Why Ownership Beats Employment In The AI Economy - Andy Tanner, Del Denney

Welcome back to Rich Dad Stockcast. I'm your host, Del Denny. And today we're tackling a question that's on a lot of people's mind right now. Will AI replace jobs? Layoffs are happening. Automation is accelerating. Companies are investing billions into AI. Some people are excited. Other people are nervous. But the big question is this. How should investors think about the shift? Because when technology disrupts industries, fortunes are made and lost. And joining me is Rich Dad expert Andy Tanner. And today we're going to break down what AI disruptions means for workers, for companies, and most importantly for us investors. And before we dive in, go to stockcastbonus.com, grab your free investing tools. If you want to prepare instead of panic, that's where you start. Andy, welcome back. Thanks so much, Del. I hope you'll excuse the small cough, but I think we're doing okay. I think we'll make it through. I think, hope, I think we'll make it through. AI is replacing everyone. They're not going to have coughs. It's all good. We're going to dive deep into that. Uh, but before we go into that, stockcastbonus.com, great resources there. It's always evolving. What do our listeners receive when they go there? Right now there's a great ebook they can download. It's, you know, free, no cost. And I say this a lot, but there's the, the amount of time I spend consuming content and watching things online. And then there's the amount of time I spend doing stuff. And you know, that doing stuff, I just tell people is pretty important. So if you go to that site, uh, free stuff where you can get habits, where you're actually doing things. So if you want to be a doer, uh, drop by there and we'll show you how, show you how to get to doing stuff. I love it. Taking action. So important. All right. So going back to AI here, you know, let's start here. Is AI actually replacing jobs or, or is that just a headline that we're always seeing what's really happening? Well, there's been two headlines. You know, the first headline says we're going to lose a lot of jobs, but there's already headlines to say we've lost them, you know, the example I've been giving is Salesforce, you know, they lay out, they lay off 4,000 people and the CEO says, well, you know, why is it because, uh, they had a bad quarters because they need to cut costs. No, he says, I need less heads quote. No, that's what he said. I just, the automation is working. Oracle's laid some, some folks off Microsoft, it seems to be happening in tech industry first, simply because, you know, we don't need coders, you know, it can code now. So, yeah, I think it has taken jobs a hundred percent and I think it's going to take more. Why are companies investing so heavily in a right now, AI right now? It, you know, we, we use Salesforce as example there, but why, what, what's the story behind this about efficiency, cost cutting, profit margins, all three. Why are companies doing this? Yeah, I think it's all that, but imagine imagine this way, I mean, if labor in production is largely free, meaning you're paying for electricity to run it basically, and then you're paying for maintenance and if you can automate things, why wouldn't you? There's, there's a, um, not to be too long winded on this, but there's, there's two phrases you hear, you hear, well, creative destruction, right? It's going to, it's going to destroy these jobs, but in doing so, it's going to create all these other jobs. Um, Jeffrey Hinton, Hinton, Dario Motaday, Eric Schmidt, these guys that are at the forefront of this, they don't think it's going to happen this time because, uh, it's not creative destruction. The phrase is, well, it's kind of changed a little bit, it's meaning now, but it's comparative advantage. So as an entrepreneur, you say employment or deployment, you compare those two and what gives, you know, what does it cost to replace with technology and as, as the prices drop and as the cost of technology drops, that threshold gets lower and lower and lower to say, I'm going to make a kiosk that can do this instead of having a human being do it. And, uh, that's, that's where we are. So yeah, we're going to have, it's the comparative advantage. We're going to have more jobs lost as the advantage of using technology is compared to having that human. Does that make sense? It does. And to dig a little bit deeper, what industries are most vulnerable right now in which are positioned to benefit? You know, is it, we talk about coders, right? That very vulnerable, but what's on the horizon? Well, I, I I'm the wrong guy to ask him that, you know, I'm, I'm an investor, not a programmer, but if you talk to those people, I just mentioned, you know, they, they caught the San Francisco consensus. These guys are all in San Francisco and they have a consensus of how fast this is going to happen. And, and those guys say it's going to be across all industries. You know, we, it's going to start with tech, which would be natural, but it's going to go everywhere. And I'm excited for it because you know, on the, on the business side of things, if production is largely free, what does that do to our gross domestic product? And what does that do to the value of ownership? It's massive. So I'm very excited about, about AI and what it should do for the markets. Companies will get more valuable when they're using technology that, that produces things for free. Where should investors be paying attention to right now? If, if we're, we're cutting costs, uh, we're automating more. Um, what does that do for the companies? Where do we invest? How do we look at like what, when we put our investor lens on, what should we be looking for? I think for me, I think there'd be three things, the most natural one, which isn't necessarily the best one. Most natural