Setting The Stage: AI And Money

SPEAKER_00 0:24

Welcome back to the Make the Most of Your Money podcast. As always, you've got Colin and Taylor here. Colin, how are you? Good, Taylor. How are you? I'm lovely. We're gonna talk about AI today because nobody else is doing that yet. No. Everybody's talking about AI. I think there's all there, yeah, I think that it's gotten to the point. It's such a real thing. It is so popular. I think it's worth having a conversation about just how it fits into from a planning context, not just AI in general, but like how to think about AI and financial planning for yourself, maybe shed some light on how we're using it internally, pros and cons, risks and opportunities, all that good stuff. But what kind of led to this? I know you're working on a blog post that should be up by the time this episode airs, but you read a different blog post that kind of stirred something in you. Is that is that?

Overhype, Underhype, And Reality Checks

SPEAKER_01 1:09

Yeah. Um, and and not just me, but I think this this blog post made its way around the financial world, fancy circles, it made its way through business circles on the uh the New York Post, you know, widely read. It's called uh Something Big Is Happening by Matt Schumer, who's a AI entrepreneur and blogger, obviously, um, who wrote this post. And it's kind of directed towards people who are outside of the tech industry as an insider, but you know, writing as if it's to family members, friends, clients of his. And it it makes this kind of unsettling argument that that AI is is moving faster than most people realize. And that the people who are closest to it, the people actually working on it, working with it every day from a technical perspective, are actually the most alarmed about what it can do and what the disrupt, you know, the coming disruption um you know may include. And so yeah. So so, you know, obviously it's on everybody's minds, it's moving markets, it's it's capturing headlines. But you know, it caused me to kind of step back and reflect on how I'm using it, you know, what what its role is in the in the financial planning world and even bigger questions about the economy and what it's gonna do to our education and societal relations and whatnot.

SPEAKER_00 2:28

I have a thought just like r related to that, people not people inside being more worried than people outside. I think there's kind of a it's not dissimilar to how we view financial markets. If you think about like kind of a a curve, like when AI first came out, everyone's like it's gonna take over the world. And we just extrapolated like like as if it's gonna take over the world tomorrow. And then it didn't. And so it kind of starts going down. The people are like, ah, CAI sucks. It's not that powerful. And then it's got a little meanwhile, that like the actual trend line is just slowly going up and to the right. But we're kind of overhyping, underhyping, overhyping, underhyping. I feel like we went through the overhype, then an underhype cycle. I think right now, today, kind of March of 26th, we're a touch of an overhype cycle, but only because we're just a little early. Like everybody now is starting to see, holy crap, this is all gonna happen. But then I think it's not gonna happen to the level they think in the next year, so they're gonna underhype it again and then be shocked over out in a year or so. I don't know. Yeah, totally. It is because I I mean, not to pick on my parents, but they they use it as a glorified Google at this point. They're asking it like, what time is it in so-and-so? You know, it's like Googling type questions, which is just not honestly, it's probably its worst use cases as a search engine.

How Clients Currently Use AI

SPEAKER_01 3:38

It's like Yeah, like where should I go to dinner tonight?

SPEAKER_00 3:42

Yeah, yeah. There's all sorts of issues with that. But like I think it's with some of the recent releases, it's becoming a true useful tool. But that's separate. I think we want to talk more from a from a planning perspective, which kind of doves tail dovetails into that Googling thing. I think what are you seeing, I guess, for people are using it in your clients that you deal with? How are they talking about or thinking about or using AI?

SPEAKER_01 4:02

Gosh, I mean, I I primarily work with with you know people that are 50 plus approaching retirement and and older. And so they're they're reading the newspaper. They actually do read the newspapers. And so they're alarmed about it. I would say they don't quite uh understand it and and maybe have started to experiment with with using it. But it it's not necessarily from like a practitioner's perspective, at least those conversations that we're having in client meetings. Um maybe you know, focusing, well, what's the AI gonna do in the markets, or you know, what's it gonna do to my portfolio, or are we invested in it? Uh that sort of thing. But it's it's not I would say it hasn't broken through yet. Well I used with some younger folks and you're also more enmeshed in kind of the developer and technical side of things as as well as you're building a software.

