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My guest today is an AI bot · The Money Puzzle

0:09
Speaker 1: Hello and welcome to The Australian's Money Puzzle podcast. I'm
0:12
Speaker 1: James Kirby. Welcome aboard everybody. It looks very much like
0:17
Speaker 1: twenty twenty five is shaping up as the year artificial
0:21
Speaker 1: intelligence really changes the game for investors. And in today's show,
0:25
Speaker 1: I've got two guests. I've got financial advisor James Gerard,
0:30
Speaker 1: who you know, and an AI chatbot in the form
0:34
Speaker 1: of Microsoft's co Pilot. Now, in each segment of the show,
0:39
Speaker 1: I start by interviewing the AI copilot, and then my
0:44
Speaker 1: very human financial advisor guest, James Girard, reviews the quality
0:48
Speaker 1: basically of what's been offered for free by this remarkable
0:52
Speaker 1: new technology. Okay, stand by, here we go. Thank you for.
1:00
Speaker 2: Coming on, Thanks for having me, James.
1:03
Speaker 1: Okay, let's get into it. I really just want to
1:05
Speaker 1: figure out how to start. You know, how do I
1:07
Speaker 1: begin as an investor? Is there certain books or very
1:10
Speaker 1: well known courses perhaps I could.
1:12
Speaker 2: Do starting out as an investor? You want to look
1:15
Speaker 2: at the basics first. There's a classic book called The
1:19
Speaker 2: Intelligent Investor by Benjamin Graham that's really useful, and you
1:23
Speaker 2: can find online courses too. It's about getting a good
1:27
Speaker 2: grasp on the fundamentals before diving into the market.
1:31
Speaker 1: Yeah, thank you. Okay, Well, the thing is, I looked
1:33
Speaker 1: at the Benjamin Graham books and they written a long
1:35
Speaker 1: time ago. I mean, I find that those books very difficult,
1:38
Speaker 1: that they're beyond me. Really, I'm looking for something much
1:40
Speaker 1: more elementary, you know, like a introduction perhaps to personal investing.
1:45
Speaker 2: Got it. The older stuff can be a bit dense.
1:48
Speaker 2: For something more digestible, you might check out A Random
1:51
Speaker 2: Walk down Wall Street by Burton Malkiel. It's a bit
1:55
Speaker 2: more approachable for beginners and talks about the basics of
1:59
Speaker 2: investing in the stock market.
2:02
Speaker 1: Yeah, very good. I like that idea. I know that
2:05
Speaker 1: basics of the stock market that would be useful. One
2:08
Speaker 1: of the things I think that's happened since was it
2:10
Speaker 1: Burton Malkiel wrote that book? Of course, it's again it's
2:13
Speaker 1: a long time ago, and it's a bit dense, you know, Like,
2:16
Speaker 1: which is better? Can you tell me? The shares or
2:18
Speaker 1: the ETFs.
2:20
Speaker 2: ETFs have really changed the game. They offer diversification and
2:24
Speaker 2: tend to have lower fees compared to buying individual shares.
2:28
Speaker 2: It's not necessarily about one being better than the other.
2:31
Speaker 2: It depends on your strategy. ETFs can be a good
2:34
Speaker 2: starting point for beginners because of the built in diversification.
2:38
Speaker 2: What's your goal with investing?
2:40
Speaker 1: My goal? Look, my goal with investing is like any
2:43
Speaker 1: other goal, which is to make as much money as possible.
2:46
Speaker 1: I suppose one of the things that sort of is
2:48
Speaker 1: a dilemma for me is whether I buy shares or
2:52
Speaker 1: exchange traded funds. As you say, maybe they're interchangeable, but
2:56
Speaker 1: which do you think? Whether I should buy shares or property?
2:59
Speaker 1: Because house price is also going up pretty.
3:01
Speaker 2: Fast, Property can be a solid investment, especially if you're
3:05
Speaker 2: thinking long term. It's a tangible asset and has potential
3:09
Speaker 2: for appreciation and rental income. Shares and ETFs are more liquid,
3:14
Speaker 2: but property offers a different kind of stability. Diversifying across
3:19
Speaker 2: asset classes could balance out your portfolio. What's your risk tolerance?
3:24
Speaker 1: Like my risk tolerance? My risk tolerance is normal. I
3:29
Speaker 1: suppose One of the things I'm wondering is though, if
3:32
Speaker 1: I'm paying down my home loan right at the moment,
3:34
Speaker 1: my mortgage, maybe I'd be better off doing some investing.
