Information Age

The Information Age is the book’s name for a new economic order in which information moves around the world at the speed of light and timely knowledge becomes a source of wealth. It marks a contrast with eras when land or factories determined economic power, and it makes financial learning, adaptability, and the ability to act on information central to the prospect of keeping or building wealth.

From Land and Industry to Information

The book sketches a succession of economic orders: land represented wealth roughly three hundred years earlier; factories and production later supported the rise of the United States; in the present era, information is said to confer wealth on those who possess it in time. Unlike land and factories, this new resource cannot be contained by national boundaries. Its rapid circulation makes economic change harder to control and, in the author’s account, more dramatic.

The transformation is described as both creative and disruptive. The author anticipates many new multimillionaires, alongside people left behind as established work and business arrangements change. A story about Alexander Graham Bell makes the contrast concrete: after patenting the telephone, Bell sought $100,000 from Western Union for his patent and small company; its president dismissed the price and refused the offer. The account points from that rejection to the later emergence of a multibillion-dollar industry and AT&T, presenting invention and the recognition of its value as consequential responses to change.

Adaptation, Education, and Risk

The book treats financial intelligence as a means of meeting an economy in motion, not as a guarantee that change can be avoided. Its author contrasts welcoming change and seeking the possibilities of making millions with fearing the loss of a pay raise. People who remain flexible, open-minded, and willing to learn are said to grow richer through change; those who expect money itself to solve problems are warned that money without financial intelligence can soon disappear.

That argument is linked to the book’s criticism of education. Schools are described as concentrating on scholastic and professional skills while leaving financial skills largely untaught. The author argues that a person can have excellent grades and technical knowledge yet lack the confidence to act, and that excessive fear and self-doubt can suppress financial ability. Developing financial intelligence is presented as a way to gain options in a period that brings both new ventures and bankruptcies, layoffs, and downsizing—not as a promise that every risk will pay off.

The Information Age also changes the book’s account of what makes older knowledge valuable. An idea or practice that functioned as an asset yesterday may become a liability when circumstances change. People who lose jobs or homes may blame technology, the economy, or their bosses, while failing to consider whether their own attachment to outdated ideas is part of the problem. In this framing, adaptation requires reassessing what once worked rather than assuming that past success will continue to apply.

Information, Fear, and Investment Decisions

The book’s investment examples show how information affects decisions through both analysis and emotion. It warns that pessimistic rumors and dramatic reports can make people retreat from opportunities. The recurring image of Chicken Little represents the fear that disaster is imminent; the author describes such warnings as arising both in people’s own minds and through friends, family, coworkers, and media. Peter Lynch’s term for this surrounding alarm is “noise.” The prescribed distinction is not between risk and safety, but between reacting to warnings and examining an opportunity for oneself.

A 1992 example gives that distinction a financial consequence. The author and his wife showed their friend Richard a two-bedroom townhouse in a Phoenix resort community priced at $42,000, although similar units were selling for $65,000. Richard initially bought it, then withdrew after a neighbor who was not an investor told him it was overpriced. By 1994, the townhouse rented for $1,000 a month, or $2,500 during peak winter months, and by 1995 it was worth $95,000. The book presents Richard’s retreat as buyer’s remorse: a secondhand warning displaced his own opportunity to investigate.

The author offers another example in tax-lien certificates. He says that a portion of his assets is held in certificates yielding 16 percent annually, compared with the 5 percent he says a bank offered on certificates of deposit; the tax liens are secured by real estate and enforced by state law, but lack liquidity. People who have not used the investment nevertheless warn him against it, often citing a friend or an investment magazine. The example supports the book’s call to inspect the basis of a claim, while also showing how its argument relies on the author’s own investment comparisons.

Teaching the Next Generation

The era’s demands connect to the book’s account of financial education at home. In the co-author’s introduction, Robert’s scattered, unfinished manuscript is described as a work that deserved to be assembled and shared, especially in changing times. The two co-authors agree to develop it as a book for parents and children. Robert says that the amount a child needs to learn depends on the child, but presents education as the foundation of success, alongside financial and communication skills.

The argument about inheritance is not limited to money. In 1990, Mike took over his father’s business empire, which the author says was in good hands, and began grooming his own son to succeed him, as his father had groomed the boys. The author, by contrast, says that he retired in 1994 at age 47, while his wife was 37. Retirement, as he defines it, does not mean that work must stop: their assets can grow without their physical presence, allowing them to choose whether to work. These divergent outcomes—Mike continuing the family enterprise and Robert choosing financial independence—give the book’s account of the new era a generational dimension: knowledge, financial habits, and control over one’s time are presented as things that can be learned and passed on.