SPEAKER_00 4:53

Yeah. So I think first of all, we should just acknowledge we have a selection bias. If uh people are coming to work with us, then they clearly are not using AI for their all their financial planning tools. So like with the people you know that we're kind of already getting people who are saying, okay, maybe they're using it, maybe they're not, but they're still not ready to like fully delegate that. So with that, I mean, I think everybody's AI curious and trying it out. I think I'm too close to this. Uh it's all I've ever known, and doing it full time to like know when it's good or not. I I like to think about of like, when would I not go to a or how do I how do I use AI in a medical or legal sense? Because I think that's how a lot of people are viewing the financial planning side, like high-level questions, fine. Uh, but with my kid, like, is this rash, good or bad? That kind of is a gut check, which is still kind of what WebMD was a little bit. Sure. You know, like you could ask it for health advice and it's gonna tell you, you know, eat more, move, eat better. There can be, it can do some nice things, but I'm I'm still seeing a doctor and asking the serious questions to a doctor. And I think that's how a lot of the people I'm seeing it are like they're maybe able to get some quick questions answered. I think it's nice. Well, some will probably talk about you can get some calculations done relatively quickly. The problem is those calculations are aren't always right. Nobody is using it. Well, again, that with that selection bias in mind, like I think people are using it to kind of get those quick questions answered, but still when it really comes down to making big decisions with your life savings, that it's just we're not quite trusting it yet. And that's how I would view it with legal and medical advice as well.

Background Research Vs Real Expertise

SPEAKER_01 6:23

Sure. Yeah, and I think that's a that's an important or interesting way to frame it. You know, when do I go to a lawyer versus Google something or or ask ChatGPT? You know, I think it's great for doing some background research. You know, what are give me the framework of how you know this topic is, or what's what's, you know, get my get me oriented or at least point me in in the direction of what client, what, what questions I need to ask, or what resources I should be background research I should be doing. But then if you if you have to write a contract, you're you're gonna go, you're gonna want to go to a lawyer. You know, I don't know enough to know what I don't know, or you know, to keep be able to evaluate a contract that Chat GPT printed out and and know where are the gotchas or where, you know, where is it making a mistake.

SPEAKER_00 7:15

Well, and and that you bring up, I think, one of the biggest issues with AI currently. You said you don't know what you don't know. And AI loves to be confident. And so they'll be like, this is it, this is the best contract, it's airtight. And I think that's something we all got to look out for. And like, and there's ways to prompt and challenge it, but like it you can feel like, okay, that's it. I AI did it, but there's like a massive hole. I I think an interesting thing for us to talk about is like I could go and build a contract and think it's perfect. AI could tell me it's perfect, and I take it to my lawyer buddy, and he's like, This is trash. Yeah. What are those examples that you think if if you see like how you would use like you know, regular client would use AI, seems really good, seems really confident, comes to you, and you're like, this is trash. What what do you think are the gaps in like what is AI really good at identifying planning wise, and what is it poor at identifying planning wise?

Overconfidence, Gaps, And Incomplete Advice

SPEAKER_01 8:05

Yeah, good question. I think um, you know, it it is good for getting a general plan in place. The kinds of nuts and bolts like what is my saving, what should my savings rate be if I if I'm 35 years old, I want to retire at 60, um, I have this much in the bank. Uh you know, it it it will do a projection for you, and it may even give you some pretty good recommendations about, well, here you should put this amount in your K. Uh, and if it grows at this rate, then you'll achieve your goal. Like those, those kind of calculation type questions, like it actually can answer pretty convincingly and and pretty well. I think, you know, and and also basic advice, like you need to have an umbrella insurance policy, like that's a gap in your in your liability coverage, or you know, you don't have a will, you probably should have one. You've got young kids, like those are the kinds of things that it of course it's gonna identify those things and and do it well and and give you the right advice. I think where it gets tricky and where I've seen it make mistakes is the more nuanced um or edge cases or things that uh you know deal with like real technical tax or legal advice. And then also, you know, on the on the the softer side too, like it it's not just you know, I I don't need to just be told what to do because if if that were enough, like I I probably would have already done it. You know, we all know we need we need to be saving more. We all know that like I should be maxing out my 4K. But I'm not and yeah. And I need somebody to, you know, help me think through well what are my goals and and what is this really all for?

