth has come from recognizing and investing in long-term traits. And the AI bulldozer is actual.
Discover Your Minimal AI Funding Consolation Level
Simply as there’s a “Minimal Funding Threshold” the place work turns into non-obligatory and you may cease stressing about workplace politics, there’s additionally a “Minimal AI Funding Threshold” the place you may cease worrying fairly a lot about AI wrecking your profession or your youngsters’s livelihoods.
This Minimal AI Funding Threshold is conceptually much like your Coast FIRE quantity. However not like Coast FIRE, which is too harmful for most individuals to rely on, the Minimal AI Funding Threshold is an lively hedge, not a passive hope.
Right here’s methods to calculate yours:
Plug into an AI instrument. Use a compound curiosity calculator or your favourite AI LLM to crunch the numbers for you.
Forecast the timeline. Estimate when your job will probably be eradicated attributable to AI, or when your youngsters will graduate highschool or school and enter the job market.
Estimate future residing bills. Take at present’s primary residing bills and mission them ahead utilizing an inexpensive inflation fee (2%–4%).
Select your cushion. Resolve what number of years of primary residing bills you’ll need saved in AI investments—choose anyplace from 1 to 10 years.
Low cost to at present’s {dollars}. Use a reduction fee of two%–8% (decrease if conservative) to calculate how a lot you’d want to take a position now.
Instance Utilizing Our 8-Yr-old Son
Let’s take my 8-year-old son. Within the 12 months 2040, 15 years from now, he’ll be 23 and a brand new school graduate from an everyday college.
An revenue that might cowl his primary wants is $40,000 a 12 months in at present’s {dollars}—equal to $62,319 at a 3% annual inflation fee in 2040.
I estimate it might take him 2–4 years of job looking to appreciate that his desires of clicking buttons to optimize advertisements for large tech firms are out of attain. At that time, he’ll most likely must take a trades job to make ends meet. (Electricians, plumbers, and common contractors needs to be in enormous demand given all of the datacenters being constructed.)
So, I have to have about $125,000–$250,000 ($62,319 X 2 – 4 years) put aside for him by the 12 months 2040 to provide him that cushion.
Right here’s how a lot I’d want to take a position at present to succeed in $125,000–$250,000 in 15 years, relying on the low cost fee:
| Low cost Charge | Wanted for $125,000 | Wanted for $250,000 |
|---|---|---|
| 2% | $92,877 | $185,754 |
| 3% | $80,233 | $160,465 |
| 4% | $69,408 | $138,816 |
| 5% | $60,127 | $120,254 |
| 6% | $52,158 | $104,316 |
| 7% | $45,306 | $90,612 |
| 8% | $39,405 | $78,810 |
Based mostly on a sensible worst-case state of affairs—him taking 4 years to appreciate his hopes and desires received’t materialize—at a 2% low cost fee I’d want about $185,754 invested at present. That means, by the point he’s 23, I’ll have secretly put aside $250,000 in AI investments alone to assist him survive.
It’s vital all mother and father NOT inform their youngsters precisely how a lot they’re saving and investing for them. You don’t need them to develop into gentle and develop an entitlement mentality.
AI Investing as a Psychological Hedge
A few of chances are you’ll be scratching your heads: why spend money on AI in any respect if I’m solely assuming 2%–8% annual returns? With such modest expectations, I may simply make investments principally in Treasury bonds yielding 4%–5% sprinkled with some shares.
I hear you. However the level isn’t simply the mathematics. It’s the psychology.
Will you diligently make investments in your or your youngsters’s future particularly to hedge towards AI? Possibly, perhaps not. Additional, I’m attempting to be conservative in my assumptions.
By particularly investing within the very firms that will make your life and your youngsters’s lives more durable, it turns into simpler to truly save and make investments for the longer term. You now have a transparent why behind your delayed gratification. And when you have got a why, nearly something is feasible.
If you begin viewing AI as an unstoppable beast that might run you and your youngsters over, you get extra motivated to spend money on AI firms.
Worry and Duty Drive Me to Make investments
In 2025, pushed by concern of a dire future and a robust sense of duty to guard my youngsters, I launched into a brand new quest. I made a decision to take a position the Minimal AI Funding Threshold so I may scale back my fear and even begin rooting for the very know-how that might hurt my youngsters.
Step one was opening a new Fundrise Enterprise account earmarked for my youngsters with $26,000 in early August. (There was, and nonetheless is, a promotion the place for those who invested over $25,000, you bought $500 free of charge invested of their Flagship actual property fund.)
Then, as my Treasury payments matured, I stored funneling between $15,500–$50,000 at a time into Fundrise Enterprise to hit my Minimal Funding Threshold. Each switch I made into my account made me really feel higher.
