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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

#281

Post by jjav »

prasadjoglekar wrote: post #198
throw0101a wrote: post #170

Earlier quoted context omitted.

> I never personally liked the blanket advice to "Max your 401k." I think the general advice is max out employer contributions to your 401(k) * https://old.reddit.com/r/personalfinance/wiki/commontopics * https://old.reddit.com/r/PersonalFinanceCanada/wiki/money-st...

For enough income, maxing out 401K is the one way to reduce taxes and keep your money.

When young and lower income (lower tax rate) the best deal is to max out Roth 401k and Roth IRA if you can. Then you'll have a lifetime of tax-free appreciation.

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

#282

Post by jjav »

throw0101a wrote: post #161
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…

> 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…

> Never buy or sell an individual security.

This is controversial but very bad advice. No index funds, by their nature, will ever match the return of high-flying company stocks.

If you have very little investment capital available, then yes, allocate it all to index funds because you can't afford to narrow it down yet. But as soon as you have some room to invest in individual stocks, do it.

After about three decades investing, I can say that more than 95% of my returns are from just a small handful of individual stocks. The index funds are in the noise. More than 60% of my net worth is just from two stocks.

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

#283

Post by jjav »

ornornor wrote: post #275
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…

> The seller explained us how a lease was so much better financially than outright buying.

Of course a lease is better than buying.. for the dealer. So the seller was honest, just not entirely transparent.

Leasing is one of the dumbest financial moves ever. Forces you into a perpetual treadmill of payments for life.

Just buy a car, pay it off (cash if you can, or with a loan) and then drive it forever.

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

#284

Post by Cider9986 »

gpt5 wrote: post #280
Cider9986 wrote: post #274

Earlier quoted context omitted.

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

Thanks gpt5.

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

#285

Post by robocat »

dr_dshiv wrote: post #237
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…

Elon told the economist in his interview last week that money won’t matter in 10 years. That is not financial advice. More people now “know” that than this list.

Musk tried to argue that:

  AI and robots will break economics by creating an era of "incredible abundance". He argued that if we can produce more necessities (goods and services) than we could consume, then the practical need for a medium of exchange simply disappears.
Not a great argument, since developed countries already have an abundance of say food and entertainment, yet the marginal price hasn't gone to $0 (except maybe iPhone games?).

We don't have a good way to value our time, or our status, or many other economic intangibles. Instead we tend to hyperfocus on money, which isn't necessarily worthwhile.

We will fight for those things and money is just one way to measure that.

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

#286

Post by baq »

jjav wrote: post #282
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…

> Never buy or sell an individual security. This is controversial but very bad advice. No index funds, by their nature, will ever match the return of high-flying company stocks. If you have very little investment capital available, then yes, allocate it all to index funds because you can't afford to narrow it down yet. But as soon as you have some room to invest in individual stocks, do it. After about three decades…

You’re correct in that people with good returns usually hit a few home runs over the decades and the rest is just beta. That isn’t the point, though.

The point is you have to be able to let the home run ride or cut when it obviously isn’t and that is hard - it’s literally the whole ‘running money’ business and unless you’re in it, you are at a disadvantage.

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

#287

Post by rcxdude »

jjav wrote: post #282
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…

> Never buy or sell an individual security. This is controversial but very bad advice. No index funds, by their nature, will ever match the return of high-flying company stocks. If you have very little investment capital available, then yes, allocate it all to index funds because you can't afford to narrow it down yet. But as soon as you have some room to invest in individual stocks, do it. After about three decades…

>more than 95% of my returns are from just a small handful of individual stocks

Yeah, but did you know which ones from the start? The whole point of index funds or diversification in general is that you don't.

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

#288

Post by blitzar »

throw0101a wrote: post #161
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…

> 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…

1-7 lay the case for why a financial advisor is not required and not beneficial.

8 is simply a contradiction of the prior at best.

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

#289

Post by blitzar »

wojciii wrote: post #234
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…

10. Teach the next generation to be responsible with money and their use thereof. This means all this akward conversations about why I don't spend money on stuff that I don't need just because some YouTubers want me to.

Teach the difference between need and want.

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

#290

Post by blitzar »

groundzeros2015 wrote: post #150
AussieWog93 wrote: post #132

Earlier quoted context omitted.

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

Index funds are not risk free! We have had a solid 15 years and everyone forgot that there are decades of declines or stagnation.

I would happily have a decade of declines or stagnation on the 10's of 1,000s in the kids account over the next 20 years - they can then invest in their productive earning years in companies trading at p/e's of 10 again.
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