 |
|
|
|||||
The elders in my family were big on safe investments. Growing up in the 1980s, I can recall receiving savings bonds as birthday gifts from far-flung aunts and grandmothers. Though these bonds were disappointing presents for any 8-year-old hoping for the latest Skeletor action figure, my parents assured me I would be grateful when I was older. My white-haired relatives had no understanding of the ongoing battle for Eternias future, but they consistently invested money for mine. In 1997, just before I left for college, I took nearly two decades’ worth of these savings bond gifts to my bank. The face values added up to no more than $1,000 total. I redeemed my savings bonds for an amount closer to $2,000. I walked out of the bank feeling like I had the Power of Grayskull. The little old ladies in my family were onto something with those second-rate birthday gifts (that came with principal protection and a decent return). I wondered if I should listen when these wise elders also advised me to put my money in other safe investments, like real estate, gold, and annuities. But as smart as my aunts and grandmothers were, the past 30 years has me wondering if there is such a thing as a safe investment. Heres what Ive come to understand about the low-risk investments that are traditionally considered safe. Real estate In the mid-2000s, the accepted wisdom about real estate was that home values could only go up and an upside-down mortgage was an economic impossibility. Which explains why banks were throwing bags of money at anyone with real estate dreams and a verifiable pulse. Back then, I was still teaching high school English and not paying close attention to financial or housing newsbut the explosion of house-flipping reality TV weirded me out. Many of these shows documented photogenic amateurs overleveraging their finances and DIY skills to remodel cheap homes for a quick profit. Considering how common these shows were, and how incompetent many of the flippers were, it struck me that the demand for housing couldnt possibly remain high enough to keep up with this kind of supply. Unfortunately, by 2008 the housing bubble had burst. Apparently, real estate values can go down and a borrower can be upside down in a mortgage. The subsequent great recession was a painful reminder that real estate isnt a straightforward path to generational wealth, no matter what the Welcome to the American Dream brochure may say. The risky fine print When your grandmother suggested that buying a house was a smart and safe investment, she wasnt thinking about you taking out an adjustable rate mortgage to purchase a foreclosed fixer-upper to renovate and sell in less than six months. For the majority of real estate investors (i.e., homeowners) buying a house is more about securing shelter than investing money for a future financial payout. Thats what Nana meant when she called buying a house a smart investment. Becoming a homeowner will not only provide you and your family with something you need, but your home will also appreciate in value over timeas measured, traditionally, in years or decades rather than months or quarters. But if youre counting on turning a quick profit, you may be in for a rude awakeningjust ask any real estate developer. The safety of such a real estate investment is the fact that you build equity and value as the years pass in your home. Gold Humans have prized gold for its beauty and malleability for millennia. We have adorned ourselves and our homes with golden decorations for at least the past 6,000 years, and we began using gold as currency about 1,500 years ago. Since gold resists corrosion and oxidation, its an ideal medium for currency, since it holds its value better than a metal that rusts, corrodes, or becomes hollowed out in a can of Coke (allegedly). But gold doesnt just hold its value over time. Between our collective fascination with its glitter and the durability of this malleable metal, the value of gold has generally risen over time. Typically, the price of gold spikes during periods of economic or political uncertainty. Investors appreciate the tangible confidence of an investment in gold, especially if they have just experienced major losses in the market. The risky fine print Its unlikely that the relationship between humanity and gold will go away anytime soon. So buying gold probably isnt a bad idea. But that doesnt mean it should be the cornerstone of anyones investment strategy. For example, in the past 30 years, the S&P 500 has averaged a 10.29% compound annual growth rate, while golds spot price has a 6.97% compound annual growth rate. Just under 7% compound annual growth is certainly not nothing, but gold experienced negative growth for 11 of the 30 years, compared to only six for the S&P 500. Ultimately, gold was more volatile. In addition, scammers often prey on investors hoping to put their money into safe investments like gold. While a legitimate investment in gold may be a prudent investing decision, treating all gold investments as safe could leave you vulnerable to fraud. It may be easier to think of gold as safe in the same way that cash can be safe. In some situations, its helpful and prudent to have, but in others, it can cost you. Annuities Before I started writing about money, I associated annuities with people who knit. Thats because the only people who ever seemed to discuss them were friends of Miss Marple in Agatha Christie mysteries and my elderly relatives. Of course, once I became a financial journalist, I learned that an annuity is an insurance contract and that knitting is rarely required. Typically, youll pay the insurance company either through a series of payments or via a lump sum, and theyll give you monthly payments for a specific period of time, death benefits, and tax-free growth on your investment. Annuities may offer fixed interest rates, variable interest rates, or rates tied to a specific stock market index. Since you purchase an annuity through an insurance company, the safety of your money is ensured by the companys financial rating. The annuity will also do the hard work of budgeting your money for you, sending you monthly payments that re-create the experience of having a salary postretirement. That makes it a safe and smart way to offload your financial chores to the insurance company. The risky fine print Of course annuities