thing is for people to say, well, I'm going to invest in tech. I'm going to invest in, you know, Google. I'm going to buy the, the people that make Google brain and make Gemini. I'm going to, I'm going to invest in those, those companies. I'm going to buy Nvidia, you know, so I can get exposure to the chips they need. So that's one way you could, you could do that, but the other way I think personally look at it and it's the way I like to look at it is Scott, what people might call the Levi Strauss, uh, trade where everyone's going to California for gold, this guy says I'm going to sell them all Levi's. So you look at all the things that AI needs, I'll give you one example. Corey holiday gave this big to me and I liked it is their bottleneck is power. And whether you're winning the AI race or losing the AI race, if you're trying to play the AI race, you need energy, you need power and, uh, you know, they're going to open up three mile Island, I guess, and they're going to, you know, do all they really are. I think Microsoft bought or has an interest in a company that's going to open up for nuclear power, uh, because that's the bottleneck. So I think energy is a big one. So chemical is a nice one that we bought and they sell, you know, the, the materials, the uranium and the stuff allows for new nuclear power. So, um, stuff like that on the edge of it, my wife used to work for a company when we were first married out of Carrollton, Georgia, uh, Southwire, and they make all this wire, a data center to build a data center, you might have, you know, a hundred million dollars of wire, $200 million of wire. So you can buy the things they need to build the things they want to build. And then the third one is, I think you could go broad because it isn't like, well, I got to invest in the people that make this technology. No, you invest in the people that use it. So, you know, name a company that won't have better logistics with, with AI name, a company whose processes won't be more automated with AI. Um, a machine can do everything that we can do already. It's just a matter of cost. Let's say that again, there there's machines, you can build a machine to do everything we can do now, like now we could do it. It's just, does it, is the comparative advantage there? How much does it cost to build a robot? There's robots, the roof houses, robots that do plumbing, you know, there's robots that do all kinds of stuff, wiring. So yeah, I think it's all industries. And that's the three places I focus on the broad, everything should do better. You try to guess the technology. You can do the Levi Strauss trade. Any of those three. Speaking, speaking of Levi Strauss, always like a little, little history there, and I know you're, uh, I'm going to call you a scholar here. Uh, no, don't go there. We'll lose credibility. Comparative advantage. I'm I lead to you on this one. Uh, historically, how has technology disrupted jobs? You know, we we've seen it all throughout our years, but we have something really, unlike anything else in the world, AI coming in the history of the world, mankind technology, this is, this window here is amazing. Is it scary? Is it exciting? Like how has technology disrupted jobs and what lessons can we learn from that? Well, I think the lesson might be different this time. I think the lessons, the biggest lesson of the past might not be the biggest lesson of the future. You know, automatic teller machines. Oh, now we're not going to have tellers anymore. Yeah. We have tellers. They just do different stuff, right? So automatic teller machines is one that Jeffrey Hinton talks about a little bit. You have a steam shovel instead of a manual shovel, right? And in the past, the lesson has been, yeah, but there's always been better and better jobs created, right? Every time you've done that, you get a track hoe, someone's got to build that and maintain that and paint that and ship that and fuel that and it's just going to create all these other jobs. And in the past, that's been true. It really has. We need human beings, but let's break down those three things. I have to be able to perceive the environment. Computers can do that better than us. Now I can perceive a MRI. I can look at an MRI image. The computer can do it better. It can find those tumors better. It can find, it can look at every pixel and find those things. It's just better. I can't see the moons around Jupiter. I can't see the microbes on the sponge, you know, we have tools that can perceive and hear and detect things in the, in the air. There's not a sense we have that isn't already better automated somewhere else, right? The other part of that is cognition. Then if I perceive stuff, I got to be able to process and think about what should be done next. Then the third one is got to be able to reach out and manipulate my environment. So we have all three of those. So the lessons of the past that this will create more jobs. Well, what, what jobs is AI going to create if it can do everything a human can do, and that's, they say superintelligence, general intelligence. They're saying is probably three years away and superintelligence is, you know, six years away, they say. And superintelligence means that's intelligence that's smarter than the sum of humans, uh, is the way that is the way, uh, Eric Schmidt puts it. So if a machine can do everything we can do, I think it is different. I don't think, at least no one's told me what those jobs are because it boils down to those three elements. And why can't a computer it's already, I mean, it's already knows more than we do, right? So there's, there's nothing to be, there's no information that's hidden anymore, but there you go. All right. So let's do this. Let's go to break real quick. If AI reshapes the workforce, it also reshapes how cash flows. The key isn't fear it's positioning. So when