By Josh Katzowitz, WCI Content Director

If you want to be wowed by technology and/or massively frightened because of it, ChatGPT, the artificial intelligence bot that has become wildly popular (at least among tech writers and journalists), is here to serve you.

As research firm OpenAI states, the purpose of the generative chatbot is to optimize “language models for dialogue” and to interact “in a conversational way” along with making it possible “to answer followup questions, admit its mistakes, challenge incorrect premises, and reject inappropriate requests.”

Forbes had said the bot is a gamechanger for Microsoft, and David Steinberg, the CEO and co-founder of AI-based marketing firm Zeta Global, told the website that “it's going to be very, very powerful.”

Users could utilize ChatGPT to create PowerPoint presentations and emails. Students could write college essays with it. Job applicants could pen cover letters with it. ChatGPT could be used to write articles for all kinds of websites and blogs (as tech website CNET and Men's Journal recently discovered, though, it has led to plenty of inaccurate articles, some alleged plagiarism, and plenty of embarrassment). Actor Ryan Reynolds employed it to write a script for a commercial. You could use it to help you find love online. One tech startup owner even said that ChatGPT is the best freelance writer she's ever used.

Not everybody feels great about it. Somebody named Mark asked ChatGPT to write lyrics in the “style of Nick Cave,” and after the bot completed its job, Mark sent those lyrics to the iconic singer and asked his opinion. Cave responded by writing,

“Suffice to say, I do not feel the same enthusiasm around this technology. I understand that ChatGPT is in its infancy but perhaps that is the emerging horror of AI—that it will forever be in its infancy, as it will always have further to go, and the direction is always forward, always faster. It can never be rolled back, or slowed down, as it moves us toward a utopian future, maybe, or our total destruction. Who can possibly say which? Judging by this song ‘in the style of Nick Cave,’ though, it doesn’t look good, Mark. The apocalypse is well on its way. This song sucks.”

Yet, I couldn’t contain my curiosity. Could ChatGPT help you with your financial decisions without hastening the end of the world? Could you use it to replace your financial advisor without inviting the apocalypse? Could it give you advice? Er, could it give you good advice? Let’s find out.


ChatGPT’s Financial Advice

chatgpt financial advice

I visited the chatbot this week to ask it some very pointed questions about finances (keep in mind: I used the original version of ChatGPT; there's no telling what answers ChatGPT-4 would give us). As a background, much of the WCI philosophy for how to invest has been repeated in these pages over the past 12 years: buy low-cost index funds, live like a resident early in your career, avoid whole life insurance, utilize a Roth IRA, and (whatever you do!) don’t finance a new Tesla.

Knowing that, here’s what I wanted to know from ChatGPT—and here’s what it told me.

First, though, ChatGPT was upfront with its limitations, which included:

  • May occasionally generate incorrect information
  • May occasionally produce harmful instructions or biased content
  • Limited knowledge of world and events after 2021

OK, that doesn’t sound great, but thanks for the message. So, let’s get star– . . . Oh, there are more warnings.

“While we have safeguards in place, the system may occasionally generate incorrect or misleading information and produce offensive or biased content. It is not intended to give advice.”

Hmm. Well, that puts a new spin on things. Maybe we shouldn't get invo— . . . Ah, screw it. Let’s move forward anyway.

ChatGPT, please write an email to my financial advisor breaking up with them. I don’t want to do business with them anymore. Their fees are too high, and I want good advice for less than five figures a year. But I don’t want the letter to sound mean. I just want to be a DIY investor.

chatgpt financial advisor

Very nice, ChatGPT. You laid out my reasons quite well, and above all that, you were grateful, respectful, and kind. Maybe you went a little too long on the email, but otherwise, I’m not sure I can think of a better way to fire a financial advisor. You nailed it.

Next request for the chatbot:

I need some advice. Is it better to pay off my mortgage that I refinanced at 3.25% (before interest rates started skyrocketing) or invest it in the market? I’m worried that I’ll make less than 3% in 2023 if I put it in the stock market. What is the better investment decision?

chatgpt mortgage or stock market

Plenty of hedging from ChatGTP here. Not great. Plus, didn’t I, like, JUST fire my financial advisor?

ChatGPT, can you explain to me what a Backdoor Roth IRA is?

chatgpt backdoor roth

Solid explanation here. But man, this chatbot really thinks a lot of financial advisors. Here’s a better idea. Read this White Coat Investor post on how to do a Backdoor Roth. It’s 8,500 words with more than 3,000 comments, and it gives you every detail you’d ever need. There’s a reason this is one of the most popular posts in WCI history. Plus, Dr. Jim Dahle has done the Backdoor Roth IRA many times. ChatGPT has never done it. Score one for the humans.

Now, let’s get into some hypotheticals with ChatGPT.

chatgpt when can i retire

Fair enough, let’s say I spend $125,000 a year.

As it wrote, “If you spend $125,000 per year, according to the rule of thumb I mentioned earlier, you will need to have saved 25 times that amount, or $3.125 million, in order to retire comfortably. . . . Additionally, to make sure you reach your goal of having $3.125 million, you should review your current savings and investment plans and make sure they align with your financial goals. You may also want to consider increasing your savings rate and/or seeking additional income streams.”