What AI Gets Right In Planning

SPEAKER_00 9:46

And so if you if you think about make the most of your money podcast, what do we talk about? It takes to make the most of your money. You need technical knowledge, you need behavior to actually do it. You gotta know what to do, you gotta actually do it, and you gotta have spiritual alignment of putting it towards the life you actually want. Hey guys, just freaking awesome at the technical piece. Like that's if you think about it like what it can do. It can build a calculator, it can identify some things you need to change. Like that's just technical. Software, this is like I sometimes I gotta be like, okay, that was AI, but also we've had that in software forever. It can analyze a plan, it can build a calculator. It's just software. Well, what's new about this? You know, like that's not actually anything unique or new. Like, no, like what okay, you need to up your life insurance, you need to save more in your 401k. Like that's like a doctor being like, you need to exercise more and eat better. Yeah, I know. You didn't tell me anything I don't know.

unknown 10:34

Right.

Behavior, Meaning, And Doing The Work

SPEAKER_00 10:35

So it's still, if you think about like making the most of your money, it just makes the technical piece super easy. Like, cool. Yeah. You still gotta do it. I so I think like there, I have a couple of sorts. So just just looking at the technical piece, the calculator, the more advanced it gets, the less reliable it gets. The there can be some some real issues with compounding and inflation treatment and some tax treatment. I have full confidence all that will be addressed in almost no time. Like that's that's not a hard problem. It will eventually get there. But in the current times, just you can have a calculator, it can look really nice, but you got to be able to check it. Like I unfortunately, yeah, we we do mock up a bunch of calculators and it's wrong 95% of the time on the first try. Um and so being able to check that. Um just another tangential thought on that. I think with AI, like I am who knows in the long term. I'm I'm thinking like six months at a time right now. Just because something's not here today doesn't mean it won't be there tomorrow. But I think waiting until with it depending if you have a really consequential decision, waiting until you're absolutely confident that it is really good is a good idea. It's just so costly to be early. Like everybody wants to use AI. Just wait until we're really confident with major decisions rather than like, well, I could save 500 bucks by using AI's advice right now. I don't know. I'm I'm just a lot of thoughts coming to me on this. But um Yeah, so the technical piece, it's it can answer some high-level questions, tell you some observations that you probably already knew, build a projection calculator that's gonna be based on assumptions and have all the same problems that it always does, of like, okay, that's one assumption, you run a range. Well, okay, like it still doesn't fix that behavior issue. Yeah. And you know, I know like what the like the second biggest use case of AI is like counseling. So like people counseling it, it can certainly help, but like there's also been books about that. And if you think about AI is just really kind of borrowing from all the other content that's already out there in a lot of ways. So, like, how's it solving that problem?

SPEAKER_01 12:27

It speeds the process up like crazy, but it's and it does the work of making it feel like it's adapted to you, you know, in the way that it's it's responding to your questions in natural language, it's addressing you by name, and it now it remembers what you told it last week. Um and and and can bring that back. And so it's you know, it's deceptive in how real it it actually feels when you're conversing with a chat box. It's a therapist. Yeah. Gosh, I've I've used it in in in that way. Like I had to write a really challenging email to my son's principal. And like I was I was sitting down and I was angry when I was trying to type out that draft. And the AI was like, Yeah, you know, I understood that I was feeling angry in the, you know, understood in in air quotes, but like it knew that like maybe this isn't the right tact to take. And it was counseling me on these things that, you know, one once I settled down and had read it, I was like, Yeah, that's that's actually a good point. That's the way I should approach it. And so it's it's it was one of those like, wow, this is scary, good, the advice that it's giving to me.

SPEAKER_00 13:39

Yeah. Well, and that that's right. I said, like, that's where it's super powerful. Strategy, uh, writing, coding. That's what it's amazing. Search is not its best capability, which is what most people use it for. Yeah. Um, give it a problem and ask it to think it through. It's unbelievable. And it's just it can be a fresh perspective, and that's that's great.

SPEAKER_01 13:56

Um Yeah, I was gonna say, what what what are some of the areas where you see it go wrong?

