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 cards - they're not a bubble, Logan Paul told me so!
You could replace the AI with a piece of paper that says "set aside 10% of your income and invest it in an ETF" and it would outperform the financial "advice" that people receive on a daily basis.
While I agree with you about the level of financial illiteracy in the general population, I don't really see what AI has to add for the vast majority of the population is simple. Basic financial advice is not hard (save regularly, invest in low cost index funds, don't take on CC debt, etc.), but a lot of it goes against most human nature, especially around delayed gratification. People have known for decades that "diet and exercise" are very important for good health, yet we still have an obesity epidemic.
It reminds me of that Saturday Night Live skit from decades ago, "Don't Buy Stuff You Cannot Afford": https://youtu.be/R3ZJKN_5M44
“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 for things to stabilize sucks, if you even can. So these get rich quick by just doing X scams are enticing but only set you farther behind.
God I still remember when a friend showed up on his 18th birthday with a pack of cigarettes to show how “mature” he was. I always think about how much that one decision cost him over the 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.
> God I still remember when a friend showed up on his 18th birthday with a pack of cigarettes to show how “mature” he was. I always think about how much that one decision cost him over the years.
The irony of taxing vices. I imagine most of it's paid by people who didn't know better at a young age, and helps encourage the downward spiral of poverty.
And if you say it discourages young people from starting on the addiction, I think we're barking up the wrong tree. Disposable vapes have the highest amount of nicotine they can put in their nicotine salts. Nicotine pouches like zyns sell the most at 6mg and above. Dispensaries and street weed have enough THC that would put a hippie in the 70's in a psychotic break.
God bless that Gen Z doesn't drink or smoke cigarettes. But they vape nicotine and marijuana. Or use pouches / edibles.
As the OP has "Aussie" in their name I think they'd be referring to the Commonwealth Bank of Australia Dollarmites accounts. They were shutdown recently after a watchdog investigation. It was locking kids into using the bank that would continue into adulthood and schools were getting paid to sign kids up.
"They found that it provided little value for children and the largest outcome was that children were being exposed to ‘sophisticated’ marketing tactics."
If all you're doing with a bunch of cash over 18 years (!) is holding it in a bank account to collect interest, you're just losing money to inflation. Bank interest is almost nothing. Better to hold stocks, or at the very least bonds if you're extremely risk-averse.
Though this needs to be put in context - maybe you actually intend for the child to be permitted to spend the cash, in which case a bank account makes plenty of sense.
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.
I'm definitely at the point where, if not sticking money in my mattress, I'm keeping a lot in pretty safe investments. Did sort of an equity housecleaning a couple years back and consolidated some investments, in part to make them easier to track and manage.
Truly conservative investments are more in the 3-4% range these days; money markets were running around 5% a few years back but they've come down. I have some bonds (including treasuries) that are higher than that but I bought them quite a while back. For long time horizons I'd be more weighted on equity indexes and maybe dividend-heavy stocks.
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.
From a return on investment perspective, it is not great.
Bank accounts are convenient and safe, but you pay the price with low interest rates. But if you don't intend to touch that money for 18 years, you don't need the ability to withdraw at any time without losing money that a bank account offers, so why pay the price for it?
However, it has symbolic and educative value, teaches the value of saving, how interest works without going into the complexities of the financial system, and making it clear to your kids that it is their money, even if they can't touch it yet. So it may be a good thing for that reason, when the sums are reasonable.
The object of the game is to live within your means, save and invest. More than half the population does not do that. When you’re 18 the treadmill starts turning if you don’t use your time wisely, you’re going to be in trouble at the end of life. When you are young, simple compounding is your friend because you have time.
People have won the lottery and blown it all, some people who have extremely high paying professions in their youth, have over the course of time have also blown it all.
Not OP, but I think they are referring to the fact that you can get tax advantaged accounts instead of a standard savings account. Not to mention the interest rate on those accounts is basically a rounding error.
