The Future’s Arriving Faster than You Think. Now What?

Here are just a few of the practical examples of blockchain technology.

Scientists at the University of Washington School of Medicine have developed an automated system that uses robots to produce human mini-organs from stem cells.

 

WIRED’S Predictions for Bots, Blockchains, Crispr, and More

“SOMETIMES THE FUTURE shows up so fast it hits us in the face, like a brick wall in a VR headset. Other times the miraculous promises of technology—the rearrange­ment of our very DNA, the blockchain-­enabled toppling of Facebook—are frustratingly slow to arrive. But either way, the future is coming, and we should be ready. In the following pages we lay out a series of predictions, starting with some changes that are immediately upon us. Then, looking down the road, we get ever-bolder in our prognostications, year by not-so-far-off year. —The Editors

  • Cyberattacks Will Hit a Power Grid Near You
  • Robots Will Roam Abandoned Big-Box Stores
  • We’ll Share Our Emotional State as Willingly as We Share Our Photos
  • We’ll Crispr the Hell Out of Things—but Not, at First, the Way You Think
  • Robotrucks Will Crisscross the Country
  • You’ll Go to Work in Virtual Reality
  • The Blockchain Will Rebuild the Internet as We Know It
    https://www.wired.com ILLUSTRATIONS BY SAMMY HARKHAM

3 Things We Need to Do to Revive Innovation and Entrepreneurship in America

1. Start The Low Hanging Fruit
Clearly, the backbone of any innovation economy is entrepreneurship. Yet by a number of metrics, startup activity in America has faltered.
2. Renew Our Commitment To Science And Technology
We tend to think that the best technology is built by entrepreneurs in a garage somewhere or, possibly, in a corporate lab. Yet the truth is that most technology starts with federally funded research that later gets commercialized by the private sector. That’s the engine that drives innovation forward.
3. Build An Innovation Ecosystem For Hard Tech
Yet we often forget that the Silicon Valley model was developed for a specific industry at a specific time and is not transferable to every business sector. These are partnerships between government, academia and the private sector that focus on specific industries, such as chemical processing and advanced fabrics and offer state and local governments the opportunity to build entrepreneurial ecosystems.” https://www.inc.com/ Greg Satell

Why Amazon and Jeff Bezos Are So Successful at Disruption

“No other organization in the world better embodies the power of audacious and continual disruption than Amazon. This is the company that, upon its founding by Jeff Bezos in 1994, took on publishers and booksellers around the world. Along the way, it forced many incumbents to disrupt their business models or turn off the lights. At the heart of everything Amazon does is a short and simple mission statement: “Our vision is to be Earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.” There is always the risk that Bezos and his team will lose focus in their never-ending quest for the perfect disruption. But for the time being, at least, Bezos has not only sustained his position as the master of business disruption but has also become the richest man on the planet. The company he founded 24 years ago is set to achieve $200 billion in revenue sometime this year, sustaining an annual compounded growth rate of 41 percent.” https://www.entrepreneur.com John F. Furth Image credit: Michael Tullberg | Getty Images

Four Ways Crowdsourcing Drives Health Care Innovation

“Here are four examples where crowdsourcing can help drive healthcare innovation.
1. Medical Research And Discovery
When faced with a numbers problem, crowdsourcing may be researchers’ best hope for speeding up scientific discovery.
2. Raise Capital To Jumpstart A New Venture
RedCrow believes that investors “can come together and collaborate and take advantage of the wisdom and the experience of the greater crowd.”
3. Inspire Entrepreneurial Thinking
The device captures and transmits CHF data to the cloud, providing medical professionals with continuous diagnostic data that streamlines the feedback process, improving health outcomes.
4. Identify The Most Important Unmet Medical Need
Given the urgency to innovate in health care, crowdsourcing is one way to tap people outside your organization who can bring fresh ideas and thinking and quite possibly expedite the path to your goal.” David Goldsmith, Chief Strategy Officer WEGO Health www.forbes.com Shutterstock

Robots can now grow human organs

“Scientists at the University of Washington School of Medicine have developed an automated system that uses robots to produce human mini-organs from stem cells. According to Science Daily, the ability to mass produce “organoids” promises to expand the use of mini-organs in basic research and drug discovery. “Ordinarily, just setting up an experiment of this magnitude would take a researcher all day, while the robot can do it in 20 minutes,” Freedman tells Science Daily. “On top of that, the robot doesn’t get tired and make mistakes. . . . There’s no question — for repetitive, tedious tasks like this, robots do a better job than humans.”
https://nypost.com/ Raquel Laneri Composite; Shutterstock; iStockphoto

30+ Real Examples Of Blockchain Technology In Practice

“While Bitcoin and cryptocurrency may have been the first widely known uses of blockchain technology, today, it’s far from the only one. In fact, blockchain is revolutionizing most every industry. Here are just a few of the practical examples of blockchain technology.

  • Entertainment: KickCity, B2Expand, Spotify, Guts.
  • Social Engagement: Matchpool
  • Retail: Warranteer, Blockpoint, Loyyal
  • Exotic Cars: Bitcar
  • Supply chains and logistics: IBM Blockchain, Food industry, Provenance, Blockverify, OriginTrail, De Beers
  • Insurance: Accenture, Proof of insurance
  • Healthcare: MedicalChain, MedRec, Nano Vision, Gem, SimplyVital Health
  • Real Estate: BitProperty, Deedcoin, Ubiquity,
  • Charity: BitGive, AidCoin, Utopi
  • Financial Services: Bitcoin Atom, Securrency, Ripple, ABRA, Aeternity, Smart Valor, Circle”
    https://www.forbes.com Bernard Marr Adobe Stock

Plastic Bag Found at the Bottom of World’s Deepest Ocean Trench

“The Mariana Trench—the deepest point in the ocean—extends nearly 36,000 feet down in a remote part of the Pacific Ocean. But if you thought the trench could escape the global onslaught of plastics pollution, you would be wrong. A recent study revealed that a plastic bag, like the kind given away at grocery stores, is now the deepest known piece of plastic trash, found at a depth of 36,000 feet inside the Mariana Trench. Scientists found it by looking through the Deep-Sea Debris Database, a collection of photos and videos taken from 5,010 dives over the past 30 years that was recently made public.” https://news.nationalgeographic.com Sarah Gibbens A plastic bag floats through Manila Bay in the Philippines. PHOTOGRAPH BY RANDY OLSON, NATIONAL GEOGRAPHIC

We Depend on Plastic. Now We’re Drowning in It.

