It’s been several months since we returned from Hawaii, and surprisingly, my FOMO about the AI tech boom has faded. Sure, I still don’t have a job paying me gobs of money as AI CapEx surges higher, but that’s OK. Instead, I’ve allocated enough money to AI investments to where I no longer feel the need to chase the industry from the inside.
You see, my real fear isn’t missing out on another AI unicorn. It’s raising kids in a crueler and harsher world—one where, partly because of their identities, they get rejected from every top-50 university they apply to. Then, by the time they graduate from a so-so university, entry-level jobs have largely been automated away by AI.
This is not some far-off dystopia. CEOs of every major company are openly exploring or adopting AI. They’re implementing hiring freezes, slashing jobs, and reducing headcount by the thousands. Accenture cutting 11,000 jobs and Lufthansa cutting 4,000 jobs due to AI aren’t outliers, they’re harbingers. Anyone paying attention can extrapolate how dire things could be 15–18 years from now, when my children are entering the workforce.
As an investor, it’s key to forecast the future. As a parent, it’s key to forecast potential misery for your children. In both cases, if you forecast even halfway properly, you’ll likely end up wealthier, calmer, and better prepared.
Jobs Are Vanishing Due To AI
Take a look at the S&P 500’s recent performance in red compared to Total Job Openings in white. Notice the inflection point: investor optimism as AI promises profitability due to increased productivity, while job openings continue to crater.
As an investor, my hope is the S&P 500 keeps climbing. History suggests it will over the long run. As a parent, my fear is that Total Job Openings will continue to collapse to 2009 levels or worse. I clearly remember the 2008-2009 Global Financial Crisis—that’s when I launched Financial Samurai after the seventh round of layoffs at Credit Suisse. Fear was my motivator then too.
At the pace we’re going, by 2032 we could easily see a scenario where the S&P 500 is at a record high, but job openings match the lows of the last crisis.
And yet, after privately consulting with dozens of readers this year, I don’t think most Americans realize what’s coming. Sure, I may sound fatalistic, but a large part of my wealth has come from recognizing and investing in long-term trends. And the AI bulldozer is real.
Find Your Minimum AI Investment Comfort Point
Just as there’s a “Minimum Investment Threshold” where work becomes optional and you can stop stressing about office politics, there’s also a “Minimum AI Investment Threshold” where you can stop worrying quite so much about AI wrecking your career or your children’s livelihoods.
This Minimum AI Investment Threshold is conceptually similar to your Coast FIRE number. But unlike Coast FIRE, which is too dangerous for most people to rely on, the Minimum AI Investment Threshold is an active hedge, not a passive hope.
Here’s how to calculate yours:
Plug into an AI tool. Use a compound interest calculator or your favorite AI LLM to crunch the numbers for you.
Forecast the timeline. Estimate when your job will be eliminated due to AI, or when your children will graduate high school or college and enter the job market.
Estimate future living expenses. Take today’s basic living expenses and project them forward using a reasonable inflation rate (2%–4%).
Choose your cushion. Decide how many years of basic living expenses you’ll want saved in AI investments—pick anywhere from 1 to 10 years.
Discount to today’s dollars. Use a discount rate of 2%–8% (lower if conservative) to calculate how much you’d need to invest now.
Example Using Our 8-Year-old Son
Let’s take my 8-year-old son. In the year 2040, 15 years from now, he’ll be 23 and a new college graduate from a regular university.
An income that could cover his basic needs is $40,000 a year in today’s dollars—equivalent to $62,319 at a 3% annual inflation rate in 2040.
I estimate it may take him 2–4 years of job searching to realize that his dreams of clicking buttons to optimize ads for big tech companies are out of reach. At that point, he’ll probably have to take a trades job to make ends meet. (Electricians, plumbers, and general contractors should be in huge demand given all the datacenters being built.)
So, I need to have about $125,000–$250,000 ($62,319 X 2 – 4 years) set aside for him by the year 2040 to give him that cushion.
