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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

#251

Post by gpt5 »

Cider9986 wrote: post #241

What's the best place to put money for my 6 year old son or best strategy to follow? ChatGPT: 529 college savings or custodial brokerage or custodial Roth IRA. 80-100% diversified in us. Optionally adds international. Advertisement: >SoFi Online Savings Account Better Banking is Here To Stay. Up to 3.10% APY and No Account Fees. Terms apply. GLM 4.7: 529 / Roth IRA / UGMA broad, low-cost index funds for example VTI.…

I'll just note that the ChatGPT version you used is 5.5 instant (with no thinking budget).

Unfortunately, this is the experience of most people with ChatGPT, which is why the broad population is so unaware of how intelligent and nuanced an AI response can be.

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

#252

Post by jandrewrogers »

dingaling wrote: post #244
throw0101a wrote: post #161

Earlier quoted context omitted.

> You could replace the AI with a piece of paper […] This is actually the 'schtick' of a book that was written ten years ago: > Emails and comments on his blog asked for a real index card with financial advice, so Pollack jotted down nine rules in two minutes, took a picture of it, and posted it online.[1][4] The image went viral, and was covered on many internet news sites.[4][5][6] Pollack and Olen wrote The Index…

Sadly, also hyper-unrealistic. Very few people can afford to save 20% of their income whilst maxing pension contributions, let alone maximising other accounts. Points 1, 3 and 5 are probably the key ones and would still stretch most people.

The median US household is statistically within the ballpark of being able to achieve this per the data. Americans have extremely high incomes and anomalously low taxes on the middle-class. They can easily afford it.

Whether they save or not is another matter. Something like 30% of Americans don’t save a significant fraction of their income even though the data clearly indicates it is easy to do so.

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

#253

Post by wojciii »

bonesss wrote: post #239
kristianp wrote: post #136

Earlier quoted context omitted.

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!

My kids have bank accounts to learn how to manage money, banks, and training: getting used to having money in the bank before, during, and after a trip to the mall. My hope is to let them screw up their finances when they’re little instead of 20-something. We’ve also setup tax-deferred retirement investment accounts for them. $1 at 20 can 70x or more by retirement. Mostly it’s the mental training though. Being ok “lo…

This is a very good idea. I will have to copy this. :D

My oldest is 8 and can get a debit card now.

When I think back I made a lot of mistakes that I made with money was around the time I was 18. They were expensive to undo later.

My parents didn't teach me being responsive with money as they shown me how but didn't explain why.

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

#254

Post by seattle_spring »

what wrote: post #217
jeffreyrogers wrote: post #175

Earlier quoted context omitted.

You can convert your 401k to an IRA when you leave an employer. Some employers also offer in service rollovers (I think these mostly have minimum age restrictions on them though)

That’s a traditional IRA, not Roth.

Right but once your traditional IRA is fully rolled over to a 401k, you can take full advantage of backdoor Roth IRA contributions regardless of income.

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

#255

Post by continuational »

Cider9986 wrote: post #241

What's the best place to put money for my 6 year old son or best strategy to follow? ChatGPT: 529 college savings or custodial brokerage or custodial Roth IRA. 80-100% diversified in us. Optionally adds international. Advertisement: >SoFi Online Savings Account Better Banking is Here To Stay. Up to 3.10% APY and No Account Fees. Terms apply. GLM 4.7: 529 / Roth IRA / UGMA broad, low-cost index funds for example VTI.…

Why ask GLM-4.7 instead of GLM-5.2?

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

#256

Post by petterroea »

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…

I'm generally very critical of the idea that people are relying on ai, but the thing I didn't realize in the past and that I see many like me haven't is that the literacy of an average citizen is surprising low. I know people who get very useful life advice from these models. Life advice anyone over 16 should know, but that doesn't matter. This trust people incorrectly put in models means they actually listen. And SOTA models are pretty accurate when it comes to common sense. Most of the time. So it actually works out.

I still get very anxious at the idea of people relying on llms though. It just works out more often than we think.

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

#257

Post by MattyRad »

scrapcode wrote: post #152
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…

I never personally liked the blanket advice to "Max your 401k." For most, if achievable at all, that would be the most they can invest at all. Even though it is often recommended alongside a proper "emergency fund," that advice leaves little liquidity without major penalties.

I actually had a great session with Gemini pushing back on the "Max 401k" advice. Summarized in my own words:

  - Why would I contribute tons more to my already decent 401k? If anything, I want to pull from it. I refuse to diminish the peak years of me and my family's life together just to be wealthy when I'm old and alone.
  - that's a good point, but know you'll pay tax on top of 10%
  - well I would have paid tax anyway if I just saved it, and 401k turned out to be more lucrative anyway. So the penalty is only 10% when tax is unavoidable timewise, paltry
  - true, but you yourself just mentioned how lucrative the 401k is over time. That money will not manifest over time if you pull it now
  - why would I even want to be rich when I'm old and boring anyway, life is happening for me right now
  - well that depends on what you consider old, you could retire early, use SEPP to access penalty free, say at 50
  - I actually wasn't aware of that as an option... The difference between my age an 50 isn't that large, at least not compared to 55/60. Very good then, perhaps I'll keep things as they are.
As is typical with AI, I can't attest to whether this is accurate, whether it's good advice, or whether I myself am financially illiterate (probably), but it did raise my confidence a bit, and legitimately talked me out of a hypothetical of using some 401k money to buy a better house.

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

#258

Post by noduerme »

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…

The other stuff sounds scammy. But what's wrong with setting up savings accounts for your kids? It's a good way to teach them to save money. I was 10 years old or so when my parents set me up a bank account with $100 in it. I saw the statements every month and started putting money I earned into it. I had that account until I left home at 17, and it had several thousand dollars in it by then. I think that was actually crucial to helping me have financial literacy. Maybe you're talking about some scammy email or whatever. But the basic idea of setting up accounts for your kids is a good one.

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

#259

Post by noduerme »

dingaling wrote: post #244
throw0101a wrote: post #161

Earlier quoted context omitted.

> You could replace the AI with a piece of paper […] This is actually the 'schtick' of a book that was written ten years ago: > Emails and comments on his blog asked for a real index card with financial advice, so Pollack jotted down nine rules in two minutes, took a picture of it, and posted it online.[1][4] The image went viral, and was covered on many internet news sites.[4][5][6] Pollack and Olen wrote The Index…

Sadly, also hyper-unrealistic. Very few people can afford to save 20% of their income whilst maxing pension contributions, let alone maximising other accounts. Points 1, 3 and 5 are probably the key ones and would still stretch most people.

I was saving 20% a year when I was making $36k a year and spending $800/mo on an apartment in the tenderloin. In 1997. It's called beans and rice. I'm still saving 20% a year, making $200k a year and owning a house. Yes, you can do it. Stop buying shoes, clothes, rims, and video games and you've probably got 20% right there.

Oh, and don't get married.

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

#260

Post by lawn »

noduerme wrote: post #258
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…

The other stuff sounds scammy. But what's wrong with setting up savings accounts for your kids? It's a good way to teach them to save money. I was 10 years old or so when my parents set me up a bank account with $100 in it. I saw the statements every month and started putting money I earned into it. I had that account until I left home at 17, and it had several thousand dollars in it by then. I think that was actuall…

Inflation will erode the value of money just sitting in an account.

Even if you lock it up and get better interest the results will get dwarfed by investing in broad, passive, and low fee funds.

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