Yes, and that's from supposed professionals too, not just crazy youtubers or tiktok channels. My neighborhood has enough old people that Edward Jones reps come over to try to manage your money. So I get to ask them questions, and see they are basically offering to rip me off. And that's in the US: You should see the investment recommendations people in Spain get when they talk to supposed advisors in real banks. Search for the Preferential shares scandal, where banks had scripts teaching how to lie to people to sell a product that would prop up the bank while having great chances of wiping out the buyer's savings.
Careful just recently two old guys in Chino Hills, California. Brothers 66 and 67 years old were involved in some sort of apartment deal for 20 million dollars which went south.
They were so extremely dissatisfied with something and went to the house of the financial advisor or grifter depending upon your point of view and took it took on him. What is going to start happening with AI data centers?
came here to say some version of this. for the average joe, good financial advice is simple and boring (low cost ETF tracking broad based index), and AI is definitely able to give that. the question has always been getting people to listen though, and I am not sure how effective AI will be at that. I continue to be amazed at the confidence that people place in hot stock tips from tiktok (yes, tiktok!). little has changed since the 1920s i guess.
I wonder if telling (or somehow architecturally coaxing) the LLM it has 'skin in the game' will make it more risk-averse? I imagine it does.
This makes me wonder too about the entire premise and worthiness of these evals. They orient themselves around normal one-shot interactions with a likely non-sys-prompted model with no built up context or memory of the person. I doubt the mentioned 'job loss' scenario is even contextually seen as a 'loss'; it is only a circumstance descriptor, a single snapshot without a history. Maybe to get the best advice we actually need to tell the LLM our entire story, not just a narrow request for a question; a question that - itself - is biased to our own imaginings of what problem we perceive ourselves as having, which humans are often bad at.
The problem I see with this approach is threefold.
First, from a technical standpoint the required context window would be massive if you're looking at a person's career/life holistically. Probably solvable, but definitely something to be aware of.
Second, privacy goes completely out the window since you're sharing everything. You don't know what's relevant and what's not up front so you need to provide everything.
Third, you would need a training dataset of all those input variables and their outcomes to be able to provide any sort of useful output. The first set of people to share everything wouldn't be able to derive any value from the tool, and I think you'd be hard pressed to convince enough people to do it to get a useful dataset.
> First, from a technical standpoint the required context window would be massive if you're looking at a person's career/life holistically. Probably solvable, but definitely something to be aware of.
Why would it be massive? The application layer typically compacts a profile of information about the users financial situation when offered. I doubt many of us have financial situations that would exceed the context window.
> Third, you would need a training dataset of all those input variables and their outcomes to be able to provide any sort of useful output. The first set of people to share everything wouldn't be able to derive any value from the tool, and I think you'd be hard pressed to convince enough people to do it to get a useful dataset.
Would you 'need' a training dataset of input variables and their outcomes for an LLM? Certainly for traditional ML, but the LLM toolcalling can simulate what an astute user should statistically do in their situation based on information on the internet and reason about the different constraints.
You wouldn't need history. You can probably build a flowchart choose-your-own-adventure that gives good financial advice, and then have an LLM hold the user's hand through that flowchart.
Like, do you have $1,000 in an emergency fund? No? Start there.
AI seems to struggle most when it has to make decisions with lots of trade-offs, especially where the context or implications of various decisions are nested, which is presumably why it struggles to write full software systems that are well-designed.
By comparison, financial advice is pretty simple, and there is a universally agreed-upon approach that most people should follow to maximize long-term financial health.
This is the common fallacy of “AI is terrible in my own field of which I have deep knowledge, but AI is totally fine in this other field of which I only have cursory knowledge.” Even ignoring all other aspects of financial advice and only focus on saving for retirement, there are so many topics involved like asset allocation glide paths, tax advantaged accounts, safe withdrawal rate, sequence of return risk, etc etc.