“If plastic had been invented when the Pilgrims sailed from Plymouth, England, to North America—and the Mayflower had been stocked with bottled water and plastic-wrapped snacks—their plastic trash would likely still be around, four centuries later. If the Pilgrims had been like many people today and simply tossed their empty bottles and wrappers over the side, Atlantic waves and sunlight would have worn all that plastic into tiny bits. And those bits might still be floating around the world’s oceans today, sponging up toxins to add to the ones already in them, waiting to be eaten by some hapless fish or oyster, and ultimately perhaps by one of us.” Laura Parker Photographs by Randy Olson

Steps:

(19) Anticipate the growing shifts in life and business. Nobody wants to swim upstream if the current is moving everything in the opposite direction.

Artificial Intelligence, Quantum Computing and the Future of Work

It will likely take a decade or so until some AI technologies become the norm.

Enterprise teams are content to chew through budgets on the wrong things because they worry they won’t receive the same monies the next year if they don’t.

 

3 Signs Your Innovation Budget Needs a New Approach.

Entrepreneurs and investors operate leanly. They know big-bang innovation rarely ever works. Instead, they take small, smart steps toward a solution without worrying about nitty-gritty features. In contrast, enterprise teams are content to chew through budgets on the wrong things because they worry they won’t receive the same monies the next year if they don’t. Talk about wasteful!  See your product or service from a scrappy, entrepreneurial viewpoint. Don’t waste time on that obscure API or flashy layout. If users want it, they’ll tell you during the prototyping phase. Spend where your product provides value, and innovation will follow. Far too many firms don’t connect the dots between their budgetary input and innovation output. It’s not as simple as spending more money. The truth is, it’s about agile planning, frequent failure, and regular reallocation of resources. The sooner your innovation budget accounts for those things, the better your balance sheet will look.”  BUSINESS.COM Emerson Taymor Image credit: lOvE lOvE/Shutterstock

Why Innovation Tends to Bypass Economics.

Many of these problems can be traced back to a basic economic distinction: the difference between invention and innovation. Invention is defined as the discovery of a new exciting idea, product or approach. Innovation means applying that idea through changes in operating models and mindsets. Too many areas today contain the invention but not the innovation. This harmful decoupling is driven by a combination of biases,  blind spots and inertia (knowing you need to do something different but ending up doing more of the same). In too many cases, the flaw has less to do with the need to come up with a brilliant idea, and more a matter of embracing it and adapting accordingly. That requires being curious, open-minded, willing to listen, open to experimentation, creating safe zones for candid discussions and learning from failure. Economics has persistently failed to address this fundamental — and solvable — problem. The gaps between inventions and innovations have led to too many foregone welfare-enhancing opportunities for individuals, companies, governments and society.” newsmax.com Mohamed El-Erian Bloomberg View One Photo | Dreamstime.com

This Is How to Get Started With AI When the Only Thing You Know Is the Acronym.

Autonomous AI, however, is capable of learning certain tasks that require complex decisions to be made. Autonomous AI often receives the most attention because it makes innovations like self-driving cars possible, but at least in the short term, the business world might have more use for AI’s organizational and triage capabilities. Whatever you choose to do with AI, don’t delay. “AI is going to revolutionize the world more than any other tech advancement of the past 30 years,” Mark Cuban remarked at the recent Upfront Summit in Los Angeles. Like the internet, AI will produce a rich-get-richer environment, and those who get a head start are going to run the table.” So far, the following areas of AI show particular business promise: 1. Predictive analytics. 2. Computer vision. 3. Natural language processing.entrepreneur.com Sourav Dey Image credit: Photographer is my life | Getty Images

AI and the Future of Work.

It will likely take a decade or so until some AI technologies become the norm. While that provides plenty of lead time for the transition, few companies are taking action now to train their workers. Another little-noticed problem is that the AI systems themselves are being created with data and algorithms that don’t reflect the diverse American society. Accenture research shows business leaders don’t think that their workers are ready for AI. But only 3% of those leaders were reinvesting in training. At a Davos meeting held by Accenture, Fei-Fei Li, an associate professor at Stanford University and director of the school’s AI lab, suggested using AI to retrain workers. “I think there’s a really exciting possibility that machine learning itself would help us to learn in more effective ways and to re-skill workers in more effective ways,” she said. ‘And I personally would like to see more investment and thought going into that aspect.‘” wired.com/wiredinsider/  WIRED Brand Lab for Accenture. GETTY IMAGES

A Simple Tool to Start Making Decisions with the Help of AI.

Clarifying these seven factors for each critical decision throughout your organization will help you get started on identifying opportunities for AIs to either reduce costs or enhance performance. Here we discussed a decision associated with a specific situation. To get started with AI, your challenge is to identify the key decisions in your organization where the outcome hinges on uncertainty. Filling out the AI Canvas won’t tell you whether you should make your own AI or buy one from a vendor, but it will help you clarify what the AI will contribute (the prediction), how it will interface with humans (judgment), how it will be used to influence decisions (action), how you will measure success (outcome), and the types of data that will be required to train, operate, and improve the AI.hbr.org Ajay AgrawalJoshua GansAvi Goldfarb MARTIN HOLSTE/EYEEM/ GETTY IMAGES

Physicists Just Discovered an Entirely New Type of Superconductivity: No one thought this was possible in solid materials.

