Afford Anything - AI and The Future of Jobs - with author Darrell West

Episode Date: November 19, 2018

#162: How will artificial intelligence, AI, impact jobs? Former Harvard president and leading economist Larry Summers predicts that one-third of men will be out of work by 2050. Finance guru Suze Orman says not to be surprised if we see 25 percent unemployment by 2030. And major research institutions predict anywhere from 14 percent to 50 percent unemployment. But could this really be possible? Or is everyone panicking about what will essentially be a shift in the types of jobs that people hold — reminiscent of our shift from farm to factory, and from factory to office — but not an actual net job loss? To answer these questions, we talk to Darrell West, author of The Future of Work, about artificial intelligence, robots, and the future of jobs.   For more information, visit the full show notes at https://affordanything.com/episode162  Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything, but you can't afford everything. And that doesn't just apply to your money. It applies to your time, to your focus, to your energy, to your attention, to the things that you're interested in. It applies to anything in your life for which you have limited resources. And so the question becomes, what matters most? Because saying yes to one thing implicitly means that you're saying no to something else. There's an opportunity cost, a trade-off with everything. What matters most and how do you align your actions to reflect that?

Answering those two questions is what this show is all about. My name is Paula Pant. I'm the host of the Afford Anything podcast. Today's episode is a look at AI artificial intelligence and the future of jobs. Now, my curiosity about this was peaked when Susie Orman made a rather bold prediction. And here's what the fire people. you are not thinking about. So I'm going to give it to you straight here now. Artificial intelligence is coming in big time. Do not be surprised if by the year 2030 there is a 25% unemployment rate.

Those are rather dramatic numbers. And upon hearing something so bold, so dramatic, it would be very easy to dismiss that. There is a natural human bias to believe that a future will be similar to the past. But I started digging into this, and I discovered that she's not the only person who thinks this. Economist and former Harvard president Larry Summers predicted that by the year 2050, one-third of working-age males defined as men between the ages of 25 to 54, will not be working. Maybe they'll all be FI. But, no, actually, it's not that they will be earlier retirees, his prediction is that they will be pushed out of the workforce due to technology. So we're going to discuss all of that in today's episode. And in order to lay the foundation for

this upcoming discussion, here are some basic facts about AI that I would like to lay down as groundwork before we get into this interview. Number one, AI is already here. It is not something that will happen in the future. It is something that has happened in the past and is happening in the present. Siri and Alexa are both excellent examples of AI in our everyday lives. And it is very tempting to say, well, you know what, I'm not that impressed with Siri and Alexa, so I'm not worried. I've certainly read those comments on Twitter where people say, you know, autocorrect is completely off the mark and so I really doubt that anything will ever be a problem and we'll all live happily ever after the end. But that type of attitude is oversimplified. It does not take into account the

iterative exponential power of something that is intelligent to become more intelligent. And again, it assumes that the future will be very much like the present, that 20 years from now we will all have a slightly better Siri and Alexa. Basic groundwork number two, AI is not the same thing as robots. A robot is a container. It is a vehicle. AI is the intelligence. When people talk about a robot revolution, that makes for a good headline, it's visual, it's alliterative, but the reality is that it won't be physical robots like the Jetsons. It'll be code. Number three, there's a huge distinction between artificial narrow intelligence, which is AI that is very good at performing one specific task like your nest thermostat versus artificial general intelligence, which is

AI, that is generally as intelligent as a human being. We talk about that in this upcoming interview. I'll just leave it there. Number four, intelligence and consciousness are not the same thing. We are used to thinking of these qualities as closely correlated because we interpret that from our understanding of the animal kingdom. Consciousness is hard to define, but it could be seen as the capacity to feel joy and suffering. And we often conflate consciousness with intelligence because a dog is more intelligent than a snail. And also, arguably, a dog has a higher capacity for both joy and suffering than a snail does. The author Yuval Noah Harari in his book 21 Lessons for the 21st Century talks about how we are about to see the decoupling

of intelligence from consciousness. And as an asterisk, of course, there are people who speculate about what might happen if AI becomes conscious, but that's outside of the scope of this particular podcast episode. This episode is about AI's impact on jobs, and that leads to the next and final point before we get into the interview,

which is point number five. Thinking on AI's impact on jobs is divided. There are some people who predict that wrote, routine, unskilled, and entry-level jobs will suffer the brunt of the impact. As you're about to hear in this interview, there are others who warn that high-skilled jobs may also be at risk. So, how will AI impact jobs in the future, and by extension, how will it impact the economy, the stock market, and every other facet of our lives? And what can we do

as individuals to prepare. That's what we're about to discuss in this interview. Daryl West is the author of a book called The Future of Work. He joins us to talk about how AI and automation might radically change our society and how we can best be prepared for the coming changes. Here he is. Hey there. Hello.