Here’s how much I’d need to invest today to reach $125,000–$250,000 in 15 years, depending on the discount rate:
| Discount Rate | Needed for $125,000 | Needed for $250,000 |
|---|---|---|
| 2% | $92,877 | $185,754 |
| 3% | $80,233 | $160,465 |
| 4% | $69,408 | $138,816 |
| 5% | $60,127 | $120,254 |
| 6% | $52,158 | $104,316 |
| 7% | $45,306 | $90,612 |
| 8% | $39,405 | $78,810 |
Based on a realistic worst-case scenario—him taking 4 years to realize his hopes and dreams won’t materialize—at a 2% discount rate I’d need about $185,754 invested today. That way, by the time he’s 23, I’ll have secretly set aside $250,000 in AI investments alone to help him survive.
It is vital all parents NOT tell their children exactly how much they are saving and investing for them. You don’t want them to become soft and develop an entitlement mentality.
AI Investing as a Psychological Hedge
Some of you may be scratching your heads: why invest in AI at all if I’m only assuming 2%–8% annual returns? With such modest expectations, I could just invest mostly in Treasury bonds yielding 4%–5% sprinkled with some stocks.
I hear you. But the point isn’t just the math. It’s the psychology.
Will you diligently invest for your or your children’s future specifically to hedge against AI? Maybe, maybe not. Further, I’m trying to be conservative in my assumptions.
By specifically investing in the very companies that may make your life and your children’s lives harder, it becomes easier to actually save and invest for the future. You now have a clear why behind your delayed gratification. And when you have a why, almost anything is possible.
When you start viewing AI as an unstoppable beast that could run you and your children over, you get more motivated to invest in AI companies.
Fear and Responsibility Drive Me to Invest
In 2025, driven by fear of a dire future and a strong sense of responsibility to protect my kids, I embarked on a new quest. I decided to invest the Minimum AI Investment Threshold so I could reduce my worry and even start rooting for the very technology that could harm my children.
The first step was opening a new Fundrise Venture account earmarked for my children with $26,000 in early August. (There was, and still is, a promotion where if you invested over $25,000, you got $500 for free invested in their Flagship real estate fund.)
Then, as my Treasury bills matured, I kept funneling between $15,500–$50,000 at a time into Fundrise Venture to hit my Minimum Investment Threshold. Every transfer I made into my account made me feel better.
Hedged Against Whatever Happens
Only time will tell whether investing $190,000 in 2025 in names like OpenAI, Anthropic, Databricks, Anduril, Canva, Ramp, and dbt Labs will pan out. If they do, I’ll be thrilled. The $190,000 could grow to anywhere from $256,000 to $2.87 million in 15 years, based on a 2%–20% annual return.
That means one child will either have all his or her expenses covered for four years of job-hunting or perhaps be set for at least a Lean FIRE life. They can pursue careers they want rather than careers they need.
Alternatively, I could potentially lose 80% of my money and end up with just $38,000 after 15 years because AI turned out to be an overhyped dud. Maybe CapEx spend is too high for the profits. Maybe the world realizes human oversight is more essential than ever—Jevons’ Paradox at work.
In that scenario, I’d be even more thrilled if both my children found livable-wage jobs they enjoyed. Because as parents, it is our responsibility to raise children to be self-sufficient adults. Needing to still depend on your parents after age 25 slowly chips away at your sense of worth.
Without the mission of protecting my kids from AI, there’s no way I would have invested $190,000 in risk assets like the S&P 500 in just two months. In the past, I've dollar-cost averaged more slowly, or invested in structured notes with downside protection when valuations are high.
But once I reallocated the money from me to my children, I extended the investment time frame from “right now” to 15 years in the future. And when you have such a long runway to invest, it becomes easier to stomach risk assets.
Asset Allocation Matters Too
Finally, when deciding your Minimum AI Investment Threshold, compare that target number to your overall asset allocation. The comparison can be to your total investable capital or total net worth.
Personally, I have a target of investing up to 20% of my investable assets in alternative investments such as venture capital. Not only am I in an open-ended venture fund that invests in AI, I’m also invested in four other closed-end VC funds, and I’m considering two more that all have AI investments.