3:37
Speaker 1: Is there any sort of surveys that suggests which is
3:40
Speaker 1: better and keep in mind I live in Australia.
3:43
Speaker 2: It really depends on your specific situation. Paying down your
3:47
Speaker 2: mortgage can be a safe bet because it reduces debt
3:50
Speaker 2: and can save you on interest. Investing could potentially offer
3:54
Speaker 2: higher returns, but it comes with risks. Consider speaking with
3:59
Speaker 2: a financial advisor who knows the Australian market.
4:01
Speaker 1: Well, okay, yes, well. One of the things I'm hoping
4:04
Speaker 1: to get ASPUS is, you know, without going to an advisor,
4:06
Speaker 1: maybe gets some information from you because you seem to
4:09
Speaker 1: be across investment data. One of the things we have
4:12
Speaker 1: here is this choice between putting money aside for the pension,
4:17
Speaker 1: you know, for later life, or putting money into mortgage.
4:20
Speaker 1: It's difficult to assess how much do you need in
4:22
Speaker 1: this area? How much do you need to retire? How
4:25
Speaker 1: do you estimate these things?
4:27
Speaker 2: Retirement needs can vary greatly. A common rule of thumb
4:31
Speaker 2: is aiming for around seventy to eighty percent of your
4:34
Speaker 2: current income annually in retirement. This includes your pension savings
4:38
Speaker 2: and any investments, but it really depends on your lifestyle,
4:41
Speaker 2: health care needs, and life expectancy. It's a balancing act.
4:45
Speaker 1: Oh yeah, where did you get that number? For the
4:48
Speaker 1: rule of thumb, the seventy to eighty percent. It sounds
4:50
Speaker 1: has high to me. I'd love to have that level,
4:52
Speaker 1: you know, of income in my own retirement.
4:55
Speaker 2: The seventy to eighty percent figure comes from financial planning guidelines.
5:00
Speaker 2: It's based on the idea that retirees might spend less
5:04
Speaker 2: on things like commuting or saving for retirement, but it
5:07
Speaker 2: can vary. Some folks aim for more, especially if they
5:11
Speaker 2: plan to travel or have high medical costs.
5:14
Speaker 1: Okay, okay, and what would you say financial planning guidelines?
5:18
Speaker 1: What which guidelines are you referring to?
5:21
Speaker 2: I'm talking about advice from financial planners and experts.
5:24
Speaker 1: Can you name who the financial planners are? I mean, like,
5:27
Speaker 1: is it an association some sort? Is there a qualification here?
5:31
Speaker 2: Sure? These guidelines often come from financial planning associations and
5:35
Speaker 2: experts worldwide. In Australia, you've got bodies like the Financial
5:40
Speaker 2: Planning Association FPA or the Association of Financial Advisors AFA.
5:48
Speaker 2: Financial planners typically need qualifications and must meet certain standards
5:53
Speaker 2: to give advice.
5:54
Speaker 1: Do you know how many financial advices there are in Australia.
5:57
Speaker 1: I'd like to find one.
5:59
Speaker 2: There are thousands of financial advisors. I am not sure
6:02
Speaker 2: of the exact number, but finding one might be easier
6:05
Speaker 2: through the Financial Planning Association or the Australian Securities and
6:09
Speaker 2: Investments Commission website.
6:11
Speaker 1: Okay, pretty so, thank you well, James Gerard, human financial advisor.
6:16
Speaker 1: That was pretty spooky. I found it spooky because I'd
6:19
Speaker 1: been talking at that point to the bot for this
6:23
Speaker 1: is edited versions you're hearing, folks, I'd been talking to
6:25
Speaker 1: it for about half an hour and I was starting
6:28
Speaker 1: It never gets emotional, of course, but you know, I
6:31
Speaker 1: was starting to respond like I was talking to a character.
6:35
Speaker 1: First thing I think we have to put on the
6:37
Speaker 1: table is it's probably right. I mean, a lot of
6:39
Speaker 1: the elementary financial advice, Why on earth would you pay
6:42
Speaker 1: three thousand a year to get basic questions answered when
6:44
Speaker 1: you can get them answered with AI. Am I being
6:48
Speaker 1: brutally simplistic or is that true? I think it's true, James.