Nice to be with you. Oh, thank you so much. Thank you for coming on the show to talk with us about AI and the future of jobs. My pleasure to do so. I have so many questions, but let's just dive right in. We are already seeing artificial narrow intelligence replace workers in a variety of professions. So we are already seeing, for example, restaurants in which you order on an iPad. We're seeing security robots that cover an area.

We're seeing the first self-driving cars slowly come to market. We're seeing artificial narrow intelligence. in a variety of industries. Can you share some other examples of what's currently happening already? You're exactly right. We're already seeing the impact of technology in a number of different sectors. Retail is going to be one of the big ones that are affected. Amazon is close to announcing that it is going to open 3,000 convenience stores in the United

States over the next three years. And these are going to be stores without any retail clerks. Basically, you take the Amazon app. You walk into the store through ternstyles, scan your app, go shopping, and you walk out and it automatically charges your credit card or your mobile payment system. So you will not deal with any cashiers or cash registers. So it's just one more example among many that are out there in terms of how AI robots and other automated features are starting to affect the workforce. I've seen a prototype of that Amazon store in Seattle on a visit there last year. That was quite innovative.

Definitely. We're seeing it in Seattle. I think they have a store in Chicago as well, but they're going to be thousands more of that open soon. Now, it seems as though all of the examples that we see right now are examples of artificial intelligence that is able to replace a very specific job that is typically a lower skill job. What are some of the ideas or predictions around the advent of artificial general intelligence? when AI gets to a point where it is broadly as smart as a human in terms of rational decision-making? Personally, I think we are decades away from that. Most of the AI performs functions that are very specific and are in a particular niche.

There actually are great AI software that can do those types of tasks. But the idea of a generalized type of AI that can function like a human can switch from ordering food to driving a car to picking up items in a warehouse, we are a long ways from that. We really don't have any examples of that. And the technology is really not that well developed. So I don't think there's any risk of seeing that anytime soon. Does that mean that if AI were to replace a handful of jobs, would those primarily be lower paying jobs? Right now, of the biggest threats are at the entry level. The retail clerks through the Amazon example that I just gave, you cited waiters and waitresses who are being displaced in restaurants because people can order either through a mobile tablet or a

automated kiosk. Autonomous vehicles are going to be coming in. So truck drivers will be affected. Taxi drivers, ride-sharing drivers will be affected. You mentioned the example of waiters and waitresses just because there are restaurants that are having people. people order through mobile tablets or automated kios. So those are clearly types of jobs where the impact could take place pretty quickly. But it's not just going to be entry-level jobs. There are higher-level jobs where technology is starting to come in. So, for example, in the healthcare area, radiologists now are the ones who read CAT scans. But it turns out that AI systems can learn to read those CAT scans with a high-degree.

of accuracy. If you show them a bunch of CAT scans and label them either normal or abnormal readings over a period of time, the AI then can diagnose those kinds of abnormal readings. So that's an example of a higher level job that could be at risk in the very near future. Now, will the advent of AI, will this trigger what is fundamentally a shift in the type of jobs that people have, but not necessarily a net job law? So, for example, would more people become programmers rather than medical service providers? I mean, there's certainly going to be new types of jobs created. Anything in the coding area, there will be lots of opportunities.

Data analytics will be a big growth area just because all these technologies generate a lot of digital data, and we're going to need people who know how to analyze that information. There will be communications, jobs that are created because we have all these scientists and coders who will need people who can translate the technical things that they're doing so the rest of us can understand it. But the risk is that there may be a mismatch between people's skills and the new kinds of jobs that are being created. There may be many people who don't have the skills for those new types of jobs. And so people worry about the mismatch, kind of represented by those types of things. How would that be different from any other point in history in which people had to

retrain from, say, farm jobs to factory jobs and then from factory jobs to service sector jobs? I mean, there certainly are parallels in history, such as when we move from an agrarian to an industrial area where people on the farms had to gain new skills and move to the cities. And it took several decades to work through that transition, but we handled it. And there certainly are other examples of new technologies that have come in. There were short-term disruption. There were problems in terms of jobs and incomes, but eventually we were able to cope. I think what makes this situation a little different is it's not just one new technology that is coming in, but it's dozens. You know, it's facial recognition software. It's virtual reality. It's robots.