Sure, the Yale and Harvard endowments have ~40% of their assets in private equity or alternatives. But you don’t have the size, influence, or edge of a multi-billion-dollar endowment. For the average DIY investor, allocating up to 20% in alternatives is plenty.
The older (and hopefully wealthier) you get, the more important proper asset allocation becomes to ride out volatility. Review your goals, run new financial projections, and stay disciplined. It’s easy to get caught up in hype, especially in a bull market. But nothing good lasts forever.
No More AI FOMO
I’m no longer bummed I don’t have a job at a hot AI startup growing triple-digits a year. It felt like a waste not grinding it out while living in AI central, San Francisco. I'm also less bummed that AI is stealing my content on Financial Samurai and not providing a proper link back.
But now that I’ve reached the Minimum AI Investment Threshold for both kids, I’m more at peace because I'm no longer helpless.
It feels great to invest in hungry founders and employees working 60+ hours a week for fortune and glory, while I play pickleball during the day and write on Financial Samurai. I’m grateful to be investing in AI near the beginning of the revolution. Our young children aren’t as lucky, which is why it’s up to us to invest for them.
So, for all you AI employees out there, keep grinding and enjoy the ride. You could make enormous fortunes over the next ten years, and I’ll be grateful if you do!
Readers, how are hedging against AI destroying the livelihoods of your children? Do you think most people are aware of the risks AI poses for their job security? What are some other things we are doing to help our children thrive in an AI world?
Easy Ways To Invest In AI
If you want exposure to private AI companies, consider Fundrise Venture. The platform owns stakes in names like OpenAI, Anthropic, Anduril, and Databricks. AI is poised to reshape the labor market, eliminate millions of jobs, and dramatically boost productivity. Since private companies are staying private much longer than in the past, it makes sense to allocate some capital to them if you want to capture potential upside before they go public. Fundrise has been a long-time sponsor of Financial Samurai, and I’m personally an investor in their funds.
For public exposure, you can also just buy QQQ or shares of the Magnificent 7—Apple, Microsoft, Google, Nvidia, Meta, Tesla—plus Oracle, which has become a stealth AI play. The beauty of investing is that you don’t need to live in Silicon Valley to participate. From anywhere in the world, you can buy a piece of these companies leading the AI revolution.
That said, don’t forget: there are no guarantees when investing in risk assets. Fast-growing companies can be extremely volatile when downturns hit. For example, Meta lost more than half its value during the 2022 bear market before recovering. Always stay diversified, keep an eye on your asset allocation, and make sure your portfolio matches your risk tolerance.
I work in a company where we build products that use Gen AI. Before GenAI became popular, we were building products that used the “classic” AI. Even we technologists recognize there is an element of bubble and hype. We do not know what is going to happen in the next 2-3 years, or what will be in store for the next 10 years. As technologists we hope, the trillions of dollars being spent will bring revenues to the companies spending that money. The bubble might burst, but we would have scaled newer heights, and society would be at a different norm. But we don’t know if those newer heights, but lower heights would recoup the investment, let alone be profitable.This is all up in the air, and there are optimists, pessimists, and realists.
In this landscape, how are you so confident and optimistic about AI?
I’m an optimist because if AI works to eliminate millions of jobs, our AI investments will make us rich.
And if AI ends up being a complete dud, our children will be able to find job jobs that pay a livable wage, and that is even more awesome.
But I did not get that nuanced sentiment reading your blog. Though you did mention the word “dud”, a reader might be more probable to conclude that you nurse a FOMO sentiment than looking to play smart the situation.
Oh, I definitely have FOMO. These windows of opportunity to make max money don’t come around that often. But I’m prepared for the big corrections too. They are inevitable.
Fantastic article like always. As a core piece of my investment strategy I try to visualize what the world will be like in 10-20 years and invest accordingly. Fortunately alot of that was tech related but with AI now at the forefront I have never been so blind in what the world might be like in 10 years.
I have been able to utilize AI for so many things at my job or even creating childrens books for my kids that its truly astonishing and worrisome.
