Compound Growth

Episode 09- "Bomb-Proof" Your Life: AI, Money, and Preparing for What’s Next

• Compound Growth • Season 1 • Episode 9

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In this episode of Compound Growth, Wheeler and Colin take a sweeping yet grounded look at the intersection of artificial intelligence, personal finance, and long-term security. What starts as a casual conversation about “Back to the Future” quickly accelerates into a high-stakes discussion on what the real future holds—from AI-generated films to autonomous companies and personalized virtual realities. With reports from top thinkers like Mary Meeker, they lay out the trajectory of AI over the next decade and unpack what it means for careers, investing, and human relevance.

The duo then shifts into practical mode. Using insights from recent economic data and their own experience as advisors, they outline what it means to truly “bomb-proof” your finances. That means more than just having a rainy-day fund—it’s about reassessing what financial resilience looks like in a world where jobs can vanish, inflation persists, and markets swing fast. Real stats, real risks, and real talk.

Wheeler and Colin finish by offering actionable advice: build an emergency reserve that lasts, invest in your skills (especially those that complement AI), and avoid the false confidence that tech alone can solve all problems. Whether you're already feeling prepared or starting from scratch, this episode provides the clarity and motivation to take the next right step.

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Credits:
Created By: Wheeler Crowley and Colin Walker
Production Assistance: Tori Rothwell
Editing and Post-Production: Steven Sims

I was booking, uh, the trip to London and Paris with the family. Okay. Right? And one of the things we are going to do is go to a show in the West End, I guess it's like their Broadway, right? Okay. Like I know nothing about theater. You will soon. Yes. You know, there's the, the part of London where you go see shows, and we're gonna go see a show, and we're gonna go see Back to the Future. Cool. Which is, I didn't know was a show- didn't know people in Europe even knew what Back to the Future was. Yeah. They, well, sure why not? I mean- I guess, yeah. I guess it's the, it's a very, you're right. We watched the movie recently with Michaela, and it is a very American movie. It is. Like, very- Yeah. You know, it's Pepsi everywhere, and like it's the future, the future is about like inflation, and you know, spending, and the economy- That's true, yeah. And the future is, and like the entire like theme of the second movie is like about getting rich and like how that can change the future. Yeah. Whatever, but- 'Cause he had that book, right? Yeah. With all the sports stuff in it- Yes. that he could go and bet on? Yeah, like the almanac. Yeah, that was the second one. Yeah. That's right. Kaylee, I showed her the first one maybe last year, and she had never seen it before. She liked it. It was good. It's a good m- the first one is better than What's funny is when I was kid, I really liked the second one. Mm-hmm. And I watched the first 2 with Michaela, and she like was so bored by the second one that she's like, "Why are we" We didn't even finish it. Really? Yeah. I f- Jess and I finished it later, but Michaela was not into it. Different times, I guess. Yeah. I thought those movies were awesome growing up. Yeah. I used to be so into them. The first one is still really, really good. The first one's great. It's incredible. Yeah. And the second one's, it's kinda lazy, it's like they go back and they show the first movie, right? Like- Yep.'cause he has to go back. Spoiler for this- 40-year-old movie. For those who haven't seen it in the last 50 years. But it's So they have to, like, they end up like just showing some of the old movie, like it's, it's kind of a I'm sure it felt kinda neat at the time to like watch some of the first movie in the second movie from a slightly different angle, but- Yeah. from a story perspective, I'm like, oh, this is kind of like just a retread, right? Like we've already know what happens here. We've seen this play out. So is the play on the first one, or is it something different just themed Back to the Future? Ah, you know, I actually don't know. I, I, I assume it's just like the first, the first movie as a play. Did you show Michaela knowing that you're going to the play? No. It just, it's a happy, uh- Just worked out. Yeah. What's that called? A happy, um, circumstance or whatever it is. Yeah, guess, yeah. yeah, just a happy accident. It's basically we just, we were showing her movies from the '80s, and it happens to be that we're gonna go see one on the London version of Broadway. Is she too young for Jurassic Park? don't think she is. Um, she was just talking about Jaws the other day, and how she'll never watch Jaws 'cause it's like supposed to be so scary, and I'm like, It's so boring. I don't think you're gonna be that scared. No. It's like an animatronic- Yeah. shark that jumps up outta- Yeah. nowhere. So I showed her a picture of the shark, like the actual shark that they used to film and everything, and it just looks like, so. If you think about movies these days, if there's a shark underwater, they'll just like CGI a shark underwater. Right. And it will look a lot scarier. It's meg. Yeah. It won't just be a fin- Going around. going around, and then occasionally a mouth. Isn't it crazy how you have such an iconic song with 2 notes? Yes. Duh, duh. Duh. And Michaela- Duh, duh. like loves the- And it's literally just 2 notes. Yeah. And it's just like dun, dun, dun, dun, dun, dun, dun. And it's- Oh, then it goes to duru, it's a different note now. Yeah. That's true. Yeah. I guess, but yeah, she should watch Jurassic Park. That's like my favorite movie of all time. Yes. Jurassic Park is definitely on my list of things to show her. Although, and there's a, a new Jurassic Park coming out this year. Mm. Right? And I wonder if you have to watch- it Park or World? Is it Jurassic World this year? Because we already did Jurassic World. Wasn't that- Jurassic are not very good. So, okay, so there's already 6 movies done. They've done the trilogy twice. And- Wait. You're saying there's 6 Jurassic Park Worlds done? Yes. There are, are, there are 6 Jurassic dinosaur movies right now. Okay. What's this one?