Math Issues And Waiting For Maturity

SPEAKER_00 14:02

But yeah, overconfidence, just it sounds super confident. You feel like, yep, we got it, we're good. You know, uh work with AI long enough, you'll you'll start to see the patterns and like of when it seems like it's then, and it's just it it can seem super confident and it's it can not it can be incomplete. It it can be confident wrong. That's a separate issue, but also incomplete of like, did it consider that? And like it's based on the prompt that you give it. And so, like, did it know to look to consider this other part of your fa financial life? And so, like anything with AI, the more context you give it up to a point, it the better it gets. But just you don't if you don't know what you don't know, that's super, super tricky. Yeah. And then you've got to know, like, AI can handle all this, but you've got to know to prompt it, which still comes back to you have to know to ask for these things. And so just I think there's still some math issues that it has, and then it can be overconfident at times, be incomplete. There can just be some things missing. And so I think that's the same that I would view with like a medical question of you know, what's this rash? And it could be pretty confident, like you can probably narrow that one down, but it's like, should I can I mix these two medicines? Yeah. Well, I also have this. No, now it's lethal, but you didn't know to add that little extra piece of context. Right. You know what I mean? So it's like that's where uh it's just incomplete. And it's like now again, there are ways around it. Like, ask me questions as if it was a full medical checkup. You can do all of these things to get there, but you're gonna spend a lot of time to get to an answer. You're still like, am I fully confident in this? Sure. And so, yeah, I mean, I think that yeah, those are the main things. I mean, I I think that it and then just it's a lot of it's gonna be very general advice at this point, you know, which is not gonna tell you anything you probably didn't already know. Like I said, um which is still it's better than nothing, but it's still not gonna help you implement it at all. So those are the issues I would say I've seen to date.

SPEAKER_01 15:44

Yeah. Um it's hard. I mean, I think uh one of one of the ways to start getting experience with AI is is just to use it. And um, you know, I think it especially if you want to understand where it's useful, where its shortcomings are, you know, start talking to about uh talking to it or chatting with it about a topic that you are an expert in or you have expertise set. And and you will simultaneously be amazed at how fluent it is in in that topic. Um, but you'll also really see where its shortcomings are or where its nuances are missing nuance or has certain biases or whatever. You know, so I can't speak to other fields, like you know, I wouldn't presume to be able to evaluate it as a as a medical tool or whatnot, but I certainly can evaluate it from my tax planning knowledge or or that sort of thing. Or yeah, I I mean I I personally encourage people to start experien uh experimenting with it, whether it's for financial questions or in your professional life. Like the thing that is clear to me is that this is just a a freight train uh of of a type, you know, a change that that's not going to stop. You know, it it's going to only be.

Try It Where You’re An Expert

SPEAKER_00 17:02

No, we're we're talking about the internet and mobile phones in the sense of like just it's what a daily part of like Matt like experiment you or encourage you to experiment with the internet. It seems like stupid to say now, but that was a thing people are saying 30 years ago. And then I encourage you to experiment with getting a mobile phone and then a smartphone. It's on that same level of like, yeah, just make it's an incredible tool. Start to learn how to use it because it's the world's going that way. So something else that I think we should talk about is it's not necessarily from building a financial plan or anything of that nature, but just how it could affect people's financial plans. I think there's a lot of fear about how AI affects people and their jobs. Do we want to touch on that at all? Yeah. Because that that's that's becoming a really real thing of like, okay, I've got this projection. Is it even aside from the other, it's not like, is my income going to be there? Have you having any of those conversations with people? Or how are you thinking about it?

SPEAKER_01 17:54

Yeah, I mean, I I I certainly have a lot of I have a lot of thoughts. Like I said, dealing with folks who are who are approaching retirement, you know, they may not be, you know, I think they're there's certainly many of them, if they're uh affluent enough to already be coming to me and are close enough to retirement, they're they're it's kind of somebody else's problem at that point. Um and and I've had several clients express thankfulness that like this is not something that I have to figure out right now.

SPEAKER_00 18:20

That's a great time to be independently wealthy in like 50, because you don't have to worry about the income and you can you're gonna be able to play with this stuff for a long time. That's a great place to be.

Jobs, Risk, And Liquidity Buffers

SPEAKER_01 18:29

Yeah. Yeah. Or use it as a tool to go, you know, start a start a business that you all you you always wanted to, or or something like that. But but I I think it's I think it's huge. The point you bring up is huge. The the the fact that this is having such an impact already and is only going to continue and it's going it's already impacting the job market. I don't think there've been you know mass layoffs yet because of AI, even if there are some CEOs who may phrase it like that. But I think there's certainly been a slowdown in hiring for folks in the kind of technical side, technical jobs and in other industries as well, where where I think people are rightly seeing and questioning, you know, how much more are we going to be able to do with AI with fewer people than before? And so I th I think the disruptions to the job market are gonna be huge. And now how to bring that home to like what what does that mean for me? You know, what does that mean for my personal financial plan if if I'm a client sitting here? I mean, I think all the things we've talked about before with regard to making sure you've got enough liquidity to be able to, you know, sustain uh yourself in a job loss or or you know, retrain to to find the next one, or that that's all hugely important. I think it certainly calls into question the value of real long-term projections. You know, we the those we all love certainty and we all would like to know, you know, where things are headed, but the reality is we don't know. We we there there are any numbers of things beyond AI that can happen that can throw a a wrench into best laid plans. And so I think you know, making sure that you are are protected, that you are you have the the the right, you know, liquidity, insurance, estate plan, what you know have you have all your bases covered now, is it's kind of the best you can do.

