Future Wealth

Rating:
Summary: Flawed Underlying Themes Behind Old But Reworded Concepts...
Review: As communications improve, everyone wants to be entertained or helped by the best in the world. This means an incredible shortage of top talent and a glut of all other talent. In such a world, how will the market allocate resources? This book uses existing trends to extrapolate into a free market economy for talent that will be patterned along the lines of stocks and time share units. It all makes sense, once you get past the initial shock of thinking about yourself potentially as being a public version as YOU, Inc.

Future Wealth is the second book in a trilogy that began with Blur, by Stan Davis and Chris Meyer. The book builds a full argument on the most intriguing, but small, theme in Blur concerning the issue of Bowie Bonds by the rock composer and performer David Bowie. Seldom will you find a book with such a valuable insight into the likely future of capitalism.

Unlike most business books which just describe something that has been going on for some time, Future Wealth clearly goes beyond today into tomorrow. For those who are unfamiliar with scenario-based thinking, this book will seem strange. Experience shows that such thinking is extremely valuable for helping each of us prepare for things that may well happen when the exact shape of the future is unknowable.

Although some will see nothing new in this book beyond Blur, that is clearly not the case. Blur ends with the Bowie Bonds example and Future Wealth begins there, but that is not the end of the thinking.

The biggest idea in Future Wealth is that individuals need not have the exposure to volatility risk that makes each of us take a conservative financial course. The solution to volatility for each person is to pool risk with a statistically significant number of others. This is the solution that makes insurance and mutual funds work better. Davis and Meyer have the insight to see that combining all aspects of our future, including our net worth, into such pools can allow us to take greater risk that will permit the potential for achieving much greater rewards. As a result, risk is our friend when we handle it properly. This is a powerful insight that will change the way almost all human beings conduct their lives.

They also see the systems potential of getting the present value of our economic potential available to us when we most need it. Then, we can use the funds to both expand our future income and net worth, while diversifying our risk. That is a fundamental insight that we should each pay attention to.

Instead of being limited to the resources at hand, we can have virtually unlimited potential by investing in our futures using all of the potential resources that might be available to us. A public company is like a government, in that it can issue more stock to create more resources. Now, Davis and Meyer point out the important benefits of extending that perspective to the individual.

Turning around the current company-centered economic culture, they argue that companies should invest in their employees by helping them go public and taking a position alongside of them. By making every employee a shareowner in many firms, companies are already started down this path. This next step will work even better. Imagine how much more incentive you would have to hire and nurture the best, if you could always get benefit from that relationship . . . even after they left the firm.

One of the great strengths of this book is that it suggests a fundamental new paradigm for growth and wealth. There is a set of public policy suggestions that emphasize greater social safety nets that permit each person to take on more risk that can expand wealth for the individual, the company and the society. They point out that the connected economy favors the potential for each of us to so much more.

In the future, thoughtful readers will remember this book as The Wealth of Nations for individuals. Good luck with developing your Future Wealth!

I also encourage you to find ways to diversify your risk in advance of these new market mechanisms being available. In that way, you can make progress faster now. That is an important part of the lesson of Rich Dad, Poor Dad . . . seen from this perspective.

When the market mechanism is in place, the paths to entrepreneurship will be much more available. That will be good for us all!

Rating:
Summary: The Evolution of Paying Up for Top Talent
Review: As communications improve, everyone wants to be entertained or helped by the best in the world. This means an incredible shortage of top talent and a glut of all other talent. In such a world, how will the market allocate resources? This book uses existing trends to extrapolate into a free market economy for talent that will be patterned along the lines of stocks and time share units. It all makes sense, once you get past the initial shock of thinking about yourself potentially as being a public version as YOU, Inc.

Future Wealth is the second book in a trilogy that began with Blur, by Stan Davis and Chris Meyer. The book builds a full argument on the most intriguing, but small, theme in Blur concerning the issue of Bowie Bonds by the rock composer and performer David Bowie. Seldom will you find a book with such a valuable insight into the likely future of capitalism.

Unlike most business books which just describe something that has been going on for some time, Future Wealth clearly goes beyond today into tomorrow. For those who are unfamiliar with scenario-based thinking, this book will seem strange. Experience shows that such thinking is extremely valuable for helping each of us prepare for things that may well happen when the exact shape of the future is unknowable.