Jurassic World:

Rebirth. Rebirth. Okay. We're just doing it again. Yes. We have an idea. Let's do exactly what we just did again. But this time, I don't even know who, who Chris Pratt, like it's not Chris Pratt anymore. It's like- It's not. We'll just have- He gave up. He's done. That trilogy's, now we're moving onto whoever the- different trilogy- whoever the hot new at the same island. Yeah. Making the same mistakes. Making, yeah. With the same animals. Again. History doesn't always repeat, but it often rhymes. Sometimes it does repeat in the- Interesting. instance of those movies. sometimes you just watch the same movie in the sequel, like in Back to the Future II. So it's all- Yeah. It all favorite was the, um, And by favorite I mean least favorite, was the second Jurassic World where they're like auctioning the dinosaurs off in like Morocco or something. They're in like, no, they're in like a mansion. There's that part too. Yeah. Oh, there's a different It eventually goes to the mansion in the end. Okay. And there's Like why it doesn't make any sense. And then there's like little kids climbing around- Correct. and Velociraptors like ceiling. like happens to be like a gymnasium in the house while this auction's going on. Yeah, sure. Rich people, you know? Right. Jurassic Park is great though. Jo- the original We, watched the, um, the first and the third 1 Yeah. recently. We skipped over the Vince Vaughn one. They're great. They hold up so well. I don't know how you can do that to Vince Vaughn though. I mean, I feel like it's worth watching just Vince Vaughn. Well, the reason why we didn't watch the second one is 'cause I had already recently watched the second one. Kaylee second So you recently watched the second Jurassic Park movie by choice? Well, you watch the first one, then the second one automatically starts playing. I mean, you're helpless. You're powerless to- I can't reach the remote. I can't change it. I got things I gotta do. It just on in the background. It's not very good though, the second one. The third one's actually pretty good. It-The third one is where they go back to the island. Their child was parasailing. Right, naturally. Right next to Jurassic Park- Of course. Island, Jurassic Whatever-it-is. Of course. The boat gets eaten, he detaches. In the woods, his parents go- Yeah. and get Grant, I think is the guy's name is- Sure. Yeah. and try to go rescue him. Rescue mission. Right. It's always good to have a rescue mission. Yeah, and a ton of people die. Yeah. I'm impressed that you can- the, all the henchmen die immediately. Yeah. And they're just, you know, there, so yeah. You can watch movies in the background while you're working. I cannot do that. I will be distracted by that. You have to sit and focus on- Yeah. That annoys Kaylee, that I always have, like, 3 things going on. Yeah. Yeah, I'm a m- I'm a music working guy. Like, I like to have music playing in the background. See, I like to have, like, some TV or something. Yeah. Yeah. Yeah. Or silence. All right. Well, that was not at all what I was gonna talk about with you today. But here we are. Welcome to the Compound Growth podcast with Colin and Wheeler, where we talk all things growth. From financial growth to career growth, personal development to societal progress, we explore how each layer builds on the next, compounding over time to shape who we become. Each week, we break down complex ideas and emerging trends into clear, actionable insights, because growth isn't just about numbers, it's about understanding the world and our place in it. The information in this material is for general information only and is not intended to provide specific advice or recommendations for any individual. Investment advice offered through Integrated Partners doing business as CoFi Advisors, LLC, a registered investment advisor. Integrated Partners does not provide legal, tax, mortgage advice or services. Please consult your legal tax advisor regarding your specific situation. Past performance is no guarantee of future results. All investing involves risk, including loss of principal. No strategy assures success or protects against loss. The economic forecasts set forth in this material may not develop as predicted, and there can be no guarantee that the strategies promoted will be successful. few weeks ago- Mm-hmm. I was listening to some podcasts over the weekend, and, uh, they happened to all be themed on AI, and they kind of had me thinking about the disruption coming from AI. So- What isn't themed on AI these days? Right. Yeah, it's true. So, we met for our, uh, weekly coffee, Monday morning coffee. Mm-hmm. And I feel like you were in a really good space. I think you'd recently gotten back from Greece, and you were- Yes. like, in this great space. And I walk in, and I'm like, "We're all gonna die.""We're all doomed." Which is not actually, not actually what I was saying, of course. But that was the vibe. It was like, Colin's in a really good place, it's a beautiful day, we're at this coffee shop sitting outside, and here's- Wheeler's not in a good place. Yeah, here I come, like, saying, "Hey, we got to figure some stuff out." Wah, wah, wah. Yeah. Yeah, I squashed the vibe a little bit. Yeah. That's all right. So, I start kind of talking to you about what my concerns are, and you referenced something that Jamie Dimon had said recently. Mm-hmm. And I thought it was a really good term. Yeah. So, what Jamie Dimon was basically saying is, in the event of a recession or some sort of depression, he's bomb-proofed JPMorgan. Mm-hmm. So, he doesn't know what's gonna happen with the other banks and the other major firms out there, but he knows JPMorgan's gonna be good because they're prepared for that sort of thing. Yeah. This led us to our discussion, how do we get our business and our own personal lives and our clients' lives bomb-proofed- Right. so to speak. Right. Where if Maybe not the worst was to happen, you know. I guess if the worst was to happen, money may not matter that Right. If there's, like, some sort of- That's a real nuclear disaster. Yeah. That's a legit bomb. Yeah. But in the hypothetical sense of the phrase bomb-proofing, what can you do to protect yourself? Yep. And what does that look like? Yeah, exactly that. So, I think it's good to kind of set an idea or kind of get a frame of reference for where we are- Mm-hmm. today. So, there's this, uh, investment researcher named Mary Meeker. She's a professional investor. She writes great research. She is basically the queen of the net, they referred to her, back when people called the internet the net in the '90s. Okay. All right? so she, in the '90s, she was