It's AI. It's autonomous vehicles. I mean, you can kind of go down the list. There are many different types of new technologies that are coming in simultaneously. And at the same time, we're also seeing a fundamental change in terms of business models, that companies are moving from full-time employees with benefits to temporary workers, part-time workers, jobs that don't necessarily bring benefits along with them. And so it's really the combination of the multiple technologies and the changes in the business models that people need to worry about. Do people need to worry about it? I mean, one of the things that you mentioned in a presentation that you gave is depending on how you would frame something like the new business model, you could see the dystopic version of it as you don't have benefits, you have higher levels of unemployment or self-employment. On the other hand, you also have more flexible schedules, all of the benefits of gig economy work in terms of greater work-life balance, more compatibility with having a family, more flexible scheduling and so forth, more location independence. There certainly are ways that we can navigate this in a way where most people will end off better off.

As you suggested, we may end up with more leisure time. People may end up working a fewer hours. So I can certainly see lots of ways in which this transition could work out well. We'll come back to this episode after this word from our sponsors. The holidays are almost here. And if you are selling stuff online, You know it's crazy. You've got all these orders coming in

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Gusto.com slash paula. So what can we as individuals do to prepare? People can prepare by constantly upgrading their job skills. Right now, we tend to invest in education up through about age 25. In the new world of work, people are going to be moving from job to job, company to company, and sector to sector. So there's going to be more job churn. So people are going to need to invest in new skills at age 35, 40, 45, and 50. And so I think people can protect themselves by really paying attention to what are the new kinds of skills that are necessary and making sure that they have those skills.

One of the predictions that I've read about AI's impact on jobs is that the brunt of the impact may be felt by workers in DACA or in Bangalore, workers at call centers whose jobs will be replaced by AI or workers at close. manufacturing factories in Bangladesh, who might be replaced by AI. Will the impact be, I mean, the impact certainly will be global, but will it be disproportionately felt in less developed countries? People in the developing world certainly are going to see consequences of technology innovation. So, for example, a lot of people there work either in factories or in warehouses. Those are things that are now becoming subject to automation. China, for example, has a number of factories that are fully automated, where there are a handful of humans who monitor control panels, but it's basically robots and AI that are doing the bulk of the

assembly work. So that certainly is something we all need to think about. But it's not just going to be the developing countries, like even a place like the United States, which has a well-developed, of the economy, there are going to be consequences just in terms of the retail sector, finance, transportation, resource management, and the like. So these technologies are really starting to accelerate. They're going to be more widely adopted. So even in the United States, we're going to see workforce consequences. Now, there have been a wide range of predictions as to how severe these workforce consequences will be. You cited some numbers that various institutions have made estimates on the percentage of impact that this will have. You noted that McKinsey estimated a 45%

impact, Oxford estimated a 47% impact. That range has been between 14 to 54%. What is meant by impact in that context? The impact that these studies are attempting to measure is really the percentage of the workforce that is at risk of a job loss. And so, as you point out, the range is really broad from the low end of a 14% impact to a high end of over 50%. It's very possible that, you know, those studies showing a 40 or 50% impact are just wildly off, that they don't take account in terms of the new jobs that are going to be created. They may overestimate the possible a job loss. But let's say that the job impact is only at the lower end of those estimates. Let's say it's a 10% impact. I like to remind people that during the Great Recession, it only took a 10%

job impact to really disrupt the society, alter the nature of the economy, and create a lot of bad feelings among a lot of different people. So relatively small workforce ramifications can have a big impact on the society. Wow. And you mentioned that Larry Summers predicted that one-third of men between the ages of 25 to 54 will be not working by the year 2050. Yeah, he based that estimate. Obviously, that's a very big number, and it's a number that scares a lot of people. But he based his estimate on looking at current trends. Right now, only 88% of prime age men between those ages that you just cited, are in the workforce. So we're already in a situation where 12% of the men who could be working are out of the workforce. So what he did was really project that trend,

which is developed over the last 50 years, over the next 30 years. And his conclusion was that anywhere from a quarter to a third of prime age men are going to be outside of the workforce. But is that because of AI or is that offset by the greater numbers of women who are working who are becoming primary breadwinners in their household? The percentage of women in the workforce has been going up, so that certainly is one way to offset that. His analysis was based on looking at the consequences of trade agreements, which has led to a decline of manufacturing,

which has hit that prime age male part of the workforce, especially hard, the impact of technology innovation and just all the new tools that are coming into being, the fact that more people are taking, taking disability time off, either due to physical problems or mental and emotional problems. There seems to be a rise in terms of alcoholism and substance abuse and the opioid crisis. And so if you add all those things together, that's what led to his prediction that by 2050, one-third of these men will be outside the workforce.

