Money Rehab with Nicole Lapin - How AI Will Help You Achieve Financial Freedom

Episode Date: July 31, 2023

You've probably caught wind of people’s fears that AI will take jobs away from humans, or worse. But AI can actually help— not hurt— your financial picture. Nicole gives a simple explainer on what AI can and can't do, and how it will help you meet your money goals.

I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. Okay, which has gotten more press this summer, the Barbie movie or AI? Carrie, the one. Honestly, I'm not sure. We're not going to talk about the Barbie movie today. Although congrats to director Greta Gerwig on Barbie's opening weekend, carry the one? Honestly, I'm not sure. We're not going to talk about the Barbie movie today, although congrats to director Greta Gerwig on Barbie's opening weekend, which just broke the record for the highest grossing U.S. opening for a film directed by a woman, Slay Queen Slay. But today we're talking about AI. At this point, I'm betting you've heard the highlights and

some lowlights. ChatGPT came to the scene in November and gained 100 million users in just two months. ChatGBT is the AI chatbot that can help you craft whatever message you need written, from an email to your boss to a birthday message to your mom. From there, conversations on AI went bonkers. You probably caught wind of people's fears of AI taking over their jobs, taking it away from humans, or even bigger, taking on the world. So, okay, let's bring this whole conversation back to Earth and talk about what the actual F AI is, what it can do, and why AI actually can make you money, not take it away.

So let's start with the big picture. As we can all recite in our sleep by now, AI stands for artificial intelligence. And I'll also tell you what AI is not. It's not Wall-E. It's not the Terminator. It's a type of program that allows machines and digital devices to learn from data. So for example, you know how sometimes your phone or your computer can suggest what you might want to say when you're typing a message, and that can actually be really helpful. That's a simple example of AI. It's trying to guess what you might say based on the things you've said before. Even though AI feels new, you've probably

been using it for a while without even realizing it. If you use an app that recommends music or sets reminders, you're using AI. If you've ever played a game online against, quote, the computer, that was AI. Also, if you've ever used Siri, Alexa, or Google Voice, that is AI too. I think it's easier to wrap our heads around this through understanding how AI is built. AI is engineered in three steps, receiving input, processing, and learning. So let's break that down step by step. To build an AI program, you first have to give it a whole lot of input. And what this input will be depends on what you want the AI program to do. So for example, if you want to build an AI program that can write you jokes to make you laugh when you're feeling bummed, you would start by giving

the AI in training a ton of your favorite jokes as input, and then you would give your AI in training a lot of sucky jokes as input too. And you would tell your AI what's a good joke and what's a bad joke. It's honestly not dissimilar to how I trained my puppy Penny. When you're training a dog, you teach them to sit by rewarding it when they sit, and not rewarding it when they don't. AI is pretty similar. AI is basically petty. Then in step two, the AI processes all of these jokes and then moves on to step three, where it starts to learn from the information it processes. Learning for AI is essentially pattern recognition. So the AI I'm training might notice, Nicole really likes jokes that have puns in them. Nicole really likes memes about money. Nicole does not like jokes that lean into cliches.

And this is the super cool part. Once the AI has learned what a good joke is through the input, it can generate its own. And yes, AI learns so fast and so efficiently that it can get better than humans at some technical things. There are already AI programs that can beat humans in chess, for example. And often we react to these stories by being totally freaked out. Our minds immediately go to the worst case scenario, like AI is a threat and will be better at being us than we are. Well, that is really dark and also not where our minds need to go. Instead, we should think that AI is like having a super smart assistant around. Who doesn't want that? Like, think about the movie The Devil

Wears Prada. Who wouldn't want Anne Hathaway scheduling her travel for you, right? And just because Anne Hathaway schedules your trip doesn't make her the boss. Meryl Streep is most definitely always going to be the boss. And so are you. Think about AI the same way. You're Meryl.ep is most definitely always going to be the boss. And so are you. Think about AI the same way. You're Meryl. AI is Anne, except a much cheaper Anne. Now, let me just pause and say, I know this feels scary if you are someone's Anne Hathaway and you have to worry that AI will take on your job. Jason Pfeiffer has a really, really interesting and helpful take on this. And if you don't know Jason, he's the editor-in-chief of Entrepreneur Magazine and co-hosts an MNN career podcast with me called Help Wanted. On the pod, Jason recently tackled the question of AI and job

security and brought really cool perspective and suggestions. I'm going to drop the whole episode in the Money Rehab feed tomorrow, but just to give you a sneak peek, Jason talks about the moment in history when the technology to record music was invented. The reaction was chaos. Musicians thought their jobs were going to be replaced and babies were going to start talking like machines. The whole thing was crazy. Cut to the present. Obviously, that didn't happen. This technology doesn't make musicians obsolete. This technology actually made musicians more money. And that's on Taylor's version. And let's double click on this making more money thing, because obviously, that's the innovation I'm rooting for. I'm most excited about the potential of AI to help us make financial decisions. Because while finance isn't super complicated, being human is complicated, right? We've talked

about this before on the show and how the best investing strategy is to buy low and sell high. It sounds so super simple, but it's actually really, really hard because your instinct is to do the opposite, right? When stocks are high, your portfolio is up and you're feeling awesome, you want to buy more. And when your portfolio is low, you feel terrible, right? You're like, sell it all. Get me the heck out of here. That's the worst thing you can do for your wealth. But we're only human. And that's why the ultra rich use something less human, AI, to keep their cool. AI also aligns with my values as a champion for those of us who aren't trust fund kids and didn't grow up with the Wall Street Journal on the kitchen table. You know this from listening

to Money Rehab. It's been shown time and again that investing is the best way to grow significant wealth. But those investment opportunities have historically only been available to people who already have money. AI can change all of that. I'll break that down. There are still some fancy brokers at big investment firms that won't even take a meeting with you unless you have at least $10 million. But AI doesn't care how much money you have in your bank account. There are AI apps that can give you multi-million dollar investing guidance for less than $20 a month. Now, you know, rose-colored glasses are not in my wardrobe rotation. AI is not all rainbows and butterflies. But I just want to nix the belief that the danger

of AI is that it's going to act autonomously and cause trouble all on its own. The danger of AI is that it's going to be used by humans who don't care about causing trouble. As we know by now, AI is a powerful thing, and those who can harness the power will certainly use it to benefit themselves and others. The good side of this will be people using AI to make more money by investing. The bad side of this, I mean, look no further than the entertainment execs right now who are brainstorming ways to use AI to replace the irreplaceable writers on Strike. So the question here isn't whether or not you should use AI because you likely already are using AI and will continue to use it more. The question here is how do you use AI to make your financial life better and protect yourself and your family from those who would use

it against you? And that brings me to today's tip you can take straight to the bank. Tune in to tomorrow's Money Rehab episode where I'll drop Jason's insightful discussion on how to future proof and advance your career in the world of AI. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content.

And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.