we come back, and he's going to explain how smart investors prepare instead of becoming victims of it. And don't forget, go to stockcastbonus.com, download your free resources. This is how to build clarity in uncertain times. Stick around. We'll be right back. So far, it's been great. I needed a source where I could really enrich my education through stocks. I didn't really have an avenue for it. And it's helped me a lot. The simplicity has really gotten me on the track to where I enjoy the learning as well as it's really solidifying in my mind. And like, they're not just trying to sell you something. They really care about the people that are in the course, and they really do care about you and your personal goals and what you want to do is to help you and your family and whatever your goals are in life through that. So it's really been great. Welcome back to Rich Dads Stockcasts, Andy. So now that we understand the lay of the land somewhat right now, let's talk strategy. If AI changes the employment landscape, how should it, how should investors adjust? Well, I don't know. It depends on what people are doing now. I mean, people are, some people are doing the right things. Some people are doing the wrong things. So the first thing is, is to, I mean, I'm going to throw out opinions. I can't prove this. This is just my opinion. I'll prognosticate all the time, but I'm, I'm doing it now. It may just be the biggest thing is to participate. If, if a person is not trying to acquire an asset every week, if a person's not looking around every day for something to buy, they should adjust that because why do people go have jobs because that is less scary to them than buying, uh, borrowing money or buying, buying stocks or buying real estate. When you think about it, people have a lot of fear of buying a stock. Number one is what if I buy this stock and it goes down that, that keeps people out, they're afraid to buy something because it might go down in price and, and so working for money is, is less risky, it's more palatable for them. Well, what happens when, when joblessness begins to really start the impact and people start to realize, well, how long before my job, is it five years? Is it four years? Is it three years? How long before my job goes? And as that happens, the confidence investing will rise because here's the thing, are you going to compete against this technology or are you going to own it and, and, and use it? Right? So who's going to own the technology and use it? Businesses are, um, they're going to own it and use it. So you have this choice now of work for money or own the technology. I think owning the technology is going to win, you know, ownership is always one, it's just now it's more pronounced where, where human labor now, if it's becoming less valuable, ownership is becoming more valuable. So I think the first adjustment people make is if you're not buying an asset each week, start because ownership is going to be, I think the future, I think that's where you get to preserve your opportunity to be the best that you can be, you know, and become as wealthy as you'd like to become. Uh, I think that's the ticket. Ownership. Let's, let's dig in a little bit more cashflow, love cashflow. Right. It's such a great day. It's probably why everyone's listening. So how do we position ourselves to cashflow better, uh, while we have these, uh, technology shifts, you know, that's really important. Oh, no, keep going. I was just saying it's, it's way important. Well, yeah, it's, it's so important. I, I don't want to, here's, here's what I have in my mind. And maybe some people are thinking the same thing is when I first started investing in 2008 in real estate, you know, that was during a collapse. There was this big shift that was happening and maybe other people did the same thing. And I think, man, I wish I would have bought more right now as AI comes and you know, 20 years later, we're future pacing ourselves. What are we going to look back and say, man, I wish I would've done more of that thing. Uh, is it ownership, the cashflow? Like how do we prepare it? Like, how do we get better position ourselves better for cashflow? So the cashflow is really, really important. Here's why a lot of people, when they look at investing, they, they look at capital gain, they say, what's going to go up, is Bitcoin going to go up, is gold going to go up or is real estate going to go up? It's all obsessed with price, price, price, price, price. That's going to become less important because prices, I think prices are going to be huge. Some people predict the crash. I, I, I don't know if we can have a crash with free labor. I mean, if the labor's free, so people say, well, I want to buy something because I think it's going up. Not in this case. Um, you want to buy something that's going to provide you cashflow because I don't care how high those prices go. There'll be a point where I just don't think people are going to want to sell very much. Let me explain. Cashflow comes from things like dividends or writing options against your, your stock and writing options against them takes a lot more skill than just, you know, getting a dividend of course, but those are ways you cashflow and you, you divide up the profits amongst the owners. So if the business becomes more profitable, that's more profit divide amongst the owners. That's a better way to get paid. That's what Warren Buffett calls participation at the lowest level. Don't drive the truck at Coca-Cola. Don't bottle the drink at Coca-Cola. Uh, don't, don't work in the advertising department, have a new jingle, just own the company and get a dividend, just participate as an owner, lowest level of participation. Uh, so I, I think that's so much more important because if we have to sell things, it's kind of like, you know, Bitcoin, if, if Bitcoin goes back