How do we square this all with the fact that we currently do have AI already that's being used by many businesses on a daily basis? And yet right now in 2018, we have record low unemployment. Unemployment is probably not the right number to be looking at during this time of technology innovation. The number of the people worry more about is participation in the workforce. So for men, as I just talked about, that number is down to 88%. So there are 12% of prime age men who are outside the workforce. That is probably a better indicator in terms of the impact of technology than the unemployment rate. Because keep in mind, the unemployment rate, it's the percent of the workforce among those actively seeking a job.

So if you're no longer seeking a job and are outside the workforce, those people are not. picked up by the unemployment rate. I see. If some of these more dire predictions come to pass, if there is a 15, 20, 30, 40, 50 percent impact on jobs in the future as a result of AI, what implications might that have for everything ranging from taxes to social security payouts to the health of our economy? and at a personal or individual level, what can we or should we be doing right now to prepare for it? It will be completely chaotic if we end up, you know, with 15, 20 or 25 percent of people outside the workforce.

There will be lots of people with time on their hands, and especially men who have time on their hands, often don't do good things. Like there's more crime, there's more domestic violence, there's more child abuse. So there are a host of social problems that come from that. There certainly are ramifications in terms of the tax base. If you end up having a relatively small number of people supporting other people through social services, and that creates a lot of bad feelings. So when you look around the world at countries where there are a lot of people outside the workforce, like in the Middle East, many countries have that.

They tend to be pretty violent places. there's a lot of unrest, there's a lot of unhappiness in the society as a whole. Let's say that you are a 30-year-old individual who is looking at this as their possible future. You know, looking at this as something that might happen over the course of their career. What can you do now to be ready? I mean, my favorite quote in this regard comes from Charles Darwin when he was talking about evolution. And he noted that survival is going to go not to the most intelligent or to the strongest, but the most agile. It's people who could see the changes that are taking place and adapt to them.

And so adaptability, agility, kind of keeping your eye on the possibility of their being widespread change and then figuring out how to navigate those changes. That will be one of the most important skills for people going forward. Excellent. Great. Well, thank you so much. Is there anything else that you would like to mention or anything that I haven't asked? No, I think those were great questions. Thanks. I appreciate your interest. Absolutely. Great. Well, thank you so much. Thank you. Thank you, Daryl. What are some of the key takeaways that we got from this conversation?

Here are two. Key takeaway number one. It's not just lower paying jobs that are at risk. Sure, there are many entry-level or lower-paying occupations that are at risk of being eliminated. And that's certainly nothing new. Economies have seen people move from the farm to the factory and from the factory to the office, with retraining happening along the way. Typewriters, floppy disks, we've seen lots of industries come and go. But what's interesting about the AI revolution is that it may not just be a couple of industries that are affected. It's the entire marketplace, and it may not just be entry-level jobs.

It's not just going to be entry-level jobs. There are higher-level jobs where technology is starting to come in. For example, in the healthcare area, radiologists now are the ones who read CAT scans, but it turns out that AI systems can learn to read those CAT scans with a high degree of accuracy. If you show them a bunch of CAT scans and label them either normal or abnormal readings over a period of time, the AI then can diagnose the those kinds of abnormal readings. So that's an example of a higher level job that could be at risk in the very near future. So what does this mean in terms of how we as individuals can prepare? Well, it means that soft skills, such as empathy and social skills, which were once fuzzy and hard to quantify and viewed as lower value in the marketplace, those soft skills are likely to become increasingly important in the decades to come. AI might be able to read a chart or make a diagnosis, but it cannot have good bedside manner.

And so, developing your empathic skills, developing your ability to emotionally validate others, developing your ability to listen, to understand rather than to reply, those skills may be increasingly important. Key takeaway number two. It's not about being smarter. It's about being more flexible. Survival is going to go not to the most intelligent or to the strongest, but the most agile. It's people who could see the changes that are taking place and adapt to them.

