Ep 27 - 5 Ways to Make ChatGPT Your (Free) Financial Advisor (Without Getting Sued or Sold a Timeshare)

Risk isn't just math.

It's emotion.

It's behavior.

It's you at your worst.

So before you build the portfolio, use AI to build a mirror.

Look at who you are when the lights flicker.

Because a good risk profile isn't what you hope you do, it's what you will do.

Hello friends, this is Tyler Gardner welcoming you to another episode of your money guide on the side, where it is my job to simplify what seems complex, add nuance to what seems simple, and learn from and alongside some of the brightest minds in money, finance, and investing.

So let's get started and get you one step closer to where you need to be.

Before we dive in this week, a quick and honest thank you for listening.

for your feedback, and for helping me shape this show into something truly and hopefully useful.

If it's been helpful to you in any way, I'd love it if you left a review on Apple Podcasts or drop me a note directly anytime at socialcapconnect at gmail.com.

Now, today's episode is a little bit different.

We're not talking about stocks, bonds, or retirement strategies.

We're talking about your new favorite financial assistant that you never knew you had, artificial intelligence, specifically ChatGPT, the chatbot that can write a haiku, draft your wedding vows, and help you figure out whether your Roth IRA's allocations are secretly a dumpster fire.

All in under five seconds.

It's like Google and your financially savvy friend had a baby, but guess what?

That baby never sleeps, doesn't charge by the hour, and won't try to sell you a whole life insurance policy disguised as peace of mind.

Now, before you roll your eyes and tell me you either don't trust AI or you already use it to help you with your financial decisions on a daily basis, I assure you that I designed this episode specifically to speak to both crowds.

This is for those who don't yet know how to use ChatGPT in such a way, or at all, and for those who are simply looking to better engineer their prompts to get the most helpful information and guidance possible.

This episode isn't about my convincing you to trust in algorithm with your life savings.

Rather, it's about using AI as a thought partner, a sidekick, or a financial co-pilot that helps you ask better questions about your goals, your risk tolerance, your timeline, your current fee structure, and ultimately your portfolio.

So you can walk into any financial conversation going forward more prepared, more confident, and perhaps even slightly more smug in a good way.

And the best part?

ChatGPT doesn't care how dumb your questions are.

You can ask it what a mutual fund is for the 12th time.

You could paste your advisor's contract in and say, translate this into English, please.

You can even ask it what money means to you, and it'll come back with something that feels like a very polite TED Talk.

So today I'm going to walk you through five key sections where I genuinely believe AI, again, specifically ChatGPT, can help you think more clearly and creatively about your money.

We'll cover the following five topics.

Number one,

how to get clear on your values and know retire early and drink wine in Italy is not a value.

it's a lifestyle mood board.

Number two, how to better understand your risk profile without filling out one of those clicky quizzes that assumes a market crash is a fun hypothetical.

Number three,

how to clarify your timeline and major financial and life milestones.

Number four, ooh, big one, how to analyze your fees

because termites aren't the only thing eating your wood frame house alive.

And number five,

ultimately, how to review your portfolio like an overcaffeinated and truly objective fiduciary.

By the end of this episode, you will have a playbook for using artificial intelligence as your free, always-on, emotionally stable money sidekick.

So let's get into it.

Prompt number one:

What do I value about money?

AKA, what do you actually want money to do for you?

If you have spent your life as most of us have, which is to say, wanting more money because we're told to want more money and we're taught that more money is better than less money, super duper.

But we've all been putting the financial cart before the horse.

Seriously.

Because before you do anything else in in life, starting right now,

you need to ask the only question that should lead off this personal finance fun.

What do you want the money for?

What's the goal?

Is it a lifestyle?

An emotion?

Or a massive new truck that you can drive around Nashville, Tennessee, so you feel more connected to the local tourists?

Before you start stress testing whether you can afford a second home in coastal Maine or just a second fridge, you've got to ask, why am I even doing this?

This is where ChatGPT is shockingly useful.

Not because it knows your soul, it doesn't, even though sometimes you might think it does.

It's actually a robot, but it will help you start asking better questions about what wealth actually means to you.