up, you know, to its high, when do you sell it? You say, I, you know, is there, if they say it's going to a million dollars, you shouldn't sell it, right? When do you sell it? And when do you actually get to use the money, but if you have something that produces cashflow, like a rental property or stock with a dividend distributions, dividends, disbursements, um, now you can live and that's how you get out of the rat race and, you know, pretty soon there'll be no rat race to run because we have AI rats to run all the, you know, AI can run it now. So it's an interesting time for sure. Very, very exciting for owners. Very, very, uh, unsettling for workers. Um, so be an owner. Be an owner. I love that. Get educated and be an owner. Now I, I, I want to take a spin on things and you know, there's 10, you know, we have the 10 commandments, right? You gave us a lot of thou shouts, but there's more thou shall not, what should we not be doing? Uh, going into this technology revolution as well, I, I think really is what's the mistakes. Yeah. What mistakes should we not be doing? Uh, I probably say number one is emotion and mindset and getting caught up in the headlines, but in your opinion, like what, what should we be aware of going forward? Well, I would say thou shalt not underestimate AI Eric Schmidt, who is the CEO, you know, at Google for a long time helped start, uh, you know, he was involved with all that Google brain stuff, you know, he's, he said some pretty, pretty brutal things. And he said, it's underhyped because it's underhyped that, that it's bigger than anyone even imagines. So I would say thou shalt not underestimate this. I don't think, I don't think people can really, I've never thought they can afford to sit on their laurels, but I think that's true now more than ever. I don't think people can afford not to learn about this technology and not to not to really appreciate how it's going to change human labor and the whole landscape it's, it's, it's the biggest thing ever. And a lot of people are not prepared for it. So prepare, learn how to buy the right stuff, learn how to invest rather than work for money because five, 10 years from now works what it looks like. It's going to change. That's going to change huge. And it is amazing that we're underestimating, even though that it's the number one Google search term is AI right now. So people are, and we're still, there's, there's understanding it, which everyone in the world can understand it, but then there's appreciating it. I think that's two different things. You can understand how something works and maybe not appreciate its gravity. And so everybody knows all AI is the chat, it's like a search engine chat sheet, you're asking questions. No, man, it, it, it does a lot of stuff So, um, you know, will it replace, uh, uh, you know, athletes, I don't know, you know, but it's replacing sculptures and painters and musicians and, you know, they see that little thing with Brad Pitt and, uh, and, uh, AI Brad Pitt and AI Tom Cruise in that fight. And the whole Hollywood industry is like, man, we're dead. We are freaking dead. Yeah. I saw that video and I was like, oh my goodness, this is crazy. I thought it was real at first. And, uh, and I was like, no, this is AI. Um, but it's going to, it's going to get to where we won't know the difference. It'll get there. I, oh, absolutely. I mean, I, it's funny that yesterday I took a long walk, it was nice and sunny outside the whole walk at chat GBT, having a conversation with chat GBT the whole time as I was walking, like it's my friends going through my goals, all that good stuff. I like arguing with it myself, but I'm argumentative. I, I argue with it all the time. Well, I have to tell it to be more pessimistic because it is a little optimistic too. So I was like, no, prove my plans wrong. I want to hear why it's wrong. It's very rhetorical. I will tell you that it's not a veridical, it, it is for profit, you know, the purpose is for profit. So it's very, it's very, very rhetorical. It seeks an outcome. It's more worried about the response to what it says than telling the truth. And that's, that's a concern actually is you got, if you don't live in the truth, you're in trouble. But anyway, the most important thing for investors own it, you know, own more, own more, because if labor becomes basically, or large part of labor is basically electricity and maintenance that's, that's productivity. And that should be gross domestic product increasing. So you want to own stuff. There we go. All right. Last question. If, if someone is worried about AI replacing jobs and including their own, what's one financial move they should consider doing right now? Well, I, I recommend that weekly meeting. I try to buy something every week, increase your holdings every single week, go to StockCast bonus, like we always talk about and get those resources for free and get started. You got to buy something and do something and put it in your asset column. Can't just learn about the asset column. Got to actually fill it with real assets. Very good. Love it. Well, that is a wrap for this episode. Technology always changes the landscape. The question isn't whether AI will disrupt jobs, it's whether you'll be positioned on the right side of that disruption and a big thank you to Andy Tanner for bringing clarity to a topic that's generating more emotion than. Common sense today. And if you want to prepare intelligently instead of reacting emotionally, go to StockCast bonus.com right now, you'll find free tools, education to help you to invest with discipline and foresight. And if this episode brought clarity, like, subscribe, share it with someone who's wondering what AI means for their future, you're not here by accident. You're building something that most people won't. So stay smart, stay invested and we'll see you next time.