One of the ultimate goals of modern physics is to unlock the power of superconductivity, where electricity flows with zero resistance at room temperature. What they found was odd – as the material warmed up from absolute zero, the amount that a magnetic field could penetrate the material increased linearly instead of exponentially, which is what is normally seen with superconductors. After running a series of measurements and calculations, the researched concluded that the best explanation for what was going on was that the electrons must have been disguised as particles with higher spin – something that wasn’t even considered as a possibility for a superconductor before. While this new type of superconductivity still requires incredibly cold temperatures for now, the discovery gives the entire field a whole new direction.sciencealert.com FIONA MACDONALD (Emily Edwards, University of Maryland)

Australian Scientists Just Solved One Of The Biggest Quantum Computing Challenges Using Material Found In DVDs.

In quantum technology, information is carried on quibits, single photons. For the quibits to be actually useful in quantum technologies, though, they need to be produced by Single Photon Emitters that work at room temperature (it’s just practical, really) and at telecom wavelength (the most efficient way to transfer information via optical fibres) all at once. It wasn’t easy, but they’ve done it. Those plucky Australian Scientists have gone and done it. And they did it using a material found in DVDs.” www.gizmodo.com.au  Rae Johnston Image: NASA

Feynman 100.

”’Dick Feynman relished the pleasure of finding things out, and he had a remarkable knack for conveying the excitement of science to a general audience,’ says John P. Preskill, Richard P. Feynman Professor of Theoretical Physics at Caltech. ‘We hope this event will capture some of that boundless curiosity and sense of fun that made Feynman such a treasured colleague.’ The event will be divided into two days, with an evening celebration on Friday, May 11, and a scientific symposium during the day on Saturday, May 12.http://m.caltech.edu/news/remembering-richard-feynman-81875 Credit: Caltech Archives  Whitney Clavin

Einstein and the Quantum.

The notion of an underlying quantum probability proved to be too much for Einstein (and Schrödinger as well), who would now turn his back on the new quantum mechanics forever to pursue his dream of a causal unified field theory. In the end, Einstein would never realize this final dream, and the “strangeness” of quantum mechanics continues with us today.https://blogs.scientificamerican.com/observations/einstein-and-the-quantum  Credit: Getty Images Scott Bembenek.

Steps:

(19) Anticipate the growing shifts in life and business. Nobody wants to swim upstream if the current is moving everything in the opposite direction.

Driving Radical and Incremental Innovation

This chart shows every major technological innovation in the last 150 years — and how they have changed the way we work.

I had been struck by how the artificial intelligence (AI) seemed to use the same principles many of these successful Silicon Valley tech giants were using to induce innovation

 

Breakthrough Technologies. 150 Years of Innovation. Emerging Intelligent Machines. Squeezing Water Out of Desert Air. Future of Mobility. Digital Innovation Frameworks. AI and Radical Innovation. Enjoy!

10 Breakthrough Technologies 2018

Artificial Embryo

What we’re really looking for is a technology, or perhaps even a collection of technologies, that will have a profound effect on our lives. 3-D Metal Printing, Artificial Embryos, Sensing City, AI for Everybody, Dueling Neural Networks, Babel-Fish Earbuds, Zero-Carbon Natural Gas, Perfect Online Privacy, Genetic Fortune Telling, Materials’ Quantum Leap.” MIT Technology Review  photo credit UNIVERSITY OF CAMBRIDGE technologyreview.com/lists 

This chart shows every major technological innovation in the last 150 years — and how they have changed the way we work.

Steve Jobs with iPhone Innovation

In its recent Equity Gilt Study, which is a massive annual report by Barclays chronicling the bank’s thoughts on important topics in finance and economics, the bank focused heavily on new technologies and particularly on cryptocurrencies and artificial intelligence. Included in the report was a breakdown of how productivity and output have developed over the course of the last century and a half, crossed with the major innovations that have come in that time.” Will Martin. REUTERS/Alessia Pierdomenico. businessinsider.com

Unleashing The Power Of An Innovative Mind.

With the advent of latest technologies of Internet of Things (IoT), robotics, rapid prototyping, artificial intelligence and big data analysis, humans worldwide are creating thousands of innovations in the form of smart machines. And these intelligent machines are not only beginning to perform human tactical tasks more efficiently but also are being trained to operate with human intelligence. However, humans have a unique power, the power of thinking, the power of innovation: encompassing intellectual, emotional and spiritual intelligence.” Dr Ayesha Chaudhary. Photo Credit : ShutterStock  http://businessworld.in  

Researchers develop device that extracts water from desert air.

Researchers at MIT and UC Berkeley have developed and now tested a device that can extract water out of the air even in the driest of climates. The team proposed the device in a Science article last year and now they’ve improved the design and tried it out in Tempe, Arizona. While there are a few ways to pull water out of the air, most come with significant limitations. They usually require humidities upwards of 50 percent and some need a lot of energy input to make them work. The research team’s latest design, however, works passively, without the need for energy input, and can work in places with humidity as low as 10 percent.” Mallory Locklear. Kim et al. engadget.com 

Bill Gates Thinks These 6 Innovations Could Change the World.

(Photo by Yana Paskova/Getty Images)

Better Vaccine Storage. Gene Editing. Solar Fuel. mRNA Vaccines. Improved Drug Delivery. Artificial Intelligence. Of all the innovations on this list, this one seems like the surest bet to transform the way we live. Although AI will create new challenges that we need to address – including how to retrain workers who lose their jobs to automation – I think it will make our lives more productive, more efficient, and easier overall.” Bill Gates. time.com 

Disruption vs. Innovation: Defining Success.

Innovation or rapid evolutionary innovation, as I define it, is turning your dreams into reality, or manifesting what you envision. Disruptive companies are those whose innovations or innovative processes completely change the market they serve. They might use an innovation to accomplish their goals, but not all innovations are disruptive. In other words, not all innovations cause a business or market to rapidly evolve. I firmly believe that all businesses must evolve over time in order to stay competitive in the marketplace, and that has shown to be true when it comes to disruption. Companies need appreciable time for their services to evolve and react to the needs of the market.” David Meltzer. Image credit: Natali_Mis | Getty Images entrepreneur.com

Forces of Change: The Future of Mobility.

