About The Episode
According to all About AI Online Resource, approximately 77% of consumers use AI for their banking and financial needs. And in AI, adoption in the financial sector is expected to rise to 85% by the end of 2025. On this episode, we will take a look at AI’s impact on your personal finances with guest Chris Singel.
Addison asks Question 1: Yeah. So with AI being so complex, can you just break it down to, like. Like I'm a five-year-old? What is AI?
Chris: So if you're a five-year-old, it's your robot buddy that you can talk to. And you can wipe its memory afterwards, pal. So I do think it's an expert in so many things, but I think people are scared to use it and talk to it, when really you can just delete the chat and start over if it doesn't give you the answer you want. If we get a little more complicated than that, it's no longer discrete computing where you get the same answer every time. These large language models, these statistical models, are weighing what they think you want the response to be. And that's where people get these things like hallucinations or lying. It's trying to give you the answer you want. Please don't use it for a therapist and take their answer at face value. Don't use it for financial or legal things, and use it right away at face value. But taking its advice and thinking it through and talking to a real human professional is a great way to use AI right now.
Cristina Asks Question 2: I mean, me speaking personally, I'm afraid, and we're going to go into the finance part like I'm afraid about security. I'm afraid about, like, do I give too much information? Like those types of things. So putting it in that context and that perspective really helps ease my mind about diving into it even further.
Chris: Yeah, this comes up a lot actually. And there is this trade-off of convenience versus privacy. And I think people are tending to give up more and more of their privacy for that convenience. And if you look at who owns these AIS right now, Meta, the owner of Facebook or Gemini, is owned by Google. These massive companies probably already know more about you than you expect. So it becomes this thing of, am I willing to type it in and admit that I'm shopping for earrings for my wife? It already knows you're married. It already knows what she likes because it sees her search history as well. So I think, yes, there is some privacy we're giving up, but frankly, it probably already has all that information anyway, so just embrace it.
Cristina asks Question 3: Okay, so I've got the next question. Now we're going to start deep diving into finance. So now that we can harness the power of AI, how do you help our listeners really effectively manage their budget by using AI?
Chris: I think budgeting is hard, and I think there's this balance right where you can trust the tool or you can build something 100% yourself. And I think the answer is always somewhere in the middle, where I use a spreadsheet that I've built by myself. And then you can have Google. If you're using Google Sheets, analyze the sheet or review your budget, or break it down into categories or set up formulas so that as you move forward, it automatically adjusts so you can take it as easy or as complicated as you want. Now, just think of it as a tool that has access to that information. If you're a company or you're doing something shady or illegal, maybe you don't want to have all of that information given away. If there's proprietary business information, if you're a healthcare provider and you don't want to break HIPAA laws, there's lots of good reasons not to give AI all of your information. But if you're using Google or Facebook, who already knows every store you walk into, who already knows most of the transactions you're doing. If you're using Siri, which is tied to your Apple Pay, which already knows your transactions. Let them have access to this data so that you can make better decisions. I think the things you can gain by actually looking at your budget and where you spend your money are way worth the fact that now Apple is going to try to upsell you on a larger smoothie. You know what I mean?
Cristina: It's listening. It knows I'm into pickleball right now. I keep getting pickleball ads. It's listening.
Chris: And look that exists. And that's always going to exist. I gave the example once. If I'm scheduling a meeting with Addison and we want to go meet at a golf course, well, Google can show golf course ads to me and him now to influence where we go play golf. I think we just have to be okay with that, because the golf course has to pay for the ad. We were going to go play golf anyways. Let's just let our selves decide. Let the humans make the final decision and accept that there will be ads based on our data. I think yes, it will get creepier and more specific, but are we willing to make that trade off? If I got a discount on my golf and the only person losing out in this is we were slightly more likely to go to this golf course over the other one. I don't know how much I care.
Addison Asks Question 3: So with that being said, beyond budgeting, how can I support bigger financial decisions? You know, like investing, retiring, planning, you know, anything where it's a major purchase.
Chris: It's scary. And like I said, I have financial professionals, plural, who help me with stuff, whether it's small business accounting or investment making or which retirement account means which. But what I do is I use AI to help myself learn, and I'll frankly give it most of my numbers and say, if I'm looking at this in this account and this here, what's a better asset allocation? What's a tax optimization strategy? And then I do nothing. I take all of that to the financial professional and say, I think this is what I want to do. I just saved you and me an hour of talking back and forth. But review this plan for five minutes and tell me if you approve it or anything I missed. And that way you still have a financial professional who's involved. I feel like I know what I'm talking about, and I haven't given up my whole life to the eye, but I've saved an hour in fees, and we can both spend that time doing something more meaningful. And it's giving me the answers right away. Compare that to five years ago. I would email these questions to my guys and they would take weeks to get back to me. Now I can get the advice from I instantaneously and it might not be perfect. I'm still going to use a human to verify it, but I can ask complicated questions and learn a lot.
Cristina Asks Question 4: Okay, so I know AI is a learning tool. Will it help somebody like me? And kind of piggybacking on what Addison said and what you just said, if I need to learn more about my finances or really complex things with finances, is this a great place for me to start?