6:55
Speaker 3: People will be jumping onto AI more and more to
6:58
Speaker 3: typing these basic questions, and that's a threat to all
7:01
Speaker 3: financial advisors where they're just focusing on the basics. So
7:05
Speaker 3: I think what's going to happen with the financial advisory
7:07
Speaker 3: industry is that everybody will need to skill up and
7:10
Speaker 3: level up. So where there's very complex situation, not even
7:14
Speaker 3: complex situations, complex decisions to be made, where there's maybe
7:17
Speaker 3: five to ten different potential pathways where someone could go
7:21
Speaker 3: with an investment or the way they structure something, it's
7:24
Speaker 3: very difficult to capture that in a very full discussion
7:28
Speaker 3: and overlay that judgment, that human judgment, because AI is
7:33
Speaker 3: taking data, it's listening to the import it's whacking out
7:36
Speaker 3: what it thinks is best. But it does lack that
7:39
Speaker 3: human element and I'm not sure if that can ever
7:41
Speaker 3: be replicated because we have to take it to another degree.
7:45
Speaker 3: Where As we sit in video calls or face to
7:48
Speaker 3: face meetings with clients, us as human financial advisors, we
7:51
Speaker 3: look at people's body language, how they react, and we
7:55
Speaker 3: position our communication in a way that is in line
7:59
Speaker 3: with how the person would like to receive it. So
8:01
Speaker 3: some people in our stereotype engineers they love information, whereas
8:05
Speaker 3: salespeople in directors they just want short, snappy answers. So
8:09
Speaker 3: that's a very simple example of how we adapt in AI.
8:12
Speaker 3: Can't see you.
8:13
Speaker 1: That's EQ right, that's EQ yeah, IQ. It's never going
8:16
Speaker 1: to have the EQ yeah. That's an interesting point. And yeah,
8:19
Speaker 1: there's one other thing which you mentioned. I think it's
8:21
Speaker 1: the it's the killer point. Really, you have to know
8:23
Speaker 1: the question to ask. And in a very almost paradoxical way,
8:29
Speaker 1: part of this amazing leap in information supply from AI,
8:35
Speaker 1: it means that knowing the questions to ask is more
8:39
Speaker 1: important than ever. So you would think financial literacy is
8:42
Speaker 1: less important, but in a way it's more important because
8:45
Speaker 1: the people who can harness this other people who will
8:48
Speaker 1: ask the right questions. But you're never going to know
8:49
Speaker 1: the right questions unless you have some basics I think,
8:54
Speaker 1: and then you think in terms of your industry. Basically
8:59
Speaker 1: the whole thing moves up. Mar is that the ultimate
9:02
Speaker 1: I'll come here.
9:03
Speaker 2: Yeah, I believe.
9:04
Speaker 3: So. I bet my last dollar that there's financial advisors
9:08
Speaker 3: out there today who are typing in basic questions into
9:11
Speaker 3: eye engines like what's the current contribution cap, what's catch
9:14
Speaker 3: up concessional? So financial advisors are doing it every day.
9:17
Speaker 3: Moms and dads and people general public are going to
9:19
Speaker 3: do it as well. So the financial advisors need to
9:21
Speaker 3: scale up. And one little AI tip would be that
9:24
Speaker 3: if you don't know what questions to ask, or you
9:27
Speaker 3: think there may be things that you're not completely aware of.
9:29
Speaker 3: You can actually ask AI say all right, well, this
9:32
Speaker 3: is my situation. I want to know this, but I'm
9:34
Speaker 3: not sure what questions to ask. Can you help me
9:36
Speaker 3: promptly ask? Tell me what questions I should be asking.
9:39
Speaker 1: All right, we're going to keep these segments short. There's
9:41
Speaker 1: a lot to get through. So what we're going to
9:43
Speaker 1: do in the next segment you'll hear in a moment.
9:58
Speaker 1: Hello and welcome back to The Australian's Money Puzzle podcast.
10:02
Speaker 1: I'm James Kirby, and my guest today is the Microsoft
10:06
Speaker 1: co Pilot AI chatbot. We've been going fairly well so far.
10:10
Speaker 1: I want to lift it a gear now and I
10:13
Speaker 1: want to ask the co pilot a bit more elaborate,
10:16
Speaker 1: bit more advanced questions about Super. For instance, So, okay,
10:22
Speaker 1: can you tell me about Super in Australia. I live
10:26
Speaker 1: in Australia. How much can I put into Super? Do
10:29
Speaker 1: you know?