Deloitte Insights

The result is the emergence of a new ecosystem of mobility that could offer faster, cheaper, cleaner, safer, more efficient, and more customized travel. Though there is some uncertainty, in particular about the speed of this transition, a fundamental shift is prompting a move away from personally owned, driver-operated vehicles and toward a future mobility system centered around (but not exclusively composed of) driverless vehicles and shared mobility.” Deloitte Insights theatlantic.com

2018 framework to understand digital innovation.

The challenge with distributed teams and tools, and with architectures that rely on distributed solutions more broadly, is managing the complexity of having so many moving parts. There is a hidden cost to such flexibility: it requires a lot of organizational coordination and integration. This can be confusing and costly for organizations and teams that lack the experience or commitment to put the right process in place. This is especially through for companies that start their digital transformation journey. New techniques will be developed in the near future, to ‘orchestrate’ the entire innovation process, from idea to shippable product, across all the different stakeholders. We’re already starting to see 2 types of orchestration capabilities emerge.” Andries De Vos. hackernoon.com 

A Secret Formula For Radical Innovation: Lessons From Silicon Valley.

I had been struck by how the artificial intelligence (AI) seemed to use the same principles many of these successful Silicon Valley tech giants were using to induce innovation—self-organization, simple rules, a generalist approach, diversity of input, speed of execution, and profuse experimentation (I gave a TEDx talk on this topic and wrote an article about it). I asked him if his company implemented these principles by design or coincidence. Employees must self-organize meaning they cannot be micromanaged, rather should be given broad boundaries using simple rules – if A happens, do B. In the process, they learn from trial and error and radical innovation happens when these errors accumulate and break through a critical point.” Sunnie Giles. Shutterstock forbes.com 

IBM has created a computer smaller than a grain of salt.

Specifically, this computer will be a data source for blockchain applications. It’s intended to help track the shipment of goods and detect theft, fraud, and non-compliance. It can also do basic AI tasks, such as sorting the data it’s given. According to IBM, this is only the beginning. “Within the next five years, cryptographic anchors — such as ink dots or tiny computers smaller than a grain of salt — will be embedded in everyday objects and devices,” says IBM head of research Arvind Krishna. If he’s correct, we’ll see way more of these tiny systems in objects and devices in the years to come.” Monica Chin. Image IBM mashable.com

Steps:

(19) Anticipate the growing shifts in life and business. Nobody wants to swim upstream if the current is moving everything in the opposite direction.

Appreciation

Why swim upstream, if the current is moving everything in the opposite direction, right?”

Using economic cycles and bubbles, demographic shifts and a way of sizing up quality-of-life communities to live and invest in.

 

An excerpt from Book Two in “The Knowledge Path Series” dedicated to helping you make more money from a lifestyle businesses you’re truly passionate about.

Peak around the corner.

About the time of my own mid-life crisis I discovered the author Harry Dent.

Bubbles Bursting

He introduced me to economic cycles and bubbles, demographic shifts and a way of sizing up quality-of-life communities to live and invest in.

Any Poehler’s Leslie Character

Amy Poehler’s fictitious Pawnee, Indiana didn’t grow on me until season five when neighboring Eagleton, an ultra-affluent town, was written into the script.

In the sixth season the town of Eagleton, involved in a longstanding rivalry with Pawnee, goes into bankruptcy and is absorbed by Pawnee.

Fictitious Pawnee, Indiana

An effort spearheaded by Leslie after she sees no other way to save the town.

Having lived in a small Indiana college town on a bluff overlooking the Ohio River for four years and, then in another rural college town for my masters degree, I sought higher quality-of-life choices in a region that wasn’t so topographically flat.

But where?

  • And what if I discover after I move that I don’t like it?
  • What do I need to know ahead of time?
  • What if I chose a new Eagleton somewhere else and it files bankruptcy?
  • That can’t be good – except for Amy Poehler, right?
  • Nearly anybody can forecast the future.

How do you know which ones will come true?

I set up “The Journal of 2020 Foresight” after researching the top 100 trends and predictions from a variety of technical, economic, social and political sources.

And, knowledge labs to monitor key indicators in 5-year timelines –

  • 2003 to 2008,
  • 2009 to 2014 and
  • 2015 to 2020.

Why swim upstream, if the current is moving everything in the opposite direction, right?

The first knowledge lab, conducted during the 5-year timeline between 2003 to 2008.

Top Forces, Trends and Predictions

We began tracking some of Dent’s forecasts, especially the following four out of our original 100:

“4 – Basic innovation in communication technologies is allowing more people to relocate their homes to small towns and exurbs, and telecommute to business. 

3 – The baby boomers are moving into their vacation-home-buying years, which, in combination with the first trend, will stimulate demand for property in attractive resort towns. 

2 – The echo baby-boom generation is now moving into its household formation years, which will stimulate demand for apartments and rental property in the cities, and has already caused commercial property in these areas to appreciate, 

1 – There is a broad geographic migration towards areas of the country with warmer climates. You can expect the first three trends to be accentuated in the southwestern United States. “

Back to Harry Dent’s economic cycles and bubble forecasts.

He included a bubble wildcard as a fifth forecast.

The mother-of-all depressions, arriving sometime in the 2009 to 2015 time horizon.

Which presented itself as the mother-of-all Great Recessions.

More on that later.

The Warm Migration Trends
  • But, let’s say you decided to investigate opportunities triggered by the warm climate migration?
  • How do you explore the possibilities?
  • How do you go about it?

Dent borrowed from innovation, growth, and maturity product lifecycle curves to describe the potential for community growth and real estate appreciation.

S-Curve of Growth

You might say he spoke my language coming from my career in high technology.

  • Innovation – .1%, 1% to 9%.   
  • Growth – 10% breakout to 25% and from 50% to 75% and 
  • Maturity then to 90% – 99% percentiles.

What if the lifecycle model could be applied to resorts – estimating investment appreciation and community growth?

How does that work?

“The time it takes for an idea to move from a .1% idea to a 1% prototype, and finally to a 10% niche in the marketplace (Innovation), is roughly the same amount of time it takes for that niche to accelerate up the curvilinear curve of market acceptance through 50% to 90% (Growth).”

