This week we got together with the Rock Star Platinum Group over at the Bronte Harbour in Oakville.
This is where we get together with other business owners, share successes for all to learn from, and then tackle their biggest obstacles.
Sometimes your biggest obstacle isn't the business.
It's you.
Your mindset, your approach, your context, and perspective.
We all get set in our old patterns and our old thinking and it can hold us back.
We're guilty of this for sure.
And it's this type of "old thinking" that's going to prevent a lot of people from living life on their own terms over the next three, five, and ten years.
As we enter the "last economy" (shout out to AI entrepreneur Emad Mostaque) we need to stay nimble in our thinking.
And one of the most controversial takes right now is this...
Your income is under attack.
Your personal freedom going forward will be directly connected to your balance sheet.
Let us explain...
For years companies have been valued based on their income.
So if you owned a pizza shop and it had a net income (profit) of $100K at the end of the year that's what the market paid attention to.
If you sold that pizza shop for $500K, then the market was willing to pay you $5 for every $1 of income you generated.
So the "P/E" would be 5.
And this is how the entire economy has been operating.
If you were a high growth company like a software business maybe your "P/E" would be 10 or 20 or 30, etc.
Income mattered.
And on a personal level the banks have always analyzed a person's "credit worthiness" based on their income.
If you made $100K a year and had little debt they liked you.
They really didn't take into account any of your assets. So the overall value of your rental properties or maybe some amazing art your great aunt left you or the gold coins your uncle gave you didn't really matter to the bank.
Incomes ruled the day both on the personal level and at the business level.
That's all changing in real time.
Incomes are under threat.
And the most obvious proof of this threat is how the big software companies, who have been sitting on piles of cash, are now furiously spending those stockpiles to win the Artificial Intelligence arms race.
Meta, Google, Oracle, OpenAI, Anthropic...they're all spending billions and billions of dollars to build the best AI model possible.
They know the game; their cash flows are under attack.
Incomes are "dead in the water".
Artificial Intelligence is creating an economic threat that most people don't see yet.
It goes something like this...
2026 to 2028...Automation begins to replace existing jobs and slow down new hiring.
2028 to 2031...Humanoid robots with AI begin walking out of assembly lines ready to tackle even more jobs that humans held.
2031 to 2035...We are no longer the superior species on the planet.
Artificial Super Intelligent humanoids are walking the earth and are all smarter than us.
The "agentic" economy will grow exponentially in the digital world.
The "robotic" economy will grow exponentially in the physical world.
How are you going to compete with this?
With your income? Hardly.
It's imperative now to increase your personal balance sheet.
Incomes are under attack.
At this moment in time you need to add scarce assets to your life.
In our opinion this can be things like:
Gold.
Art.
Good, scarce real estate (if it also produces cash flow that's a huge bonus).
Bitcoin.
And the best part of this is you can add these to your lives for $10 or $100 or $1000 at a time.
Gold and Bitcoin specifically can be purchased in small denominations. You don't need to be a billionaire to begin increasing your personal balance sheet.
We're very quickly going to go from a world where people were impressed by your "high income" to being impressed by your "personal balance sheet".
The big software companies know the income game is up.
They are scrambling.
That's the signal. This is the smart money. They know the game is up.
Their entire income streams are under threat from AI and they know it.
This is the behind-the-scenes conversation that MANY of my old software buddies are having.
It's been shared quietly over lunch meetings...but there's urgency to their discussions. They're all trying to figure out how to handle these trends.
Here's what we can tell you...
Stop focusing on your "career path" only and start focusing on your "personal balance sheet" and do it now. With urgency.
This is the way (in our humble opinion) to continue to live life on your terms.
Nick and I discuss the state of affairs in a podcast released this week...
You can click right here to watch or listen on YouTube.
Also, next week Nick is hosting an in-person class where we will explain how you can add real estate to your life while minimizing the costs.
That class is in our Oakville offices on Wednesday, May 13 at 7:00pm and you can grab a seat by registering right here.
We will talk financing. We will talk "house hacking" where you can rent part of your house to offset the costs. We will talk student rental trends, best areas to invest, appreciation trends, etc.
You won't want to miss it!
Learn more and grab your seat for next Wednesday's class right here.
Talk next week,
Tom & Nick
p.s. Was there any doubt the Leafs were going to get the first overall NHL pick this week? Of course they were.
