The economic reality of everyone under 40

If we read the papers today, or look around here, or listen to tales at the coffee shop, one thing is constant, life is hard. Purchasing power is going down, jobs seem scarce and unemployment is always a constant. Even in business this is felt, with bosses getting stressed out, heavy competition left right and center and theres always a risk of an odd ball coming around to kill everything. So on everyones lips is, the economy is bad

But if we stand back and look at it, the global economy is like this, the same happens in USA, SG, AUS, MY, Thai and even CN. This is unprecedented, normally rich people nations have rather different problems than the poor. But across the board the same complaints can be heard no matter where you go and what you read.

BUT GDP numbers are up, economic numbers are healthy and things all seem fine.

so whats the problem?

Through observation, my theory comes out to this, there is no brick and mortar business anymore, least not in the strictest of sense. To understand this, we must first understand how a traditional brick and mortar business comes around.

First theres the boss, he has an idea, at the start this is likely some rough prototypes, agency sales or service. Normally this takes time, so we have an incubation period, often 5 years to a decade. Depending on what kind of business it is, how well it does and the market its positioned, some candidates grow super fast , others slower but both take some point to get to a maturity point. This on average takes about 10 years, there after the business is mature, returning customers are there to provide cushions for the downtime. in the next 10 years again, the business may compound on its success or stay stagnant, but 2 decades is often sufficient to last a lifetime to many, and life is good.

now however this is wildly different

First there is the founder, he has an idea, he does not peddle his craft, what he does is he generates investments though the capital markets. The funding in millions come in if successful, he puts it into the business, spams the market, the incubation period can be shortened to 1- 2 years. then boom, its suddenly mature, controls the market, the guy is rich and then if the business can solve its long standing issues at the start it does well , if not, it implodes in ruin ; or some other competitor comes in and kills it.

one of the best examples of this is netflix vs blockbuster, the former started a decade later, if you read back the history, blockbuster was done like the first one. A successful guy, started a business with most of their own cash, got successful, built on it, then at 04 (about 2 decades from its beginning) achieved its peak

Netflix, on the other hand started in 97, with the founder putting in about 2m, then just 4 years later started an IPO (fund raising) , then fumbled on abit, then suddenly it picked up, in a decade it totally outpaced blockbuster. If you notice the incubation period is much smaller, the business matures much faster and the success comes almost overnight

What happens from this if one notices, blockbuster closes stores, people get laid off and well we have a new chapter 11. What happens to the employees? well they need to find new jobs, their income gets hurt before the closure, and the economy is down.

Its not to say that one is better than the other, there are merits to both ways, but what is essentially happening is people of this age are forced into 2 very very volatile markets (startups can belly up in 2-3 years). They dont have the established connections of the 40 and above, the capacity to stay very long (cause company can sack any time), then they have student debt and whichever debt to look into.

so its not like before, where a guy out of uni can stick to a company for a decade or so, get a comfy living out of it, now volatility is constant. Its hard to project 5 years ahead, shit happens in 3, and theres debt chasing them around the globe.

And the worst part? success is not built on blood, sweat and tears anymore - but funding.

its a scary world we live in.

Write so much but no hhnngghh habuan.. babi betul...

panjangnya

Ts kem gerakan or mca?

DAP

The reason why cost of living keeps going up, salary stagnant and purchasing power going down is because we have a store of value that is inflationary in value and inflation rewards capital and punishes labour. thats why your house price will only go up and out of reach of the average people because land is limited but money supply is forever increasing

we need a store of value that has a fixed monetary policy - bitcoin

This post has been edited by Grammar Police: May 23 2018, 01:07 PM

TS, I need funding

But america say capitalism is the one and only sustainable and true idealogy

This post has been edited by mooney: May 23 2018, 01:09 PM

nice writeup

Nice long post. I expect nothing less from +3kk! as he always put serious post even in /k.
As you said, hard working doesn't guarantee success but the chance could be higher with the right connections, especially in the developing countries like Malaysia.
Some businessmen show dedication but their work just hasn't shown anything yet, like Elon Musk, or perhaps he is too ambitious?

its not really capitalism, actually if you ask me its closer to a ponzi scheme.

a lot of these things are new age stuff, theres no real "ism" to be tied to it really

Well Elon is aiming for the heavens, its quite hard to do more due to diminishing returns, his early stories also are quite interesting. Selling Maps of the inner cities, now if you think about it, how many map people died off cause he did that.

theres thing thing going around now, i heard over the radio, the "30 something entrepreneurs" kinda random no bodies that suddenly get together and BOOM, big hit, almost at random

like one of the co-founders of pandora, was a nanny for 5 years and jobless before doing that shit.

Wait till robots start taking over jobs.

Ts, you mean ecomonic cycle become short hence we are now making quick buck but also making quick loss?

U play big and win big or u play small and win small

something like that, but smaller

look at the taxi industry for example for decades no events, then uber came in, then grab, then uber exited. (this happened in less than 10 years)

if one was a guy who is in the taxi industry, the entry of uber to the exit of uber, both are career changing and potentially career ending.

then, those who picked it up first, earned a huge boon waaaay more than any taxi driver could, but then those who joined late, get into hardship

i started noticing this in university programmes also

like its quite unheard of for a market to totally not need engineers in a short span of 2-3 years, before 00, yes it happens when a market crash like 98 happened. But if you went in in 89, chances are you'd get a job in 91'.

now, you go into uni in the next 3 years your job may not even exist

Does that means that we have more frictional workers than before? Dude.... No wonder got high gdp but employment either worse or little to no improvement.

exactly, thats why very often you dont see people who are trained in their industries work in them these days or how uber/grab employs a lot of very skilled professionals.

Today's work slowly taken over by technology/machine.

GDP grew but jobs doesnt.

nice post ts.

agreed, it's a volatile world we live in.

and to succeed you need to think out of the box and cater to ppls needs. if u can sell that idea and get funding then you're on your path to success

this is more like we're living in digital age, any information we can just get it within a second.

hence marketing people can reach to us instantly, plus logistic nowadays are super easy and cheap compared to last time.

globalization.

in a way, but even if they did, no one can predict what will or will not survive 5 years from now

yup, ive seen similar things with my work,

these days to service or fix a problem, you need a cable and a computer then it will link to Europe and they will sort it out.

then any half decent engineer is able to do the rest.

while its not mass market yet, but in time i wont be surprised that this becomes the norm.

then you dont need physical sales agents here anymore.