Even at these wild valuations Im still cautiously buying into AI related businesses. Philosophy is if it truly does have near unlimited potential my investments will carry me and my family for quite some time. If its a fad thats gotten to its near peak usefulness then I dont have to worry about losing my job. Basically placing a hedge on my future employment and income derived from it.
Thanks for sharing that. I feel the same way. It’s such a strange mix of awe and uncertainty right now. On one hand, AI feels like this unstoppable force that could reshape everything; on the other, it’s hard to tell how much of what we see today will truly last.
Investing in AI-related companies feels like a way to balance the risk that our own work could be disrupted by the same technology. Either way, being open-minded and adaptive seems like the only real edge we have left.
I see a lot of jobs can’t be replaced by AI. Hands on stuff, like lab techs, application engineers, nanny, construction workers etc. Also I can’t fix or prepare for an unknown future for the kids based on my own experience. Most people couldn’t anyways.
Totally agree. There’s still a huge world of hands-on, human-centered work that AI can’t replicate — at least not anytime soon. The physical, emotional, and intuitive parts of those jobs are what make them so valuable.
And you’re absolutely right about not being able to prepare kids for an unknown future based on our own experience. The world is shifting too fast. I’m just trying to teach my kids adaptability, curiosity, and how to keep learning — traits that should hold up no matter what the next wave of change brings.
I’m just not sure. I own a 100 million dollar engineering firm with over 500 professionals and not one has been replaced by AI. Just seems like we are a long way from me laying off a senior PM and replace with software that can manage clients (yes clients still want human contact) mentor employees and communicate with regulatory authorities, write reports the require specific recommendations based on every jurisdiction or regulation. then for that person i need to hire a robot because we have field certify structural components, i person does all those things and more. i can see it dampening hiring but until we get to super AI if we do, becoming a civil engineer should be a viable vocation for many years.
and one more point: I attend many national conferences and not a single engineering firm has expressed major hiring or firing trends related to AI. We are looking forward to some better design programs utilizing AI but there is so much in our jobs that require a human touch that it is a long way away. don’t forget, regulatory agencies won’t work with non-humans. they are a long way from being willing to meet a robot on site to certify a bridge or building footer. can’t even imagine a world where both the civil and county inspector are robots. sure but probably 2059 or later.
Maybe I’m looking too far ahead, but for any Dune fans out there it seems that the Butlerian Jihad may start far sooner than 208 B.G. In the series, it’s explicitly stated that humanity lost purpose from delegating more and more to thinking machines.
On a serious note, while I love the idea Sam, it does have a certain “let them eat cake” feel to it for those who can’t find any jobs at all. And that should worry everyone.
Full disclosure, I did dump some money last night into a tech fund, so I agree with your premise. But I can’t follow this advice without some trepidation.
Great comment — and totally fair take. The “let them eat cake” feeling is exactly what makes this such a tricky topic. I don’t think AI investing is about celebrating job loss or technological disruption, but rather acknowledging it’s happening whether we like it or not — and trying to protect our families from being on the losing side of that shift.
I actually feel a lot of empathy for those who’ll get left behind by automation — that’s part of why I’m hedging through ownership. Ideally, society figures out how to retrain and redeploy displaced workers, but history shows transitions like this are never smooth.
Thankfully, almost everybody can buy 1 share of a public tech company or invest $10, the investment minimum in Fundrise Venture.
I’m the Dune fan out there, I love this comment
So is it officially ‘different this time?’ I look at the JOLTs/S&P Chart and the market certainly is telling us that it is. I wondered if the post-COVID job openings boom in 21/22 was simply rebalancing, but we’re going on three years since that happened and the divergence has only increased. If AI-driven productivity has officially began and profit per employee has begun it’s ascent, then structural ‘difference’ has arrived and thus the reason the top 10% is accounting for more consumer spending than ever before. I imagine that divergence will only continue to increase as well…
Hi Sam… I enjoy reading Financial Samurai and learning from your experiences in the market. I’m retired and manage most of my investments in equities which have performed very well. I recently looked at Fundraise. You like the venture capital space and I decided to take a look. I was not very impressed with the advisory client returns graph. My investments are mostly tech and many have connections with the venture funds listed in Fundrise. My returns thus far have exceeded the Fundrise returns in all years 1-9 and I built this portfolio 5 years ago. Please help me if I’m overlooking something beyond performance. Thank you.