10:29
Speaker 2: Each year for the twenty twenty three to twenty twenty
10:34
Speaker 2: four financial year you can contribute up to twenty seven thousand,
10:38
Speaker 2: five hundred dollars in concessional before tax contributions.
10:42
Speaker 1: Uh huh, very good. Okay, that's really all I'm interested in.
10:45
Speaker 1: Twenty seven five hundred. Now, we'll take it, right, we'll
10:47
Speaker 1: take it on board. That's actually a bit out of
10:49
Speaker 1: date because in fact it's gone up to thirty thousand
10:52
Speaker 1: more recently. But still, Now, when I put the money
10:54
Speaker 1: into SUPER, what happens? Is it tax free? Does it mean?
10:58
Speaker 1: Does it go straight in? Or is or tax involved?
11:02
Speaker 2: When you put your before tax contributions into Super, like
11:05
Speaker 2: salary sacrifice, they're generally taxed at fifteen percent, So it's
11:10
Speaker 2: not tax free, but it's a lower tax rate compared
11:13
Speaker 2: to most people's income tax rate.
11:16
Speaker 1: I understand. Okay, yeah, very useful. And in terms of
11:18
Speaker 1: how much I can put into Super, there's a certain
11:22
Speaker 1: amount that goes in by low, right, that I must
11:24
Speaker 1: put in. The government makes me put in a certain amount.
11:26
Speaker 1: How much is that? Yep?
11:28
Speaker 2: There's a compulsory amount. For the twenty twenty three to
11:31
Speaker 2: twenty twenty four financial year, employers must contribute at least
11:36
Speaker 2: eleven percent of your earnings to your super. This is
11:40
Speaker 2: called the superannuation guarantee.
11:42
Speaker 1: Okay, right, very good superannuation guarantee. That's the minimum as
11:46
Speaker 1: such that I must put into my Super Okay, can
11:49
Speaker 1: I take It's my money right? So can I take
11:53
Speaker 1: money out of SUPER before I retire?
11:56
Speaker 2: Generally, accessing SUPER before retirement is an allowed unless underspecific
12:01
Speaker 2: conditions like severe financial hardship or certain medical situations. Once
12:06
Speaker 2: you hit the preservation age, you can typically access it.
12:10
Speaker 1: The preservation age. What's the preservation age? What does that mean?
12:14
Speaker 2: Your preservation age is the minimum age you can generally
12:18
Speaker 2: access your Super. In Australia, it ranges from fifty five
12:22
Speaker 2: to sixty depending on when you were born.
12:25
Speaker 1: Uh huh, okay, okay. Now can I ask you there's
12:27
Speaker 1: some changes going on in super where it once if
12:31
Speaker 1: you had basically this new tax is coming in on
12:34
Speaker 1: Super over three million. I thought Super was tax free.
12:38
Speaker 1: I thought all income in Super was tax free.
12:40
Speaker 2: Super income is generally taxed lower than regular income, but
12:44
Speaker 2: it's not always tax free. From July twenty twenty five,
12:49
Speaker 2: over three million dollars will face higher tax rates on
12:52
Speaker 2: the earnings. The idea is to ensure fairness in the system.
12:56
Speaker 2: It might not affect everyone, but it's worth being aware
13:00
Speaker 2: and seeking advice. If your balance is approaching that level, and.
13:04
Speaker 1: Is that the low? Now? Is that actually the low.
13:07
Speaker 2: Yes, it's set to become law starting in the financial
13:10
Speaker 2: year twenty twenty five twenty six.
13:13
Speaker 1: Thank you very much. Okay, James Gerard, the human financial
13:17
Speaker 1: advisor you were listening to that. I think it's amazing
13:21
Speaker 1: that a US based app AIP could give us such
13:26
Speaker 1: precise answers. This is the sort of thing that people
13:29
Speaker 1: ask financial advisors at an elementary level when they go
13:32
Speaker 1: in how much can I put in super? How much
13:33
Speaker 1: can I put in pre tax, et cetera post text?
13:36
Speaker 1: What did you think of the answers?
13:39
Speaker 3: I thought it was very interesting. The answers were mainly
13:42
Speaker 3: technically correct. So when it talked about contribution, CAPS gave
13:48
Speaker 3: a form of financial year's number. So currently it's thirty
13:51
Speaker 3: thousand dollars for pre tax super contribution.
