Let’s start with a quiz that everyone fails.
Imagine a piece of paper.
Now fold it.
It’s now 2X thicker than the original piece.
Fold it again.
Now it’s 4X thicker.
Say we do that 47 more times.
How thick would the piece of paper be?
As tall as the tallest person on earth?
The height of the Empire State Building?
Tim Ferriss guessed from earth to the moon.
All of those are wrong.
The answer is from earth to the sun.
I don’t understand it either.
This is because the thickness is increasing exponentially, and humans don’t think exponentially.
Here’s another one Peter Diamandis explained on The Tim Ferriss Show.
If you take 30 steps you’ve gone 30 meters.
If you take 30 exponential steps, you’ve gone 2, 4, 8… 1 billion meters.
Why is any of this relevant?
It’s the rate at which technology is advancing.
It never made sense for humans to think in exponentials in the past, but we’re approaching a sort of take off point that experts like Nick Bostrom and Ray Kurzweil know is coming, but none of the general public talks about.
I dove into this a few weeks ago and wanted to write about it.
I’ll try to explain what it means.
2015-1989 = 2025-2015
I was born in 1989.
If you had showed someone then the laptop I’m typing this from, they wouldn’t know where to begin.
If you tried to explain this blog to someone in 1989, how would you do it?
You couldn’t use words like internet or website, google, twitter, facebook, blog.
Even “computer” would be difficult to understand for a lot of people.
Maybe they’ve heard of one, or even seen one, but probably not used one.
Think about a simple task today like calling an uber from your smartphone.
It would take years to get someone up to speed if they skipped 1990-2014.
So we can say in the last 25 years, a lot has changed. Enough for someone in 1989 to call you crazy for making accurate predictions 25 years ahead.
Let’s call the amount of change that happened between 1989 and 2015 25 units of change, or change units (CU’s).
That doesn’t mean there was 1 CU each year from 89 to 2015 though.
Actually it would look something like this.
Every year has more CU than the previous year.
More importantly, the difference from one year to the next is always bigger than the previous.
For example, let’s say in 2007 we had one CU, and in 2006 we had 0.9 CU.
Then we know that the CU in 2008 has to be greater than 1.1 because the difference from 07 to 08 has to be bigger than the different from 06 to 07.
In 2008 we had 1.15 CU.
See if you can figure out what we had in 09 then.
You might recognize the difference between the previous two intervals increased by .05 so then 2009 we can expect a difference of .2 which gives us 1.35 CU.
That makes sense. But it’s wrong.
The nature of exponentials makes the difference increase by more with time. 2009 must have greater than 1.35.
Since we know we got 25 CU’s from 1989-2015, we also know that our next 25 CU’s will happen in less than half that time.
We agree that most people in 1989 would have been way off predicting the future in 2015.
Humans can’t see 25 CU’s ahead.
Our next 25 CU’s will happen before 2027. Probably closer to 2025 or earlier.
So that means you can’t possibly understand what the world is going to be like in ten years.
In other words, if you could talk to someone in 2025, you wouldn’t understand their basic technology, and even a lot of the words they use.
My Retirement Fund Is Not Exponential
I turn 26 next month.
I’ve had people give me a lot of advice since graduating college 4 years ago.
Travel while you’re young…
Save for retirement…
Go to grad school…
Some of it might be good advice, some bad. I dont really know which.
I also hear people my age picturing life in 5, 10, 30 years.
“I can’t wait till I’m the boss in 15 years and can play golf every other day.”
“One day when I’m rich I’ll have have a huge beach house and a yacht and do whatever I want.”
All of the advice above and dreams people have about their futures have one flaw in common.
They’re forecasting a future based on the past, specifically their life experiences up to this point.
Don’t do that. It’s wrong.
I don’t know what the next 25 years will be like, but I know what it won’t be like – the last 25 years.
The next 25 years will bring us a lot more change units.
If I had to guess I’d say over a hundred.
But we already figured out that we underestimate exponentials so it’s probably closer to a thousand or ten thousand.
At some point we will pass 25 change units per year. So all the change that’s happened in my lifetime will be happening in less than a year.
You might be calling bullshit here.
It seems unimaginable, I know. But that’s the point, we don’t think like that.
For me, knowing I have no clue what the world will be like in 10 years.
I’m not going to worry about my retirement fund too much.
Well, pretty much anything that involves me banking on something 10+ years from now.
I value flexibility.
I want to be able and willing to change any aspect of my life at any time.
The world is changing faster and faster, so I want to be ready to change with it.
- I’ve seen some sources say other numbers like 84% of the way but shutup.
- I always hated this one because it implies you can’t travel when you “grow up”. That’s stupid. If I’m old and I want to travel, I’ll do it. This could be a whole other post, so I’ll stop.
Here are a few resources below that I used for this one if you’re interested.