And so adaptability, agility, kind of keeping your eye on the possibility of their being widespread change and then figuring out how to navigate those changes. That will be one of the most important skills for people going forward. Stay nimble, stay flexible. And I mean that both in terms of your job skills as well as your financial life, Susie Ormond predicted that tax rates might shoot up to obscenely dramatic levels. I don't know if they will or not. And I don't know if unemployment is going to be 14% or 50%.

or maybe all of this is much ado about nothing, and everything will be fine and we can all just relax. Any number of possibilities are out there. But flexibility is that key to survival, and when you contextualize that in your financial life, well, you know how you can preserve maximum flexibility? Be totally debt-free, including owning your home free and clear, and also have enough investments that you have at a minimum,

baseline, lean financial independence. So, for example, if you need to live on $40,000 per year, you'll need $1 million in your portfolio. If you can do those three things, and I realize I've just stated like a fairly big goal, right? I don't mean to sound flippant about that. But if you do those three things, debt free with a million bucks in the bank and a home that you own outright, if you nail those three things, you will be much more flexible, much more adaptable to whatever situation you find yourself in, far more so than the average individual. To quote J.L. Collins, flexibility is the only true security.

So those are two takeaways from this conversation with Gerald West, author of the book The Future of Jobs. By the way, I'm going to make one final note here. In our interview, we talked about the Larry Summers prediction that one-third of men will be unemployed by the year 2050. I want to give a little more context behind that claim. He cited four factors in support of this claim. Number one, he says that we are already seeing this take place, for example, the elimination of drivers. Number two, he says that the gains that we've made in the last 50 years in terms of the average education and the health of the workforce, those gains that we've seen in the last 50 years are unlikely to be repeated in the next 50, which means growth will slow, if nothing else. Number three, to the extent that non-work compounds upon itself, to the extent that it is contagious, the fewer people who are working, the more that that not working will spread at a rate that becomes exponential rather than linear. And number four, according to him, declining marriage rates may also play a role in this given that non-work is more common for unmarried men than for married men.

whether or not you agree with him is up for debate, of course. But the fact remains that there are some very knowledgeable people. He is one of the nation's leading economists who are making predictions that are quite bold, quite dramatic, in line with what Susie Ormond said. When you think about one third of males not working, the social ramifications of that are massive. So once I read that, I started looking at predictions made by major research institutions. I was shocked because these predictions that I'm reading, they don't feel intuitive because they feel so bold. And again, recency bias leads me to want to believe that the future will be similar to the present. But once I started looking at predictions, the most optimistic studies predicted a 14-periodic.

job loss and the most pessimistic studies estimated up to a 50% job loss. So even if we take that most optimistic prediction, that's huge. And a 14% job loss would have massive ramifications on the economy, the stock market, the housing market, every facet of our lives. And as I sit here explaining this, I really have to give the asterisk that at a deep internal level, I don't believe it. But this is what some of the most well-regarded thinkers and institutions out there are saying. And if that's what they're saying, then we have to sit up and pay attention. And who knows? It might be that humans integrate with AI at the biological level through brain AI interfaces. So, you know what? If nothing else, there may be plenty of jobs in the field of neurotechnology. I think neuro technology and AI, this is fascinating stuff. The next 50 years are going to be a turning point for civilization. They're going to be fascinating. I have no idea what's going to happen, but I can't wait to find out.

And in terms of what we can do to prepare, it really all boils down to stay flexible. That is our show for today. Thank you for being part of this conversation about AI and the future of jobs. And if you have any thoughts or comments, please head to Afford Anything.com slash episode 162. That's afford anything.com slash episode 162 to leave a comment. You can also reach out on Instagram at Paula Pant, P-A-U-L-A, P-A-A-N-T, or hang out in our Facebook group for the Afford- Anything community.

Now, I have a special treat for the end of this episode. So as you know, if you've been listening to this show for at least a month, as you know, afford anything, you have raised, you, the community, have raised enough money, that we are going to be the official project sponsor of a water project through Charity Water. We're going to take a quick break for a final word from our sponsors. And after that, we'll talk to Tyler from Charity Water. Tyler is going to share a very special story about a recent trip to Malawi where they built a water project. That's coming up next.

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Paula P-A-U-L-A. Hello. Thank you for coming on the show. Oh my gosh. Thank you for having me. Tyler, what is your role at Charity Water? My title is technically brand content lead. It just means that I'm one of our storytellers here. At Charity Water, I get to travel to the field and meet the communities that we serve

and capture stories that we can come back and use to inspire new supporters or connect people with their impact. Nice. Where was the most recent place that you traveled? We had, it's been a little while, but we were in, uh, We did Rwanda and Uganda earlier this year. Back-to-back three-week marathon. So, Tyler, I wanted to bring you on the show because we, as you know, have officially raised enough money to become an official project sponsor.