Not to your neighbor with the boat, not to your uncle who hoards gold bars in his basement like a doomsday squirrel.

You.

Here are some prompts you could use right now to get this started.

Can you help me clarify my core financial values?

Or what are some questions I should ask myself before setting financial goals?

Or can you help me write a personal money mission statement?

Or even

Can we do a five-minute values-based coaching session to figure out what I actually want money to do in my life.

And you might be surprised that you don't already know the answers to many of these questions.

I promise, it'll come back with something wonderfully thoughtful that prompts you to prompt yourself further.

It's like having a life coach who doesn't breathe, sweat, or say abundance mindset every five minutes.

And here's the type of response it might offer you in return.

Great questions, Tyler.

It sounds like freedom and flexibility are more important to you than just maximizing wealth.

You may actually value time, affluence, over financial affluence, and your goals should therefore reflect that.

Would you like to explore financial plans that prioritize optionality and semi-retirement rather than full accumulation?

See?

It's like therapy, but much faster.

And you don't have to make eye contact or change out of your PJs.

Because here's the thing we continue to overlook about all finance.

Money is just a tool, albeit a powerful one, but a tool nonetheless.

If you don't know what you're building, you might end up constructing a very well-funded prison.

So whether you value security, generosity, autonomy, creative freedom, or just not working in a cubicle that smells like despair and burnt coffee, start there

and let AI help you name it, frame it, and then build around it.

Because sure, a Roth IRA is a wonderful thing, but a Roth IRA in service of the wrong life, that's just a very tax-efficient mistake.

Prompt number two,

what is my risk profile?

AKA, are you a golden retriever?

or a honey badger.

Now that we've dusted off your values and given them a name, let's talk about your risk profile.

Because nothing says, I'm emotionally prepared for adulthood, like trying to guess how you'd behave in a market crash that hasn't happened yet.

Traditionally, risk tolerance has been assessed by five-question multiple choice quizzes that seem to have been written by someone who's never actually met a human being.

If your portfolio drops 20% overnight, would you A, buy more, B, do nothing, C.

Cry in the bathtub while googling what's a portfolio.

Not exactly helpful.

Here's where ChatGPT, however, becomes your new best friend, and ironically, something that can help you figure out the human element here far better than most human financial advisors.

And quick side rant for anybody in the financial advising industry who listens to this podcast, for the love of all things that are real and human in this world, stop giving your clients a hypothetical list of questions for them to answer about market doomsday scenarios while they're at home in their boxers sipping morning coffee, telling their partners with conviction that they have a much higher risk profile, at least on paper, than they ever thought.

Those questionnaires are nonsense hypotheticals delivered in a vacuum.

So instead of being boxed into one of three flavors of investor, conservative, conservative, moderate, or I once owned Bitcoin, you can actually talk through the psychology of how you think and feel about risk.

You can ask things like the following.

Can you help me figure out my risk tolerance based on how I've actually made real decisions in the past?

Or, what are some signs I might be more risk averse than I thought?

Or, how can I invest if I want long-term growth but still lose sleep over $50 parking tickets?

Or my personal favorite, can you simulate a 30% market crash and coach me through it like you're my emotionally distant but surprisingly supportive uncle?

And ChatGPT will walk you through a reflection that feels less like a BuzzFeed quiz and more like a conversation with someone who's actually read Kahneman's phenomenal phenomenal book, Thinking Fast and Slow, 200 times in the last five minutes.

Once again, here's an example of how it might respond to you.

Based on your responses, Tyler, you seem to prefer stability and incremental growth over aggressive upside.

You're emotionally reactive to losses, even if they're on paper, and you may benefit from a portfolio that balances long-term equity exposure with short-term buffers like cash or bonds.

It's like a therapist and a financial planner had coffee and decided to make a spreadsheet for you that they're not selling for $11 in the link in their bio.

Because the truth is this.

Risk tolerance isn't just about how much money you can afford to lose.

It's about how much you can afford to feel like you're losing without panic selling everything and retreating into a bunker with six months of freeze-dried lentils.