Hedged Towards No matter Occurs
Solely time will inform whether or not investing $190,000 in 2025 in names like OpenAI, Anthropic, Databricks, Anduril, Canva, Ramp, and dbt Labs will pan out. In the event that they do, I’ll be thrilled. The $190,000 may develop to anyplace from $256,000 to $2.87 million, primarily based on a 2%–20% annual return.
Meaning one little one will both have all his or her bills lined for 4 years of job-hunting or maybe be set for all times. They’ll pursue careers they need moderately than careers they want.
Alternatively, I may probably lose 80% of my cash and find yourself with simply $38,000 after 15 years as a result of AI turned out to be an overhyped dud. Possibly CapEx spend is just too excessive for the earnings. Possibly the world realizes human oversight is extra important than ever—Jevons’ Paradox at work.
In that state of affairs, I’d be much more thrilled if each my youngsters discovered livable-wage jobs they loved. As a result of as mother and father, it’s our duty to boost youngsters to be self-sufficient adults. Needing to nonetheless rely in your mother and father after age 25 slowly chips away at your sense of value.
With out the mission of defending my youngsters from AI, there’s no means I’d have invested $190,000 in threat belongings just like the S&P 500 in simply two months. Many of the cash got here from risk-free Treasury bonds after I offered my previous home earlier in 2025. Previously, I’ve dollar-cost averaged extra slowly, or invested in structured notes with draw back safety when valuations are excessive.
However as soon as I reallocated the cash from me to my youngsters, I prolonged the funding time-frame from “proper now” to fifteen years sooner or later. And when you have got such an extended runway to take a position, it turns into simpler to abdomen threat belongings.
Asset Allocation Issues Too
Lastly, when deciding your Minimal AI Funding Threshold, examine that focus on quantity to your total asset allocation. The comparability might be to your whole investable capital or whole internet value.
Personally, I’ve a goal of investing as much as 20% of my investable belongings in various investments resembling enterprise capital. Not solely am I in an open-ended enterprise fund that invests in AI, I’m additionally invested in 4 different closed-end VC funds, and I’m contemplating two extra that every one have AI investments.
Positive, the Yale and Harvard endowments have ~40% of their belongings in non-public fairness or options. However you don’t have the scale, affect, or fringe of a multi-billion-dollar endowment. For the typical DIY investor, allocating as much as 20% in options is loads.
The older (and hopefully wealthier) you get, the extra vital correct asset allocation turns into to journey out volatility. Evaluation your objectives, run new monetary projections, and keep disciplined. It’s simple to get caught up in hype, particularly in a bull market. However nothing good lasts eternally.
No Extra AI FOMO
I’m not bummed I don’t have a job at a sizzling AI startup rising triple-digits a 12 months. It felt like a waste not grinding it out whereas residing in AI central, San Francisco. I am additionally much less bummed that AI is stealing my content material on Monetary Samurai and never offering a correct hyperlink again.
However now that I’ve reached the Minimal AI Funding Threshold for each youngsters, I’m extra at peace.
It feels nice to spend money on hungry founders and workers working 60+ hours per week for fortune and glory, whereas I play pickleball in the course of the day and write on Monetary Samurai. I’m grateful to be investing in AI close to the start of the revolution. Our younger youngsters aren’t as fortunate, which is why it’s as much as us to take a position for them.
So, for all you AI workers on the market, maintain grinding and benefit from the journey. You would make huge fortunes over the following ten years, and I’ll be grateful for those who do!
Readers, how are hedging towards AI destroying the livelihoods of your youngsters? Do you assume most individuals are conscious of the dangers AI poses for his or her job safety? What are another issues we’re doing to assist our kids thrive in an AI world?
Straightforward Methods To Make investments In AI
In order for you publicity to non-public AI firms, contemplate Fundrise Enterprise. The platform owns stakes in names like OpenAI, Anthropic, Anduril, and Databricks. AI is poised to reshape the labor market, eradicate tens of millions of jobs, and dramatically increase productiveness. Since non-public firms are staying non-public for much longer than up to now, it is sensible to allocate some capital to them if you wish to seize potential upside earlier than they go public. Fundrise has been a long-time sponsor of Monetary Samurai, and I’m personally an investor of their funds.
For public publicity, you may also simply purchase QQQ or shares of the Magnificent 7—Apple, Microsoft, Google, Nvidia, Meta, Tesla—plus Oracle, which has develop into a stealth AI play. The great thing about investing is that you simply don’t have to dwell in Silicon Valley to take part. From anyplace on the planet, you should purchase a bit of those firms main the AI revolution.
That mentioned, don’t overlook: there are no ensures when investing in threat belongings. Quick-growing firms might be extraordinarily unstable when downturns hit. For instance, Meta misplaced greater than half its worth in the course of the 2022 bear market earlier than recovering. All the time keep diversified, regulate your asset allocation, and ensure your portfolio matches your threat tolerance.
