We're living in a K-shaped world

The most important letter in the alphabet right now isn't a, b, c, x, y, or z.

It's k.

For many, life is feeling K-shaped, in more ways than one.

Everywhere you look, it’s: prosperity and precarity. Boom and bust. Opportunity and stagnation. Up or down. Accelerate… or die.

Just look at the data. Here’s one example:

The stock market is ↑, while consumer sentiment is ↓.

That may sound strange until you think about what it actually represents.

• Stocks —> people who own

• Consumer sentiment —> people who owe

The stock market’s performance largely measures how the top 10% feel. Consumer sentiment measures everyone else.

Also, lots of stuff can contribute to K-shaped dichotomies like this in the market. But what’s becoming increasingly clear is that this K shape is appearing… everywhere.

The nature of your work. AI skills. Asset exposure (stocks, real estate, business ownership).

Once you start to see it, you can’t unsee it.

Here’s what we mean…

K-shaped trends you need to see…

Let’s start here.

The top 10% now account for nearly half of all consumer spending.

“This is why the economy can look strong in the data while millions of people feel like they're falling behind,” as Peter Mallouk put it.

Another one:

Homeownership is going “great”… if you're 70:

But not great if you’re 30…

As Scott Galloway said:

“We’ve broken the social contract that binds America: Work hard, play by the rules, and you’ll be better off than your parents were. For the first time in our nation’s history, this is no longer true… Neither the minimum nor median wage has kept pace with inflation or productivity gains, while housing costs have outpaced them… A decent proxy for the success of a society is how it treats children… Can we answer a simple question: Do we love our children?”

The man certainly has a gift for stabbing you with the truth, then twisting the blade… Okay, what else? How about:

“Offices for computers” will increasingly break ground, “offices for people” less so.

How about reading?

What about our media consumption (YouTube, in particular)?

Our values?

How about AI spending:

Vs… Alcohol spending:

In the tech world, especially, things are going K-shaped fast.

Bearing in mind correlation ≠ causation…

Companies using AI heavily are seeing their revenue double, while companies that aren't using AI… aren’t seeing that.

Anecdotally, the same thing is appearing in careers:

“AI users vs. AI refusers” is rapidly manifesting in K-shaped results.

Look around in your own job, and you’ll likely agree.

As Shaan Puri illustrated it:

K-shapes are even manifesting in weird headlines like these…

NVIDIA employees are seeing their net worths rocket past $25 million…

…While young tech grads who thought they’d be set for life are competing for Chipotle jobs.

(10 years ago, it would’ve been hard to believe that could be a headline.)

Some recent K-shaped trends are happening so fast, they’re hard to visualize:

How exactly they measure this… who knows?

But here’s what’s important: today, it’s words and code. Eventually, it may be houses, factories, and entire businesses. Value will accrue to those who own and can leverage AI for their benefit.

Which is why this may be the most important K-shaped chart for you to see today…

Labor now takes home its smallest slice of the economy in decades.

“This explains almost all of the discourse around the K shaped economy,” the account @BoringBiz_ explained. Here’s how they broke it down:

• “When you are young, society essentially offers you a trade, give us your labor, in exchange we will give you capital that can help you retire comfortably. This worked out well for many decades.”

• “People entered the job market, contributed their sweat and tears in the form of labor, and walked away with a happy retirement at the age of 65. Then the growth stalled down and the money printer was turned on. Asset prices went vertical but the value of labor didn’t keep pace.”

• “Today, that labor doesn’t earn you anywhere close to what it used to in inflation-adjusted dollars. In summary, the people who only have labor to contribute got the short end of the stick. With the onset of AI, this trend probably only continues. Value of labor will get diluted away. Capital owners will continue to capture the value and rejoice as assets appreciate.”

Read that again, then read it again and again, until you get it.

The money is moving toward capital, not labor.

The patterns are clear:

The Common Thread

At the heart of it all, the story we’re living in isn’t really about tech layoffs, or housing markets, or even AI. The story is about who owns what. That’s the American economy today, and the winners are clear.

As Sam Altman put it in 2019: “You get rich by owning things… Somehow or other, you need to own equity in something, instead of just selling your time. Time only scales linearly."

Only getting truer.

Don’t let this be you.

Our invitation to you…

We want you to be on the right side of the K-shaped economy and own the businesses AI isn’t replacing anytime soon. So we’re going to give you the exact playbooks to do it. Things like…

> Spotting great business ownership opportunities

> Structuring deals

> Stepping into ownership

> Using AI to scale

We’re talking about deals like these…

And we’re going to do it with you at this 1 incredible event coming up.

Come, and we’ll show you how to:

• Identify great businesses for you (and avoid bad ones).

• Finance acquisitions with tools like SBA loans and seller financing.

• Negotiate with sellers and transition into ownership.

• And so, so much more. You can check out the schedule here.

The cool part:

Click HERE to learn more and save your spot.

The American Dream might look broken or splintered, but it isn’t dead.

It’s just waiting for new ownership.

We’d love to help you seize it.

-Team Contrarian

The information contained here is educational, may not be typical, and does not guarantee returns. Background, education, effort, and application will affect your experience and the profitability of any business. Individual results may vary.

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