SPEAKER_00 20:29

I love that. Just to bring it back to that part hasn't changed. Would you do any would you do any of those extra right now? Extra liquidity? I think it depends on your job.

SPEAKER_01 20:40

Yeah. I mean, uh it totally depends on on the field you're in. If if you if you're a junior developer or something like that, that that's a different answer than if you're a a nurse or something like that. You know, there there are certain jobs that are gonna be insulated from this or take longer for AI to disrupt.

Disruption, Inequality, And Adaptation

SPEAKER_00 20:57

That's the nice thing, is like the physical world isn't going anywhere for a while. Robots are coming for them eventually, don't worry. But like, um, you know, people still gotta eat fix or plumbing, fix our electricity. But yeah, we're I mean, for the uh typical office worker, knowledge worker, which I don't love that term, because but like, you know, um, I I think listen, you got to acknowledge that it's a risk. Pretending it's not is just absolutely irresponsible that like your job could be at risk. Absolutely like I say this as a financial advisor and somebody building a software company. Those two things are like in the freaking crosshairs right now of AI companies. I'm fully aware. I have no freaking clue where it's gonna go. Could be deleted in six months, could be two years, could be five years. I don't know. It's gonna happen eventually. Fine. My other favorite phrase, embrace uncertainty. We just have to hear nobody freaking knows how it's gonna play out. And if anybody, like on this AI stuff, like if anybody does, they're just it's like market prognostications. Like, what are you selling? You know, if you're trying to play this out. But like, so I think bringing it back to what can you control? And it's liquidity, insurance, like, do you take a little extra liquidity? I I don't love to be fearful, but like this is I d I think ignoring this and pretending I'll be fine, I'm gonna continue to just ignore it, like that that's just that doesn't solve anything. So I think you just my thoughts are in the short term, I expect for sure disruption. I don't see how it's avoidable at some point. Because using it as a business owner, there's too many lower level jobs that you can very quickly clearly replace. So I just I think there has to be some level of disruption. Long term, I'm highly, highly confident we'll all figure it out. We always do. But in the near term, yeah, could get choppy. And so, you know, you can stick your, you, you can say, no, that's fear-mongering. It's not going to happen to me. No, it's just a reality. Just be aware that it's a possibility. Playing for it, prepare for what you can. Um we'll get we'll adapt adapt from there. I mean, that I know not everybody can take that approach, but that's genuine how I feel about it. It could certainly happen.

What AI Can’t Replace Yet

SPEAKER_01 22:48

I'm a little bit more I'm I'm I mean, I'm a little more pessimistic, not in not in the sense that like I don't think I don't think we're heading for a crash. You know, I don't, I don't, uh, I don't I don't think it's gonna happen all at once. Yeah, yeah. Yeah. Um but but I do question like what the nature of work will look like because we haven't seen a disruption like this before. You know, with the industrial revolution, if you were a you know, someone who who did weaving in your cottage, the industrial revolution was was the end of that, you know, end of cottage industry. If if you were somebody, you know, if you were a manufacturer of of buggies for for horse-drawn carriages, like the automobile was the but there were still other you know manufacturing jobs.

SPEAKER_00 23:38

I know exactly what you're saying. Do you think those people in the in the you say that now, in the moment did they know what was gonna happen to them? Was it clear where they were gonna land, that everything was gonna be okay? Or only in hindsight?

SPEAKER_01 23:51

I think only in hindsight we can know that it was going to be okay, that the living standard for everybody was lifted, you know, by by these um by these revolutions, as it were. But I I don't think, you know, I don't think that's necessarily a guarantee. And I think my fear is that, you know, people have talked about the K-shaped economy, the, the, you know, the people who are educated, who are wealthy, who, you know, have the background and the skills continue to do well. That's the upward sloping to the right, you know, arm of the K. And the people that don't have those skills or that background, that wealth are on the on that downward sloping leg of the K. And so, you know, I I worry that AI, you know, is going to be is going to accelerate that trend.