Yes. We have, as of the time of this recording, we've raised 14,277 with the rest of the year still on the clock. So I bet we're going to pass 15,000 by the end of the year, maybe 16. That's incredible. What is a water project? So it looks different everywhere we work. We work in about 17 countries around the world right now, but it generally means that you will sponsor clean water for an entire community.

We're working in these places that are really remote and hard to get to. So the solution that we're providing is often at a community level. So over the course of the next 18 to 24 months, you're going to go on this journey and get to see the process for yourself. but eventually you're going to find out where your money's going and then kind of be part of the story is we introduce a partner team and what makes their work unique and the solution that they're providing. And then you'll get to see the final result, your project, come to life in a community somewhere on the other side of the planet. And what are some examples of these solutions? Because I know Charity Water takes a solution agnostic approach in which whatever makes the most sense based on those local factors is what you do. But what are some of those examples?

Yeah, so the most common, the one that people, everybody pictures is a drilled well. And it's incredible because in places like Ethiopia, the irony is that people are walking hours every single day to find some sort of water source when there's water 30 to 100 feet below the ground. They just don't have the tools or the resources to access it. So that's what your community is just unlocked, that drilled well. We would bring in a drilling crew, about eight people who spend 29 out of 30 days of the month on the road, traveling from community to community, trying to serve as many people as possible. They'll spend a couple days drilling deep down to reach this water source and then put pipes in the ground so they can bring that clean water up to the surface at like a hand pump.

So the community can come to this hand pump at any time a day and pump as much clean water as they need. In other places, we're funding larger structures, whole pipes. systems that would take water from the top of a mountain, maybe a spring, like clean water source high in the hills, and bring it down to the community in these distribution tanks and then even down to a household level. So people would have their own tap stands behind their homes in places like Cambodia where water is available everywhere. It's just often contaminated, sometimes has arsenic and different bacteria. They just need a household level solution that can help filter the water. So we provide biosanfews. We provide biosanfews.

filters in Cambodia that just, they're like a giant science fair project. It's a concrete box full of layers of gravel and sand and microbacteria and you pour that dirty water in the top and clean water comes out the bottom. Yeah, each solution is different. It totally depends on our partner and the problem that they're trying to solve for their people. What are some of the other examples? You work with rainwater catchment systems? Yeah, we do. In places like India, the Thar desert, which is up in about, I think it's northwest India, there's hardly any water at all. And these communities will often dig a hole in the ground where they can catch rainwater during the rainy season, the short time of year where they have an opportunity to collect rain from the sky. But these holes

are just, it's just a muddy hole in the ground. So the solution that we provide there is a massive concrete cistern. It's still that's sort of same idea, this concrete collection in the ground next to their home and then we'll attach a well to that so they can pump the water out at any point. In terms of afford anything being the official project sponsor on some project, what's going to determine what it is that our contribution does? How are those decisions made? We have a programs team who's working very closely with our local partners around the world and just trying to figure out where and how we're granting that money. The process is really based on the need and the opportunity. Again, those 17 countries, you know, we have

multiple partners in each one. So the programs team is really responsible for saying, determining where the money goes and who it helped. So it's a mystery to me right now. The largest portion of our portfolio is based in Ethiopia. That's where we do the most work, but your money could go to Nepal. It could go to Malawi. It could go to Sierra Leone. But that'll be part of the fun part for you guys in the coming months. And is that determination made by need? Is it made by the amount of money that a particular project costs matched with the amount of money that the sponsor provides? Yeah, yeah, that's a good point. Yeah. So we would take your $14,000 or $16,000 and figure out all the places where you would potentially sponsor an entire project. And then it would just be

based on need. What happens if, let's say that we contribute $16,000, and you discover hypothetically that there is a project in Sierra Leone that the team estimates would cost about 16,000. That becomes the project. We begin the project and then there are cost overruns, very much like how any time that you try to remodel your kitchen, it always costs more than you think it will. Right? What happens then? Yeah, we work really closely with our local partners to try to be as careful about the overspend or any, anything that could go wrong. It does happen from time to time. I would imagine that we would fill in that gap with another fundraiser, maybe somebody who raised a smaller amount of money who can cover the extra costs. But again, you'll get to be part of that whole story. So,

you know, in my opinion, that's part of what makes this so cool. The work is hard and sometimes things go wrong, but you guys get to be part of the next year and a half and see the process, see your project come to life and everything that goes into making that happen. So as I understand it, January is when afford anything's contribution, our $14,000 or $16,000, however much we'll raise by the end of 2018. January is when that will get sent into the field. And you guys do that twice a year, January and July. Yeah, that's exactly right. Your campaign will close right at the end of the year. And then our team will jump into action trying to figure out where we're going to send the money. And then it will take about just walking through the timeline here. It'll take about six months from that point forward. So we're talking about roughly July 2019 when the permitting will be acquired, the supplies will be acquired, the specific site will be picked, and the groundbreaking begins.