In the innovation stage, the risk is high and the potential reward could be astronomical.

If you found a small pristine mountain community at this stage and moved or invested in a vacation home on a lake, you may see your small down payment and mortgage pay off handsomely decades later.

Or not.

  • No guarantees.
  • Buy low, sell high.
  • As an investor, you’d want to find that goldilocks moment.

You wouldn’t want to invest too soon and wait forever, but definitely not too late when it is way too expensive to buy.

Pick sometime in the early growth stage but before the late growth phase turned into maturity.

When everyone else has heard of the premier destination.

As the mix of community residents begins to shift from High Country Eagles to Wireless Resorters.

You might find Pawnee attractive, but you probably missed the golden opportunity to move to Eagleton.

And by “season six” you’d be glad you did.

In priority order for finding the first three driving trends in one place – broad communications, Baby Boomer vacation-home buyers and echo-boom (Gen-Y, Millennials) entering the rental market, he lists:

  • Resort Towns
  • Small College and University Towns
  • Classic Towns
  • Revitalized Factory Towns
  • Exurbs
  • Suburban Villages
  • Emerging New Cities
  • Large-Growth Cities
  • Urban Villages

What if you’ve already built your mobile knowledge company, “Mobile KnowCo” and weren’t bound by your current fixed location?

How would you know if you found a town to fit your needs?

On your next vacation Harry Dent said to keep your eyes open for:

  • “A new look that includes intelligent town planning for increased human interaction; and abundant open space; 
  • flexibility in home design; 
  • planning for safety; shared facilities; and high-tech communications infrastructure.”

With those criteria in mind, we initiated coverage of “Resort Towns” in western United States like…

And, continued to aggregate lists of “Best Places” that fit Dent’s other eight categories of towns and cities.

Southwest Region from Wikitravel

From those thousands, we focused on and curated only those from six western and island regions:

  • Hawaii and other Tropical Regions;
  • Texas Regions;
  • Southwest Region (Arizona, Nevada, Utah and New Mexico);
  • Pacific Northwest Region (Washington and Oregon);
  • California Regions; and of course my favorite
  • Rocky Mountain Region (Colorado, Montana, Idaho and Wyoming).

But guess what?

All vacation destinations aren’t equally attractive and the reasons why aren’t obvious until you dig in and find out for yourself.

So, the only real question becomes, which one is right for you?

Especially if you longed for a fresh start.

Or were forced to take one.

(22) Selectively evaluate the best quality-of-life communities to live in and weigh the tradeoffs of risk and rewards for accruing real estate appreciation along a progression of rural and small towns that meet what your pocket books can afford.

On The Verge of a New Era

We are entering a new era when the interests of the environment and the economy become aligned. The one fly in the ointment is energy storage.

If new research is correct, this could be the best it’s going to get for humanity in terms of physical fitness.

 

Equality Neutrality

Here is how tech companies are responding to the repeal of net neutrality. “Google is a proponent of net neutrality and has repeatedly voiced its support of it in the past. In a statement released to news organizations after the vote, Google pledges to continue to follow the policies of net neutrality. Facebook is another company that voice support for strong net neutrality regulations. Many fear that with the repeal of net neutrality, world-changing companies like Facebook may never be able to sprout up. Facebook’s COO released the following statement after the vote (more) …” androidauthority.com

AI Learning Machines

5 Key Artificial Intelligence Predictions For 2018: How Machine Learning Will Change Everything. “All the indicators show that investment into the development and integration of AI and, in particular machine learning, technology is continuing to increase in scale. And importantly, results are starting to appear beyond computers learning to beat humans at board games and TV game shows. I expect 2018 to provide a continuous stream of small but sure steps forward, as machine learning and neural network technology takes on more routine tasks.” forbes.com

Inflection Point

2018: The Year to Shift to a New Era of Innovation. “Today we are at an inflection point. Costs for renewables have been dropping an an incredible rate and will become considerable cheaper than fossil fuels over the next decade. At the same time, electric cars are on pace to become cheaper to use than gas powered ones by 2022. We are entering a new era when the interests of the environment and the economy become aligned. The one fly in the ointment is energy storage. The current technology, much like Moore’s law, is nearing theoretical limits and advancement will likely slow to a crawl in the next ten years. So it is essential that we come up with at least two new battery chemistries — one for transportation and one for the grid — in the near future.”  inc.com / Getty Images

Neural Magicians

To Harness Creativity, You Need to First Understand Its Neural Magic. “Anthony Brandt is a composer who with leading neuroscientist David Eagleman has done a deep dive study into how human creativity happens. They’ve collected their thoughts into a new book The Runaway Species: How Human Creativity Remakes the World, which unravels the interplay of art, neuroscience and evolution, while celebrating the special thing that is human innovation.” entrepreneur.com

Cell Adoption

Potential “master switch” could help immune system fight cancer. One way scientists are manipulating the body’s natural defenses is called adoptive cell transfer, which involves extracting a patient’s own T-cells, genetically modifying them to target the specific proteins that mark cancer cells, and then injecting them back into the patient. This kind of therapy is proving promising against some specific cancers, such as blood and bone marrow, but not as effective in targeting cancers with solid tumors. One of the key mysteries in this regard that scientists haven’t been able to uncover is exactly what mechanism directs the T-cells from home base to specific compromised tissues. newatlas.com

Infection to Immunity

We Finally Know How Our Immune Cells Remember Diseases For So Long. A new study has filled in missing details on the steps our body takes to remember pathogens, finally revealing the steps our immune cells take to preserve a reference library of past battles. Scientists from the University of California, Berkeley, used a hydrogen isotope to label white blood cells inside volunteers, and tracked a specially selected virus from infection to immunity in order to record significant steps in the immune process. The big picture of adaptive immunity and our ability to remember and eliminate specific pathogens has gradually built up over the past century.  sciencealert.com