Financial advice is universally agreed upon, to the same extent that advice about software engineering is also universally agreed upon, you know, like write unit tests, write maintainable code, etc. But the devil is in the details.
You are comparing to the almighty, not to the kind of financial advisor most people would find while looking at random. Between those with very high AUM fees, those selling bad vehicles that they get kickbacks for and such, people are basically getting robbed already.
It's not that one cannot get very specific, technical advice that helps, but someone without much financial literacy cannot tell someone doing honest work for a reasonable price from easy to find scammers with a marketing budget. The AI isn't going to get everything right, and it's not going to be easy to send good, proding questions to double check things without sufficient financial literacy, but that boring baseline is miles ahead of what most people get, as it's not trying to deceive you professionally, at least for now.
> By comparison, financial advice is pretty simple, and there is a universally agreed-upon approach that most people should follow to maximize long-term financial health.
What will AI do when those rules, which it's trained on their repetition so much, don't apply anymore? ~8% annual stock gains for the next 40 years may not hold and an 80/20 stock/bond ratio may not be as wise in upcoming decades
Stock/bond ratios are way too advanced for what's qualifying as good advice here:
> AI consistently advised people to save during their working years, draw down savings in retirement, invest heavily in diversified stock funds, and reduce stock exposure after age 45.
This is analogous to saying to an aspiring software developer, "You should write clean and testable code, have clearly defined API boundaries, and a repeatable build process." All very true, but also so general and basic that it's not helpful.
> Prompt: but I don't have enough money to save, I can barely make ends meet.
> AI: I see the problem now---If you don't have enough money to save, and reducing your expenses is not an option, then the answer is clear: make more money.
I don't know why you're being downvoted here. A huge amount of 'financial advice' boils down to 'stop being poor,' which is to say it's about what to do with your economic surplus rather than what to do if you don't have one and aren't long on avocado toast.
I didn't downvote them, but I am genuinely curious to hear from people who "can't save money", and try to understand why that's the case. My assumption is that a large percent of them are spending way more than they need to, but that could easily be an incorrect stereotype.
It's not helpful to the kind of person whose recreational weekend reading includes MIT Sloan analyses. Most Americans don't have what I suspect you'd consider a basic level of financial literacy (https://www.nytimes.com/2026/06/12/your-money/americans-fina...), and do need to be informed about things like the compounding effect of savings or the benefit of diversification.
Its also not helpful to the person who doesn't. How much to save, when to save, how to diversify, what rate of exposure to equities is too much, how much to with draw in retirement? And thats just questions on the answer it gave. But what about if I have a loan bearing interest? What about if I'm self employed? What if my appetite for risk is less, greater? What if I want to retire early?
It gave vague unspecified advice that isn't actionable and didn't provide any weight to tradeoffs.
Why do you think it gave vague advice? The paper has a sample of provided advice in Table 1 that seems pretty specific. (I attempted to quote it, but it triggers the HN spam filters, presumably because it's a chunk of LLM generated text substantially larger than my actual comment.)
Models can be updated when foundations domain knowledge graphs are built on change. As of this comment, target date funds and pensions containing trillions of dollars adhere to the assumptions you mention (asset class allocation, growth rate and return assumptions, safe withdrawal rates ["Trinity study" aka ~4%/year], etc), and so consumers of AI provided guidance assuming these foundations could do much worse (as they already do today due to lack of information, knowledge, will, etc).
You literally just need to stick the Bogleheads forum into your AI assistant of choice for most folks, if they'll listen (which is the hardest part, imho, people want to gamble, not invest, in my experience). Prompt "What is your age?" respond "Optimal target date fund is 20XX fund based on your current age and retirement age, please confirm to set to default for investing." I suppose this will eventually make its way in some form into every banking, fintech, and brokerage mobile app chatbot in some capacity.
Investing and trading is a dynamic game. If everyone has the edge of certain portfolio to out perform the average, then no one has the edge.