Yeah, we try. You'll get a couple updates along the way, and it almost works out that it's every six months or so. We usually say it's about 18 months to 21 months before you're going to receive your final completion report. But that first one will likely come around July, and that's where we'll get to announce where your money. going where it is right now in the process, what our local partner is doing, and what the next 12 months or so are going to look like. And then it's at about the 12 to 15 month mark that we get to see the first photos, right? It's exciting.

It's like seeing the first photos of a new planet. Yeah, along with your completion report, in the end, you're going to receive this beautiful report that shows you exactly where this community is, the name of the community, people in the community, you're going to see the project that you funded. and we'll prove it all with the photos and GPS coordinates. So you guys can rest assured that this exact location somewhere far away is drinking clean water because of you. On your website, when it shows approximately the number of people who will get clean water,

like right now it's showing that it's $14,277 that would fund clean water for about 475 people. How is that estimate made? Yeah, it's a great question. It is an average across our portfolio. So all of the places where we work in some places like Cambodia, I mentioned the solution that we're providing, that biosan filter is at about a $65 price point, and it works at a household level.

So if you're talking about serving five people for $65, obviously that's going to bring our price per person way, way down. But we have other places in the world, Rwanda and Nepal, where the solution that we're providing is a much large, scale and that brings our cost per person number up. So across our entire portfolio, we say $30. That is the average cost that it would take to bring clean water to one person. And in your case, when you're sponsoring a water project, we're traditionally looking at communities that are that $12,000 to $14,000 range. So it is, it will be very close to the $30 per person number.

Oh, nice. Yeah. How are these projects monitored? So after the pipe system is built, after the well is drilled. How do we know that they're still working five years into the future? You know, it's a really hard question. It's a scary one to ask what happens when a well breaks. We're doing a whole bunch of things to combat it. The very first is that when we provide the solution, we're also going to train our local partners going to train a water committee, a team of people, five to seven people who live in the community who are responsible for maintaining it, keeping it clean, making sure that the rest of the community is aware of the power of, sanitation and hygiene collecting money in the community in case there need to be minor

repairs and we'll even train them to make some of these minor repairs themselves and then we'll also empower them to get in touch with our local partner if something major does happen each partner works a little bit differently they go out and visit these communities there are sort of phone trees ways to be checking in and making sure that water continues to flow but one of the coolest developments for us is we've been working on this remote sensor technology in Ethiopia now piloting in a couple new countries, but it's essentially this plastic block that lives within the body of the well, and it monitors the amount of water that's flowing at any

given time. So if something goes wrong, if something changes, it's smart enough to send a notification to our local partner to us here in the U.S. We know exactly how much water is flowing, and if something changes, we can do something about it. What are some of the more memorable water projects that you've seen in your time on this job? you know what, we spent about a week in Malawi in this community. And from the day that we arrived, the community came out and greeted us. They're singing and dancing, playing instruments. And we sat down to explain what we're doing there. And the village chief said, this is your home now. You know, I just want you to feel comfortable. You're part of this community. We just had this really

formative week with these folks and getting to see the water source that they were using, which was this really muddy little stream in a ravine outside of their village. It wasn't very far. away, but women and girls in particular were walking there every single day, probably five or six times to collect water for their families. And we got to be there on the day that this drilling rig came in and it went to work and you could feel the anticipation, all these people who skipped their chores and responsibilities and they come stand around the rig and just, you know, they're sitting in the shade waiting and waiting for this moment.

They never thought that they would see this day. When that moment came and water came shooting up out of the ground, kids came tearing through the ropes to come dance and the water that was spraying. People were singing. It was just an incredibly iconic moment. And really that, the level of joy in celebration was just such a testament to the change that's coming, you know, the change that they know is going to come as a result of getting access to clean water. It never gets old. Seeing that moment is just so, so incredible. And I'll, and I'll just add this, as we were leaving that community, we're in our car and there's a group of women who are behind us following along with the car, they're clapping and they're singing.