13:54
Speaker 1: So it was wrong, Okay, I spotted that. Obviously I
13:57
Speaker 1: didn't want to get into an argument with a bot
13:59
Speaker 1: on air, but it was as such, it was wrong.
14:04
Speaker 1: But then, to be fair, it was not so much
14:08
Speaker 1: wrong as out of date. It was right a couple
14:12
Speaker 1: of years ago, but it was wrong right now. So
14:14
Speaker 1: why is that you think?
14:17
Speaker 3: I think it's just the underlying data that's been sucked
14:20
Speaker 3: into these various AI models may not be up to
14:24
Speaker 3: date as yet, but that's a minor issue that will
14:27
Speaker 3: improve as it has more linkage to contemporary websites and
14:30
Speaker 3: access to live data. So I noticed that when it
14:33
Speaker 3: came to the mandatory supernuation contributions, it did say twenty
14:37
Speaker 3: twenty three twenty twenty four financial year, and it said
14:40
Speaker 3: eleven percent. But we're not in twenty twenty three twenty four.
14:44
Speaker 1: No, But so then again, you know, to be fair,
14:47
Speaker 1: it was correct, they were correct figures. They were just
14:50
Speaker 1: out of date. That's that's right. And if that was
14:54
Speaker 1: an employee of yours, one of your many employees, tell me,
14:59
Speaker 1: what would you have I said in the performance review?
15:01
Speaker 1: Would you have said? What would you have said? They
15:02
Speaker 1: could have done better?
15:04
Speaker 3: They would have had to go brush up on their
15:06
Speaker 3: technical skills, because that's just not up to scratch. We
15:09
Speaker 3: can't go recommending clients with inaccurate technical information. And another
15:14
Speaker 3: area was around the preservation age. Actually, this one was wrong.
15:16
Speaker 3: It said fifty five, but it's actually sixty now, So
15:19
Speaker 3: fifty five was quite a while ago. With the preservation age, Yeah,
15:23
Speaker 3: what was.
15:23
Speaker 1: Quite a while ago. That's quite a file ago. That
15:25
Speaker 1: was actually completely wrong. That's sixty four years.
15:28
Speaker 3: That's right, And the other observation is that it in
15:33
Speaker 3: my opinion, it comes down to the prompting of what
15:35
Speaker 3: you say to the AI bot in terms of what
15:38
Speaker 3: the answer is. So with the super contributions, you asked it,
15:41
Speaker 3: what's the rate of tax on supercontributions? That came out
15:43
Speaker 3: at fifteen percent for concessional contributions, But if your income
15:47
Speaker 3: is above two hundred and fifty thousand, it's actually thirty
15:49
Speaker 3: percent contribution tax. So unless you knew that there's a
15:53
Speaker 3: different tax for people above and below two hundred and
15:55
Speaker 3: fifty thousand, the average Australian who's going to use chat
15:59
Speaker 3: chip or some other AI machine to understand their finances
16:03
Speaker 3: may not get the full pitch up because they're not
16:05
Speaker 3: asking the right questions to it.
16:07
Speaker 1: Okay, very interesting, yeah questions, Even assuming let's put it
16:12
Speaker 1: into side the fact that they were out of date,
16:14
Speaker 1: there's no context and there is really relevant context here.
16:19
Speaker 1: So for instance, on those that was true, the answer
16:22
Speaker 1: was true up to income of two hundred and fifty thousand,
16:25
Speaker 1: isn't that right? And if you were over two hundred
16:26
Speaker 1: and fifty thousand in your annual income there's a thing
16:28
Speaker 1: called Division two ninety three which kicks in, and there's
16:30
Speaker 1: another attack on Super and g gush. I'm hardly surprised
16:34
Speaker 1: at a I can't keep up with it because we're
16:36
Speaker 1: all struggling to keep up with it. Okay, we'll be
16:38
Speaker 1: back in a moment with some really interesting questions about
16:41
Speaker 1: the future financial advice. Hello, welcome back to the Australians
16:57
Speaker 1: Money Puzzle podcast. I'm James Kirby. The first time that
17:01
Speaker 1: I've had two guests on the show, one human and
17:04
Speaker 1: one AI bot, which is Microsoft's co pilot. We've had
17:08
Speaker 1: a bit of fun basically asking the bot about how
17:12
Speaker 1: to start in financial advice. Then we sort of lifted
17:14
Speaker 1: our game a bit and said pretty you know my
17:18
Speaker 1: ly advanced questions about Super and it wasn't as good
17:21
Speaker 1: on that part. I have to say now I'm just
17:23
Speaker 1: going to ask in this segment about the future financial
17:26
Speaker 1: advice itself and what might happen. And I think it's
17:29
Speaker 1: an extraordinary piece for the simple reason that initially you'll
17:34
Speaker 1: hear the bot gives a bland answer about job losses.