Similarly AI is not going to solve that. Because everyone would end up with similar AI edge until no one has the edge.
People should start with simple universal rules: Stay invested. Buy low cost diversified etf fund. Favor long term investment instead of trading. Learn something from all weather portfolio composition to hedge the risks.
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.
This already happened 10-20 years ago when personal finance got big on the Internet, it’s just taking a long time to play out.
It was never about ROI anyway, just preservation of capital and peace of mind - makes a lot of sense in the analog/less automated financial world of yore when non-professionals were writing checks or wiring money to people over the phone, and checking stock prices in the paper.
There will also never be a way to pay $10/mo for Gecko+ and trade your way to a lambo with it, because whatever advantage an amateur investor might have is purely from their niche knowledge/information/heterodox beliefs, though I give it about 6-18 months until we’re hearing all about it because it’s a timeless siren song.
They haven't made sense in the age of cheap retail brokerages, low fee ETFs for a long time. Hopefully AI closes the intelligence gap for people who need it who might be confused about the all junk alternative investment strategies
This is spot on and has been my experience. The tax-efficiency and lot-selection work it can provide is easily more valuable than a human advisor charging $2,000 for boilerplate. However, I know my P&L best and it has to ride shotgun while I am making the final decisions and I should know the overall strategy — should i be 80/20, have this much tech concentration, will 8% hold, tax implications in my state etc.
Financial planning is mostly a solved problem. For whatever goal and situation a person is looking for, there's already an optimal path that has been long proven.
The only times you need very custom advice is at very high levels of networth or ownership, as in "you want to sell stock but you have to physically find the buyers and negotiate deals because you can't just sell on the open market without disrupting the price"
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.
It's more complicated than that. You probably don't want all your equity in stock, unless you're young and you're confident you can keep your strategy when the AI bubble crashes. And what do you do with the part that isn't in stock? bonds? what are they? which ones to buy? Even the 6-12 months of expenses in cash doesn't apply to all people.
That being said, I agree with the bad and expensive advisors, but I think financial planning is hard, and you really need to educate yourself.
DCA is not unreasonable advice given that most people's greatest enemy is themselves. DCA helps avoid the very emotionally upsetting feeling of you throwing money into a fund and it dropping 5% the next day. This emotional volatility can push people to make bad decisions (pull all their money out, try to time the market, stop investing, etc.). Scheduling your investment into smaller sums lets you diffuse the highs and lows in order to keep you steadfast.
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.
If you’re a layman investor just dump all of your shit in index funds. Even if you’re smart and sophisticated, you’re still competing against the massive amount of fraudulent insider trading happening right now with zero enforcement and are trading at a disadvantage as a result
If you understand finance and aren’t specifically attempting to arb on that timescale, you actually want to participate in markets with those participants, because their presence gives you less variance/better price discovery on the scales that don’t factor into your decisions to buy and sell things.
So basically if you’re larping as a trader you will consistently get your ass handed to you unless you are genuinely better than all the pros, but if you’re investing or optimizing for a specific risk profile/exposure/timeline you’re playing a different game.
Anyway the fact that it’s so hard to explain this stuff to individuals does strengthen the argument that most individuals are better off following the herd.
AI financial advice is surprisingly good... for now. But given the historical trajectory of both the finance and advertising sectors I can't imagine it will, for long. AI responses without ads are unoptimized space!
It only takes Draftkings writing a very large check to Google before it responds to financial questions with solid advice before ending with, "Since you have a few spare hundred dollars laying around, why not try a high-risk investment into same-game parlays?"
The advice from most agents is very normie and really the normie advice is pretty good, right? It's just that that's what you get most of the time until you give enough specifics to be known not to be normie. And the problem is that it veers into technical analysis very easily.
