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Summary: Elon Musk says stop saving for retirement. His reasoning is that abundance is coming and money won't matter. The argument he didn't make is the one that explains exactly why you should do the opposite.
Elon Musk recently told the world to stop saving for retirement. And the funny thing is, his own argument says you should do the opposite.
Here is what he said on a podcast earlier this year. The world's first trillionaire reckons there is no point putting money aside for the next decade or two, because by then it will not matter. Artificial intelligence and robots are about to make almost everything so cheap and so plentiful that saving for a rainy day becomes a habit from an older, poorer world.
Let me be honest with you up front. I run a business that advises people on how to save and invest. So, of course, I am going to find a reason to disagree with a man telling everyone to stop. You should treat my enthusiasm with a healthy dose of suspicion. But hear me out, because I think the logic is on my side, not his.
Start with the part I actually agree with. I am an optimist about where we are headed. Look back a few hundred years at what an ordinary life involved, all that grinding labour just to stay alive, and then draw a line forward. It is not hard to picture a future where machines do most of the unpleasant work and things become very cheap. We are more than halfway there already. So I have no quarrel with where Musk thinks we are going. My quarrel is with what he tells you to do about it.
Think about what that machine-powered world would actually look like. If robots can do most of the work people are paid for today, then the money you earn from a job starts to shrink. And the only real claim anyone has on all that abundance becomes owning the things that produce it. The robots. The factories. The companies behind them. For people like you and me, that means shares in those companies, held directly or through a mutual fund.
And here is the bit Musk skips over. That abundance does not fall on everyone evenly, like rain. It reaches the people who own the productive capital first. It reaches the person who only earned a salary last, if it reaches him at all. So his future does not make saving pointless. It makes owning a piece of the machine the single most important thing you can do. A monthly SIP is not some quaint old ritual in that world. It is how an ordinary person buys their small share of the robots.
There is a second reason to keep going, and it does not even depend on Musk being right. Look at the two ways this plays out. If he is correct and we all wake up in a world of robot-delivered plenty, the money you set aside will have cost you almost nothing. A little less spending now, in return for a cushion you are pleased to find you did not need. But if he is wrong, or just early, and that future shows up a couple of decades late, then whoever stopped saving on his word is left with nothing and no time to rebuild. One mistake is a bit embarrassing. The other is ruinous. When the odds are that lopsided, the smart bet is obvious.
What I keep coming back to is this. The abundance Musk dreams about is not an alternative to saving and investing. It is, in large part, what saving and investing have been building all along. The long climb out of hardship happened because people deferred a little spending, put their capital to work, and let it compound into the factories, medicines and machines we now take for granted. A future of plenty is the result of that habit. It is not a reason to throw it away.
So my advice is duller than Musk's, but I think it makes more sense. Keep your SIPs running. Stay invested through the noise. Treat the idea of an abundant, machine-powered future not as a reason to stop, but as one more reason to own a slice of it. If that world really is coming, the people who enjoy it most will not be the ones who spent everything waiting for it. They will be the ones who made sure they owned a part of what was being built.
Also read: The AI revolution worth having
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