17:37
Speaker 1: I push it a second time and like a human,
17:39
Speaker 1: it takes a second read and actually gives a better answer.
17:41
Speaker 1: It's really interesting. Now this time I want to ask
17:44
Speaker 1: something more broad. Can you tell me will there be
17:48
Speaker 1: job losses in the future due to artificial intelligence due
17:52
Speaker 1: to AI.
17:53
Speaker 2: AI's impact on jobs is a complex topic. While some
17:57
Speaker 2: jobs may be affected, AI also creates new opportunities.
18:01
Speaker 1: Yeah, yeah, I know, sure, But I'm asking you. Do
18:03
Speaker 1: you think there will be job losses from AI in
18:06
Speaker 1: the next few years.
18:08
Speaker 2: Absolutely, It's likely that AI will lead to job losses
18:12
Speaker 2: in some sectors due to automation. However, it will also
18:15
Speaker 2: create new roles and industries.
18:18
Speaker 1: Okay. The industry I'm particularly interested in is financial advice,
18:22
Speaker 1: and of course that's the area invariably or other guests
18:26
Speaker 1: on the show are often from. What can AI offer
18:29
Speaker 1: in the business of financial advice and investment information?
18:34
Speaker 2: AI can offer a lot in the financial advisory space.
18:37
Speaker 2: It can analyze vast amounts of data quickly, provide personalized
18:42
Speaker 2: investment advice based on individual goals, and even predict market
18:46
Speaker 2: trends with advanced algorithms. Plus, it can streamline administrative tasks,
18:53
Speaker 2: allowing advisors to focus more on client relationships.
18:57
Speaker 1: Yeah, what would be the risk then for the day
19:00
Speaker 1: listener or investor taking AI information exclusively exclusively for the
19:05
Speaker 1: financial advice.
19:07
Speaker 2: Relying solely on AI for financial advice carries risks. There's
19:12
Speaker 2: the potential for over reliance on algorithms that might not
19:16
Speaker 2: capture the nuances of individual circumstances or market anomalies. Plus,
19:22
Speaker 2: without human judgment, there's a risk of missing the emotional
19:26
Speaker 2: or psychological aspects of investing.
19:29
Speaker 1: Okay, thank you very much. Great to have you on
19:31
Speaker 1: the show. Nice to talk to you, and well, I
19:35
Speaker 1: don't know if we'll have you on again, but thank
19:37
Speaker 1: you for coming on the show.
19:38
Speaker 2: Thanks for having me.
19:40
Speaker 1: Take care Well, that was a pretty interesting interview, certainly
19:44
Speaker 1: one of the more interesting interviews I've ever done. I
19:46
Speaker 1: can tell you that, folks, because I'm not used to
19:48
Speaker 1: talking to bots, and most people aren't. James, what did
19:53
Speaker 1: you think about the general quality of the information? I mean,
19:57
Speaker 1: I thought some of it ranged from seriously precise, and
20:00
Speaker 1: actually the precise stuff was inappropriate, I thought, But then
20:03
Speaker 1: the general stuff wasn't bad. What do you think?
20:06
Speaker 3: Yeah, it was okay. I would say I'd rate it
20:09
Speaker 3: as sort of like a seven out of ten. It
20:11
Speaker 3: covered a lot of broad principles, a lot of just
20:14
Speaker 3: general information that apply to a lot of people. But
20:17
Speaker 3: maybe if those books are a little bit off, they
20:18
Speaker 3: probably wouldn't be the first two that I'd give to
20:21
Speaker 3: everybody because they are a little bit complex in nature.
20:23
Speaker 1: But they're all books, and they're hard to read, and
20:25
Speaker 1: they're both American.
20:26
Speaker 3: That's right, So it probably just lacked that. Oh okay,
20:30
Speaker 3: a little bit of context around it would have been good.