I use YNAB (https://www.ynab.com/) for budgeting so I already had all of my financial data in a single source. Exporting the CSVs locally and asking Claude to be my financial advisor legitimately gave me good advice. Not just nagging me to save more (which is always useful), but how to organize my budget categories better, detecting longer term spending patterns I wasn't thinking much about, researching credit card reward programs based on my spending patterns, digging deep into interest and tax rates in way I never bothered etc.
That was the first time I felt like real people's jobs were threatened by AI. Financial advisors and tax accountants better adapt quickly.
I would suggest also simplefin. Only $15/year. Its a bit more simple/restrictive (e.g. they only allow like 25 api calls per day), but if you are just doing simple personal budget tracking they are more than enough.
I spun up a simplefin sync tool recently and they made some surprising errors with some of my accounts (incorrect sign, completely missing some transactions). Also they don't do investments, which is problematic when our primary "checking" is actually a brokerage account.
I found SnapTrade[1] which gives away a free personal account with up to 20 brokerage connections (i.e. logins, not accounts).
I'm using simplefin for credit cards and loans and SnapTrade for investment accounts. Seems to be working well so far.
Financial advisors giving generic advice, sure. Tax accountants though? I'd be careful. I know the mistakes that llms make when complexity gets involved (especially tax codes and laws) and frankly I don't know enough about them to be able to verify whether what I'm getting out of it makes sense. I could probably verify it with enough research but then I just could so it myself anyway. Or I just pay an accountant a smallish fee and let them handle it.
Yeah, Claude told me what a great idea converting my LLC to an S Corp would be and how much I would save in taxes. When I asked my accountant about he told me it would actually cost me more, because of NYC taxes S Corps.
I didn’t tell Claude I lived NYC, because it didn’t occur to me that it was relevant. I find tax stuff is full stuff like this (often more subtle than where you live).
I've been building a smart personal finance app with AI integration and I've heard great feedback from my first users. I had a friend ask me a financial advice question the other day and I directed him to use the chat interface in the app, it gave him a better answer than I could and gave it to him with context of all of his financials. This stuff is the future of personal finance.
There's a huge market right now for "AI product, without much different than Gemini/Claude/GPT do out of the box, but from somebody you actually trust"
There's a good book on this called Psychology of Money. I also recommend Money for Couples to see in real time this psychological effect of money, especially with changes since childhood and how that affects people into adulthood.
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.
It's easy to make a good call, but it's really hard to stick with it.
The main financial advice I'm giving to all relatives is to write down their decisions before buying anything. Or, if you're looking for a long term investment - asking someone close to change the password on your account without letting you know.
The major problem with investing is that most people will commit to 2-5y strategy, and panic on the first dip.
If you did your due diligence and you believe that this particular asset will grow within 5 years - when it starts dipping after few months, and nothing major has changed in your predictions - you should buy more instead of selling.
> If you did your due diligence and you believe that this particular asset will grow within 5 years...
This assumes that most people know how to do "due diligence" and that their "predictions" are accurate. Most people don't actually have the knowledge and skill to evaluate the investment vehicles (stocks, bonds, etc.) available to them so their predictions are inherently limited and flawed.
> ... when it starts dipping after few months, and nothing major has changed in your predictions - you should buy more instead of selling.
One of the biggest mistakes average people make is selecting investments with risk profiles and durations that are mismatched to their needs and objectives. This is why, for most people, it's much better to use a properly-selected model portfolio than to try to pick individual stocks.
I've learned this applies to a lot of life. Being a good manager, tech lead, consultant, etc, advisor, parent, friend, etc, is sometimes just half being a good therapist and helping them regulate.
I've watched a lot of "not officially financial advice" finance videos on YouTube (the solid people, not grifters), and while the financial theory side is interesting, when they talk about pragmatic investing and patterns of client behavior they have dealt with professionally, a large part of it is emotion management. Convincing clients to stick with a solid plan even when this month is abnormally bad, or avoid going all-in on the latest hotness, etc.
I honestly write it off. "especially if you ask the right questions" just collapses to being a bag holder because I didn't ask the right questions with or without AI.