dubbed the Queen of the Net. Interesting. And she had, uh, her ear to the ground and she would make prescient predict- predictions that would eventually come true. Is this the dot-com- Well, - bubble? Did she get that? Not, it's, she did get the dot-com bubble as well- All right. but, like, in general, I think she has a good idea of where the trends are going, where technology is going. So, she's often referred to as, like, the Warren Buffett of the tech sector. Interesting. All right. So, she came out with, she has her own, uh, resur- her own investment firm and has her own research alignment with that investment firm. And she came out with a report, um, basically talking about the trends in artificial intelligence and where she thinks we're all going. So, this is her recap of what ChatGPT-4o can do right now. Oh, this is what you've read. Yeah. Yep. So, right now, ChatGPT can write or edit anything. It can summarize and explain complex material, tutor you on nearly any subject, be your thinking partner, as you and I usually- We use that all the time. regularly, right? Automate repetitive work, role play anyone you need, which is also a fun way to prepare for meetings. Connect you to tools, offer therapy and companionship. That's a little scary. Very scary. It's like Her. Did you ever see that movie, Her? No, I didn't either. But- I know there's a movie. It's- it's the one with Scarlett Johansson's voice, right? Oh. That they And, uh, Joaquin Phoenix, like, falls in love with the AI in his head. Right. Just in his earbu- earbuds. But, uh, help you find purpose and organize your life. So, those are all the things it can do- Now. Right, and that's a lot. That is a lot. That's so m- like, you, I feel like that was 10 different lists, or different, uh, items on the list. And, you know, a couple years ago, each item had its own person that you would talk to, right? Now it's one program. 1, it's not even a person. Yeah, it's a program. Right. Yeah. So, Mary Meeker thinks in just 5 years, we're gonna go from that list to this list, and this list is ChatGPT will be able to generate human-level text, code, and logic. So, it's not just, mediocre elementary school business plans being put together, but- I feel like it's almost there right now. Yeah. You're probably right. Like, it's- it's always getting smarter and faster. It's remarkable. Yep. Create full-length films and games, which I have a lot of thoughts on. And I really don't want this to come true, but it's probably going to come true. Well, maybe it could improve the quality for what people are doing, or maybe increase the amount of content being released. Yeah, or augment the content, right? Exactly. But then there's this whole can of worms about replacing the writers or, you know, aging or de-aging the actors, or just replacing the actors 'cause they have their own People. Yeah, they have their own image. They don't even need people anymore. They can just create the image, and- You wanna know what's crazy? Mm-hmm. What if the movie is different for you than it is for me? Yeah, like if we the characters- Yeah. or look different to you than they do to me based off of preference? Yeah. Like, it's all customized to the viewer. Right. It's scary. That is. Uh, understand and speak like a human. To your point from a couple weeks ago when we talked about, how do I know? That it's you. That it's you. Uh, power advanced personal assistants, operate humanlike robots. That's coming. Run autonomous customer service and sales, personalize entire digital lives, build and run autonomous businesses, drive autonomous discovery in science, collaborate creatively like a partner. I'm not even gonna touch the AI in 2035 list 'cause it- Give me 2. Okay. In, uh, so that's, that was the 2030 list. Okay. 2035- The 2030 list doesn't scare me that much. Okay. Let's scare you then. I'll- I'll- I'll try to scare you a little bit more. Try scare me. All right. Conduct scientific research. We don't need scientists anymore, we've got AI. Okay, that's a little scary. All right? Design advanced technologies like engineering, biotech, prototype engineer energy systems, prototype weapons, all without a human having any touch on that whatsoever. Simulate humanlike minds, operate autonomous companies, whole companies. We've talked about this. We have. When is there going to be a one-person billiondollar company or a 0person? 0person billiondollar company. Perform complex physical tasks, so the robots are now cleaning, right? They're not just dancing. So, we're talking robots? Robots probably like surgery, right? Yep. So, robotic surgery is already a thing. It- it Um, but you need humans to do it. From afar, they can- From afar. Yeah. Yeah, you can, or locally. Coordinate systems globally. So, you know, everything that's the supply chain would be automated. So, a major company- Yeah. becomes automated- Ships. through shipping- Yeah. manufacturing- Yeah. sourcing. Yep. Containers, et cetera. Model full biological systems. Offer Well, they could, they could do d- they could do Jurassic Park. That could be By 2035, we could have the dinosaurs. I would like to see a few dinosaurs. Collin's boyhood dream is coming true. I'm excited. Uh, offer expert-level decisions, shape public debate and policy. That one's scary. Mm-hmm. And build immersive virtual worlds. Finally, we can go online- Metaverse. and just go to the Metaverse. It's gonna be like Ready Player One. Right. Yeah. I think that all of this is to say that this is happening, it's unstoppable because nobody, eh, this is like the mutually assured destruction aspect of it, right? Mm-hmm. It's if, if we don't do this, China does it or somebody else does it or whatever. It's happening. And there are too many people with too many interests to stop it from happening. So then what speed is it going to happen at and how is it going to happen? How is it going to impact our everyday lives, Right. And this is what I was thinking about when I met you for coffee that morning because we do need to think about us and our business, right, and our personal lives. But we're also responsible for the financial success- Mm-hmm. to one, in one form or another, to one degree or another, for hundreds of other people. And we have an opportunity to help them prepare for this shift and navigate it, right- Right. the best we can. So on that front, bomb-proofing. Yeah. Do you wanna start by focusing on people? I think, yes, let's start by focusing on people. So with this list a lot of jobs are going to get replaced. Mm-hmm. In theory. Or at least changed. Or changed or consolidated. Mm-hmm. A combination of all of them. And something that's kind of