It’s been a number of months since we returned from Hawaii, and surprisingly, my FOMO in regards to the AI tech growth has light. Certain, I nonetheless don’t have a job paying me gobs of cash as AI CapEx surges increased, however that’s OK. As an alternative, I’ve allotted sufficient cash to AI investments to the place I now 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 children 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 decreasing headcount by the hundreds. Accenture chopping 11,000 jobs and Lufthansa chopping 4,000 jobs as a result of AI aren’t outliers, they’re harbingers. Anybody paying consideration can extrapolate how dire issues may very well be 15–18 years from now, when my kids are getting into the workforce.
As an investor, it’s key to forecast the long run. As a dad or mum, it’s key to forecast potential distress to your kids. In each instances, in the event you forecast even midway correctly, you’ll seemingly find yourself wealthier, calmer, and higher ready.
Jobs Are Vanishing Due To AI
Check out the S&P 500’s current efficiency in pink in comparison with Complete Job Openings in white. Discover the inflection level: investor optimism as AI guarantees profitability as a result of 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 dad or mum, my concern is that Complete Job Openings will proceed to break down to 2009 ranges or worse. I clearly keep in mind the 2008-2009 International Monetary Disaster—that’s after I launched Monetary Samurai after the seventh spherical of layoffs at Credit score Suisse. Concern was my motivator then too.
On the tempo we’re going, by 2032 we might simply see a situation the place the S&P 500 is at a file excessive, however job openings match the lows of the final disaster.
And but, after privately consulting with dozens of readers this yr, I don’t assume most Individuals understand what’s coming. Certain, I’ll sound fatalistic, however a big a part of my wealth has come from recognizing and investing in long-term tendencies. 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 optionally available and you’ll cease stressing about workplace politics, there’s additionally a “Minimal AI Funding Threshold” the place you’ll be able to cease worrying fairly a lot about AI wrecking your profession or your kids’s livelihoods.
This Minimal AI Funding Threshold is conceptually just 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 energetic hedge, not a passive hope.
Right here’s the way to calculate yours:
Plug into an AI device. Use a compound curiosity calculator or your favourite AI LLM to crunch the numbers for you.
Forecast the timeline. Estimate when your job might be eradicated as a result of AI, or when your kids will graduate highschool or faculty and enter the job market.
Estimate future residing bills. Take right this moment’s primary residing bills and mission them ahead utilizing an inexpensive inflation price (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 right this moment’s {dollars}. Use a reduction price of two%–8% (decrease if conservative) to calculate how a lot you’d want to speculate now.
Instance Utilizing Our 8-12 months-old Son
Let’s take my 8-year-old son. Within the yr 2040, 15 years from now, he’ll be 23 and a brand new faculty graduate from an everyday college.
An revenue that might cowl his primary wants is $40,000 a yr in right this moment’s {dollars}—equal to $62,319 at a 3% annual inflation price in 2040.
I estimate it might take him 2–4 years of job looking out to comprehend that his goals of clicking buttons to optimize adverts 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 basic contractors must be in enormous demand given all of the datacenters being constructed.)
So, I must have about $125,000–$250,000 ($62,319 X 2 – 4 years) put aside for him by the yr 2040 to present him that cushion.
Right here’s how a lot I’d want to speculate right this moment to succeed in $125,000–$250,000 in 15 years, relying on the low cost price:
| Low cost Price | 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 |
Primarily based on a practical worst-case situation—him taking 4 years to comprehend his hopes and goals gained’t materialize—at a 2% low cost price I’d want about $185,754 invested right this moment. That method, by the point he’s 23, I’ll have secretly put aside $250,000 in AI investments alone to assist him survive.
It’s critical all mother and father NOT inform their kids precisely how a lot they’re saving and investing for them. You don’t need them to develop into delicate and develop an entitlement mentality.
AI Investing as a Psychological Hedge
A few of you might 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 might simply make investments largely 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 to your or your kids’s future particularly to hedge towards AI? Perhaps, perhaps not. Additional, I’m attempting to be conservative in my assumptions.