arent all yarn balls and tea cozies. To start, since annuities are an insurance product, they may be sold by high-pressure insurance agents who want a commission and dont care if the annuity fits your needs. Additionally, while some annuities are straightforward and easy-to-understand products, there are a number of much more complex annuities that may not be clear at first glance. Its important to make sure you understand exactly what product you’re getting, what it is supposed to do to help you reach your goals, why the insurer thinks it fits your needs, how it works, when it will begin to pay out, what fees it may have, etc. Finally, the biggest risk to annuities is the fact that your money is tied up in the annuity. If you want to withdraw funds early, you will have to pay a surrender charge, which can be as high as 7% of the amount you withdraw. Understanding the meaning of safe Sometimes, the wisdom of our elders gets lost in translation. When Nana sent savings bonds instead of Battle Armor He-Man, she was giving a gift for your future self to appreciate. When she told you real estate was a good investment, she was encouraging you to settle downand enjoy the side benefit of your money growing. When she shared how her own grandmother sewed family gold into her petticoat and used it to barter her way to America, she was teaching you how to protect yourself in a chaotic world. When she crowed about her annuity, she wanted you to know there are ways to relieve yourself of the work you hate doing without giving up anything you need. When you understand what someone means when they call an investment safeespecially when its someone as wise as one of your family eldersthen you can recognize how to take their advice and avoid the unnecessary risk.
Category:
E-Commerce
What happens when venture capital and government pull back from science entrepreneurs at the same time? Many scientists think were about to find out, and are looking at how we can preserve our countrys innovative leadership. While others are pulling back, at Activate were leaning in and asking, What should we teach the scientist founders we support so they can find the opportunity in this crisis? History lesson History has a lesson for us: the U.S. saw a boom in deep-tech between 1870 and 1920 even though neither venture capital nor government grants existed at that time. Moreover, much of that technology was commercialized by teams of fewer than 10 people. Consider, for example, a particularly famous startup founded by two brothers. In 1892, some of America’s most famous science entrepreneurs, Orville and Wilbur Wright, capitalized on a growing craze for bicycles in the U.S. by opening a bicycle shop in Dayton, Ohio. In 1896, the U.S. Governments War Department allocated $50,000 (about $1.9M in 2025 USD) to the Smithsonian Institution, the closest thing to a national lab at that time, to develop a powered flying machine. In 1899, in response to this very public market signal and to growing competition in the bicycle industry, the Wrights began to pivot toward developing an airplane. In their historic moment, they demonstrated powered flight in November 1903 and went on to earn their first revenue (totaling about $3.8M in 2025 USD) in late 1908 and early 1909. Financing deep tech Commercializing deep tech took the same decade then that it does now. This makes sense: we can make much more complex technologies today, but the core loop of design-prototype-test-revise continues to move at the speed of human thought and observation. Without grants or venture investment, financing deep tech then was very different, but it was not impossible. The Wrights continued to own and operate their bicycle business (with substantial assistance from their sister Katherine) over their entire entrepreneurship journey, only divesting in 1908 once the airplane was sure to pay the bills. From bicycle to airplane The bicycle shop provided the funds, skills, team, and facilities needed to develop the airplane. Funds: The bicycle shop was consistently profitable, allowing the Wrights to support themselves and invest in their airplane research. Skills: The Wrights started by selling and repairing bicycles from a variety of brands, graduated to assembling bicycles from components and selling them under their own Van Cleve and St. Clair brands, and eventually invented components (such as improved wheel hubs) for their cycles. Team: Charlie Taylor, whose many contributions to the first airplane include designing and building its aluminum engine, began working with the Wright Cycle Co. as a contract machinist in 1898 before joining full-time in 1901. Facility: The workshop and tools in the bicycle shop doubled as the laboratory for testing and building prototypes for the first airplane. When the Wrights finally closed the bicycle shop, it was to fully convert it to a workshop for their airplane business. Today’s science entrepreneurs have a lot they can learn from this model. For one, even when venture capital investment is available, opening a bicycle shop before developing an airplane is often the way to go. Were advising our Activate fellows to find products and services that customers will buy today and that build the team, skills, and assets they need to bring their transformative technologies to market. The genius of the Wright brothers wasnt just in being first in flight, but also in seeing how the airplane could grow out of their bicycle business. Three questions In my job as managing director of Activates Boston community, I have long-term coaching relationships with 20 science entrepreneurs. Right now Im telling them to ask themselves three questions: How do I grow the long-term value of my airplane? How do I grow the short-term value of my bicycle shop? How do I tighten the connection between the two? In an uncertain economy, supporting science entrepreneurs is more important than ever. They have the skills needed to build bicycle shops that deliver unglamorous but critical products and services for the millions of deeply technical niche markets that underpin our modern world. They also have the creativity and tenacity to leverage their day-to-day work to invent entirely new industries that meet our countrys most pressing needs. We need to publicly recommit to these often unsung science heroes so that we can set themand our countryup for success.