Although some will see nothing new in this book beyond Blur, that is clearly not the case. Blur ends with the Bowie Bonds example and Future Wealth begins there, but that is not the end of the thinking.

The biggest idea in Future Wealth is that individuals need not have the exposure to volatility risk that makes each of us take a conservative financial course. The solution to volatility for each person is to pool risk with a statistically significant number of others. This is the solution that makes insurance and mutual funds work better. Davis and Meyer have the insight to see that combining all aspects of our future, including our net worth, into such pools can allow us to take greater risk that will permit the potential for achieving much greater rewards. As a result, risk is our friend when we handle it properly. This is a powerful insight that will change the way almost all human beings conduct their lives.

They also see the systems potential of getting the present value of our economic potential available to us when we most need it. Then, we can use the funds to both expand our future income and net worth, while diversifying our risk. That is a fundamental insight that we should each pay attention to.

Instead of being limited to the resources at hand, we can have virtually unlimited potential by investing in our futures using all of the potential resources that might be available to us. A public company is like a government, in that it can issue more stock to create more resources. Now, Davis and Meyer point out the important benefits of extending that perspective to the individual.

Turning around the current company-centered economic culture, they argue that companies should invest in their employees by helping them go public and taking a position alongside of them. By making every employee a shareowner in many firms, companies are already started down this path. This next step will work even better. Imagine how much more incentive you would have to hire and nurture the best, if you could always get benefit from that relationship . . . even after they left the firm.

One of the great strengths of this book is that it suggests a fundamental new paradigm for growth and wealth. There is a set of public policy suggestions that emphasize greater social safety nets that permit each person to take on more risk that can expand wealth for the individual, the company and the society. They point out that the connected economy favors the potential for each of us to so much more.

In the future, thoughtful readers will remember this book as The Wealth of Nations for individuals. Good luck with developing your Future Wealth!

I also encourage you to find ways to diversify your risk in advance of these new market mechanisms being available. In that way, you can make progress faster now. That is an important part of the lesson of Rich Dad, Poor Dad . . . seen from this perspective.

When the market mechanism is in place, the paths to entrepreneurship will be much more available. That will be good for us all!

Rating:
Summary: A great book ...again!
Review: Dans ce nouveau livre qui n'est que la poursuite d'une réflexion entamée dans leur ouvrage précédent (Blur), Meyer et Davis conduisent une analyse sur quelques facettes de la transformation de nos économies . Si leur position sur le rôle du risque et la nécessité de son management est déjà d'actualité pour beaucoup d'entreprises, celle qu'ils développent sur la marcheisation du capital humain est nettement plus prospective. Mais le caractère provocateur de la démarche ne doit pas faire oublier que déjà surgissent les premiers indices de cette révolution. Pour nous en convaincre, il faut replacer les thèses de nos auteurs dans le cadre plus large de la création de valeur dans une Economie Connectée.

Même après le brutal ajustement que la bourse a connu au cours des dernières semaines, les performances de la Nouvelle Economies restent exceptionnelles. Sur les cinq dernières années, l'indice S&P500 a été multiplié par 2,75, et celui du Nasdaq composite par 4,5. Cette création de valeur exceptionnelle n'est pas due au hasard. Elle résulte d'une profonde transformation du fonctionnement de nos économies. Grâce à la connectivité, les marchés réels- celui des biens et service et celui des talents- adoptent peu à peu une organisation qui les rend plus efficients. Le marché financier vient faciliter et accélérer ce phénomène.

Un marché tend vers l'efficience s'il développe les caractéristiques suivantes : une information abondante et partagée de manière symétrique par les intervenants ; une liquidité organisée ; un ajustement continuel des prix en fonction de l'offre et de la demande ; et, enfin, des coûts de transaction faibles.

Ces caractéristiques sont celles des places de marché électroniques qui se développent aujourd'hui dans toutes les industries (il y en existent déjà plus de 600). Ces places sont organisées autour des principaux groupes pétroliers, de la grande distribution, de produits agricoles, de pièces pour l'automobile, de chaînes d'hôtels, etc., avec comme objectif d'optimiser les processus d'achat. On estime que les gains de coûts de production qui en résulteront se situent entre 10 et 25% selon les secteurs. Ces marchés poussent des entreprises concurrentes à s'allier sur des projets qui sont stratégiques pour leur avenir. La coopetition remplace la compétition.