And I asked our translator, well, what are they singing? And he's like, oh, you know, it's just a song. They're singing that you were like morning due because you were here and you were beautiful and now you are gone. I was like, oh, well, I'm not crying. You're crying. Yeah, it was beautiful. It is. It's just getting to see, not just see the impact and see clean water come out of the ground. I know what it means, but seeing people. know what it means is just so powerful. Nice. Yeah.

Nice. Yeah. It's been really cool to see the whole community get involved and to read all of the comments as people donate. We had someone Aubrey donated $5, you know? And just to see that level of, it's all these people giving anywhere from 5 to 4,000 that got it all to add up. Yeah.

And it's such a cool point, too, that how much you give, it matters. but it's about our collective impact, the things that we can do when we work together. And in that case, every single person makes a difference. It's really amazing that you're using your platform to do this. Thank you. Well, thank you so much. Yeah. Thank you, Paula. Thank you, Tyler. I can't wait to see what our water project is. Is it going to be a well? Is it going to be a pipe system?

Is it going to be a rainwater catchment system? What's it going to be and where is it going to be? Stay tuned. And if you want to support the cause, there are two ways to do so. afford anything.com slash store is where you can pick up a shirt that saves lives. 100% of the proceeds from the sale of these shirts go to Charity Water. If you want to make a direct donation, afford anything.com slash water is where you can do that. If you want to support the show, though, there are three ways that you can do that.

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So thank you so much to everybody. who rated us or left us a review. That's huge. Recently, our listener Potoki N says, The Afford Anything podcast has quickly become one of my favorites and my wife is a subscriber also. Being a mid-30s professional and a real estate investor, I can relate to Paula's material and message. It can be difficult to find a local network that has the same financial goals, passions, and interests. I feel like I found my network through Afford Anything. Finally, I'm super impressed, but not surprised. about Paula's recent accolades and awards. She does a fantastic job in her podcast.

Thank you so much. And TBC1976 says, excellent advice and discussions around financial independence and decisions. Sound quality is excellent, very well produced, professional podcast. Thank you. We also got a one-star review from somebody called REO Express who says, Paula, you mentioned to your listeners to check out certain podcasts by number, but no podcast numbers appear in the podcast title description.

If you start numbering, I will reevaluate my review. Thank you. Well, Ario Express, if you go to Afford Anything.com slash iTunes and you load it on your desktop, you will see the podcast numbers there. Also, if you go to Afford Anything.com slash episode 162 or episode 1161 or any other episode number, you can also access the episodes by number there. The reason that it doesn't show on apps is because Apple, released guidelines in November of last year, November of 2017, Apple released new guidelines

stating that podcasters should not put episode numbers in the title. And in fact, Apple would penalize podcasters who did so. However, when iTunes pulls the feed, here's what they do. They pull from the general episode title tag, which does not utilize the episode number tag. So in that way, we can have the episode numbers show up for afford anything on iTunes desktop, but everything is still compliant with Apple's recommendations on the Apple Podcasts app, the iOS app. So I hope that that satisfies your request. I am trying to balance wanting to provide episode numbers while also remaining compliant with the November 2017 Apple Recommendation Update. If you would please consider this. The one-star

Our reviews really drag our average down. And as you can tell, probably from what I've just said, we work very, very hard and pay very close attention to detail when we are making decisions about what we do on this show. Everything that we do is very strategic, very well thought out. And sometimes that does mean that we have to balance the demands of what we know our listeners want with what the Apple and Spotify and Stitcher overlords want. Speaking of our app overlords, we are about to start airing. This is a huge announcement. We're about to be on Pandora. This has actually been under discussion for some time, and I have not been allowed to talk about it. By the request of Pandora, I have not been allowed to talk about it until a couple of days ago. But I can now officially announce that as of this December, this podcast is going to be available on Pandora. So, woo-hoo!

Finally, if you have a suggestion or an idea for this show, I'd like to ask for a favor. Please do not give us a one-star rating in order to communicate your suggestion or your idea. That's not necessary. You can leave a comment in the show notes. You can message me on Instagram at Paula Pant. You can message me privately there. You can also message me on Twitter at Afford Anything. feel free to reach out to us because there's a very good chance that whatever idea you have

is probably something that we have already had internal meetings about. Like myself and Steve and Aaron have probably discussed it and we may have a very good reason why we are not doing X or Y or Z like in this particular example, in which we're just trying to comply with Apple's guidelines. Thank you so much for tuning in. My name is Paula Pan and this is the Afford Anything podcast. I'll catch you next week.