The Rise of AI

July 06, 2023

In case you hadn’t heard, artificial intelligence (AI) is taking over the world. It is rapidly seeping into every aspect of our lives and the pace of adoption is accelerating at an increasing rate. Already, AI powers a number of every-day applications, including voice assistants like Siri or Alexa. It is also used in systems which suggest movies, books, or products based on preferences you express. These systems watch, listen, and learn from your choices, try to understand your tastes, and then curate personalized offerings based on what they observe. The results are amazing and a little creepy, all at the same time.

You can think of AI as a digital brain that can sift process information, learn from it, and use that knowledge to solve problems or make predictions. Because AI models can process large amounts of data very quickly, much faster than humans, they can extract valuable insights from the data that often elude even the most observant humans. For example, my son just completed his PhD in 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 looking for clues to innovative cancer therapies. That kind of research would be impossible without AI-based technologies.

AI can also help people make better financial decisions. ChatGPT is high-profile example of an AI technology that has enormous potential for helping individuals become more financially literate. In "ChatGPT," GPT stands for "Generative Pre-trained Transformer." The term "Generative" refers to the model's ability to generate text, "Pre-trained" indicates that the model is trained on a large amount of data before being fine-tuned for specific tasks, and "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 tapping into the model's vast knowledge, interactive capabilities, and data-driven insights, users can access valuable information and develop a deeper understanding of complex financial concepts.

ChatGPT's interactive nature allows users to engage in conversations and ask questions specific to their unique financial situations. Users can seek information on retirement planning, investment diversification, debt management, or saving for major life milestones. ChatGPT can also assist users in identifying risks associated with various financial choices.

However, ChatGPT has limitations. First, it has only been trained on data up to its “training cut-off date” of September 2021. If you need anything more recent than that, like real-time stock prices or interest rates, you won’t find it on ChatGPT. Second, ChatGPT has a difficult time making a recommendation between competing choices. For example, when I asked a simple financial question (“Would it be better to get $20,000 a year for ten years or $1 million today?”), it gave me the waffly answer: “The decision between receiving $20,000 per year for ten years or a lump sum of $1 million today depends on your individual circumstances, financial goals, and preferences.” Actually, it doesn’t. In our universe, $1 million today is always going to be better than $200,000 spread over the next ten years. After several iterations, I was finally able to get ChatGPT to see the light, but if it cannot answer a financial question that simple, I would not rely on it for financial planning advice. At least not yet.

Despite its limitations, ChatGPT is a boon to financial literacy. It is an amazing educational resource, providing explanations and clarifications on complex financial concepts. Users can ask questions about investment vehicles, financial jargon, tax implications, and more. The model can demystify intricate financial topics, empowering individuals to make more informed choices. ChatGPT can provide insights and assist users in understanding and adapting to the evolving financial landscape.

ChatGPT is the creation of the AI wizards at OpenAI. If you are interested in exploring the world of ChatGPT, you can get a free account at Once you sign into your account, type a question or request into the dialogue box. If you are interested in sharing, I would love to hear about your experience with ChatGPT. Feel free to write me at the email address given below.

Please see important disclosure information here.

Steven C. Merrell  MBA, CFP®, AIF® is a Partner at Monterey Private Wealth, Inc., an independent wealth management firm in Monterey.   He welcomes questions you may have concerning investments, taxes, retirement, or estate planning.  Send your questions to: Steve Merrell, 2340 Garden Road Suite 202, Monterey, CA  93940 or email them to