De même, le marché réel le plus inefficient , celui des talents, commence à s'organiser. Dans une économie dominée par les intangibles (capital intellectuel et capital humain), cette évolution est inéluctable et, c'est l'un des points essentiel de Future Wealth. C'est ainsi que sont apparus des sites comme bid4geeks.com sur lequel des individus ou des équipes peuvent mesurer la valeur de marché de leur capital humain et mettre aux enchères leurs compétences. Le marché de l'innovation et des brevets, encore plus opaque, bénéficie lui aussi de cette évolution : pl-x.com est un site sur lequel les entreprises peuvent commercialiser leur brevets inexploités à un prix déterminé par le marché.

Cette révolution a été rendue possible et est aujourd'hui accélérée par la capacité du marché financier à anticiper les évolutions économiques et surtout à les financer. Il joue un triple rôle dans cette nouvelle dynamique : il aide les entreprises à accélérer leur croissance et à développer de nouveau modèles de développement (comme les places électroniques) ; il leur donne les moyens d'attirer les meilleurs talents (stock options) ou d'utiliser ceux de partenaires (établissement de liens capitalistiques) ; enfin, et c'est l'un des points clef du livre, il crée les conditions d'un marché du risque.

Comme le montre très clairement Future Wealth, notre attitude à l'égard du risque doit changer radicalement. Ce qui est vrai pour les individus l'est encore plus pour les entreprises. L'économie connectée est porteuse de formidables opportunités, mais engendre aussi des risques importants. Il est donc indispensable de mieux identifier les risques que l'on courre, et, de les externaliser (assurance, couverture, ...) ou les partager si l'on ne peut les maîtriser convenablement.

Cette situation contraint les entreprises à réexaminer profondément leur techniques de management stratégique. La maîtrise des connections avec leur environnement devient une compétence critique. L'avantage compétitif d'une entreprise réside autant dans ses propres forces que dans le réseau qu'elle construit avec ses partenaires. Ce réseau lui permet de bénéficier de talents qu'elle ne peut plus détenir directement et d'augmenter son portefeuille d'options de croissance future.

Le marketing financier va devenir également essentiel : les activités de l'entreprise doivent être plus finement segmentées en fonction de leur profil de risque et de rentabilité afin d'optimiser leur gestion et leur financement. Les « traking stocks » qui permettent aux investisseurs de s'intéresser à une activité spécifique de l'entreprise, l'échange de produits ou de services contre des actions, l'intrapreneurship ou les fond de capital risque créés par des groupes industriels sont autant de manifestations de cette nouvelle stratégie de segmentation et de partage de risque. Les frontières entre les marchés financiers et réels s'estompent : gare aux préjugés sur le fonctionnement de l'économie!


Rating:
Summary: interesting to watch in post-bull market
Review: Davis and Meyer believe that "control of wealth is tilting from institutions to individuals." Evidence of this is that individually managed retirement plans have taken the place of company managed pensions, a marked shift from a corporte-culture past. What's happened as a result is that "middle-class wealth is no longer an oxymoron," write the authors, so people now "see their work lives not as jobs, but as a series of risk management choices." But they go on: "Of course, the bull market's end will affect these attitudes -- at least temporarily." What we don't know from the book is what will happen to this middle-class wealth in a market downturn. Granted, the authors see the book, however, as part of an ongoing discussion with readers, and it is a provocative one. Still, don't look here for any solutions to the issues of those who aren't beneficiaries of this newfound wealth. The authors argue that the super-rich are irrelevant and they write: "The disparity between the top and the bottom 10% may distract you from the 80% in the middle," they write. Well, that might be true, but for some those at the bottom of the bottom 10% who are living below the poverty line cry out for attention, at least in the minds of some. That though is beyond the scope of this book.