Genetic Plateau

Humans probably won’t ever live forever — and new genetic discoveries might explain why. There’s a limit to the human lifespan and physical abilities, and a multidisciplinary team of researchers say that we may have already reached this threshold. Sadly, it’s one that we may not be able to exceed. Indeed, signs point to a plateau in maximum genetic and biological limits for a person’s age, height, and physical capabilities. This first-of-its-kind study, that covers over 120 years worth of historical information, was published recently in the journal Frontiers in Physiology. businessinsider.com

Biological Limits

Humanity Has Peaked And It’s All Downhill From Here, Says Study. Sorry, folks. This is it. If new research is correct, this could be the best it’s going to get for humanity in terms of physical fitness. According to the paper, humans have biological limitations – and there may be no more improvements for the species. And it’s partially our own fault. Our effect on the environment, including pollution and climate change, is having a negative impact on our biological limits. What the review has concluded is that lifespan, physical performance, and height – which were steadily rising throughout the 20th century – have plateaued over the last three decades, since around 1980.  sciencealert.com

Limits to Success

Decade Since Recession: Thriving Cities Leave Others Behind. That said, for all the economic might the top-flight cities have gained in the past decade, many city officials and business leaders have become concerned that their success is running up against limits. Surging home prices and rents have made housing unaffordable for many. With cities like Seattle and San Francisco choked with traffic, engulfed by homeless people and requiring ever-larger incomes to live comfortably, quality of life may be at risk. In the Western United States, inflation reached nearly 3 percent in October compared with a year earlier, according to government data. By contrast, inflation rose just 1.5 percent in the Midwest and New England. realclearmarkets.com

Steps:

(19) Anticipate the growing shifts in life and business. Nobody wants to swim upstream if the current is moving everything in the opposite direction.

What Lies Ahead?

So, the forecast remains turbulent with plenty of volatility

Market Cycles
Harry Dent years before even predicted the “Mother of all Depressions” lasting well into the decade beginning in 2010 and lasting until 2020.

An excerpt from Book Five in “The Knowledge Path Series” dedicated to helping you find the place of your dreams in the Sierra Mountain resorts.

Part Two in a 3-Part Series.

Part One: Tomorrow

Please remember.  Check in with your financial planner as the following trends and opinions change and may have before you read this.

What about the 25 year old Millennials?

Many, if not most of the college educated are burdened by student loans and high rents that eat up a huge share of income.

Good news for landlords, probably not so much for the starter home demand, yet.

But, for those who successfully found good employment with a fresh start on a career path, even if their pay rises they’re reluctant to  spend — or take a chance on a new job — so, don’t count on a broad positive impact on the economy just yet.

Their risk aversion may be one of the biggest overhangs from the Great Recession.

Look, they witnessed the financial woes their parents or friends endured after the 2008 crash.

While the demographic trends probably aren’t as negative for growth, you should account for them and prepare to adjust in any long-term scenarios you construct.

Obviously they’re the early adopters for companies including Airbnb and Uber..

And as another expert cautioned …

It’s impossible to know in advance how many business ideas will spring up to disrupt or even replace existing industries.

The period after the 2008 financial crash turned out to be pretty decent for the U.S. economy.

Many economists and financial news channel pundits peddled dire forecasts in 2009 and 2010.

Harry Dent years before even predicted the “Mother of all Depressions” lasting well into the decade beginning in 2010 and lasting until 2020.

Instead, by the end of 2015 …

  • The official unemployment rate is back to 5%. 
  • Corporate earnings reached record highs. 
  • And a venture capital boom has funded thousands of promising start-up companies.

But, what lies ahead?

Have we celebrated too soon?

  • The contrarian message appears more reasonable.
  • The economy and markets face challenges that could make the next five years very different.

Like what?

  • Don’t expect more than “low single digit returns on stocks and bonds.”
  • The annualized investment returns will be lousy as the January 2016 steep plunge foreshadowed.
  • Were talking 4% to 4.5% roughly half of what wealth managers plan for their clients.

And, that’s through the end of the decade

So, the forecast remains turbulent with plenty of volatility.

News at 11.

Will we ever return to tried and true savings vehicles for the Baby Boomers hitting retirements like their parents swore by?

One economist says don’t hold your breath,

“As for bonds, with yields so low it’s mathematically impossible for fixed-income securities to earn high returns.” 

How is that possible?

Five years ago a 10-year U.S. Treasury note was paying 3.5% in annual interest. 

Now, new notes pay 2.11%. The drop in yields means older, higher-yielding bonds have risen in value, boosting their “total return” — interest plus principal change.

Yeah, so?

But with the Federal Reserve’s decision in December to begin raising short-term interest rates from near zero, it becomes more difficult to imagine longer-term rates declining significantly, barring a new recession or global shock. 

Here’s what hurts my brain when wrapping my head around bonds.

  • If longer-term rates stay where they are, all you earn is the interest. 
  • And if market rates rise, older bonds will fall in value, offsetting some or all of your interest earnings.

Steps:

(6) Anticipate changing circumstances and economic cycles.

(7) Persist and pivot to navigate external threats and opportunities.

(17) Sketch out your trajectory in 5-year time frames.  Will we fall into another recession?  Absolutely.  Will you be ready this time with future-proofed strategies?

(19) Anticipate the growing shifts in life and business. Nobody wants to swim upstream if the current is moving everything in the opposite direction. Clue your fans in.

Real Estate Investment Types

Once you’ve got residential properties under your belt, the next easiest is investing in and managing industrial and commercial properties.

Renting Your Residential Properties
If the path of development stalls or turns in another direction, your bet on higher appreciation bailing out your investment turns out to be a sucker bet.

 

An excerpt from Book Five in “The Knowledge Path Series” dedicated to helping you find the place of your dreams in the Sierra Mountain resorts.

Part Two in a 5-Part Series: Is An Investment in Real Estate Right for You?

Part One: FOMO

Real estate experts recommended multifamily properties as a good first step while skipping raw land that only produces expenses not income until you sell.

By comparison multifamily rental units provided steady income.

Multi-Family Rentals
  • Normally rent checks came monthly by mail while the value of the unit appreciates.
  • Of course, now in a frictionless economy, they can be directly deposit funds into your account without delay.
  • Another example of, with the right insight, a fully functioning Knowledge ATM.
  • On the downside you’ll need to deal with problem tenants from time to time.
  • Depending on the age and condition of the property you’ll begin to incur high repair costs that will eat into your profits at some point.