Risk isn't just math.

It's emotion.

It's behavior.

It's you at your worst.

So before you build the portfolio, use AI to build a mirror.

Look at who you are when the lights flicker.

Because a good risk profile isn't what you hope you do, it's what you will do.

And it's what you have done in your SpongeBob sweatpants at 2 a.m.

when CNBC is screaming and your cousin just sold everything for gold.

Prompt number three.

Help me figure out my investing timeline.

AKA, when do you want to stop working and still be able to afford craft beer?

Once you've gained some clarity on your values and your risk profile, The next logical question is, when do you want the money to show up?

Again, this is something we rarely stop and ask ourselves.

Most of us are just taught to want more.

So we go through life wanting more and accumulating more, and then we get to the end of our lives or our work lives and statistically die with way more in the old brokerage account than we would have anticipated.

And all because we were never actually taught to flip the switch and deliberately spend money at specific times throughout our lives.

Personally, I am highly guilty of this one.

Because there's a big difference between needing cash at 42 to fund your pottery sabbatical in Portugal and needing it at 82 to fund a very different kind of clay-related expense known as ventures.

This is where most financial plans fall apart.

Not because the math is that hard, but because people plan for retirement like it's one big finish line.

And I'll spoil it now.

It's not.

As Ferris Bueller wisely notes, life moves pretty fast, and if you don't stop and look around once in a while, you might just miss it.

And know this, my friends, when Abe Froman, the sausage king of Chicago, tells you to stop and look around and spend money while your joints can still tolerate jumping off a trampoline, over a fence, to get back into your house before Principal Rooney shows up to bust you, you better be listening.

Life is a series of smaller transitions, some planned, some not, but you better be able to spend along the way, or you're going to miss some truly epic adventures at the only time that they ever could have happened.

So instead of just guessing when you want to spend money and on what, try asking ChatGPT the following: Can you help me build a timeline for my major financial milestones, like buying a home, switching careers, having kids, retiring at 55, or funding sabbaticals?

Or,

how should I think about investing if I want to semi-retire at 50 but still leave room for a second act?

Or what's the difference between traditional retirement planning and coast fire or barista fire, and what trade-offs should I expect if I am obsessed with one fire movement over another?

Or you can do what I do and even get more philosophical with it.

Ask something like the following.

If I wanted to work less, but not stop entirely, how might that change the way I save and invest over the next 20 years?

Chat GPT will come back with as many examples of timelines as you'd like, not of your life, but of your choices, and more importantly, the trade-offs that those choices will imply.

Because every timeline is really a story about your priorities, and every year you pull income earlier is a year you stop compounding that income.

No, your money doesn't hate you, it just gets offended when you stop feeding it.

But here's a sample ChatGPT answer to some of the above.

Tyler, if your goal is to step back from full-time work at 52, you'll need a portfolio that balances growth, because you need it to last 30 plus years, with early liquidity, since you'll also need to bridge the gap until Social Security or pension benefits kick in, if you're lucky enough to have one of those remaining.

So you might consider a tiered approach, a taxable brokerage for early income, a Roth for mid-stage growth and tax flexibility, and pre-tax accounts for later in life.

So instead of pretending you know exactly what age you'll be done, let AI help you sketch out what the chapters of your life might look like, from career sprints to slow travel years to the era when your hobbies get suspiciously expensive.

And yes, I'm referring to the vintage fly fishermen out there.

Because another one of the most powerful questions in personal finance isn't how much do I need, it's when do I need it, and how do I want to feel when I get there?

Prompt number four.

Help me figure out how much I'm actually paying in fees.

AKA, the hidden tax on your hopes and dreams.

Aha, fees.

The things I could say and usually do say.

These are the termites of personal finance.

I've said it a million times.

Tiny, persistent, and by the time you notice them, your beautiful wealth blueprint is being held up by duct tape and annuity regrets.

Most people ignore fees because they're intentionally stated as a small percentage of your assets.

Notice you will almost never have an advisor tell you your fees in dollar terms.

Always it's just 1% of that $4 million

you have.