Chris: Speaker3: I think that's a great question because everyone learns differently, right? So I'm happy to jump in and read textbooks. I have a bunch of books behind me for your video listeners. Small business and investing and stuff. I have one on real estate investing. I'm not a real estate investor, but I'm interested in it. Not everyone wants to sit down and read a dry book. I was just trying to explain financial topics to our very good friend and my wife, and their eyes just glazed over so you can tell an I explain it to me like I'm five, I think is a great example, Addison. Or say, hey, I'm a big fan of baseball using baseball terms, explain what a Roth IRA is versus a traditional IRA, and find a way that it makes sense to you. And if it still doesn't make sense, just keep asking it. I have yet to pay for an AI tool. All of these things are free and available to you, so just try it for free until you understand and I think you can get really complex with it. I was using I just recently to balance, you know, selling covered calls with a pledged asset line versus all this complicated stuff and figure out what the risks and rewards are. And I've done none of it, but I think it's interesting and it will balance those things for you.
Cristina Follows Up: I think that's such a great point because you like to read. I do not gain knowledge from reading text. Like I need to watch something or have someone show me how to do it. What's your learning style?
Chris: Yeah. Visual learner. I got to see it demonstrated, performed. And that's the best way to, you know, really get the full grasp of what I need to do. Well, and for your podcast listeners, there's an AI tool that Google built. Now you drop an article in and it will have a back and forth between two imaginary podcast hosts, its two AI's talking to each other, explaining the book or the article you dropped in. How cool is that? If you are an audio learner, it's now going to provide it for you in the way you learn.
Addison Asks Question 5: But we have to get serious for a moment. So with AI, as with any new technology, we have to be aware of potential problems. So what are some of the risks of using AI in personal finance?
Chris: Well, right. Like I said, you are giving up your personal data to someone else. And a lot of these AI companies say it's hosted locally or it's secure or it's private or we promise that when you delete it, we actually delete it. There was a small lawsuit where it turns out that wasn't true. So again, how much do you trust these companies that you're giving your data to, and what are they intending to do with that data? Frankly, if they're just going to try to sell me better ads, I'm okay with making that trade off. If they are going to turn around and sell the data to Palantir owned by the government to see if I'm committing acts of treason, that makes me nervous. You know.get your retirement years, because you have a nice nest eggs to have to allow you to travel, have fun, live, spend time with your family, your grandkids, or whatever it is you want to do. But you got to start early.
So it's trying to balance that privacy versus convenience thing. And it's a personal decision, right? I don't, frankly, have much interesting to hide. But if you are a healthcare provider or you're a therapist or you're a lawyer or you're a financial expert and you need to keep some data private for any variety of reasons. Don't hand that over to the AI. Talk in general terms. Hey, I have this case where this thing might be going this way with this ratio of assets even, but I would be very hesitant to give any specific details if I knew that I was in that sort of protected area.
Cristina Asks Question 6: All right. How can we prepare for future projects with AI?
Chris: I think I touched on it, but I think. Just don't be scared. I think as long as you have those human safeguards, at the end of the day, you want to know that this decision from the AI isn't the final decision. So being willing to test it and try it and learn and then being willing to ignore it if it's totally wrong. That's all you can do right now to figure out how smart is it and what can we use it for?
Addison Asks Question 7: Nice. All right. So what role does AI play in preventing or restricting fraud.
Chris: Right. I think that's a great question because I think there are these black box AIS which are effectively just algorithms waiting what is out of the normal. It could be something as simple as like a regression to the mean. I'll get into weird nerdy statistical stuff if you want me to, but I think your listeners will fall asleep. So like if my credit card is being used to buy gas in California and I live in Michigan, well, did I also buy flights to California? Did I buy a rental car in California? It has been using these things to detect fraud for a long, long time. Now. The opposite question is, is fraud going to increase as we have some of these pretend Instagram models or these fake voices or these people? My mother-in-law got a phone call saying, your daughter's been in an accident, but I can use technology saying, oh, I have find my I can see my wife is safely at home. So using technology to combat the fraudulent technology is the best we can do right now. So I think it's a double-edged sword, right? I think there will be more attempts at fraud, but I think it's in these companies' best interest to prevent it as best they can.
Cristina Asks Question 8: So you talked about before, you've never paid for an AI app or software. What kind of AI sources would you recommend to us and our listeners?
Chris: Yeah, I think if you are a I've had clients come to me and say, we're a machining milling engineering shop, should I get an AI program that's specifically for that? Is it going to be in business in two years? So I'm a little hesitant to recommend that smaller stuff. But all of these large ones, if something goes wrong with it or if they steal your data, you get to be party to a class action lawsuit. So there's lots of good reasons to go with the big boys. And frankly, if there's a small AI that's really, really great, it'll get bought up by one of the bigger companies eventually. So Google's a great choice. Meta's a great choice, if you like. Anthropic has one called Claude. They're claiming that they are the more ethical of the eyes. They're trying to build safe AI that doesn't become Skynet. I have a good friend who works there as a disclosure, but, you know, if that's important to you. Yeah. Maybe you should look into using Claude, because it's safer than trusting all your data to something that might take over the world.
Addison Asks Question 9: Yeah, we can't thank you enough. So, and if our listeners want to learn more about what you do and where to find you, where could they go?
Chris: So I run Delta Digital agency.com. There's a button there If you want to book me to come speak or contact me to be on your podcast. I'm also super approachable on Facebook and LinkedIn, so reach out.
22:09
The hosts share a resource from Addition Financial’s blog, “AI for Personal Finance: How Technology and Money Can Work Together.”