Moore's law, named after Intel co-founder Gordon Moore, is the observation that over the history of computing hardware, the number of transistors on integrated circuits doubles approximately every two years. In other words, computing power doubles. This has been changed to 18 months.
You can apply Moore's law to many electronic devices. You can see it with your own eyes. Television screens are bigger and better. Cameras are smaller, with far better quality. I-phones today take better pictures than most digital cameras did just 5 years ago. Cell phones and other mobile devices are like handheld computers now. And most of these products get more and more affordable, even in the face of rising inflation.
Many electronics are getting better exponentially. Even with a doubling of chip size every 18 months, this means that we can't even conceive of what will be available in ten short years from now.
There is no reason that Moore's law could not apply to other areas like cars and medicine. Cars do get better and a lot of it is due to better electronic technology. But cars are not keeping pace with computers in general. Medicine is not keeping pace at all. There is certainly some modern medicine that is incredible, but the prices keep going up and the quality is only getting better in certain select areas (again, usually dealing with electronics).
I believe that government never had a chance to get its hands on computers soon enough. The technology exploded faster than government could react. The government certainly would not have allowed the internet to come into existence if it had known what would happen. Unfortunately, in an area like medicine, it is heavily regulated, controlled, and subsidized by government (at all levels). This is the main reason that we have not seen the major advancements to the same degree as the computer industry.
I am a long-term optimist and a short-term pessimist. Moore's law is a reason to be highly optimistic. It means that technology can outrun the bureaucracy of government.
But it also raises an interesting question. If we are going to see incredible advancements over the next 20 years, is there much incentive for a young person to save now? It is a tough question to answer because it is impossible to know what the future holds.
If 3-D printing and other technologies we can't conceive of come to fruition, then what will that mean for us? If a 3-D printer can one day build a house for a fraction of what it costs now, does that make real estate investing a bad choice now?
In fact, what if we have robots that can serve us our food and do our chores? What if we only have to work a fraction of the time to enjoy the same (or better) standard of living that we enjoy now?
If you save and invest your money now, does it really pay off later? There is an argument to be made that we may as well enjoy life now because we will be even richer in the future anyway. Of course, if everyone took this advice and stopped saving, then we wouldn't see technology continue to advance. But from an individual perspective, there is an argument to be made that saving money now is not that beneficial for the future.
I think it is an interesting subject. And again, it is impossible to know what will happen in the future. Because of the uncertain future, I think it is good to strike a balance. I think this is good advice anyway.
Hopefully you make enough money that you can save some of it and still enjoy life to a certain degree now. It is important to find the best bang for your buck now, in terms of happiness. You may enjoy driving a $100,000 car now, but it is probably not the best bang for your buck. You have to find that balance between enjoying life now and planning for the future.
Even if Moore's law continues and we see great advancements in technology from where we are now, I still think saving and investing will likely be beneficial. You will be ahead of many other people and may be able to get in on the new technology first. And if Moore's law doesn't continue, you will certainly be glad you saved money so that you can hopefully maintain a relatively high standard of living.
It will be interesting to look at this subject again in another 10 or 20 years and compare it to now. I really don't have any idea on what the future holds.