> “We were somewhat surprised by how good the advice was,” Choukhmane said. “Especially when you read the kind of questions people asked, it was not a given that the advice would line up with what academics think are good financial principles.”
TFA goes on to point out that more academic prompts did better still -- but a major point was that, even with naive and simple questions, the advice was still surprisingly good.
And similarly, quoting from the article which TFA cites:
> First, following LLM advice would move most survey respondents closer to the prescriptions of life cycle theory relative to their current behavior, including broader participation in diversified equity funds, equity shares that decline with age, and sizeable saving buffers. Second, replacing individual-written prompts with academic prompts moves LLM advice even closer to life cycle theory, with better consumption smoothingand less reliance on simple heuristics.
It’s true across the board. How to get good results with coding using AI? Be a good coder. How to get good financial advice? Be financially literate. How to get good medical advice? Be a doctor…
Makes ya wonder: where is the intelligence coming from?
I would argue coding is different from those other categories. I think you can ask AI expert level questions without being an expert in many fields if you are smart and well educated in general.
To me its felt like the LLM sort mirrors what you say to it and how you say it, to the point where I now include additional instructions to steer the model "Never mirror the user’s present diction, mood, or affect". It feels like I get a better experience but to be honest i haven't really done any benchmarking especially on newer models
i want to create a Financial advisor agent.md / i can use for a system prompt in a claude project or as a a agent in a wider financial research workflow
by looking at this paper and access to the internet identify ways to address the points that are identified where ai is good and bad at and improve on those areas and ultimately provide a comprehensive financial advisor agent
So the document predictor tool is very good at telling you things that were already common-wisdom... except with the small downside that it can be unpredictably poisoned into telling you total lies.
In a similar fashion, it will tell you to stay away from many different ways of portfolio construction where you take on smarter risk with diversification.
It will tell you something like TQQQ is not a good long term hold, when it can be perfectly fine especially if you mix in with 60-20-20 with TQQQ-GDE-ZROZ, and DCA and annually rebalance.
AI will tell you "common" things people say, not necessarily smarter things that may be more suitable for you. This is not a bad thing, you just need to know better than to listen everything as a gospel.
> It will tell you something like TQQQ is not a good long term hold, when it can be perfectly fine especially if you mix in with 60-20-20 with TQQQ-GDE-ZROZ, and DCA and annually rebalance.
As someone who long-term-holds TQQQ (I am lazy) it is pretty much true that holding TQQQ doesn't make sense. It is basically unambiguously better (ie. the risk-adjusted returns are higher) to directly hold options that construct the same amount of leverage over the time period you want to be leveraged over.
> I am lazy
> directly hold options that construct the same amount of leverage
A lazy guy on hackernews, with knowledge on TQQQ, options.
You are making my case.
Holding TQQQ vs doing with options are different in many ways. You will get a tax drag that you need to be mindful of.
You are also not saying something that goes against what I said. The reason LLM says TQQQ is not a good long term hold is because it can go to zero or near zero due to leverage - which is "technically" true. You are saying something else.
AI, atm, is a perfect distillation of financial platitudes from ~10 years ago.
FWIW, bonds are no longer a hedge against equity unless they’re based against private equity and private equity is both more expensive and more performant than ever.
Wonder if AI finance advisory doesn't redeem investing into a zero-sum game in the long term? And actually expose investing as something that was reserved to privileged smart few?
There doesn't appear to be any control in this study. Sure, someone taking the LLM's financial advice might end up in a better position than someone who took no advice, but would they end up better than someone who hired a financial adviser, asked a friend, or simply read the first article that came up after googling their question?
I've found AI to be very conservative when it coms to financial advice. Before AI I used to make my own models, and did that to the point of obsession. In the past year or so AI has become good enough with producing spreadsheets that I just offload that part.
If I had zero financial knowledge, I would trust some of the big models with setting up a sound investment and savings strategy.
