(Contribution for Up.Date – Issue # 2, 2017)
PERSONAL FINANCETECHNOLOGICAL DISRUPTION AND ITS FINANCIAL IMPACT
Technology is a wonderful thing. It has transformed the way we live,
how we travel, how we communicate and just about every aspect ofour lives. It is wonderful - until something goes wrong. It could be theautomatic barrier on the toll road, the Internet connection or worse,
a complete global failure of the computer system as experienced by
British Airways recently which grounded planes and disrupted flights
for many days. But perhaps the biggest impact of technology is how
it affects people’s livelihoods. It has made some people rich but has
also made others very poor.
‘Technological disruption’ is a term that has only recently crept into
our vocabulary although the phenomenon has been around for
centuries. Perhaps the invention of the wheel was one of the earliest
examples. Its efficiency must have displaced thousands of labourers
who previously would have laboured to carry objects from A to B. In
modern times we are seeing technological disruption at an alarming
rate. Examples would be video and audio streaming which havecaused havoc in the music industry. Then we have e-mail which has
revolutionised communications and all but eliminated the centuriesold tradition of writing and posting letters. The President of the USA
can now communicate instantly with millions around the world bymeans of a single, cost-free ‘Tweet’. How much would it have costand how long would it have taken a century ago to send the samemessage to the same number of people?
Technological disruption is now happening so fast that gadgets weused just ten years ago now appear outdated if not ancient and no
doubt the same will be true for things we use today in another ten

years’ time. All this is a tribute to the great ingenuity of the humanrace. Many fortunes have been made. But progress has come at a
cost to many, the most obvious one being the millions of jobs thathave been lost along the way. What has happened to all the typists,
the newspaper compositors, the sales staff who sold records or otheroutdated products, the toll road employees who have been replacedby automatic gates, not to mention chimney sweepers?! The fact istheir lives were ‘disrupted’. Some will have found other jobs; many
who could not adapt to change have undoubtedly suffered financial
hardships. But job losses are not the only factors that have disrupted
lives; many other things have changed that have turned theprinciples of financial planning upside down.
The standard seven life ‘stages’
Decades ago when looking at financial planning we would see thejourney of life as a series of stages, namely: Early childhood
 Higher education
 Single adulthood Married with young family ‘Empty nest’ Retirement
We could plan with a reasonable degree of certainty that we would
follow the above path and would therefore build our financial plansaround the different stages.
Invariably financial planning questionnaires would ask ‘At what age
do you plan to retire?’ In my experience I have found that people intheir 20’s or 30’s would likely indicate an age between 50 and 60.
Those in their 40’s would be more likely to indicate 65 while many intheir 50’s and already in their 60’s now admit they don’t know when
they can afford to retire! In many cases this is because the seven life
‘stages’ did not work out as planned. Something happened along theway that threw the financial plans off the track.
What are the causes of this ‘disruption’?
They are many-fold, but here are some of the unplanned events thatcan derail the best of plans: Death or critical illness of a family member.
 Divorce. In many western countries most marriages now end indivorce. This can have a devastating impact on financial plans.
 Remarriage. A twist to the previous point; most divorces end inmarriage!
 Linked to the last point, remarriages often entail taking on
responsibility late in life for the children of a new partner.
 Disruptive technology. We can no longer assume that ourchosen skills or professions will be needed for a lifetime.
 Business failure. The commercial world is dynamic and abusiness that is successful one year can collapse the following
year due to competition or a myriad of other factors, including
once again technological advances.
How can we plan for these ‘unplanned’ events?
The fact is we never know what is around the corner. We don’t want
to go through life worrying about it but it is only sensible torecognise that things can go wrong. However, with a little bit ofplanning the impact of unforeseen events can be mitigated. We
should still base our ‘core’ planning on the seven stages of life but atthe same time make some provision for the unexpected. These aresome of the measures that we can take: A very basic one is of course insurance. This should include
medical insurance for the whole family, life and critical illness
insurance for the breadwinner and spouse. According to aBritish insurance statistic one out of every three persons will
experience a critical illness (such as heart attack, stroke orcancer) before the age of 65. Don’t wait until something goes
wrong; by then it is too late.
 Don’t be over-ambitious when committing to a long termsavings plan. You may have a secure job and profession today
but your skills could be outdated or surplus to requirements ina few years’ time. Choose an a savings amount you canconfidently maintain.
 Consider having separate rather than joint savings plans. Joint
plans can be difficult to separate when people split up.
 Always keep ample cash reserves in the bank. There may belittle or no return but access to cash could be critical ifanything goes wrong.
 Review how much you are spending and how much you aresaving. All the statistics indicate that people are spending too
much and not saving enough for the future. Even if you are
fortunate enough to go through life in line with the sevenstages you may not have enough to ensure a comfortableretirement. And if your life is disrupted by unforeseen events
you could be in serious trouble.
Finally, invest in yourself!
You are your greatest asset! Keep investing in it by devoting time toimprove your skills, become more qualified in your profession and at

the same time learn other skills. Do an inventory of your knowledge,skills and ambitions and identify other potential avenues of
employment should your present job disappear. There is a mine of
information on the Internet. If you have the time and determinationconsider distant learning courses.
As for me, my job too could disappear (as did my previous one).
‘Millennials’ are now trawling the Internet for ‘Roboadvice’ rather
than turning to a financial adviser. So I may have to consider anothercareer change. I once held a pilot’s license and quite like the idea of
training to become an astronaut. Unfortunately, age might be alimiting factor.

Colin Bloodworth, Chartered Member of the Chartered Institute for Securities
and Investment (UK), has spent over 20 years in Indonesia. If you have anyquestions on this article or related topics you can contact him atcolin.bloodworth@ppi-advisory.com, colin.bloodworth@yahoo.co.uk or +62 21
2598 5087.