interesting and also scary at the same time, so when we talk about bomb-proofing, you're talking about insulating your own balance sheet in a lot of ways. Mm-hmm. Right? What happens if your job is to be replaced? What happens if there is consolidation, all that good stuff? Because a lot of the things on that list affect a lot of industries. Yeah. Something that I thought was very interesting was I was looking at performance metrics and numbers for households and savings and what people have on hand in the event- Mm-hmm. something was to happen and in the event the average family was to lose their job and all that kind of other stuff. Right. I'll throw some more scary facts at you. Uh-oh. These, and these are not, these are not theoretical, so now we're getting really scary. These are legit. Yeah. Okay. 40% of US households have less than $300 saved. Mm-hmm. 50% of Americans have under $600 saved. Half the population have less than $600. Mm-hmm. 28% have under a thousand dollars in personal savings. And then on top of that, the median household savings in total for working families is $8,000. Okay, so median on average- Mm-hmm. for an American working family- Mm-hmm. in savings- $8,000. Is $8,000. Now let's cite the source. What was the source for all the research here? Uh, Federal Reserve- The Federal website. According to the government. Yes. Uh, Statistica. Okay. And Lending Club, Experian. There's like 5 other ones here. Yeah. All right. So we've cross-referenced the legitimately, yeah- Yeah. legitimate sources here. So that's pretty scary. Yep. So I think it, that's a really good moment for us to recognize the fact that the clients that we are working with may be, you know, on the far end of that spectrum in terms of their ability to save, right? Totally, yep. Um, but even that. So let, let's say that you're There's 2 options here. You're either in a position to save- or you're not. And I think what you just covered is a lot of people who are not in that position. Yeah, I mean, what this is basically telling you is that 60% of Americans are living paycheck to paycheck. Yeah. It's actually probably more, it's closer to 70. Yeah. So that's a pretty scary number. Yeah. I think what's, what's tricky there is that frequently I hear the, I hear stats about the, the amount of wealth that's sitting in money market funds and how we're basically at, you know, at or near all-time highs. For money market savings. For money market savings. But that's not the average per- first of all, the average person doesn't have a money market account. Well, the average person doesn't even know what a money market account is. That's true, yeah. Which by the way, if you're listening and you don't know what a money market account is, think savings account. Yeah, think high-yield- Through an institution. savings, right? Right. Yeah. Uh, with an overnight exchange rate, which is what gives you that interest rate. Yeah. But, let's, you know, there's money market in a brokerage firm. There's money market in, you know, Chase Bank, JP Morgan. Right. Right? Um, they have different returns and they- you have different reasons to have these things, but either way they're, they're a step beyond savings. Right. Right? They're a step beyond the checking account. If you were in someone's shoes right now, you're talking to our clients, they're worried about this particular situation, and we had a deep dive on this for how we're not only going to work to insulate our clients from or bomb-proofing clients, but also- Yeah. business, so to speak- Yeah. what are some of the highlights? What are some of the steps? So I think, for the clients that we're working with- Mm-hmm. we've always A- and, you know, let's say that there's, there's 2 groups that we'll just put people in. The, the people who are retired and the people who are not retired. Yeah. Right? And obviously, there's people who are not retired but soon to be retired. You can kinda get into the, the, the levels there, but if you're retired, then having a good approach to your spending is already built into the plan, right? And you're not working- Yeah. so you're not worried about the disruption necessarily. Now, you can have economic disruption that affects the markets and affects the return on your portfolio, et cetera, but- Sure. we want to make sure that people know where the next, their next retirement paycheck is coming from this, you know, this month, this year, the next 3 years, et cetera, right? Right. Yeah, I mean, your transition from retirement or, I'll say, making money- Mm-hmm. and having a job to retirement should be fairly seamless- Yeah. if it's set up appropriately. If you have the right savings set aside, you have the right accounts set aside- Yep. you've worked with a planner on budgeting and things like that, you should know how much money that you would need and like to take out to maintain your lifestyle and hit your goals and everything in retirement. Right. So if that's the case, and if you have those proper accounts set up, you shouldn't even notice a change in your paycheck when you do ultimately retire. It should be pretty seamless to the point where, when you retire, you know, you should start receiving income from your portfolio if you've done things properly. Yep, yep. And of course, you know, there are other sources that you might have. You might have a pension. You know, there are still some Americans that have a pension. Absolutely. Yeah. Um, or Social Security or rental income or whatever it might be for an income source that's outside of your just investments and retirement savings. Right. I have an- another interesting stat for you. Okay. Hit me. Okay, so I wanna hit you with savings rates historically speaking. In World War II, I'll say in the '40s and '50s, do you know what the average savings rate was for an American? I do not. 27%- Okay. was the average savings rate. In the 1980s, the average savings rate was 12%. Makes sense. Now, the average savings rate is 4.9%. Yeah, I think a lot of that has to come down to the fact that inflation has picked up more than wage inflation, and that's kinda what this is breaking down here. Yeah, and that, we talked about that in a previous episode, um, where wages haven't been able to keep up with inflation. Uh, but there's also, I feel like, the evolution of our consumerist economy, right? You know, you talk about World War II and then the 1950s and, like, what we spent money, how we spent money, that was very, very different from where we are today. In the '80s was when we really made that shift. Right. And you could see that savings rate come down as there's more opportunity and more variety for