Inflation v. Desk Jobs

Inflation has taken the shine out of every form of investment other than physical assets and entrepreneurship. The dramatic increases in the cost of housing, living, and relatively slow increase of standard wages have created a liquidity-constrained situation for retail investors, and also made the stores of that liquidity continually less appealing. When adjusting for risk, stocks barely beat bonds, and do not provide the same sort of growth potential they would in a lower-inflation society. Forms of non-physical alternative assets all face the same problem: they just don’t beat inflation by as much as they used to, at ever greater risk. The old playbook of working a normal job, spending less than you earned, and investing your money in the S&P still works, but has become increasingly difficult, with lower upside. While inflation, slowing wages, and institutional instability have made desk jobs a far less viable path to success than they once were, some paths to wealth and financial stability have increased in their relative value and probability of success. Becoming an entrepreneur or partial owner of an early stage business, while owning gold for safety, provides a large upside in comparison to the risks of the current equities market. Inflation helps rather than hurts these investments, and they are the perfect hedge for a world of structural de-dollarization.

Entrepreneurship is able to directly ride the tide of inflation and adjust to, and take advantage of, institutional instability. It’s not a bad thing that entrepreneurs can take advantage of this, because if they didn’t, everyone would be getting the short end of the stick from government-driven price fluctuations. Owning a business lets people invest countercyclically and use market over and under evaluations to create their own value. Rather than being victim to the fluctuations of the S&P and inflation, entrepreneurs can simply find a way to create value in any situation. Although entrepreneurship lacks the perceived stability of a desk job, it more than makes up for it in upside potential, development of wisdom, and flexibility. While no entrepreneur can automatically weather all of the fluctuations in currency and financial markets that the world can give, they have a real shot at upside that most employees will never see, while not being a potential layoff candidate. Desk jobs provide a promise that can no longer be fulfilled. This is being recognized, and artificial intelligence will only make this more apparent. Artificial intelligence makes future payoffs less safe for the recipients of wages, and benefits those who control capital.

Particularly with massive early stage fundraising rounds in venture capital for businesses of every kind, the expected returns to entrepreneurship dramatically increased in the last few years. Failure rates have remained relatively stable, even as revenues and access to capital has risen. Investors are putting more money into entrepreneurship for the same reason that more smart people should be going into entrepreneurship. The opportunities that are being lost in other forms of business are only growing for startups. There is currently a greater appetite to invest in quality startups than there is equity in quality startups to go around. Nonetheless, people still invest in risky startups because their alternatives are simply worse than they once were. The only thing similar to buying the S&P in the 60s in 2026 is investing in early stage startups, particularly because so many companies went public earlier in the 1960s. A moderate chance of getting a moonshot is much more appealing than the ever-diminishing inflation to equity-growth premium. Inflation makes stocks themselves a tiny bit worse, but its main damage is making the necessary rate of return unreasonably high. “Safety” is actively dis-incentivized by the inflationary cycle of doom.

The old playbook for wealth creation is finished. Owning meaningful equity in an early stage business for growth coupled with physical assets for safety is the barbell strategy that will define the financially successful of the next 50 years. Most public stockholders merely get to experience the latter part of the growth curve and miss out on the crucial returns needed to offset the inflation of almost everything in life. People with desk jobs should be thinking about how they can turn their knowledge into side businesses or leverage their way into partial ownership of an early stage company. While equities still draw the majority of investors, just holding gold against the dollar over the last year would have beat most stocks, even with the price drop. Real ownership of assets and meaningful ownership of businesses. Both provide effective methods to beat inflation.