Sunday 16 April 2017

Early Retirement Maybe A Luxury That I Cannot Afford

I have blogged about early retirement in the past 2 years, but I really do not intend for this to be an annual series. Moreover, I do not intend to retire early and sit back and do nothing. Nevertheless, there are fresh insights on this topic and it is good to write them down for future reference. 

In the past 1 year, I have read a few books such as "Capital in the 21st Century" and "Rise of the Robots: Technology and the Threat of a Jobless Future". I am concerned about automation and robots taking away jobs. By right, this should not be a concern for someone who has considered early retirement. However, there are additional complexity if I think about future generations. I do not have any children currently, but if I have, then any actions on my part now would have an impact on them in the future.

I do not think I will be replaced by automation and robots any time soon. However, the same cannot be said for the next generation. If the doomsday scenario of robots replacing workers on a wide scale were to materialise, it means that we are back to the very old days when how well we live does not depend on how hard we work, but who our parents are and/or whom we marry. In the case of my children (if any), that parent would be me. Thus, when seen from an inter-generational perspective, the window of human employment is closing soon and early retirement at a time when jobs are still available seems a luxury. Hence, instead of saving enough for my own retirement and retiring early, I should work for as long as possible to maximise the income from human capital and build up sufficient financial capital upon which my descendants could lead a decent life. Early retirement maybe a luxury that I could not afford in the face of automation and robots.

Of course, this is not a fool-proof plan. Whatever I save could be squandered away by future descendents. So, I do hope that the doomsday scenario of robots replacing workers will not happen. Or perhaps the prevailing governments of the day would understand the social implications and implement some basic income for citizens as suggested in the books mentioned above. If I have to pay more taxes for this to happen, I would grudgingly pay them. It is a small price to pay for social insurance for my future generations.

Having said the above, if I can have the option of not relying on some external parties to bail us out, that would be the best. Thus, I will have to use my own efforts and earn as much as possible. Sorry, folks, I have to go back to work tomorrow.


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10 comments:

  1. I'm not sure why you consider robots replacing work to be a doomsday scenario. Terminators? I think when robots replaces any work, it simply means that the task it replaced is no longer valuable enough to justify spending human time on it. We then divert our attention to other things which can add value to society. Innovation or entertainment for example?

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    1. My concern is when robots displace workers, how do these workers find alternative jobs that pay the same amount of money with the same level of skills? Very likely, all industries will face the same threat from robots, just to different extent. See report from Straits Times: http://www.straitstimes.com/business/economy/half-of-paid-work-can-be-automated-mckinsey-report.

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  2. Early retirement is a blessing as not many full time employees can do it.

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    1. I understand you chose to work till retirement age even though you could retire before that. Do you mind sharing your views?

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  3. Hmm... BI

    I think it's better to leave behind values,skills and knowledge for descendants than money.

    It's highly likely that the jobs for the next generation will be different from what it is now, and there might also be lesser?

    Giving them money without earning is most probably not going to work, give them the navigation capability to stay employable, by employers or by market.

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  4. Hi, I have started to read your blog lately. What you shared has been on my mind recently. While i respect those who focus on values, skills and other non material/financial aspects for their descendants, i would try to leave assets/wealth for my children so that they will have a choice and to even strike out on their own if that is their inclination. An employee is after all at the mercy of his/her boss. Having said that i also believe it is important to develop in our children with the correct moral values and to treat others respectfully without compromising their own beliefs. No one can tell what is going to happen in the distant future, any skills that we have now may or may not be relevant or desired by the market. Schools focus on resilience, confidence and other life skills but with millions if not hundreds of millions possessing almost similar attributes, how to ensure that our descendants will have sufficient tools to survive and thrive?

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    1. Would some parents prefer to provide a few hundred thousands war chest to their children as head start to invest or guide their children to invest with their own money?

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    2. It is not necessary to choose between leaving behind wealth and imparting skills & knowledge. We can do both.

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    3. Wanchai30, you are right to point out that schools churn out people with the same knowledge and skills, and textbook knowledge is a commodity. But what sets people apart is the ability to apply the knowledge. In the Straits Times article I shared above (see http://www.straitstimes.com/business/economy/half-of-paid-work-can-be-automated-mckinsey-report), it mentioned that jobs that involve working with people, applying expertise to decision-making, planning, creative tasks, as well as managing and developing people are less susceptible to automation. This is a direction we should take.

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