Practical Ways To Experiment

SPEAKER_00 24:43

Uh what are you worried? I mean, what are you so we're kind of getting off track for like I completely agree. If I had to make a prediction, what's going to happen? I think the logical route without like, I'm not very smart, so I don't know. I'm sure I'm missing a ton of stuff, is the overall standard of living is higher than it's ever been, multiples higher than it's ever been, and there's bigger disparity between top and bottom than there's ever been, which is fascinating because that's what people are gonna care about. I agree on the current trajectory, the gap between the haves and haves nots has to be massive, but the have nots will live so much better than we live right now. People still bitch about it, though, because they don't have what somebody else does. So that I I I completely get that that's gonna happen, but that's where I'm saying, well, I'll be all right. I mean, I'll love it, but your life will be easier, which is a whole separate conversation. Is easier actually better? Yeah, like what is what is life look like? I don't have to think or do anything. My robot does. What the hell are you doing then? Because you know, just wow, we're really getting off track now.

SPEAKER_01 25:36

So um, but yeah, I think I don't it is it is off track and it isn't, because I think that's one of the more fundamental questions of financial planning is like what what is it all for and what defines your success? Is it is it is it intrinsic or is it always in comparison to your neighbor? And so I mean that that question i is timeless uh and and and totally impacts your financial plan and the choices you make with you know where you're gonna work, what what what what kind of job do you want to have, where where do you want to live, you know, what are you gonna do with your money? That's foundational. And I think, you know, how's it relate to AI? I think AI accelerates that that trend.

How Advisors Use AI Daily

SPEAKER_00 26:21

At least right now that's what it looks like. Yeah. I think the scary part to me, or the the part that's harder to project, is kind of for the first time, knowledge is disincentivized. Like you could replace lower level work and you learned more. Like I remember like a a turning point for me was in college digging a ditch by hand for a gas line and like cussing like in my mind the the contractor being like, You're only paying me$8 an hour for this. How dare you? And then I had this moment that said, holy crap, like anybody could do this job. Supply and demand. So I need to learn some skills that the people don't have. So I needed to learn some skills. And all of a sudden, those skills that I learned are just come out of test. That's the incentive structure that's getting like completely twisted right now that I don't know. I guess it is kind of thing that threw on the spot. It is a supply and demand thing. You could earn more because the skills you had were in lower supply, but now if the supply is infinite, yeah.

SPEAKER_01 27:15

It's cheapen. Yeah, and so and so what are the things that AI can't replace? You know, I think it's it's it's it can replace knowledge and access to knowledge, you know. I think it's a great democratizer of of knowledge because at your fender fingertips you have, you know, essentially all of the world's written text curated for you, you know, at your at your beck and command with with in a chat. I think the things that it can't replace are um you know, wisdom, which I think has to be to be lived. You have you have to live to to gain it. I think the things it can't replace are um creativity. You know, there are there are some yeah. It's it may be making advan you know, sure, it can paint a a picture for you based on your description of what you want, but I mean creativity in the sense of what do we do with imperfect information and how do we respond to um you know the world and the people around us. I don't think it can replace that yet. So where do you lean in? I think you lean into those aspects that that yeah, I can't yet do.

Data, Analysis, And Communication

SPEAKER_00 28:25

Yeah. Yeah. Yeah. That's good. Yeah. Uh it's fascinating. Yeah. So bring it back to like today, I think experiment for sure. Start to test it out. Don't just treat it like Google. Ask it problems, give it context, let it help you think things through. I think it's fantastic at that. I think it's interesting to keep in mind that like it hasn't really changed much from a technical knowledge perspective. It's just really quick. But the technical knowledge has always been there. It's not gonna help you make the most of your money, still gotta actually do it. You know, knowledge isn't gonna probably help that, and it's not also not gonna it might help you clarify what you actually want out of life, but there's been books and everything else for that, and people are still gonna be searching. And so, you know, AI is gonna accelerate certain technical aspects, it'll it'll magnify certain things, but it's still, you know, you could make the most of your money with AI, but it's not gonna you AI is not gonna help you any more than non-AI world of making the most of your money, if you will. Like you still gotta do the work and actually have the behavioral discipline. Does that make sense? I'm I'm being serious. Like, it'll help the technical piece for sure. It might give you some behavioral tactics a little bit quicker. It might help you think through what you actually want out of your life, the you know, technical, behavioral, spiritual, but it's no longer gonna do it for you. It's not gonna make you happy. And then now that you know exactly what to do and you've got a list of tactics to go do it and you've clarified on text what your life's about, that's not real. You still gotta live it. So yeah.