Category:
E-Commerce
Last month, an AI startup went viral for sending emails to customers explaining away a malfunction of its AI-powered customer service bot, claiming it was the result of a new policy rather than a mistake. The only problem was that the emailswhich appeared to be from a human sales repwere actually sent by the AI bot itself. And the new policy was what we call a hallucination: a fabricated detail the AI invented to defend its position. Less than a month later, another company came under fire after using an unexpectedly obvious (and glitchy) AI tool to interview a job candidate. AI headaches Its not shocking that companies are facing AI-induced headaches. McKinsey recently found that while nearly all companies report investing in AI, fewer than 1% consider themselves mature in deployment. This gap between early adoption and sound deployment can lead to a PR nightmare for executives, along with product delays, hits to your companies brand identity, and a drop in consumer trust. And with 50% of employers expected to utilize some form of agentic AIfar more advanced systems capable of autonomous decision-makingthe business risks of clumsy AI deployment are not just real. They are rising. As AI technology continues to rapidly evolve, executives need a trusted, independent way of comparing system reliability. As someone who develops AI assessments, my advice is simple: Dont wait for regulation to tell you what AI tools work best. Industry-led AI reliability standards offer a practical solution for limiting riskand smart leaders will start using them now. Industry Standards Technology industry standards are agreed-upon measurements of important product qualities that developers can volunteer to follow. Complex technologiesfrom aviation to the internet to financial systemsrely on these industry-developed guidelines to measure performance, manage risk, and support responsible growth. Technology industry standards are developed by the industry itself or in collaboration with researchers, experts, and civil societynot policymakers. As a result, they dont rely on regulation or bill text, but reflect the need of industry developers to measure and align on key metrics. For instance, ISO 26262, which was developed by the International Organization for Standardization, sets requirements to ensure the electric systems of vehicles are manufactured to function safely. Theyre one reason we can trust that complex technology we use every day, like the cars we buy or the planes we fly on, are not defective. AI is no exception. Like in other industries, those at the forefront of AI development are already using open measures of quality, performance, and safety to guide their products, and CEOs can leverage them in their own decision-making. Of course, there is a learning curve. For developers and technical teams, words like reliability and safety have very different meanings than they do in boardrooms. But becoming fluent in the language of AI standards will give you a major advantage. Ive seen this firsthand. Since 2018, my organization has worked with developers and academics to build independent AI benchmarks, and I know that industry buy-in is crucial to success. As those closest to creating new products and monitoring trends, developers and researchers have an intimate knowledge of whats at stake and whats possible for the tools they work on. And all of that knowledge and experience is baked into the standards they developnot just at MLCommons but across the industry. Own it now If youre a CEO looking to leverage that kind of collaborative insight, you can begin by incorporating trusted industry benchmarks into the procurement process from the outset. That could look like bringing an independent assessment of AI risk into your boardroom conversations, or asking vendors to demonstrate compliance with performance and reliability standards that you trust. You can also make AI reliability a part of your formal governance reporting, to ensure regular risk assessments are baked into your company’s process for procuring and deploying new systems. In short: engage with existing industry standards, use them to pressure test vendor claims about safety and effectiveness, and set clear data-informed thresholds for what acceptable performance looks like at your company. Whatever you do, dont wait for regulation to force a conversation about what acceptable performance standards should look likeown it now as a part of your leadership mandate. Real damage Not only do industry standards provide a clear, empirical way of measuring risk, they can help navigate the high-stakes drama of the current AI debate. These days, discussions of AI in the workforce tend to focus on abstract risks, like the potential for mass job displacement or the elimination of entire industries. And conversations about the risks of AI can quickly turn politicalparticularly as the current administration makes it clear they see AI safety as another word for censorship. As a result, many CEOs have understandably steered clear of the firestorm, treating AI risk and safety like a political hot potato instead of a common-sense business priority deeply tied to financial and reputational success. But avoiding the topic entirely is a risk in itself. Reliability issuesfrom biased outputs to poor or misaligned performancecan create very real financial, legal, and reputational damage. Those are real, operational risks, not philosophical ones. Now is the time to understand and use AI reliability standardsand shield your company from becoming the next case study in premature deployment.
Category:
E-Commerce
All news |
||||||||||||||||||
|
||||||||||||||||||