Another way to think about it, if you like the idea of the 4% rule, you better be okay making that the 5% rule because your advisor just took 25%

of that annual retirement fund for their annual retirement fund.

1% intentionally doesn't sound like much.

It leads you to believe that you're most likely paying more than that just to get guacamole at Chipotle and feel good about yourself.

But compound that 1% over 30 years and it doesn't look like an add-on anymore.

It looks like a second mortgage on your future.

This is where ChatGPT turns into your personal fee-sniffing bloodhound.

And trust me, as someone who has two fee-sniffing bloodhounds, I've trained them well, my friends, you want as many of them by your side as possible.

That said, also note when Google tells you not to get a bloodhound as your first pet or a second one as your second pet, it's not lying.

Chat GPT will politely walk you through what the fees will look like, highlight what's buried in fine print, and give you a ballpark estimate of what it's actually costing you to invest with someone or in something

or both.

Try asking it the following.

Here's my advisor's fee structure.

Can you estimate how much this would cost me over the next 20 years on a $500,000 portfolio?

Or can you explain to me the difference between AUM fees, that's assets under management, hourly fees, commissions, and flat fee retainers, and when each might make sense for me?

Or, can you review this prospectus or advisory agreement and tell me what I'm actually paying and what I might be missing?

Better yet, if you suspect you're being overcharged but feel slightly too Midwestern to bring it up directly, just paste the whole thing in and say, is this normal?

ChatGPT will give you the answer your polite soul is afraid to hear.

An example response might sound like this.

A 1.25% AUM fee on a $500,000 portfolio equates to $6,250 per year.

Over 25 years, assuming a 6% gross annual return, this fee could reduce your ending portfolio value by approximately $150,000 to $250,000 depending on compounding and reinvestment assumptions.

That's not a rounding error.

That's a down payment on your dream lakehouse.

And before anyone comes at me with the, but Tyler, I really like my advisor argument, that's great.

You should like your advisor.

But liking your advisor doesn't mean you shouldn't understand how they get paid.

And if you think you're really good friends with your advisor, try pulling your money from them and see if you remain friends.

Because here's the dirty little secret of the industry that nobody talks about.

Most people have no idea what they're paying.

Not because they're careless, but because the fees are designed to be invisible, like resort taxes.

So ask AI to pull the curtain back.

Ask it to quantify what just 1%

actually means.

Then ask it to do the same with your entire portfolio of funds to see what you're paying in expense ratios on top of the investment management fee.

Then ask it whether you could get similar services for less, or frankly, if you even need all the services for which you're paying.

Because one of the best investments you'll ever make is not paying for things you don't need.

Prompt number five.

Ask it to please review and vet your entire portfolio as if you were Peter Lynch himself trying to make sure that it matches everything we've talked about thus far.

Your values, your risk profile, your timeline, and the fees that you are or are not okay paying.

Because let's be honest.

Most people don't know they have a portfolio.

But that 401k from three jobs ago, the Robinhood account with six crypto coins and a half a Tesla share, and the 403B that has a target date fund that your HR team picked by default because, understandably, they themselves don't quite understand what the investments even are?

Well, congrats, you're an investor, and you do, in fact, have a portfolio.

This is where ChatGPT becomes your nerdy, unpaid, spreadsheet-loving portfolio whisperer.

You can paste in your holdings, fund names, tickers, allocations, and ask any of the following.

Can you review this portfolio for diversification and alignment with the risk profile we've already discussed?

Or, does this portfolio lean too heavily on any one sector or asset class?

Or, Am I too concentrated in U.S.

large cap tech stocks without realizing it?

Answer, yes you are.

Or are there any glaring risks here that I'm not seeing?

And don't just copy and paste the 401k.

This is a mistake I see many people make, even sophisticated investors.

Your portfolio is every investment you have.

So copy and paste the 401k,

your partner's 403b,

your brokerage allocations, your HSA investments, anything that is invested is part of your overall allocation strategy.

And once you copy and paste all that info, ChatGPT will walk you through how to optimize the investments as a whole based on what you've already explored.

Not in industry jargon, not with a 43-page report written in Helvetica, but with plain, clear insights.

