The following email, sent to one of my professors earlier today, summarizes a lot of what’s been on my mind this semester. We had a speaker come to class, and he thanked me for asking a lot of insightful questions — many others were relatively silent — and I replied:
No kidding. This email is going to be a bit of a rant, but it contains some serious questions that need answering.
I finished my undergrad here (UIUC) last December, and went straight through to graduate school. I’ve learned a lot about new technology, the state of the art, etc., but as any serious graduate student will tell you, the actual content of the learning is almost irrelevant - doing a PhD, or a MS for that matter, is all about methodological learning. You learn how to study a problem, do research, and produce some kind of result, a skillset that’s applicable to an amazingly broad array of problems.
The most important thing I’ve learned in the past year is the importance of really understanding the status quo, that is, getting a handle on the state of the art, before you rush to the races and try to invent something new. Technologists are notoriously bad at this, partly because of the personalities that tend to like technology, and partly because there’s a perception that engineering (and particularly computers) are somehow “new”. I’ve been a heavy reader all my life, often reading several books at the same time, and it’s amazing how much history repeats itself. I was just reading “The Soul of a New Machine” last night, which chronicles the founding of Data General, a large computer company. The book touches on the company’s technology, but it’s really a story about the people involved - their management styles, conflicts in the company, etc. Even though the book is 27 years old, the struggles of starting a high-tech company it details are as relevant today as they were then.
So it’s a real travesty, in my opinion, that people don’t take the time to study what’s worked for other people, especially when those people are brought to them, on a silver platter. I agree with what you said above.
But, similarities aside, I believe we’re also on the cusp of a huge change in the workplace, probably the biggest in your lifetime, and maybe even farther. Again, with no real work experience to speak of, I’ve been doing a lot of reading about the the nature of work, and the workplace, and what I’m seeing is pretty striking. For one, the number of jobs in this country involving physical labor is rapidly approaching zero. The politicians will wring their hands about currency manipulation, unfair labor practices, and a whole litany of other peripheral nonsense, when the reality is that America’s biggest export - the intellectual property created here - will be the economic engine of the 21st century.
And this trend, the decline of hard, manual labor, is driving two sub-trends that touch my life in a very personal way. The first is the unprecedented level of mobility in today’s workforce. Before even finishing college, I will have worked in three different states, each in their own time zone. I have lived at more than half a dozen different addresses in the past five years, and I’m in a relationship with a girl who, despite growing up literally blocks away from me (we went to the same high school), has never lived within 150 miles over the entire course of our relationship. Traditionally, homeownership has served as both an anchor to the community and the cornerstone of wealth accumulation in the United States, but with so much mobility, I just don’t see how this can continue. A recent study by Towers Perrin reported that many members of the workforce today report feeling that there is no appropriate minimum time to stay at a job — not even 1 year, if a better opportunity beckons — pushing people to change jobs and move like never before.
The second major trend is, to be a bit tongue-in-cheek, “the retirement of retirement”. With the workforce getting away from hard labor, the idea of sitting at home, “retired”, seems very passé. More people are working because they want to, not because they have to, and the sort of creative, intellectual work people are doing has no logical stopping point. I can’t help but wonder, as retirement becomes a thing of the past, will retirement planning also change? I used to think that the widespread decline of pensions would be a social disaster, as consistent under-contribution to retirement plans would lead to an entire generation of broke retirees. However, if people can continue to do productive work until they retire, the idea of accumulating this big wad of cash, a “nest egg” one can live off of indefinitely, also seems pretty silly. There’s clearly a need for emergency savings, but maybe not heavy, lifetime contribution to an IRA, 401(k), or any other “tax advantaged retirement account”.
So, I have two very practical questions, and I’m curious what you think.
The first: buying a home, or rental property, is a good way to accumulate wealth. However, when, if ever, is the appropriate time to purchase a home? A calculator by the New York Times indicated that all other things equal, homeownership generally doesn’t make sense over renting (under reasonable assumptions) unless you’ll be there about 10 years or more - you’re better off investing the down payment and renting, because mortgage debt is very expensive in the short run (even with a relatively crappy rate of return on the investments, like 6-8%). Note that I asked the gentleman this exact question, “How did you manage the mobility” last night, and he seemed to have caught a lucky break, not necessarily managed the risk in a systematic, planned way.
The second question is about financial planing. I’ve got about (censored) in brokerage assets, diversified into a variety of carefully-picked positions I’m planning to hold indefinitely. With the possibility of starting a business on the horizon versus saving for larger, farther-off things (houses, retirement, etc.) the way I allocate this money is far from clear. I could definitely do more productive things with that much cash than letting it sit in some brokerage account, but the “more productive” things would also be more risky, and some of it’s deliberately invested in very illiquid stuff so I don’t do stupid things. It’s a question of risk tolerance: how much is the “right” amount of one’s own money to put into “safe” long-term things, versus more speculative ventures? I’m not necessarily looking for a concrete answer here, more of a way to frame the problem and thoughts on how others are dealing with it.
Perhaps we can talk about these things as a class in GE498. Whatever happens, many members of my generation are going to face these same questions, so I hope they get good advice.
In any case, its legacy is still alive and well in the distributed systems community: to get “slashdotted” is to have one’s site loaded to the point of failure, presumably from legitimate traffic, making for the ultimate “screw case” in DDoS filtering.