you to spend money. Yeah, I mean, the booming '80s, that was a pretty crazy time. I mean, you look at, like, the, the Wall Street movies. Right, of course. That was peak- Yeah. of all that kinda- Yeah. stuff, but- Yeah. I mean, it is fascinating to me that, as time goes on, you would think that if you were to design a perfect world, that people would be making more money, saving more money, have, like, an easier transition to retirement in the same way that healthcare should be improving, there should be less conflict in the world. Yeah. You know, things should be better socially, all of that stuff, and then there have been some improvements certainly if you go back- Yep. far enough. But there really hasn't been that much improvement to, I'll say, people's economics in a lot of ways. In fact, in a lot of ways, it's gone the opposite direction. I think that's where people start to find themselves looking at the American way- Right. in, uh, like in a- Consumerism. Yeah, you know, in a dark light, right? Like, it's, you know, if, if- we, we talked about, like, what, what this economy is capable of versus what it delivers. There is a wide gap there, right? Um, I think that when we're talking about these things, one thing you just said, like, it should be this. There's a, there is a world where AI actually helps us get to that. Right. And if you wanna just be optimistic, that's maybe what you're, you're keeping an eye on, right? I think if I'm to be optimistic about AI, I would love to see AI help educate people on finances from an earlier age. Right. I- it blows my mind how that is not a class. Yeah. How that's not taught to people from a younger age, because education, in my opinion, is probably the biggest problem in the financial world right now. People are preyed on from a young age with student loans, and you don't know the problems that you have until you have to start making those payments and you have your job. It doesn't hit you until later on in life. Yep. And that puts you in a tough situation in the same way that auto loans and a bunch of other things can do that, too. So if you had, like, an AI system, if I was to design an AI app, it would be almost implemented into people's lives so much- that when you get a paycheck, it automatically sorts it all out for them. I think what's good and bad about that is that it's not necessarily improving financial literacy. It's solving- No. a problem. It's, it's basically treating the symptom. It's kind of like Social Security. Right, yeah. You know, like- Yeah. we're gonna help you get out of the Great Depression by putting this benefit in place. Right. And it's the same thing with an AI program- Yeah. that just takes it over, but Well, I think what Social Security, like, yes, obviously, it came on the other side of the Great Depression, but it was also there to be, like, you know, "You've worked really hard. We recognize that you can't work anymore. You shouldn't go broke. Here's some money," right? Yeah."We don't want you working in a factory til you're 75." Yeah. Charlie Munger referred to this idea of just, like, basic worldly wis- wisdom, right? Like, just learn the basics of life and, you know, how everyday common sense is going to play out in your lives. And he thought that should be a class, right? Mm-hmm. It should be a class in college, certainly, but even before that. And actually, at Michaela's school that she's going to next year, it is a class. It is. is really cool. Common Sense? Yeah, common sense, basically. It's, uh, they have it a d- different term. Of course. I doubt they call it Common Sense. They different not just s- just like, "You should know this." It's the theme, though. Yeah. Yeah. There's a, uh, there's a trivia game that my friends and I play every year when we go away for our, our annual guys' trip, um, and it's like things you should know, right? And, like, you don't know them and it's really embarrassing. But I think when we're talking about bombproofing, we're not trying to hit a panic button, right? No. We're trying to empower, and we're trying to make sure that people are taking a proactive approach to their finances. And I think that an app that helps people do that would be a great idea, but it can't be doing it for them because then they lose that worldly wisdom themselves. Right. Right? They need to develop their own financial literacy. And one of the things that's like a basic financial literacy term is, like, the concept of an emergency reserve. Mm-hmm. Right? And there are rules or, like, financial planning guidelines that we've talked about with our clients, you know, having 3 months set aside, maybe 6 months set aside if you have m- more volatility in your income. Or a year for a retiree. Yeah, a year for a retiree. But I do think that we are now reaching a point where it would be wise for people to think about their emergency reserves, if they have them, a- as maybe something that maybe they thought they, uh, solved for this goal, right? And they said, "Okay. We've got 3 months set aside. We've got 6 months set aside. We're done." I think it's time to revisit that- Mm-hmm. and think about what bombproofing means in terms of being able to just, like, live your everyday lives if there is a significant disruption to the economy, and I think- Yeah. it needs to go from 3 to 6 months to maybe more like a year. Yeah. I remember when I graduated from college, and I was trying to make it in even in the beginning phases of being a financial planner and trying to make it and living paycheck to paycheck. Mm-hmm. It's funny. I was at a meeting this morning with, um, another gentleman in our industry, and he- we were reminiscing about that. And was amazing how much better I felt when I could get to a point where I was trying to, like, stash some money aside. Yeah. And I finally got to a point where I had 3 months set aside. Yeah. And that was the biggest weight off of my shoulders because I knew that if my tire popped- Right. I would be able to replace it. Yeah. And in fact, that did happen. When I was, um, in the very early phases, I, my tire popped on my car, and I was driving around on a donut- Mm. tire for, like, 2 months 'cause I literally couldn't afford to put another tire on my car. Yeah.'Cause I was, I was, like, struggling. Yeah. And I think that's the reality of most people, but, you know, like, $20 here, $50 there, $100 there, and it just keeps adding up and adding up and adding up. And after a year or 2, to get, you know, that 3 months was a game changer. Yeah, and it's, I mean, you know, we've been there. Like, we know what it's like to live paycheck to paycheck or, honestly, live less than paycheck