Investment in Knowledge and The Changing Role of Money
“An investment in knowledge pays the best interest.” – Benjamin Franklin
It would seem that doing a PhD follows a path. A clear path that follows motivation, passion, and ambition. A direction from A to Z. But what really doing a PhD is about is uncertainty, breakthrough, and willpower. You find yourself on a path when you are being pushed onto the next one, again and again. While that sounds taxing and unnerving, it can also be very fulfilling.
Day to day I keep adding keywords onto my list. I read and continue exploring. Like Sherlock Holmes I discover and rediscover. Robo-advisors, the main subject of my research project, are so much more than an investment tool. Robo-advisors are here to stay. Are they going to revolutionize the finance industry? Maybe. Looking at my generation, the changes in societal values, the economic landscape—so much has changed in the last decade.
Money is a Mood
While the world has become so dynamic and noisy money is somewhat silent. While it guides everything we do for ourselves and each other, everything we can afford and live, money is like the motor in the background that keeps everything moving. When I grew up money was to be put in a savings account (or a little porcellan pig). You would have a little paper notebook where you could keep track of your progress. And I had only one goal: I wanted to progress towards a driver’s license. Driving a car meant freedom and to go wherever, whenever I wanted. Money can buy dreams. Today, it means so much more than individual dreams. It means dreams for a future, for a sustainable planet, for shared wealth. Perhaps money is not so silent after all.
“The biggest risk of all is not taking one.” – Mellody Hobson, Co-CEO of Ariel Investments
Saving has lost value over the years while investing has never been more attainable than it is today. When I used to think about investment, I thought about the Wall Street. About white-collar men, aggressively yelling at the phone, staring at numbers. But everyone can invest, and robo-advisors are making exactly that so much easier.
Neither This Nor That
The robo-advisor is not just a tool. Neither is it an advisor or a robot—despite its name. Behind a robo-advisor lies an apposition of numbers and codes, a gigantic pool of data. Some of them already use artificial intelligence. Robo-advisors range from simple questionnaire tools to conversational bots or personified ones with names like Nora or SoFi. We switch out the white-collar men for an algorithmic tool to take our hand and guide us to our best investment strategy. Research has found that robo-advisors in many ways outperform human advisors.
“We’re one to two years away from a machine that can debate with you on your investment hypothesis.” – Pavel Abdur-Rahman, IBM
Yet, humans require human touch, human interaction. We do not want to hide our money under the mattress anymore, but we do want to trust someone with our money. We want a money doctor.
Any technology on the outside looks like yet another tool, another promise, another thing to spend money and time on. The deeper I looked at a technology, the more layers I see. A technology is always part of a system, such as societal or organizational. We add it into our environment and seek to advance, extend, or replace human ability. The potential is vast. The challenge to merge the two worlds vaster. With robo-advisors we change money, we change investment, and, without noticing it, we change not only our behaviors as investors, but we change our workforce too. And with so many changes confronted, we have uncertainty about asking the right questions, but we use our willpower and find breakthrough answers.