Future Wealth (Hardcover)

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!