Rating:
Summary: interesting to watch in post-bull market
Review: Davis and Meyer believe that "control of wealth is tilting from institutions to individuals." Evidence of this is that individually managed retirement plans have taken the place of company managed pensions, a marked shift from a corporte-culture past. What's happened as a result is that "middle-class wealth is no longer an oxymoron," write the authors, so people now "see their work lives not as jobs, but as a series of risk management choices." But they go on: "Of course, the bull market's end will affect these attitudes -- at least temporarily." What we don't know from the book is what will happen to this middle-class wealth in a market downturn. Granted, the authors see the book, however, as part of an ongoing discussion with readers, and it is a provocative one. Still, don't look here for any solutions to the issues of those who aren't beneficiaries of this newfound wealth. The authors argue that the super-rich are irrelevant and they write: "The disparity between the top and the bottom 10% may distract you from the 80% in the middle," they write. Well, that might be true, but for some those at the bottom of the bottom 10% who are living below the poverty line cry out for attention, at least in the minds of some. That though is beyond the scope of this book.

Rating:
Summary: Flawed Underlying Themes Behind Old But Reworded Concepts...
Review: First of all, when you look at the "Advance praise" section, you will see that one of the sources is Kenneth Lay, former chairman/CEO of the now-defunct Enron. If that doesn't scare you off, I don't know what will. In a book chock full of the bygone-Internet-era business terms, I did NOT find anything particularly novel or ground-breaking with this work. The concept of "human capital" is not a new idea; certainly Bill Gates has already put this concept to good use for nearly two decades. Also, the concept of marketing one's talents, while a sound idea, has major consequences which I'm surprised the authors did not place much emphasis on: Given the constant emphasis on training in school to improve your job skills, there has been and always will be growing intensity and competition in the job market -- this can already be seen in the market for engineers, where more versatile candidates get a better shot than specialists; the disastrous result would be a glut of engineers and techs, most whom will be unemployed (or underemployed). The same thing happened to lawyers in the 60's and 70's, MBA's in the 80's, and most recently, to doctors. Add to this the fact that a direct correlation between deteriorating skills and age has been established. So the whole "human intellect" as capital, while noble, is practically unsound. The sad reality is that we as human cogs in the wheel of work (skilled or not) are still depreciable assets. I am also surprised that the authors placed some emphasis on the efficient market as a basis for companies, etc. EMT is a theory whose soundness has been invalidated time and time again. Even more so recently, with all the "creative accounting" that has caused the market to crash just recently. Assuming that the book was written during the wave of post-Internet wealth euphoria, it must be only natural that there was no expectation that the markets would ever get into a downturn once the plain, good-ol' economics set in, and the poorly-managed, overvalued companies imploded unto themselves. I would strongly suggest that business owners NOT try their hand at doing any human capital accounting just yet, until they prove themselves competent at doing conventional (and legal) accounting practices. I would also strongly advise against running your business to market standards. I know that's a loaded statement, as businesses indeed do have to watch the market to stay competetive and retain their assets (especially employees), but to keep on changing just for the market's sake is just pure nonsense. As with a lot of the ideas here, most of it is speculative and defies common sense. Theoretical, yes; just not sensible. In general, economic theories should never, ever be taught unless proven experimentally, i.e., the battlefield of business, with a reasonable degree of success... this coming from an experimental physicist who knows damn well what he's talking about. The book lacks clear organization, and therefore does a poor job of relating their points, much less arguing the validity of such. As I said before, the main idea of treating human capital as assets is not a new idea. There are indeed sound ideas that could be manipulated in harnessing this vast pool of knowledge for the benefit of the greater good, but they aren't here in this book. I flatly recommend against ever buying this book -- just check it out at your local library, if a copy is available.

Rating:
Summary: Black tulips for today's market
Review: Future Wealth is populist, upbeat and a typical product of the latter stages of a booming stock market. It succeeds Blur by the same authors. The good times are going to last for ever, risk should be seen as opportunity, the way to the future is to find ways of borrowing the cash value of your skills and to commit it to the dance. Everyone's a winner, there are no losers (or they don't rate a mention). The book is interesting primarily as an example of shrewd marketing of reassurance into a boom economy.

Rating:
Summary: Black tulips for today's market
Review: Future Wealth is populist, upbeat and a typical product of the latter stages of a booming stock market. It succeeds Blur by the same authors. The good times are going to last for ever, risk should be seen as opportunity, the way to the future is to find ways of borrowing the cash value of your skills and to commit it to the dance. Everyone's a winner, there are no losers (or they don't rate a mention). The book is interesting primarily as an example of shrewd marketing of reassurance into a boom economy.