LLMs are aligned to be cautious. And “good” financial advice is extremely simple. A conservative approach gets you there 80% of the time. Is when people want to get too smart (or they’re bordes) that money is lost (gambling mostly: literally or with bad investments). So yeah, I’d assume AI is good at this.
I don't think it's quite that simple. Sol and Fable are effectively executing rational decision making and reasoning. They're really a cut above from the previous generation.
If every human in the world offloaded life decisions to the current AI models, we would live in a better world by the commonly used metrics (less crime, better life expectancy, people doing better financially)
note this is financial advice not a crystal ball which some of you are perceiving this as. there's just no way to prompt your way into trading or any type of imperfect information situations where there is no nash equilibrium
we might get there eventually but not with LLMs no matter how much RL or "skin in the game" you throw at it.
It is good, but the harness matters a lot. The harness is what allows an LLM interact with the real world. For finance it's important you get answers using the latest data and that are calculated and not hallucinated. Also important the LLM thinks at a high level.
I've worked hard to have thetix.ai be the best at investing research compared to Claude or ChstGPT.
Financial advice for most people is incredibly straightforward and it can be summed up as: cut expenses and invest conservatively.
Cutting expenses is the absolutely best thing you can do because it gives you more money to save AND reduces how much money you need to survive in retirement. Drive a 2007 Camry instead of buying a new F150 every 2 years. Live in a small as space as possible. Don't buy designer whatever.
Own your home (if you can). Invest in a diversified passively-invested portfolio. Don't gamble (including crypto). A Vanguard total market fund is fine.
Unfortunately many people make life-changing bad financial decisions when they're the least capable of understanding the implications and that is by taking on massive amounts of student loan debt. You go to your dream school because, well, it's your dream, but your potential career has no way of conceivably paying back that $250k+ for an out-of-state private school. Favor in-state tuition at a state school or whoever will give you a scholarship. You can go further and do 2 years at a community college before transferring to a 4 year program.
Somewhat controversially, I'm also not opposed to people finding the right job in the military for 4 years to pay for tuition. Not something that'll destroy your body or put you in harm's way. Ride a desk for 4 years. Lots of people don't have this option because of common conditions like asthma or ADHD however. In certain branches you might be able to do 2+ years of that college concurrently.
Now society has cooked the housing market and that's a massive problem that's only going to get worse. It wasn't that long ago that you could buy a relatively cheap starter home. You need a fairly serious income for that now.
Oh and if you have children you absolutely need life insurance on yourself and your partner and disability insurance as well.
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The average index fund may not even be the best idea anymore - look at how most of the index providers except S&P caved on including an enormous but barely-tested IPO that has now dropped almost 20% since it launched barely 45 days ago.
You need to feed it high quality data. Try Gemini Notebook, but this time load up a spreadsheet of fundamentals information for all US stocks or ETFs. The answer will differ and be much more nuanced.
I dont think you can rely on an out of book chat agent today to have all the necessary information at its disposal - even if you can pull a stock quote in ChatGPT, it doesn't mean it's going to look at PE multiples on 5000 stocks...
I have to assume that there are hedge funds or someone like that, already investing extensive effort into trying to get AI to beat the market. I assume that it can't, but if I'm wrong then whoever figures this out stands to get extremely rich.
It is mentioned in the article that without context, it does give generic fail safe advice, but as the prompts get better it would also lead you to the right direction.
I also think it is actually most challenging to change peoples behavior and neither YT gurus nor static AI models can (maybe an agent with appropriate tools could)
Not just Generic. Any of the finance guys on YouTube that aren't grifters will say this. Post-train on a single one of them and boom AI is a financial guru.
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 cards - they're not a bubble, Logan Paul told me so!
You could replace the AI with a piece of paper that says "set aside 10% of your income and invest it in an ETF" and it would outperform the financial "advice" that people receive on a daily basis.