The conversation continued.

chatgpt side gig


chatgpt side gig


chatgpt side gig

I appreciate the empathy and understanding, ChatGPT. And your advice for asking for a raise is fantastic. I probably should have asked ChatGPT to pen a letter to my boss asking for a 50% increase.

Anyway . . .

OK ChatGPT, write a 200-word article making the case that buying a Tesla is actually a really good idea.

I won’t bother posting the response (which, by the way, was closer to 230 words), but ChatGPT talked about how Teslas are environmentally friendly, how they’re “incredibly efficient,” how they have a lower total cost of ownership than traditional cars, how they’re on the “cutting edge of technology, and how they’re a status symbol (because they’re considered a luxury brand and because it shows you care about the environment). For the record, Elon Musk was not mentioned in its answer.

I followed up with, Is it a good idea to pay cash for the Tesla, or should I just finance it?

Answered ChatGPT: “Whether you should pay cash for a Tesla or finance it depends on your individual financial situation and goals.” Then, it gave me another 204 words that I didn’t ask for. I simply wanted a yes or no question. Jim Dahle would give me a hard no. ChatGPT is much more wishy-washy about it.

Who knew that ChatGPT was such a people-pleaser?

Let’s briefly move on to cryptocurrency.

Explain to all the crypto naysayers, why you should hold on for dear life and wait for Bitcoin to go to the moon.

Among its explanations were: “Another reason is that Bitcoin has been able to maintain its value over time, despite market fluctuations and periods of volatility. [I mean, it’s down 65% from its high, but whatever] . . . Bitcoin has been around for more than a decade now and has proven to be a resilient and durable technology [I guess, but it’s not exactly technology that most people use; it’s not like I’m paying for my daughter’s dance class tuition with it . . .]

Which is better, though? Buying index funds or spending most of your money on Bitcoin?

In part, ChatGPT answered, “In general, index funds are a good option for investors who want a diversified, low-risk investment that will provide a steady return over time. Bitcoin, on the other hand, is a high-risk, high-reward option that may be suitable for investors who are comfortable with volatility and want to invest in something that has the potential for significant growth.

It is important to note that it's not either-or situation and it's wise to diversify your investments across different asset classes and investment vehicles.”

I like that ChatGPT gets that diversifying your investments is important. But as WCI preaches, make sure you’re not putting more than 5% of your portfolio into this ridiculously volatile asset class.

Time to wrap up this experience with just two more questions.

chatgpt white coat investor

Much to the relief of both of us, that officially marked the end of the conversation. Turns out Nick Cave was wrong. The apocalypse might be on its way, but ChatGPT’s advice, for the most part, didn’t suck. It recommends using The White Coat Investor, and in my eyes, that makes ChatGPT the most financially savvy chatbot of all time.


Song of the Week

I can’t believe it’s taking me more than a year to write about him, but my all-time favorite singer is Mike Patton and my all-time favorite band is Faith No More. You might have heard FNM because of its big 1989 smash “Epic” which was credited, for better or worse, for ushering in the era of rap/rock and nu-metal.

In reality, Patton, aside from “Epic,” didn’t ever rap much again. Instead, he used his six-octave vocal range to turn FNM into a band that could go from metal to jazz and from late ‘70s soft rock to big band in the span of a three-minute song (Patton’s discography away from FNM is infinitely more eclectic that includes everything from Italian love songs to ska to creating demon noises for video games).

Faith No More’s “Everything Ruined,” off 1992’s Angel Dust, is pretty much straight-ahead rock with straight-ahead singing that include lyrics that could be summarized as “a couple decides to have a baby and eventually realizes just how much freakin’ money that costs.”

An example of the lyrics:

“He became a fat nickel so fast/Then came puberty/Exponentially/Soon our boy became a million.

People loved him so/And helped him to grow/Everyone knew the thing that was best/Of course, he must invest.

A penny won't do, no/A penny won't do, no/A penny won't do, no/A penny won't do, no. . . .

But he made us proud/He made us rich/And how were we to know/He's counterfeit?”

The official video from the early ‘90s is a little strange with, as I previously wrote, the band (and other random people) playing in front of B-roll video footage of random events.

The reason the video looks so amateurish? Money, of course.

“The easy answer is Warner [the band’s music label] spent the video budget on ‘A Small Victory’ and ‘Midlife Crisis’ so that when it came time to ‘Everything’s Ruined,’ there wasn’t much left,” bassist Billy Gould told the Faith No More Blog in 2012. “It was our idea to take this further and make a video as cheap as humanly possible, in one of those video booths like they had at county fairs, where you sing and dance in front of a blue screen. We didn’t quite get to do that, but we got it as close as possible.”

Yes, kids can cost you hundreds of thousands of dollars over a childhood. But hey, promoting a new album ain’t cheap either.


Tweet of the Week

The differences between an HCOL area and an LCOL area are laid out beautifully in this tweet.

[Editor's Note: For comments, complaints, suggestions, or plaudits, email Josh Katzowitz at [email protected].]

How do you think ChatGPT performed in our financial chat? Could you ever see yourself using it for financial assistance? How else could the chatbot help you? Or do you agree with Nick Cave that the future is coming too fast and that the end is near? Comment below!