20:31
Speaker 3: I'm an Australian investor, I'm forty five years old, so
20:34
Speaker 3: on and so forth, and I don't know it still
20:36
Speaker 3: maybe even the same ones, But again it comes back
20:38
Speaker 3: to these issues around these AI models. They're still relatively new.
20:42
Speaker 1: Yes, okay, now there were I thought it was good
20:45
Speaker 1: on the basics there, like ETFs, you know, and having goals.
20:51
Speaker 1: I thought that was quite good. I mean there were
20:54
Speaker 1: very general answers, but there were very general questions, and
20:57
Speaker 1: I don't think, what did you? And she only fought
20:59
Speaker 1: with the B principles or approach that it took.
21:05
Speaker 3: I had no concerns with what it said generally about ETFs,
21:09
Speaker 3: but I guess the next step with an AI financial
21:12
Speaker 3: adviser would be to say, well, which ones for me?
21:14
Speaker 3: And then that just opens up this whole conversation that
21:17
Speaker 3: typically someone would have with a face to face advisor,
21:20
Speaker 3: because the AI financial advisor can look at the whole
21:24
Speaker 3: list of ETFs that are available through this ground and
21:26
Speaker 3: share market. But it's not going to be as good
21:30
Speaker 3: as picking well what about time in market conditions should
21:33
Speaker 3: be dollar cost average in and it can do the
21:35
Speaker 3: basics on risk return metrics, but it's going to take
21:38
Speaker 3: a very big conversation, like you need to know quite
21:40
Speaker 3: a bit to be able to get the best out
21:42
Speaker 3: of it to get what you want.
21:43
Speaker 1: Yeah, it'll be interesting to talk to it the morning
21:45
Speaker 1: after a crash. That would be really interesting because it
21:49
Speaker 1: would be on emotional on like the human advisors and
21:53
Speaker 1: stuff workers that we might be talking to. Okay, now
21:56
Speaker 1: I tell you, well, I tell you what I didn't like.
21:58
Speaker 1: As one stage, it says retirement needs can vary greatly.
22:01
Speaker 1: A common rule of thumb is for aiming for seventy
22:04
Speaker 1: to eighty percent of your current income in retirement. Oh yeah,
22:09
Speaker 1: I don't know. Tell me that sounds too high to me,
22:11
Speaker 1: that sounds way ambitious, I reckon. Most Australians is not
22:14
Speaker 1: retired with seventy to eighty percent of their previous income
22:18
Speaker 1: and wouldn't even aspire to do so is it too
22:20
Speaker 1: high or was it in the ballpark?
22:23
Speaker 3: I think it's too high, And I think this is
22:25
Speaker 3: maybe one of the issues at present with these AI
22:28
Speaker 3: chat engines is that they learn from these thing called
22:31
Speaker 3: large language models. So it's basically the database of information
22:34
Speaker 3: that is in there that when you type a question,
22:36
Speaker 3: it looks into that and then spits out the answer.
22:38
Speaker 3: And it's probably going more for a theoretical answer. So
22:41
Speaker 3: in some textbook or some website somewhere, it probably says
22:44
Speaker 3: that you should aim to retire on seventy to eighty
22:46
Speaker 3: percent of your pre retirement income. However, when you overlay
22:50
Speaker 3: that with reality, as you say, most people don't. So
22:52
Speaker 3: there's a difference between what theory says and what actually
22:55
Speaker 3: happens day to day, which AI may not be so
22:57
Speaker 3: good at distinguishing.
22:59
Speaker 1: Actually, which brings me back in a nice way to
23:01
Speaker 1: close this show to one of the very first things
23:04
Speaker 1: we were told when we started in journalism, which is
23:08
Speaker 1: there is no such thing as a stupid question, only
23:11
Speaker 1: stupid answers. And we might leave it right there, thank
23:15
Speaker 1: you very much, James Girard. I won't go through the
23:18
Speaker 1: protocol of thanking a bot because I still like to
23:20
Speaker 1: think that I only talk to humans. So thank you.
23:23
Speaker 1: James Gerard, Financial Advisor dot com dot au. Thank you, James,
23:26
Speaker 1: my pleasure lovely to have you on the show. Keep
23:29
Speaker 1: the emails rolling, folks. The money puzzle at The Australian
23:32
Speaker 1: dot com dot au