Thanks for your thoughts. Happy to explain, as my public tech Investments have outperformed since end 2022 as well. However, the Fundrise Innovation Fund is up around 35% so far this year.
The Innovation Fund began in 2022 and started building positions over the next couple of years and until today. With the vast majority of venture capital funds, there is a buildout and initial J-curve, as it takes time for private companies to grow. Some do, most don’t. But either way Fundrise Venture, they actually didn’t dip as they were able to invest in Databricks relatively early (~25% of fund).
So it’s important to compare venture capital funds/stocks with other venture funds/stocks and public portfolios/stocks with other public portfolios/stocks.
Hope that helps. I like investing in private companies because the long-term compounding I could really take off. But of course, there are no guarantees.
Is the Fundrise Venture fund participating in current AI rounds and new opportunities? Many of their deals seem dated (First wave AI)? Also, their fee is really high which could cause some significant drag on performance. Thoughts?
I’m sure they will try to continue investing new cash to maintain their position percentages. But getting in to any of these companies is highly competitive.
As someone who is a limited partner in multiple closed-end funds that charges 20-35% carry (percentage of profits), I think Fundrise Venture is a bargain because it charges 0% carry.
I would gladly pay a 20% carry if I could gain access to open AI, anthropic, Databricks, and Anduril. But I don’t have to either Fundrise Venture.
This article really resonated with me. I am personally freaked out about the rapidly changing job market let alone reduction in privacy due to all of this AI tech. I feel you on wanting to protect our kids from an uncertain future since AI is already displacing opportunities.
Investing in AI feels like a smart, proactive hedge because it takes our fears and translates them into positive reaction. Thanks for laying out not just the risks but a plan for how we can look at our own investment goals and act today to help tomorrow. Really solid article. And a major thanks for not being a robot! AI gets so many things wrong all the time, especially personal finance related stuff.
How do I hedge against AI? First, I stay invested. My workplace is currently constructing automation. I estimate a 50% probability that my job will be replaced by automation within a year. If it does, that’s too bad. However, since I effectively invested everything I earned from that job, it’s not all for nothing. Those investments should continue to grow, likely in large part driven by automation and AI.
Since AI is likely to change employment opportunities in unexpected ways, I try to be flexible-minded. Maybe I’ll need to re-skill several times. I try to be productive every day, in some way, even if it’s not what I expected.
I also try not to be overly reactive. I don’t like aspects of how my employer implements automation. For example, my employer abruptly ended its tuition reimbursement program with one day’s notice. I don’t like that. But it’s not in my best interest to abruptly quit. So, I crunch the numbers, consider the variables, and make a decision. Then the decision is about acting in my best interest based on the current situation, rather than over- or under-reacting to what happened.
Very rational and calm response to hedging against AI.
I guess my 2nd reaction after reading is, what about eventually retiring and doing something else? AI may elongate that journey to financial independence if it becomes this disruptive.
Sam, I know I may seem pessimistic by my comments, but just know that the frequency thereof proves that I’m a loyal reader and fan of your blog :-)
Just wanted to say that AI presents incredible opportunities, but also incredible danger, but not how people commonly view it. The biggest risk, in my opinion, is for confidentiality and security – people oversharing information, files, trade secrets, and things like that. The second, macro-level danger is the general dumbing down of society. The former hasn’t been touched on much, from what I have seen or read, but the latter has been written about -some-.
Thank you for how hard you work! No AI is going to ever have the unique perspectives that you have.
Hi Tyler – Your comments and thoughts are always welcome!
Thanks for mentioning confidentiality and security actually. B/c I’m right in the middle of deciding how much to invest in a fellow school parent dad’s new VC fund that specializes 70% – 80% in cybersecurity. I always like to support people I like who are launching new funds. But I’m not sure if 70%+ of the fund in cyber the right percentage. But maybe!
If society does get dumbed down by AI, perhaps the people who can keep thinking, learning, and producing can outperform. Cheers