By particularly investing within the very firms which will make your life and your kids’s lives more durable, it turns into simpler to really save and make investments for the long run. You now have a transparent why behind your delayed gratification. And when you will have a why, virtually something is feasible.
Whenever you begin viewing AI as an unstoppable beast that might run you and your kids over, you get extra motivated to spend money on AI firms.
Concern and Accountability Drive Me to Make investments
In 2025, pushed by concern of a dire future and a powerful sense of duty to guard my children, I launched into a brand new quest. I made a decision to speculate the Minimal AI Funding Threshold so I might cut back my fear and even begin rooting for the very expertise that might hurt my kids.
Step one was opening a new Fundrise Enterprise account earmarked for my kids with $26,000 in early August. (There was, and nonetheless is, a promotion the place in the event you invested over $25,000, you bought $500 without spending a dime invested of their Flagship actual property fund.)
Then, as my Treasury payments matured, I saved 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 might develop to anyplace from $256,000 to $2.87 million, primarily based on a 2%–20% annual return.
Which means one baby 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 relatively than careers they want.
Alternatively, I might doubtlessly 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. Perhaps CapEx spend is just too excessive for the earnings. Perhaps the world realizes human oversight is extra important than ever—Jevons’ Paradox at work.
In that situation, I’d be much more thrilled if each my kids discovered livable-wage jobs they loved. As a result of as mother and father, it’s our duty to boost kids to be self-sufficient adults. Needing to nonetheless rely in your mother and father after age 25 slowly chips away at your sense of price.
With out the mission of defending my children from AI, there’s no method I might have invested $190,000 in threat property just like the S&P 500 in simply two months. Many of the cash got here from risk-free Treasury bonds after I bought my previous home earlier in 2025. Prior to now, 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 kids, I prolonged the funding time-frame from “proper now” to fifteen years sooner or later. And when you will have such an extended runway to speculate, it turns into simpler to abdomen threat property.
Asset Allocation Issues Too
Lastly, when deciding your Minimal AI Funding Threshold, examine that focus on quantity to your general asset allocation. The comparability will be to your whole investable capital or whole web price.
Personally, I’ve a goal of investing as much as 20% of my investable property in different investments equivalent to 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.
Certain, the Yale and Harvard endowments have ~40% of their property in personal fairness or options. However you don’t have the scale, affect, or fringe of a multi-billion-dollar endowment. For the common DIY investor, allocating as much as 20% in options is lots.
The older (and hopefully wealthier) you get, the extra necessary correct asset allocation turns into to trip out volatility. Overview your targets, 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 without end.
No Extra AI FOMO
I’m now not bummed I don’t have a job at a scorching AI startup rising triple-digits a yr. 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 children, 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 through the day and write on Monetary Samurai. I’m grateful to be investing in AI close to the start of the revolution. Our younger kids aren’t as fortunate, which is why it’s as much as us to speculate for them.
So, for all you AI workers on the market, preserve grinding and benefit from the trip. You could possibly make huge fortunes over the subsequent ten years, and I’ll be grateful in the event you do!
Readers, how are hedging towards AI destroying the livelihoods of your kids? 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 youngsters thrive in an AI world?
Straightforward Methods To Make investments In AI
If you would like publicity to personal 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, remove hundreds of thousands of jobs, and dramatically enhance productiveness. Since personal firms are staying personal for much longer than prior 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 as well 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 fantastic thing about investing is that you simply don’t must stay in Silicon Valley to take part. From anyplace on the earth, you should purchase a chunk of those firms main the AI revolution.
That mentioned, don’t neglect: there are no ensures when investing in threat property. Quick-growing firms will be extraordinarily unstable when downturns hit. For instance, Meta misplaced greater than half its worth through the 2022 bear market earlier than recovering. All the time keep diversified, control your asset allocation, and ensure your portfolio matches your threat tolerance.