to paycheck- Right. if you're living- Yeah. Um, I think that, yeah, l- it's, we, you have to recognize that this isn't something that's always easily achieved, but it's still something to strive for. Mm-hmm. And if you think about it as an opportunity cost, like, "Well, I could be putting this money in my IRA," or, "Well, I could be investing in Palantir," or, "I could be, you know, just buying whatever I think the next hot AI stock is, maybe that's my strategy for fighting this." I think the confidence and the empowerment of having the emergency reserves set aside so you know you can navigate this, and that can actually prepare you or maybe enable you to take risk in other areas. Mm-hmm. Because if that's wrong, you have this backup. It's like if, if you're building a fou- if you're building a house, you wanna lay a foundation that the house isn't gonna fall down. Right. You do not wanna skimp on the foundation of a house. Yeah, yeah. Exactly. I think as I look at our client base and the people that we know and we've talked about who are the most successful people, they all did it slowly. You know, I don't know of a single person that started a business and hit it really big in a year. Yeah. I mean, certainly, you know, some businesses take off quicker than others, but the people who are really successful, it takes time. And, uh, I think trying to use cash to take on more risk I was talking with one of my buddies the other day, Dogecoin. Mm-hmm. Do you remember when this popped up? Oh, I do. Yeah. Multiple times. So my buddy put a, I don't remember how much, i- it was a very small amount of money when it was trading for next to nothing. Mm-hmm. And then it shot up. And he had, I wanna say, it was like $80,000 in Dogecoin in a matter of, like, a few months. I knew that him and his family were kind of, like, not struggling, but you know, they needed the money. Right. And I said, "Hey man, like this is a once in a lifetime opportunity." Like, y- you went from literally it was like $1,000 to $80,000- Yeah. in a matter of a few months. You should probably sell some of this and take some profit and insulate, have that cash reserve- Yeah. deploy it other places. At least take some money out. He didn't do it. Yeah. And he rode it all the way back down. Mm-hmm. And he was super depressed for a long time, it didn't work out. But, um, I've made the same mistake before. You know, I bought Nvidia when it was like at $13 and I sold it at $26 thinking I was an absolute rockstar 'cause I had 100% rate of return. You doubled it, yeah. If if I would have left it, you know, it would have been a completely different situation. But the fact is, is because of that, I was able to build up cash reserves, I was able to do other things and deploy. So it's not necessarily the, the loss that I think about, it's the opportunities that that gain gave me. Right. And the peace of mind to have those sorts of priorities taken care of with the cash reserve, if there is an emergency expense or something big pops up, we'll be all right. Yeah. I think the, there's FOMO, right? Mm-hmm. And, uh, it's strong these days, isn't it? Right, it's, it's if you see everybody, it feels like everybody. If you see this guy getting rich on Dogecoin and, and that woman getting rich on Nvidia. Or all these people on TikTok that have the recipe for day trading- Sure. that's gonna make you rich. Yes, yeah. Sign up for my master class. It's, it's easy to feel like you're missing out- Mm-hmm. and to fear that you're missing out. And there is always opportunity cost, but opportunity cost is a lower risk. It is. Right? Like, the core risks are, being able The, the big risk, I think, if you're working right now is disruption to your income 'cause we always talk about this. Your income is way more important than the return you get on your investment. Right. And yes, there's possible, possibly a chance that you could put $10,000 into something and turn it into 20 in a year. Yep. But that shouldn't be your expectation. No. And you know, if you have a realistic expectation that that $10,000 might be $11,000 next year, or you could lose your job and wish you had that $10,000, right? Like, it's, there, you have to weigh the risks and I think risks are probably in order while you're working, risk to employment- Mm-hmm. um, risk to life, obviously is a big one. Health risks. Right? Health risk, life, you know, having life insurance, making sure your family's taken care of, et cetera, um, inflation is a risk. Yep. Right? There's all these other risks and somewhere down the line, it's opportunity lost. We, uh, were having a conversation with one of the women that Kaylee works with and this is dark, but, um- Uh-oh. she was talking about life insurance. Okay. And how her husbands worth so much more when he's dead. Mm-hmm. And she was just like, "Man, if my husband died, I'd be rich." And I asked her, I was just like, "Well, what does that mean?" She was just like, "Oh, he's got a half a million dollar life insurance policy." Mm-hmm. But I was like, "Okay, well, he makes 100 grand. So would you rather have a half a million now or 100 grand a year for the next 25 years?" Right. that math doesn't math. Yeah. Yeah. Yeah. I's, I, you know, I've heard that joke before, right? Of course. Like, I'm worth more dead than alive," or whatever, but Yeah, maybe right now, but when you factor in your income over the next 20, 10, 15- Yeah. 30 years, that is not the case. You are almost always worse off.I mean, when you're looking at life insurance from a financial planning perspective, if you are in the accumulation phase, then life insurance is literally insuring against the loss of your income. Right. That's like the biggest thing that we're insuring against there. 