In case you didn’t know, artificial intelligence (AI) is taking the world by storm. It is rapidly permeating all aspects of our lives, and the pace of adoption is accelerating.
AI is already powering many everyday applications, including voice assistants like Siri and Alexa. It is also used in systems that suggest movies, books, and products based on user-expressed preferences. These systems monitor, listen to, and learn from user choices and seek to understand user preferences, curating personalized products based on what they observe. The results are both surprising and a little creepy.
AI can be thought of as a digital brain that can process information, learn from it, and use that knowledge to solve problems and make predictions. AI models can process large amounts of data much faster than humans can, so they can extract valuable insights from the data that even the most observant of humans can’t. For example, my son just got his PhD. in the field of computer science. His research focuses on using AI to comb through the mountains of biological data accumulated over the years by so-called wet labs for clues to innovative cancer treatments. This kind of research would not be possible without AI-based technology.
AI can also help people make better financial decisions. ChatGPT is a high-profile example of AI technology with great potential to improve personal financial literacy. GPT in “ChatGPT” stands for “Generative Pre-trained Transformer”. The term “generate” refers to the ability of the model to generate text. “Pre-trained” indicates that the model is trained on large amounts of data before being fine-tuned for a specific task. “Transformer” refers to the specific architecture used. in the model. GPT is a type of AI model that excels at generating human-like text based on the input it receives. By leveraging the model’s vast knowledge, interactive capabilities, and data-driven insights, users can access valuable information and gain a deeper understanding of complex financial concepts.
ChatGPT’s interactive nature allows users to participate in conversations and ask questions specific to their financial situation. Users can look for information on retirement planning, investment diversification, debt management, or saving for major life milestones. ChatGPT also helps users identify risks associated with various financial choices.
However, ChatGPT has limitations. First, it is only trained on data up to the September 2021 “end of training” date. If you want something newer than that, like real-time stock prices and interest rates, you won’t find it on ChatGPT. . Second, ChatGPT has difficulty making recommendations among competing alternatives. For example, when I ask a simple financial question (“Would it be better for him to receive $20,000 a year for 10 years, or $1 million today?”), the ambiguous An answer was returned. Or a lump sum of $1 million today, depends on your personal circumstances, financial goals, and preferences. ” Not really. In our world, $1 million today is always better than $200,000 spread over the next decade. After several iterations, I was finally able to shed some light on ChatGPT. But if you can’t answer such a simple financial question, you can’t trust ChatGPT for financial planning advice. At least not yet.
Despite its limitations, ChatGPT improves financial literacy. This is a great educational resource that provides explanation and clarity on complex financial concepts. Users can ask questions about investment vehicles, financial terms, tax implications, and more. The model demystifies complex financial topics and empowers individuals to make more informed choices. ChatGPT provides insights to help users understand and adapt to the evolving financial landscape.
ChatGPT is an AI wizard created with OpenAI. If you’re interested in exploring the world of ChatGPT, you can get a free account at https://openai.com/. After signing in to your account, enter your question or request in the dialog box. If you’re interested in sharing, we’d love to hear about your experiences with ChatGPT. Please feel free to contact us at the email address below.
Steven C. Merrell is a partner at Monterey Private Wealth, Inc., an independent wealth manager in Monterey. He welcomes questions about investments, taxes, retirement, wealth planning, and more. Please direct any questions to Steve Merrell, 2340 Garden Road Suite 202, Monterey, CA 93940 or email smerrell@montereypw.com.
