Change may be a given, but even when we know it’s for the better, shifting our own thinking can be quite a challenge. Charlie Chaplin’s film Modern Times is a classic—not only because it’s Chaplin at his most brilliant, but because it does such an amazing job at contrasting the positive and negative impact of the last century’s industrial revolution. Imagine it: machinery was replacing “traditional” jobs at breakneck speed, and in a span of just 40 years people saw the invention of the telephone, the lightbulb, the airplane, and the Model T Ford. The changes were a shock to nearly everyone’s way of life. Change isn’t always negative though, it also opens us up to new opportunities.
I’d love to see Chaplin’s take on the rapid change we’ve seen over the past 40 years. Computers and other advancements have altered how we earn our dollars, how we spend our dollars, and how we shape our own futures. And just as it was in the early part of the last century, there are pros and cons to every change.
WHERE IS THE OPPORTUNITY?
Communication
- Can you imagine life without a cell phone? 87% of adults in the US now use mobile phones, and it’s hard to remember a time when getting lost on the road meant searching for a pay phone for help! From cell phones to the Internet to Skype, it seems every time we turn around there’s a new way to stay connected. Instant communication has changed our lives in many ways. Yet who would have expected to pay hundreds of dollars each month for what most people now consider necessary technology?
Energy
- The focus on alternative energy sources was fueled (pun intended!) by the need to reduce our reliance on fossil fuels and imports from the Middle East. As a result, natural gas is back on the map, and fracking is providing new sources of energy as well as jobs. To compete, oil companies have “turned on the pump,” making oil cheaper than it’s been in years. And while consumers are smiling at the gas pump, the downside is less incentive to continue to invest in solar power, wind power, and other alternatives that reduce the impact on natural resources.
Banking
- Just 15 years ago, waiting in line at the bank to deposit your Friday paycheck was the norm. Then came the ATM. Then mobile banking. Now, apps allow you to take a photo of your checks for mobile deposits. We use Applepay to pay for goods and services, and Venmo to pay our friends. In the brokerage world, roboadvisors are streamlining processes and helping to reduce costs. Automation is, it seems, everything. As a result, traditional banks are fighting to stay relevant, and banking and credit card fraud have become a major global issue.
Healthcare
- The Affordable Care Act, aka Obamacare, is reshaping American healthcare. Now that doctors are being compensated for keeping patients out of the hospital rather than filling hospital beds, they’ve had to completely rethink their business models to focus on patient outcomes instead of patient volume. In response, some physicians have left the insurance system entirely, creating concierge medical practices that strive to offer a differentiated level of service for patients willing to pay directly rather than going through a health insurance provider.
Robotics
- Everyone seems to love the idea of self-driving cars, wearable technologies, and other artificial intelligence (AI), but unlike the industrial revolution that created jobs on a large scale, the AI revolution has the potential to do the exact opposite. On the plus side, all of this new intelligence is expected to give us more free time (opportunity!) to do the things we love to do (less driving, more playing!). I’m all for that!
Build an emergency fund
- If you’re in an industry that’s facing disruption, it’s important to have enough cash to cover 6 months of your current spending if you need to make a transition. One of the most important things you can do during a job search is maintaining your dignity. Having an emergency fund can keep you from accumulating debt (no borrowing from your parents or racking up charges on your credit cards) and give you the support you need to make the best possible decisions when it comes to a change in your career.
Diversify, diversify, diversify
- Personally and financially. As things shift, it’s important to embrace change. Educate yourself. Learn new skills. Take charge, leverage new opportunities, and never, ever, put all your eggs in one basket! And when it comes to investing, take a lesson from the Enron scandal. Few people would risk investing in a single company, but investing in a single industry can be just as detrimental. By investing in great companies and allocating assets among various industries, demographics, and geographies, you can hedge the risk of a major disruption in any single sector.