Once you’ve got residential properties under your belt, the next easiest is investing in and managing industrial and commercial properties.

Renting Commercial Properties
  • The experts caution about jumping into large properties, advising beginners to start small.
  • Incomes tend to rise and fall with the ups and downs of the economic cycles.
  • When conditions favor your property and your vacancies are low you can generate large incomes with a full building.

What about shopping centers and strip malls?

Strip Malls and Shopping Centers
  • Like commercial properties in good times which generate high incomes with centers and malls you can share in the gross receipts of your tenants.
  • And, with the right location your land can appreciate quickly.
  • But, there’s a downside.
  • Buying can be complex and difficult to negotiate due to the property’s high cost.
  • So, zero cash deals can be extraordinarily hard to work out.
  • And, remember sophisticated tenants want to negotiate their best deals which will eat into your profits.

What’s the attraction to raw land?

Low Barrier for Entry with Raw Land
  • In great areas it can appreciate very quickly as development approaches your location.
  • And, before the path of development becomes common knowledge you may be able to tie up property for as little as $ 1.00 down.
  • However, without the strong appreciation probability, raw land requires improvements like streets, sewers, electricity and other utilities — all costs.
  • So it rarely gives you a positive cash flow, especially after the tax burden is factored in.
  • If the path of development stalls or turns in another direction, your bet on higher appreciation bailing out your investment turns out to be a sucker bet.
Initial High Cost of Entry in Self Storage

Likewise, building self-storage warehouses incurs out of pocket expenses.

But once they are built, or if you buy existing units, you can enjoy positive cash flow with little overhead and low operating expenses if you keep your vacancy rate low.

Steps:

(22) Selectively evaluate the best quality-of-life communities to live in and weigh the tradeoffs of risk and rewards for accruing real estate appreciation along a progression of rural and small towns that meet what your pocket books can afford.

(34) On your visits look for any newer developments that may trigger changes in neighborhood patterns. New construction in or around the neighborhood? Major regional economic adjustments? Transition from households with children to ones that are empty nests? Rezoning, and dramatically rising/falling land values?

Two Ways to Stay Home

Part Four in a 4-part series weighing the pros and cons of investing in real estate over the course of a life time.

Peace of Mind that Home Equity Affords
Pulling the trigger on any major decision like this one with consequences (intended or unintended) will significantly impact the rest of your life.

Back in February of 2007 I read a FidelityReport published by Fidelity Research Institute that compared unlocking equity for investments to risks and relative returns of stocks, bonds and cash.

NOTE: Don’t take what follows as financial advice. If you haven’t consulted professionals, well, what are you waiting for? Do so at once!

Part One

Part Two

Part Three

DOUBLE AND TRIPLE CHECK YOUR SCENARIOS WITH A FINANCIAL PLANNER WHOSE FIDUCIARY DUTY IS TO YOU!

Option Four – Stay in your home, invest your equity

Two Tactics.

Reverse Mortgage or

Home Equity Line Of Credit (HELOC)

HELOC scenarios:

HELOC rate is 8.0%; this is based on a loan for 80% of the home’s value and is .25% below prime (Source: Countrywide).

Assume that there is one refinance after 10 years.

HELOC mortgage interest deduction is limited to the interest on the first $100,000 of the loan.

Assumes home is sold off to pay the loan; if another mortgage is taken out, transaction costs could be lower. 

Pros: 

  • Allows both couples to live in their home.

    Enjoying the Fruits of their Labor
  • Works well when the home continues to appreciate in value.
  • The HELOC debt is covered by the increase in value.
  • After paying off the credit line heirs receive substantial legacies

Remember both couples could deduct the mortgage interest by itemizing on Federal taxes attributable to the first $100,000 of the loan.

HELOC transaction costs are also quite low at about 1% of the loan and the credit line offers flexibility in timing any drawdown.

Cons: 

  • The costs and responsibility of home maintenance.
  • As cost of living expenses increase both couples may be tempted to spend down more than the initial 80% debt value ceiling.
  • Or, as their home value increases they may  continually ramp up their debt.

    Risk of Foreclosure

Of course, they will need to make regular monthly payments on their HELOC or face the risk of foreclosure.

Reverse Mortgage scenarios:

Assumes that proposed legislation is enacted that would change housing limits to a national limit of $417,000.

Limit increases at 4% annually.

Assume current interest rate of 7% – includes the 6.5% interest rate and the .5% insurance premium.

Monthly servicing fee of $30/month is added annually.

This scenario assumes that interest rates stay fairly constant.

Reverse mortgage interest deduction is limited to the interest on the first $100,000 of the loan; accrued interest is deductible by the heirs in the year that it is paid. 

Leaving a Legacy for Heirs

It is assumed that the heirs will be able to deduct the mortgage interest in the year that it is paid, and that the heirs will be able to utilize $100,000 of that interest deduction. 

The utility of the deduction will depend on the individual tax situation of the heirs.

Assume home is sold to pay off loan; if another mortgage is taken out, transaction costs could be different.

Reverse mortgages

Enable these couples to receive regular payments (actually loans) secured against the value of their homes and be assured that they can remain in those homes for life. 

Pros: 

  • Homeowners live in their homes and tap into their substantial amount of equity.
  • Depending on their age.
  • Home value.
  • Prevailing interest rates.
  • As long as they live in their home, life is good.

No payments need to be made on the reverse mortgage (though they must, of course, cover the home’s routine expenses and maintain it). 

Better still, loan payments to the borrower may feel — and function — like ordinary income, but they are not taxable income. 

Under current law, payments received by a reverse mortgage borrower don’t count towards Medicaid resource limits provided they are spent each month and not accumulated. 

Here’s the bonus while you live in your home.

They don’t count toward the income threshold for determining whether regular Social Security payments are subject to federal income tax. 

