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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

#271

Post by noduerme »

lawn wrote: post #260
noduerme wrote: post #258

Earlier quoted context omitted.

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.

Yeah, but that's really not the point of opening a bank account for a kid. The point is that saving should become a habit. Seeing a balance grow is satisfying. When you're 12 years old and mowing lawns it's better to put money in your bank account than stuff it under your mattress, or spend it on dumb shit you won't remember next year. Then you talk to your kids about CDs, mutual funds, high yield savings, growth stocks, dividends, inflation, retirement funds, real estate, loans, etc.

The first thing is how to open a bank account and put money in it. You'd be amazed how many adults I've met who didn't learn that until their mid-20s.

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

#272

Post by dcow »

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 trick is not to let it hit your checking account. Live without it and your lifestyle will adjust.

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

#273

Post by FabHK »

zrail wrote: post #140
orsorna wrote: post #101

Earlier quoted context omitted.

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.

BTW, you are correct technically that if the expected return of the investment is positive, then you maximise the expected return by putting in everything now all at once. However, maybe you want to reduce the variance. Or you want to trade off return and risk. Or you want to minimise regret.

If you put all in at a certain price, and later the market moves down, you'll regret that you didn't buy cheaper, and think you timed it badly.

If, however, you commit to a strategy of putting in say 5% per month over the next months, then a) you just automate it, and don't think about it anymore, and b) you don't really have a reference price at which you bought (sure, you can determine your actual cost basis, but who does that...) and thus avoid regret when the market tanks. Plus you reduce variance (by reducing the variance of your cost basis).

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

#274

Post by Cider9986 »

gpt5 wrote: post #251
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.

I wasn't signed in. Do people not get better models when signing in? I imagine a lot of people have accounts.

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

#275

Post by ornornor »

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 was at a dealership not that long ago to buy a new car for someone.

The seller explained us how a lease was so much better financially than outright buying. He was completely wrong on the fundamentals: basically with a lease the car company makes you a huge favour because after the three years are up the car is worthless but they’ll take it back and lease you a new one anyway and you get a brand new car. Whereas if you own your car is worth 0 at year 3 (???) and you have to pay 100% of the price of a new car again to get a new one.

Never mind residual value or that you are allowed to keep a car longer than 3 years.

Must be working because most of my relatives friends have a leased car.

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

#276

Post by noduerme »

camillomiller wrote: post #265
noduerme wrote: post #259

Earlier quoted context omitted.

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.

What an exciting life you got there! Enjoy your sad and lonely retirement

Not sure what that means. I own a couple classic cars and a house, work 60 hours a month, travel for fun most of the time. Lived in 12 countries in the last 20 years. Have a great girlfriend and a great ex who I get along with. But I don't waste money on rims, shoes or clothes. And tonight I made rice and lentils, because my credit card bill this month was $8k and I only made $15k.

It's actually more exciting if you limit yourself and enjoy the struggle of trying to hit a high target. For example, moving to Mexico and trying to live on $3k a month. I did that a few years ago, it was awesome and I saved a lot of money.

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

#277

Post by loeg »

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 20% includes pension contributions.

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

#278

Post by loeg »

camillomiller wrote: post #265
noduerme wrote: post #259

Earlier quoted context omitted.

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.

What an exciting life you got there! Enjoy your sad and lonely retirement

I guess dying destitute because you saved nothing is more romantic?

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

#279

Post by loeg »

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.

Traditional 401k balances transfer to traditional IRAs, and Roth 401k balances transfer to Roth IRAs.

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

#280

Post by gpt5 »

Cider9986 wrote: post #274
gpt5 wrote: post #251

Earlier quoted context omitted.

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.

I wasn't signed in. Do people not get better models when signing in? I imagine a lot of people have accounts.

You need to be signed in to a paid account + change the default thinking effort.

I imagine that OpenAI will eventually roll out smarter models to the free unsigned version, but it's just a delay that also causes public perception delay

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