100%. Yeah, it's a tough conversation, but those are the other things that we bump into, it's, you know, it's one thing if you don't have a cash reserve. I think in a lot of cases, it's probably solvable if you do the right things, um, while it may not be easy, I'll say it's definitely worth it. Yeah. But the life insurance side of things, if, um, you know, you have an event where life insurance is needed and you don't have it, that's detrimental. I think that, you know, there are a lot of ways that your finances can be disrupted, right? Mm-hmm. And it's not always loss of life. It can be loss of life, it could also be divorce, it could be just loss of your job- It disability. right, it could be disability, which is a huge 1 Yeah. huge risk that, I mean, I personally am unprepared for probably. Same. Um, I- I just, you know, trust that everything's gonna work out. Wear your seatbelt. Hope is not a strategy, Colin. Right. Uh, but I think it- it is important to keep in mind that, um, my I don't have very many, uh, regrets when it comes to finances, I feel like everything's a learning experience and you survive it and you get stronger from it, et cetera, et cetera. But the few that I do have, either from an investment standpoint or just finances in general, is when I see something coming and I don't do anything about it. Mm. And we don't know what things look like 5 years from now when it comes to AI, when it comes to our economy, et cetera. We don't know what things look like a year from now. Totally. But we know without a doubt that it's going to be different, that there's going to be change, and if you have this opportunity to prepare ahead of time and you don't take advantage of it, you have no one to blame but yourself. Market's at all-time highs right now. Yeah. Recognize the fact that we're in a fantastic place- Yeah. in the market. It's basically never been better. It's been great for 15 years. Correct. And I was admittedly in one of our podcasts, unapologetic or maybe unsympathetic with what happened in February and March. Mm-hmm. And as I look at it, the reason why maybe I was a little dismissive over the situation was the market was up 5% year to date, I think it peaked February 18th, and then it dropped, so it was down 14%. Mm-hmm. So worst case scenario, that was a, call it 19% swing- Yeah. depending on the indice, plus or minus 3 or 4%. Right. Right. A lot of people were really upset about it because they were worried about trade wars. Certainly I can appreciate that, but we're talking a relatively small swing. Yeah. In 2008, the market was down 49%. Yeah. Imagine if you had a million dollar portfolio and within a few months you woke up and it was $500,000. Yeah. That is a massive change, and in the Great Depression it was even more than that. Yeah. So it has been a very long time since we've had a legit recession/depression, and I'm not saying that this is gonna happen anytime soon, but I think the possibility that it could come at some point is maybe not a statistical certainty, but it's very close. Yeah. And I think if you're And again, like, we're not doomers, Right. We- we look for opportunities and sometimes the opportunity is to prepare for times that are not as good as the times that you're in. Absolutely. Right? And I think that if you're, if you're young and you're saving into your 401K, then a market downturn like we had at the beginning of this year is an opportunity to buy things on sale, right? Definitely. If there's money you're not going to tetch- touch for the next decade or longer, then let it ride. Like, figure out, you know, what the right strategy is for you, what the right risk profile is for you, but don't change it because you think something might happen next year. Right. This is, you know, even if you look at 2008, you know, if you were not diversified, if you were just in, let's call it just the S&P 500, it- it was a 5year period of struggle- Mm-hmm. right? That is not fun, but if you have more than 5 years before you need the money, then you can ride that out. You can. Right? If you have some area of your savings or investment that you might need before- 5 years, like sooner than 5 years- You should think about that. Yeah. Evaluate that. That's the opportunity. That's like, you know, I- I don't want people to change their approach to their long-term investments because of a short-term possibility, but for their short-term savings and investment, that's exactly where you should be assessing the risk. Totally. I think what we're talking about here is obviously not investment advice, but investing- Right. principles. Right. Exactly. So when we look at our clients and when we look at these types of situations where we have these types of conversations about our own personal lives in the business, it's, you know, i- is that cash reserve available if the worst should happen? Yeah. And when we say worst should happen, normally what we're considering is if that person's an accumulator and is gonna get laid off from their job, or if they're a retiree, if there's some sort of huge cataclysmic event and you have that cash set aside for a year. But then on top of that, if you have additional spending that you're gonna need, just like you said, we have to make sure that that's also protected because, you know, a recession can last 3, 4, or 5 years. That's not that uncommon. And if that's the case, you really don't wanna be selling stocks and investments at a loss when that's going on. So sometimes more is better than not enough. 100%. So one other thing I wanted to think about, um, when we talk about preparation, it's not just building up an emergency reserve or just assessing the risk that you have in your, in your finances, but it's also how you can invest in your growth, right? Mm-hmm. In order t- to maybe look for an opportunity to work with AI, right? Like, we've talked about this before. AI isn't going to take your job, but somebody who is using AI- Will take your job. will take your job, right? So I think this is one of those things where you have to try to get ahead of it if you can, lean into it, learn more, realize that just because you're, what you're doing every day at work changes doesn't mean your value goes away, right? Like, you can find, hopefully, a different way to add value, a different way to get paid for the value that you add, and if that means, you know, training, learning, soaking up as much as you can, investing your, in yourself, not going to get an MBA and, and spending, like, X number of thousands of dollars on that, but just- Yeah, taking on more debt. Yeah. Don't Th- the answer here, and it's kinda scary actually right now, MBA applications are at an all-time high we haven't seen since 2008, and the reason they were so high in 2008 is because the job market sucked. So people wanted to become more marketable. They would, th- they had no other choice. They're basically looking at this like, "I can't get a job. I guess I'll go back to school." And that's kind of what we're looking at again right now, it seems. So I don't think the MBA is A- and again, I'm not trying to knock an MBA, I know some very talented MBA people who I see every day, um, but it's really important to look for opportunities to improve or, like, increase what you know, right? To have that growth mindset and look at this as a way, a path to the future that you can travel on as, as opposed to something that's just happening to you. Yeah, well, when it comes to planning and finances, you wanna get further ahead, there's only 2 levers that you can pull. Right. Which is