SPEAKER_01 29:42

Um Yeah, if all if all it took was an instruction manual, you know, there's there's been a lot of those written.

SPEAKER_00 29:47

One of my favorite quotes if knowledge were enough, we'd all be billionaires with six path six-pack abs from Derek Sivers. It's right over your shoulder here. It's like that's so true. It's like, wait, that didn't actually solve it. Uh yeah, if I'm making most of it, there's uh tangential thought there. But um yeah.

SPEAKER_01 30:02

Gosh, more we could talk about, you know. Didn't really go into you know how I'm using it in my practice. I mean, spoiler alert, you know, I'm using it every day. Um and I do think what's that?

SPEAKER_00 30:16

That's Google. I'm kidding. No, I mean that's we should talk about that a little bit. Like how advice like actually I think that could be an interesting frame, not to like head fake people thinking that the episode was over, but like how are we? I would love to hear that from a lawyer how they were using it, a doctor how they were using it too. I think that's a good check on like, you know, these like how are, yeah, how are you using it? So talk about that a little bit. Yeah.

SPEAKER_01 30:36

I mean, I'd say I'd I'm I I've been uh not the earliest adopter, but but I've I've been using it for quite a while now. I mean, it the the parts that it excels at and the parts that it really helps me do my job better are you know, first the the like note-taking, which a lot of people have experience with having a note taker in a Zoom call or or somebody recording a meeting.

SPEAKER_00 31:00

Also, if that freaks you out, what do doctors do forever?

SPEAKER_01 31:03

Sure. Yeah.

SPEAKER_00 31:05

They've been recording meetings forever. And actually, yeah, like this isn't a new thing, it's just new in a virtual or financial planning sense.

SPEAKER_01 31:10

Yeah, and it advisors have always had, you know, maybe a junior person sitting in on the meeting taking notes, because it's hard to both concentrate on the people in front of you while you're trying to write down every last detail and make sure you don't forget something. You know, that's that's one area. I think that was the first area that many advisors had experience with AI, actually, you know, being more than just a toy. We know, hey, this is actually pretty useful. Um, you know, it does a great job of transcribing, summarizing, condensing, pulling out the core topics we discussed and all the action items.

SPEAKER_00 31:45

I mean, transcription being better is AI, but it's really like the contextualizing and being able to summarize and search. That's been that's the real leap.

SPEAKER_01 31:53

Yeah, yeah. And and to have, you know, not only those notes to look back on when I'm getting ready for the next meeting, or but but to really, you know, the the it just it speeds up the the process of of creating, documenting the plan and and the action items we were taking and communicating those to the client. You know, you still have to review it. You still have to, you know, there still are mistakes that I catch every meeting. They're getting fewer and farther between. Usually their their you know, attribution. It's uh, you know, the client said that they were pregnant and and the AI said that I was pregnant. Uh but you know, though by and large, it's actually it's actually pretty darn good. Um I'd say the other areas where I'm I'm using it uh is in um the you know, reviewing, editing, and quote unquote content creation. And I don't I'm not you know just asking AI to, hey, go draft this blog post for me, but using it as a writing partner or a thinking partner editor. If I'm responding to a client's question in an email, it's really helpful to go back and forth with the AI over, you know, is this the right tone or how can I say this? Yeah, yeah, exactly. Yeah, I think I think that's right. You know, yeah, I use it for research. I use it for, you know, if there's a if there's a topic I need to know more about to answer a specific question, and maybe the first, you know, that's the going to be the first place I go to get a general framework or get pointed in the right direction. Um I've used it for some coding projects where, you know, not not developing my own tools, but but very targeted within in you know, soft the the the how to how to process data that my the clients give to me, you know, you know, formatting spreadsheets, things like that that you know it can it can do much faster for somebody without much of a a coding background. It it enables you to to do some pretty neat things very quickly. Now that's different than you know what you're doing. Um so I'd love to get your kind of perspective on the phone.

Efficiency Traps And Real Value

SPEAKER_00 33:52

Yeah, so I mean you think about our job as advisors, there's kind of three parts. You got to collect and organize data, analyze it, and then communicate it. There's technology, pre-AI, it's just gotten easier and easier to collect and organize data, like account linking, all this stuff. Now, there are some extraction tools that can be incredible to go through documents and pull out the key information. Amazing at that. But I was just like, here's how I think about all that. That's great. Like, thank you for pulling that out and typing that in for me so that I don't have to do it. Still need to read the document or at least understand what it's about. Because there's this idea of like, oh, I pulled the information out. Like, there's so much context and stuff to be learned. So I would say it's like doing all the manual crap that I hated, entering data, moving stuff around.