Rating:
Summary: New Perspectives on Risk and Reward Beyond Blur
Review: Future Wealth is the second book in a trilogy that began with Blur, by Stan Davis and Chris Meyer. The book builds a full argument on a small theme in Blur concerning the issue of Bowie Bonds by the rock composer and performer David Bowie. Seldom will you find a book with such a valuable insight into the likely future of capitalism.

Unlike most business books which just describe something that has been going on for some time, Future Wealth clearly goes beyond today into tomorrow. For those who are unfamiliar with scenario-based thinking, this book will seem strange. Experience shows that such thinking is extremely valuable for helping each of us prepare for things that may well happen.

Although some see nothing new in this book beyond Blur, that is clearly not the case. Blur ends with the Bowie Bonds example and Future Wealth begins there, but that is not the end.

The biggest idea in Future Wealth is that individuals need not have the volatility exposure to risk that makes each of us take a conservative financial course. The solution to volatility is to pool risk with a statistically significant number of others. This is the solution that makes insurance and mutual funds work better. David and Meyer have the insight to see that combining all aspects of our future, including our net worth, into such pools can allow us to take greater risk that will permit the potential for much greater reward. As a result, risk is our friend if we handle it properly.

They also see the systems potential of getting the present value of our economic potential available to us. We can use the funds to both expand our future income and net worth, while diversifying our risk. That is a fundamental insight that we should each pay attention to. Instead of being limited to the resources at hand, we can have virtually unlimited potential by investing in our futures using all of the potential resources that might be available to us. A public company is like a government, in that it can issue more stock to create more resources. Now, Davis and Meyer extend that perspective to the individual.

Turning around the current company-centered economic culture, they argue that companies should invest in their employees by helping them go public and taking a position alongside of them.

One of the great strengths of this book is that it suggests a fundamental new paradigm for growth and wealth. There is a set of public policy suggestions that emphasize greater social safety nets that permit each person to take on more risk that can expand wealth for the individual, the company and the society. They point out that the connected economy favors the potential for each of us to so much more.

In the future, thoughtful readers will remember this book as The Wealth of Nations for individuals. Good luck with developing your Future Wealth!

Rating:
Summary: New Perspectives on Risk and Reward Beyond Blur
Review: Future Wealth is the second book in a trilogy that began with Blur, by Stan Davis and Chris Meyer. The book builds a full argument on a small theme in Blur concerning the issue of Bowie Bonds by the rock composer and performer David Bowie. Seldom will you find a book with such a valuable insight into the likely future of capitalism.

Unlike most business books which just describe something that has been going on for some time, Future Wealth clearly goes beyond today into tomorrow. For those who are unfamiliar with scenario-based thinking, this book will seem strange. Experience shows that such thinking is extremely valuable for helping each of us prepare for things that may well happen.

Although some see nothing new in this book beyond Blur, that is clearly not the case. Blur ends with the Bowie Bonds example and Future Wealth begins there, but that is not the end.

The biggest idea in Future Wealth is that individuals need not have the volatility exposure to risk that makes each of us take a conservative financial course. The solution to volatility is to pool risk with a statistically significant number of others. This is the solution that makes insurance and mutual funds work better. David and Meyer have the insight to see that combining all aspects of our future, including our net worth, into such pools can allow us to take greater risk that will permit the potential for much greater reward. As a result, risk is our friend if we handle it properly.

They also see the systems potential of getting the present value of our economic potential available to us. We can use the funds to both expand our future income and net worth, while diversifying our risk. That is a fundamental insight that we should each pay attention to. Instead of being limited to the resources at hand, we can have virtually unlimited potential by investing in our futures using all of the potential resources that might be available to us. A public company is like a government, in that it can issue more stock to create more resources. Now, Davis and Meyer extend that perspective to the individual.

Turning around the current company-centered economic culture, they argue that companies should invest in their employees by helping them go public and taking a position alongside of them.

One of the great strengths of this book is that it suggests a fundamental new paradigm for growth and wealth. There is a set of public policy suggestions that emphasize greater social safety nets that permit each person to take on more risk that can expand wealth for the individual, the company and the society. They point out that the connected economy favors the potential for each of us to so much more.

In the future, thoughtful readers will remember this book as The Wealth of Nations for individuals. Good luck with developing your Future Wealth!