you can reduce your expenses or you can make more money. Yeah. And you can only reduce your expenses so much. Yeah. So I agree that you have to figure out a way that if you can no longer reduce your expenses further, how can you get further ahead in life? Yeah. And whether that's online courses I, I mean, I think it's TeamTreeHouse that does it, there's programs that are online that you can sign up for that are pretty affordable and it will teach you how to be a programmer or will teach you how to do online marketing or there's a million different skills, and once that's done, it will generate a resume for you and it will post it online and most people get jobs right after these sorts of things. Did you know consumer debt levels right now in s- currently, 120% of debt-to-income ratio for the average US family, which is almost the same as what it was in 2007? Okay. Yeah. So what does that mean? So debt-to-income ratio is including the, any mortgage on their home or student loans or- Correct. Yeah. Yeah. Okay. So the average debt that someone has right now is basically $105,000 per Okay. I mean, look, it's, I sometimes I feel like we talk about these numbers and they're national numbers- Right. and they, they cover a broad spectrum of people. I think also people look at these numbers and think, "Oh, well, if that's the debt-to-income ratio, then 2008's right around Right. That's not exactly what that means. Right. But what it does mean is that there are a lot of people right now that are probably living paycheck to paycheck that don't necessarily have the right savings built up. Yeah. And unfortunately, these recessions and depressions, while wealthy people do lose money, it really affects the lower and middle classes the most. Yeah. I think one thing to try to keep in mind is, like, how you can focus on this potential risk while also enjoying the life that you're living today. Mm-hmm. Right? And, you know, some people might, they might go that, well, fallback, "Well, I guess I shouldn't buy this latte today 'cause that $5 is gonna make a difference." Right? Right. And, you know, if you're I, you know, there's, we all have all these subscriptions these days, right? Yup. And it's, you know, it's $18 for this streaming service and $11 for that one or whatever, and they add up, I understand that. But thatYou know, let's say that you cut half of those streaming services and now, you know, you save $40 a month. It adds up. It adds up, but that less than $500 a year is not going to be the make or break number for you. Right. Right? So I think it's, uh, I don't think it's about not buying that latte or cutting that subscription. I think it's, it's about the bigger impact expenditures. Those are the ones that you wanna think, "Is this the time to upgrade my vehicle or should I wait and see what" Look, if we're right, um, and you still have a job, right? But other people are maybe worse off- Yeah. then you're going to have a better car market that you can buy in, right? In theory, that's true. Yeah. Going back to the making more, spending less, it's probably a scary thing for someone that's been in a job for a long time to think, "I'm gonna change careers or do something- Totally. Yeah, yeah. else whatnot," because it's, you know, a "The devil you know" type of situation is better. But there are a lot of opportunities with some crazy emerging technologies right now that if you were to be able to harness and grasp that and to really lean in to be an expert, so to speak- Yeah. I think you could go some pretty crazy places with that. Yeah. I think, uh, there's a, there is some potential here, where there is no big impact on the economy or the job market and we somehow, miraculously, navigate this great technological change better than we've ever done in human history. But I think the odds are that we don't do that. I think the odds are that there will be some sort of disruption, and if there are opportunities to prepare for it ahead of time, it's great, right? Yeah. It's basically prepare for the worst, hope for the best, and position yourself for both scenarios if you can. I was out to drinks last night- Yep. as you know, with several other financial advisors and they are at, um, a big firm that everybody knows but I won't mention it. And it was interesting. They were asking me how it's going with our business and all that good stuff, and one of the things that I brought up was the fact that some of the technology we have is unbelievable. Mm-hmm. And how it's made our work with clients so much easier, more effective, and more efficient. Yeah. And they kinda laughed and were like, "Oh, yeah? What, like AI?" Um, I think when it comes to the way that we work with AI, it's really meant to augment the rel- the, the work we're doing with our clients, right? It's meant to basically allow us to service more clients, to help more people, to broaden our reach, and to provide them with the guidance that they need. It's important to just make sure that you are taking advantage of the opportunities in front of you, and some of those opportunities are to prepare for the worst and some of those are to position yourself to take advantage of the best. Mm-hmm. Yeah, I definitely agree with that. It's using things to your advantage. If you can. Exactly that. How can it help you? How can it help Versus worrying about how it's gonna hurt me. Yeah. And, or at least, and again, I don't think you're, the goal here is to worry. It's really to empower, right? Mm-hmm. It's, it's basically we're not trying to sound an alarm, right, or raise the caution flag. We're just pointing out some areas where this could impact our clients and it could impact us and it could pack, impact our fri- friends and family and community, et cetera. Um, it will be an impactful experience in good and bad ways. Yeah, and, um, while there are some probably pretty solid predictions of the future, no one really knows for sure. 100%. And you won't know until you arrive. Exactly. Reflecting back on episode 9, this conversation was less about fearing AI and more about preparing for what's ahead. The pace of change is real. Jobs are evolving and some will disappear, but that doesn't mean you can't stay ahead of it. Resilience, adaptability, and taking ownership of your personal growth are going to be the difference makers. Appreciate you all for being part of this dialogue. Thanks for listening. If this episode sparked something for you, feel free to share it with a friend. Be sure to follow or subscribe so you don't miss future episodes of the Compound Growth podcast. Compound Growth with Wheeler and Collin sponsored by Kopai Advisors. Reach out today. Yay!