SPEAKER_01 34:31

Yeah.

SPEAKER_00 34:31

Don't do that anymore. Yeah, it's it's great with helping you how to write something how to think like it's like I'll write write something and say, is there a better way to say this, that type of thing, tighten up language that I would do if I had a human editor in the in the you know copywriter on staff. Yeah, those are the main things right now. I mean, I think about like I'm talking about on the financial planning side, like very much this gets back to the job market. What would you have an intern or a pair planner do in a lot of ways? You know? Yeah. And that that's where, you know, I I I think it's phenomenal at that and replace those pieces, but it's not, you know, you could say, give me some observations about this plan. I've yet to see something original that I wouldn't have already thought about because I also have like a checklist of things to check for against every client. That's what see that's a funny thing of like what's AI, what's processed, you know what I mean? Of like compare this and note that, if this, then that. It's just if this then that statement. So like nothing has blown me away from that standpoint yet. Again, I'm sure there will be things, but just yeah, I think just you know, doing the moving data around, summarizing data is what it's fantastic at right now. And so, like, yeah, great at collecting and organizing, can do some initial analysis and then helping communicate and format things in a certain way. Yeah, that's great. Like, you know, what's the right order to frame this in or something like that? So I I think on the on the financial planning side, those are the main things right now. And it's just made you know our jobs easier and easier of like getting to do more and more of the higher value work, which has been a team for the time.

If AI Replaces Us, Then What

SPEAKER_01 35:59

Yeah, and and I think there's a direct parallel to, you know, kind of the late 2000s, you know, 2008, 2010, when robo advisors were coming out and and what these are are are you know, software they can pick a portfolio for a client based on a certain set of risk parameters or, you know, questionnaire and put together a well-diversified portfolio for you and run it, buy and sell to reallocate, it can rebalance. And and there was a lot of fear in the advisor community at that time, you know, a lot of headlines around is this going to replace advisors? And you know, I think the the gloom and doom scenario didn't happen. I think what happened was people adapted and r had to raise their game because if all you were doing as an advisor was just put putting people into a portfolio, you know, that work is not that hard. And so you can't command a uh you can't charge a fee, you know, very much of a fee for doing that. Um and you certainly can't compete with a a software if that's all you're doing. And so people had to, dude, advisors had to level up. They had to to start providing other avenues, you know, doing retirement planning, doing tax strategy, those kinds of areas where they could add other value. And so, you know, if anything, I see I see AI kind of raising the bar among financial professionals to like you've you've got to do more now than just give me the basics. Like you've got to actually deliver higher value advice and and deeper, um, you know, more nuanced technical.

Final Takeaways And Cautious Adoption

SPEAKER_00 37:27

I mean, to to to to the advisor looking for maximum efficiency, if all you do is upload documents and have observations spit out and you call that a financial plan, you're gone. Yeah. Yeah. Oh, it takes me four minutes to do it. Well, you're gone. Why would somebody need you eventually, right? Right. So yeah, I mean, it's fascinating. And I think every profession's grappling with that. Something I always come back to somebody's pointed out the other day, like pilots barely fly a plane, yet they still have jobs too. Autopilot flies it. So it's who knows? The last thing I would say, I this is I I posted about this a while back. If we all as advisors get replaced by AI, that would be the coolest thing in the world because that means everybody's got an advisor to making better financial decisions, and like the net effect of that would be amazing. So um that'd be super cool. That'd be super cool because there's no other way for I don't know how yeah, I would I would be kind of cool to see if that happens, we'll figure something else out. Like it's just world changes, man. I don't know. It's uh I think it's exciting, terrifying, all of it. Um it's a cool tool. I think yeah, the last I keep saying the last thing, but I I think from an actual practical standpoint experiment, being super early can be very costly. So AI's getting there. It will get there to do all the things you want on a lot of this stuff. Don't be afraid to wait until you know for sure that it's there. That's I'll just say that.

SPEAKER_01 38:45

Yeah. Um cool.

SPEAKER_00 38:47

Well, great great discussion.

SPEAKER_01 38:49

I'll do it again sometime. Sounds good. Tell you next time. All right, see you next time.