Managing Your Money : THE FUTURE : Beyond the Agora : Technology is transforming personal finance. Just wait till next century.
It’s 10 a.m. You’ve just placed your elbow on the cashier’s DNA reader for a credit approval when your coat pocket issues a familiar beep. It’s not a pager--those went out when your parents were still sending you newspaper clippings through the post office--but your personal data master.
You fish for the device among the usual flotsam of your pocket. The screen flashes an alert: Human liver futures have reached a two-month low on the Kiev Board of Trade.
You hesitate. You’ve been planning to invest in organs for some time now, but the news comes at a bad time. Shares in Pluto Corp., a company you recently bought into, have fallen sharply. Is it worth selling Pluto for liver?
The machine runs a risk evaluation for you. The answer: Sell Pluto, buy liver. Pluto’s future is uncertain, but with the holiday season looming and alcohol sales up, accidents and illness are likely to raise organ demand.
By now your purchase of half a dozen ozone-absorbing ferns (a steal at $3,500 each) has been approved. On the receipt, your bank has issued a friendly suggestion: “Consider some HDL-enriched juice. At 10 a.m. your cholesterol was at a yearlong high.”
Science fiction? For now, yes. But according to futurists, techies and financiers, some version of this scenario is likely to be commonplace by 2022. One cell of dead skin may suffice to make purchases. Human health may be fully commodified. And your financial portfolio, complete with artificial intelligence and expert software, will fit on the head of a pin.
“It’s the end of the agora, “ says Paul Saffo, a research fellow at the Institute for the Future in Menlo Park.
For us to put ourselves in the financial shoes of the next generation, he adds, is a little like “plopping a Babylonian grain merchant down on the floor of the Chicago Board of Trade.”
We have only two choices. We can become monetary dodo birds, desperately clinging to outdated symbols of personal worth--such as checkbooks--until we’re swallowed by economic extinction. Or we can adjust.
“There are some things in human culture that are constant, and transaction is one of them,” Saffo says. “All we’re really doing is changing the counters. It used to be pebbles in a pile. Then we used numbers. From now on, it’s electrons.”
Just how those electrons will be transmitted, read and used 30 years from now is a hotly-contested question. Various companies are betting heavily that their vision of the future will be used by tomorrow’s investor.
Pacific Bell, for example, is hoping that the telephone will be the investment medium of the 21st Century. But those phones won’t function much like today’s. Instead, they’ll be connected to your television and computer. They’ll be multi-task: You’ll wish your sister happy birthday while you trade stock.
Dave Lockton, president of Interactive Network Inc. and inventor of a pocket-size device that gives real-time stock information, believes that whatever form technology takes, it will be small, affordable and wireless.
“In 30 years down the road the personal communications revolution will be over,” he predicts. “We will all be walking down the street with something no bigger than an appointment book, which will allow us to pay checks, transfer money, buy stocks. And there will be no human interface.”
Lockton and others believe that we will be able to use these devices, after establishing our identity through secret password, to access stores, banks, customized news services and worldwide stock exchanges, all via satellite.
But science-fiction writer Bruce Sterling predicts that we’ll be trading in far more than corporate shares. Given the escalation of health care costs and the almost limitless value most of us place on our lives, Sterling envisions a world in which longevity has become a kind of currency, in which scientific advances can extend life by as much as 30 years--but only for those who can pay.
“The amount of money you’ll actually be able to invest in your body will be incredible,” Sterling predicts. “You’ll be monitoring yourself as if you were the Chernobyl power station.”
But the same computers you use to monitor your body may be used by others to monitor your personal and financial health. If your news service, risk analysis provider or biofeedback network sells your identity and computer address to the local grocer, one day your beeper might surprise you by announcing a sale on pyramidal tomatoes (bioengineered for easier stacking and full flavor).
And the Internal Revenue Service will certainly have an easier time tracking down the extra $10,000 you pocketed for that consulting gig.
Privacy in general may become an endangered species, as all your earnings, spending, whereabouts and communications are recorded. Even your smallest purchases will be easier to track, as more and more of them will be made electronically, on plastic cards or simply by debiting an account accessed through some proof of identity, such as a retinal pattern.
“After all,” says Visa spokesman Christoph Abt, “a card is only a piece of plastic that identifies you as the holder.”
Not everyone is sure that technology will completely transform personal finance.
“I don’t believe that a lot of really futuristic stuff will ever really come to pass,” says Joseph Nocera, author of an upcoming book on the history of American personal finance.
Nocera points to Charles Schwab & Co., which doubled its business in any community in which it opened a branch, even though many new customers rarely used it.
“Human beings want to see some granite,” Nocera says. “They want to know it exists. There’s a lot of psychology tied up with personal finance.”
But Nocera does believe that what people invest in will shift. Rather than gamble on individual companies, or even selected mutual funds, Nocera says, investors will move toward index funds, which reflect the rise and fall of the market as a whole.
Our reliance on electronic information, instead of old-fashioned balance sheets and signatures, will raise its own security problems. In the future, Saffo says, terrorists will aim for our electronic memory.
“If you explode a nuclear bomb, not in New York or Los Angeles, but over the geographic center of the United States, it will act as a bulk eraser, erasing computer disks and tapes across the country,” Saffo says. “That will be the most potent weapon.”
Already, the Bureau of Engraving and Printing is concerned about technological threats to U.S. currency. Advances in color copying have made counterfeiting relatively easy. Canon has even installed a computer chip in its color copiers that keeps them from printing when it recognizes currency.
The Bureau has also responded in a variety of ways: imbedding a polyester thread in bills and including micro-engraving around the presidential portraits. Neither the threads nor the engraving can be reproduced by copy machines.
But because counterfeiters are likely to respond in turn, Ira Polikoff, spokesman for the bureau, says the federal government is weighing a variety of possible methods “to stay one or two or five steps ahead.”
The bills of the 21st Century may include “kinneagrams” (a more sophisticated and durable version of the hologram), “planshetts” (fibers than shine at certain angles), special inks that reflect different colors from different angles, or watermarks.