Here's an example response it gave me based on a hypothetical portfolio.

Tyler, this portfolio has significant overlap across multiple large-cap U.S.

tech ETFs, which may reduce diversification.

Nearly 55% of the total allocation is exposed to the same 10 underlying companies.

Consider broadening exposure to include small cap, international, or alternative assets.

Translation, you don't have a portfolio.

You have a tribute band for the NASDAQ.

You could also ask it to sanity check your asset allocation.

Something like,

if I'm 45 and want to retire in 20 years, does a 90-10 stock to bond split make sense based on what we explored earlier with my risk profile?

Or what would this portfolio look like in a market downturn?

Or are these fund expense ratios competitive?

And if not, how can I invest in the same underlying assets for a fraction of the cost?

And if you're feeling extra spicy, ask it to role play.

No, not that kind of role play.

Ask it to role play your future self looking back at your portfolio today.

Something like, imagine I'm 65 and reviewing this portfolio.

What mistakes might I wish I had avoided based on everything we've discussed so far?

ChatGPT won't predict the market.

It won't give you stock tips.

And ultimately, that's a very good thing.

That's how you know it's actually being less of a ding-dong than your financial advisor who's regurgitating the market predictions that every other advisor is pumping out via their weekly newsletters because they all subscribe to the same EverCore ISI updates.

But it will give you a sharper lens, It will tell you if your diversified strategy is really just three different ways of buying Apple, and it will be happy to do so because it's not dressed as your financial advisor trying to justify their fees and their services to you.

Financial success isn't just about making the right bets.

It's about not accidentally making the same bet 17 times in a row.

And if your current plan involves hold and hope, buy the dip, or pray to Jerome Powell, it might be time for a second opinion.

One that charges less, has fewer emotional biases, and will never try to sell you an indexed universal life policy.

So in closing, can ChatGPT really replace a financial advisor?

Come on, you all know what I'm going to say to that.

Of course it can.

And bluntly, I'll call it out now.

And you won't read this in EverCore ISI projections.

Not only can it replace a financial advisor, ultimately AI will replace financial advising.

In three years, this financial advising game will be changed forever.

There are already hundreds of incredibly sharp minds and players getting involved in creating the best possible AI research, advising, and education tools out there.

And traditional advisors are going to have to act very quickly and work very hard to figure out how to position themselves to stay relevant in a world that quickly decided to develop sharper, less emotional tools for a fraction of the annual fee to help you learn and grow as an investor.

ChatGPT will help you become a better decision maker.

It's at once a clarity engine, a sandbox, a very polite robot that's read more white papers than anyone should and still has enough time to help you figure out whether Coast Fire is a financial plan or some mixologist's newest cocktail.

The point isn't that AI has all the answers.

The point is that it helps you ask better questions, just as I have tried to do throughout this episode.

What do I actually value?

What's my relationship to risk?

When do I want money to matter?

What am I paying in fees and what am I getting?

And is my current plan and portfolio actually aligned with the person I say I want to become?

But fair warning, just remember the old and the very true saying, garbage in, garbage out.

As a machine learning tool, these systems will only and forever be as good as how you prompt them and what you prompt them with.

That's why I hope this has been a helpful episode for you to think through and get some initial example prompts.

So go ahead, go ask the dumb question, paste the statement or the prospectus, run the thought experiment, and remember, the smartest people in the room aren't the ones who are pretending to know all the answers.

They're the ones humble enough to keep asking the right questions.

And if this episode has either been helpful, or has made you think, or has made you smile at some point today, or has made you slightly less afraid of robots taking your job or your advisor's job.

Oh, that's not so scary.

Do me a favor and please leave a quick review on Apple Podcasts.

It helps other people find the show.

Or send this to a friend who's still paying 1.75% in assets under management fees and thinks that's somehow normal.

Thanks for tuning in to your money guide on the side.

If you enjoyed today's episode, be sure to visit my website at tylergardner.com for even more helpful resources and insights.

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Until next time, I'm Tyler Gardner, your money guide on the side, and I truly hope this episode got you one step closer to where you need to be.