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AI financial advice is surprisingly good, especially if you ask right questions

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Re: AI financial advice is surprisingly good, especially if you ask right questions

#131

Post by groundzeros2015 »

DonsDiscountGas wrote: post #65
networkOne wrote: post #25

Yes, financial planners will be one of the first industries to totally revamp itself because of AI. $2,000 for some SoA which is 99% boiler-plate? No thanks. I spent years in this industry, and the advice from these 'experts' is demonstrably poor.

Lol. You don't even need AI for that 99% boiler plate. Save 6-12 months of expenses in cash, DCA the rest into total market stock index funds. But people still pay expensive advisors to get worse results.

An advisor gives you emotional support and helps you not fuck it up.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#132

Post by AussieWog93 »

groundzeros2015 wrote: post #129
AussieWog93 wrote: post #111

Earlier quoted context omitted.

The banks might pay 3% interest, whereas even non-volatile conservative investments like cap notes or bonds would pay something like 7%. Plugging it into a calculator: 1.03 ^ 18 = 1.70 1.07 ^ 18 = 3.37 Example numbers, but you're effectively taking half of the money that your kid would have had on their 18th birthday, and giving it to a banker.

Yes… I also wouldn’t park money in a savings account for 18 years. But 7% is not the risk free rate! The S&P and these other things have risk! But show me a bond I can buy that’s paying 7% and I’ll show you below investment grade.

LFSPA.

Not risk free, but not volatile either. Although even that underperforms compared to an index fund.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#133

Post by mohamedkoubaa »

Eji1700 wrote: post #109
AussieWog93 wrote: post #98

People in this thread are massively underestimating the level of financial illiteracy in the general population. We've had multiple people try to convince us to set up bank accounts for our kids, so that they could accumulate interest over 18 years. More that tried to convince me to gamble on random pump and dump shitcoins. More still that talked about "investing" in random collectables like Funko Pops or Pokemon car…

“Pay your bills on time and fully” “Do what you can to eliminate addictive vices or never get them” “Max your Roth and 401k contributions before even thinking about anything else” “Try to budget” “Don’t live beyond your means. Monthly payment need to be considered carefully” If you can even TRY to do these things it puts you SO far ahead of the average person. It sucks because I get it, if you’re behind waiting years…

The writer of one punch man was on to something

Re: AI financial advice is surprisingly good, especially if you ask right questions

#134

Post by groundzeros2015 »

jbs789 wrote: post #15

The hard part is behavioural/emotional/psychological rather than technical. Usually discussions about money are never actually about money, but rather safety, fear, etc. That’s where a real advisor earns their keep. Understanding the client and instilling confidence/comfort.

The way people think and talk about money is also heavily dependent on class and culture. It’s very difficult to change. It’s not at all about typing it numbers on a calculator.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#135

Post by SideQuark »

AussieWog93 wrote: post #111
bradfa wrote: post #104

Earlier quoted context omitted.

What’s wrong with bank accounts for your kids? Sorry, this one doesn’t seem to fit with your other examples.

The banks might pay 3% interest, whereas even non-volatile conservative investments like cap notes or bonds would pay something like 7%. Plugging it into a calculator: 1.03 ^ 18 = 1.70 1.07 ^ 18 = 3.37 Example numbers, but you're effectively taking half of the money that your kid would have had on their 18th birthday, and giving it to a banker.

You’re not giving it to a banker, you’re trading risk for return and flexibility. One can access savings at any time, any amount. Not true with bonds, maybe if you fiddle with indices.

Also bond returns have averaged 5% over decades, not 7.

Not taking all this into account, and simply claiming bogey men took your money, is misleading.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#136

Post by kristianp »

AussieWog93 wrote: post #98

People in this thread are massively underestimating the level of financial illiteracy in the general population. We've had multiple people try to convince us to set up bank accounts for our kids, so that they could accumulate interest over 18 years. More that tried to convince me to gamble on random pump and dump shitcoins. More still that talked about "investing" in random collectables like Funko Pops or Pokemon car…

We have bank accounts for our kids, currently earning 1.75% because we aren't depositing money every month. If money is deposited it's another 3.3%.

I really need to get around to setting up Vanguard for them. Thanks for the reminder!

Re: AI financial advice is surprisingly good, especially if you ask right questions

#137

Post by sudo_cowsay »

mohamedkoubaa wrote: post #133
Eji1700 wrote: post #109

Earlier quoted context omitted.

“Pay your bills on time and fully” “Do what you can to eliminate addictive vices or never get them” “Max your Roth and 401k contributions before even thinking about anything else” “Try to budget” “Don’t live beyond your means. Monthly payment need to be considered carefully” If you can even TRY to do these things it puts you SO far ahead of the average person. It sucks because I get it, if you’re behind waiting years…

The writer of one punch man was on to something

He knew the way

Re: AI financial advice is surprisingly good, especially if you ask right questions

#138

Post by eks391 »

MBCook wrote: post #125
AussieWog93 wrote: post #111

Earlier quoted context omitted.

The banks might pay 3% interest, whereas even non-volatile conservative investments like cap notes or bonds would pay something like 7%. Plugging it into a calculator: 1.03 ^ 18 = 1.70 1.07 ^ 18 = 3.37 Example numbers, but you're effectively taking half of the money that your kid would have had on their 18th birthday, and giving it to a banker.

3% is amazingly good. It’s not hard to beat that, but a savings account at a common bank can easily be below 0.05%. I looked up BoA. 0.04%.

3% is becoming more common as of the last few years, at least in the US. I know several banks off the top of my head that offer 3.5% or higher (and more if you are a new customer) for their savings accounts. I would persuade people who use banks that haven't moved on from near-zero APY to move on themselves.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#140

Post by zrail »

orsorna wrote: post #101
singpolyma3 wrote: post #95

Earlier quoted context omitted.

I mean, never DCA anything that's terrible advice. But still better than what most people do.

If you only have a fixed amount of money to put aside every month, DCA makes sense. That applies to 99% of people. Not terrible at all.

That's not really DCA, at least how I understand it. DCA is something like "I have $520,000 in cash right now today sitting in checking, I'm going to buy $10,000 a week of VTSAX for the next 52 weeks" which on average is a bad strategy.

What you're describing is better analyzed as a continuing series of lump sum investments. You're investing as soon as you have cash available, not unnecessarily holding onto cash.

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