Social Security Income and Taxes

Also, reverse mortgages do not count toward the $500,000 – $750,000 home equity test for nursing/long-term care assistance under Medicaid. 

Here’s the bonus for your kids.

Heirs to a home carrying reverse mortgage debt do sell, they should be able to deduct the mortgage interest (subject to any applicable limitations).

Cons: 

During 2007 Fidelity cautioned.

  • Because the reverse mortgage market is still emerging, upfront costs are much higher than a HELOC — up to several percent of the loan value. 
  • The product is complex and the amount available for lending is inversely correlated to interest rates — which are difficult to predict and impossible to control.

Are these five options the only scenarios for both couples?

It is possible to combine these strategies in various ways. 

Both couples could choose to combine the first scenario, 

Sell Home and Buy a Less Expensive Home, with either a HELOC or a Reverse Mortgage on the new home. 

Why would this be in their best interests?

They could generate incremental cash flow. 

Heirs would benefit from the new home.

Equity could be extracted for their comfort or future investments

But, here’s the kicker.

  • Time to age 94.

    How Long Before Age 94?
  • One couple’s planning horizon is 32 years while the other is just 19 years.

What’s yours?

You need to take into account the difference in possible home values, cash flows and other variables.

Think of it this way — if these couples chose one of these options in the (year 2016) — the results we project would be realized for the Walkers (by 2035)… the Smiths would not see the results the table suggests until (2048 )— the last year of their 32-year planning horizon. 

Since this age and timeframe difference is so substantial, the only meaningful comparisons to make are among each couple’s own options. 

Takeaways?

Remember, don’t rely solely on your home equity as a significant retirement funding source.

  • Recurring cyclical downturns in real estate can inflict severe damage.
  • Investment returns on residential real estate have been lower historically than
    Nest Egg

    on stocks and bonds.

  • If you pour all your funds into your home you’ll have nothing left to invest for higher marginal returns.

Don’t count out the emotional components of owning a home.

The emotional aspects of homeownership can also present significant barriers to the use of home equity for retirees.

Whatever the financial case, the emotional investment involved can make it hard to sell, rent or float debt on a home after a lifetime of paying off mortgages — even if that strategy makes sense financially.

The comfort of living in a familiar home as one ages or the desire to leave the home’s full value to heirs compound many retirees reluctance to tap their home equity by either sale or leverage.

If you’ve planned well and acquired significant equity when reaching retirement age you’ve got multiple options for mobilizing it.

Decisions on precisely how to tap home equity require careful analysis and he financial and emotional trade-offs change as retirees age.

Non-financial personal preferences may quite reasonably trump sheer financial or cash flow benefits.

Peace of mind, convenience, familiarity are all real, if hard-to-quantify values.

Reverse mortgages do offer many advantages for retirees —

… notably, regular cash flows that do not count as taxable income. 

But this market needs to mature.

High initial costs of reverse mortgages scare off many retirees.

Many fear losing their homes to the lender, even though there is no such risk.

The reverse mortgage market will likely grow substantially once upfront costs drop, securitization takes hold, and customer awareness of potential advantages grows.

With your financial planner double-check all of the

Feel free to use this image, just link to www.SeniorLiving.Org
  • assumptions,
  • scenarios,
  • tradeoffs,
  • pros,
  • cons and
  • your spreadsheet calculations.

If the calculated risks are baked in, then go ahead with your eyes wide open.

Like all carpenters know, measure twice and cut one.

Pulling the trigger on any major decision like this one with consequences (intended or unintended) will significantly impact the rest of your life.

An excerpt from Book Four in “The Knowledge Path Series” dedicated to helping you find the place of your dreams in the Rocky Mountain State.

Pros and Cons of 3 Options

Part Three in a 4-part series weighing the pros and cons of investing in real estate over the course of a life time.

Home Sale Assumptions
NOTE: – Double and triple check your scenarios with a financial planner whose fiduciary duty is to you!

Option One – Downsize and Buy.

Couples sell their home and purchase a less expensive house.

Pros:

For both couples, this option

Generates extra income for consumption, provides a legacy for their heirs and allows them to enjoy the comfort and autonomy of home ownership. 

Security to Enjoy Life

It also preserves the option to further tap home equity in the future through various types of loans which will be discussed later.

Cons: 

Don’t forget both couples have to

… maintain and cover the continuing expenses of a home. 

They might also have difficulty finding a less expensive home in the same community — or timing that purchase with the sale of their original home. 

Or, the stress of relocation.

Once they find their new home, they have to incur the emotional and monetary costs associated with moving.

Option Two – Sell and Rent a less expensive residence

Pros: 

Both couples escape the expense and responsibility of maintaining a home.

Enjoy the Amenities

They might also have greater latitude to move to a different location immediately or as their circumstances change.

Cons: 

As renters, both couples lose control over their future housing costs.

They’ll face constraints when they want to personalize their home to suit their specific needs or tastes.

And maybe more significantly.

The Smiths, in their early 60s, could also face high cash outflows in rent for many years — longer than it takes to pay off a 30-year mortgage if they live until their mid-nineties.

Option Three – Become a landlord. And a renter.

A third option available to our couples would be to rent out their existing home and to rent a less expensive home.

If they convert their home to an investment property, this will introduce some changes to their financial situation. 

The income they receive from renting out their home will be treated as taxable income. 

They can now deduct certain home expenses such as insurance and maintenance and are able to take depreciation on the property.

Pros: 

Good news. The original home can be handed down to future generations —

… a potentially substantial benefit.

Cons: 

Cash flow concerns.

Unless the rental unit is significantly less expensive than the original home this choice will produce minimal additional cash flow.

At this stage in life do you really want a part-time job?

Fixing Up After Last Renter

Plus deal with the emotional wrench of maintaining your home for someone else.

Also, remember the following points for the renting out existing home scenario:

Home is depreciated on the 27.5 year straight-line method as required under current tax law. See IRS Publication 257 — Residential Rental Property.

Home maintenance and insurance are deductible as rental expenses.

An excerpt from Book Four in “The Knowledge Path Series” dedicated to helping you find the place of your dreams in the Rocky Mountain State.