355. The Dangerous Rise of AI-Generated Financial Advice

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In this episode of the Debt Free Dad podcast, host Chris Hawkins discusses the concept of financial noise and its implications on our personal finances. Drawing a parallel between financial noise and radio static, Chris explains how contradictory financial information from various sources can create confusion and uncertainty. He then explores the rising trend of content creation using AI tools, highlighting the potential dangers of relying on AI-generated financial advice. Chris emphasizes the importance of carefully evaluating the information you consume to ensure it's well-researched and reliable. 

Chapters

• 0:00 What Is Financial Noise?
• 5:45 Traditional Sources of Financial Confusion
• 8:03 Discovering AI-Generated Content Patterns
• 10:07 How AI Creates Financial Content
• 13:25 The Dangers of AI Financial Advice
• 15:55 Call to Action: Simplify My Money

Transcript

Chris Hawkins: 0:33

Have you ever been driving down the road and you're tuned to a radio station? You're bopping along to the music, you're singing along, you're dancing in the car and as you keep driving, eventually that station fades out, you start to get static, maybe even you get a bleed over from another radio station on that same frequency and it becomes very hard, very impossible, to continue to listen to that station because there's so much noise. There's the static and maybe even the talking or the singing or the music from the other station bleeding over. Well, I want to talk about what financial noise is in today's podcast and a new form of financial noise that I think you need to be aware of. Let's talk about it on this edition of the Debt-Free Dad podcast. This is the Debt-Free Dad podcast, where we help normal, everyday people like you take control of your finances so you can live a happier, less stressful life. My name is Chris Hawkins and I will be your host for today's episode. From 2005 to 2008, my wife and I paid off just under $100,000 in debt and we have been debt free except for our house now, for good gracious 17 years now Seems like a long time ago. So, financial noise let's talk about what it is. I want to start with.

Chris Hawkins: 2:06

Perhaps a magazine, maybe a magazine that comes out every month and there are a bunch of financial investing magazines that come out and ideally, that publisher wants you to buy that magazine every month, or maybe they want you to subscribe and have it delivered every month. And so in order to get you or to entice you to buy that magazine each and every month, well, there has to be new articles, different information, and sometimes from one edition to the next, one month to the next month, you may see a completely different set of articles, in some cases articles that might disagree with or say something completely contrary to an article that was in the previous month's magazine. But you see, if you're the publisher of the magazine, you have to create new content every month, because if you publish the same magazine, say in July that you published in June well, people who bought it in June aren't going to buy the July edition, and so they have to keep publishing new information all the time, and sometimes the information that's published and I say sometimes, actually a lot of the time the information that you read in one magazine may be different or contrary to information that you read the month before or two months before, etc. Well, let's take blog posts, let's take podcast episodes. In order to get people to continue to listen, you have to put out new information, and sometimes I've seen blog posts by the same blog owner same author, same writer, same publisher, same blog owner, same author, same writer, same publisher where they tend to give different advice in one blog post than they did in another, and so that's one form of financial noise.

Chris Hawkins: 4:08

When you're getting inconsistent information, even from the same source, you start to question what is it that I'm reading? What is it I'm supposed to learn? Which station am I tuned to? And all you in your mind? It's sort of like that noise that happens on the radio station. It's static, it's unclear what it is that this author or this publisher is encouraging you to do, and so what it does is. It creates some level of uncomfortableness, some lack of clarity, questioning what you should be doing, who you should be listening to. This is normal. It's been going on for a long time.

Chris Hawkins: 4:57

You go back to you, ask one person for a piece of advice. They may give you what they think is the best thing that you should do in a situation, and somebody else may give you a second piece of advice, someone else may give you a third piece of advice and a fourth, et cetera, and the more advice that you get, the more unclear you become. Here you are asking people for advice and you think, well, if I get more people to give me their advice, it will probably give me some level of clarity, but usually that's the opposite. So that's what we call financial noise is when you've got information coming from a variety of different sources that are inconsistent, whether it be from multiple people or even from the same magazine, the same blog, etc. And so financial noise makes it very difficult to try something different because you are unclear. And I know here at the Debt-Free Dad podcast and with the roots of personal finance, there has been a consistent message now for 10 years. That's the one thing I think I like about Brad and what he's doing. What we're trying to do here is we are consistent. We try to give you the same information over and over and over again so that there is no financial noise. But I want to talk about a new type of financial noise. It's something that concerns me and something that I want all of you out there who are on your financial journey, trying to learn to better manage your money, to do a budget, to pay off debt, to build wealth, all of the things that we talk about, something that I think you need to be aware of and be careful of, because this is a new type of financial noise that I think is very, very dangerous. So let me set the stage this way A few months ago, I saw a blog post, and the title of the blog post was something along the lines of eight mindset books that you should read.

Chris Hawkins: 6:59

Well, I love to read. So I thought, man, I want to see what this person, what books do they recommend? So I opened up the article and I went through and looked at the eight books and some of them I had read. Some of them I have not read, but I actually own and still need to read. Some of them I've heard of but don't own and haven't read, and others I had never heard of. But I think there was at least four or five of them that I've had, that I've read, and maybe one or two others that I hadn't read before, that I've heard of or that I own. So I was a little intrigued, but I read the article and that was the end of it. I read the article and that was the end of it.

Chris Hawkins: 7:36

Well, a few days later, on my phone, I see a similar heading, similar title, on a different blog website Eight books that will help you change your mindset. And I thought a little odd that here's two articles within a few days of each other that talk about books to help you change your mindset, and there just happened to be eight of them. Well, guess what, within a few days of each other that talk about books to help you change your mindset? And there just happened to be eight of them. Well, guess what? When I opened the article, the same eight books. A couple weeks later, eight books you should read to change your mindset. Now I'm becoming a little puzzled. Open the article and you guessed it the same eight books. Well, I noticed a similar trend Seven books you should read to help your personal finance. Again, I looked at the list. Some of them I had read, some of them I hadn't read, some of them I thought was a little weird. That was on their list. But you know what? That's the author's priority to put on their list what seven books they think that people should read to improve their personal finance. Until about a week later, seven books you should read about personal finance. Same seven books A couple weeks later. Another website, another blog, different author, seven books you should read about personal finance. And, as you've guessed it, the same seven books.

Chris Hawkins: 9:05

Well, about that time, after seeing this trend, I was watching YouTube and I was curious about some of the artificial intelligence or AI tools that are out there, and I'll make this short, but there are people who are publishing YouTube videos on how to use artificial intelligence, where they will go and they will write a prompt, say in chat GPT, and chat GPT will write an article based on the prompt they give them, and then they will have another tool create an image for that blog post, and then they will have another tool that will automatically publish that article to their website. You see, it's gotten to the point now where all you have to do is type in a short or medium prompt, piece together a few other tools and you can have intelligence write your article for you, create the image for you, publish it for you, and all you had to do was write a short little prompt. Well, I saw the same trend happening with podcasts. I saw a YouTuber who says I key in a short prompt on chat. Gptgpt creates the content of my podcast. It then sends that text through an AI tool that will replicate my voice and create an audio file. It then sends it to another tool that adds the intro and the outros, along with background music. It then sends it to another tool that takes the I guess it takes the text from the very beginning and creates a transcript from it using timestamps, and then automatically publishes it to the podcast platforms. And all the person had to do was write a short prompt and let the software take care of creating the podcast, including the audio, and publishing it. And they spent 5, 10, 15 minutes creating maybe an hour-long podcast that they really didn't create.

Chris Hawkins: 11:16

And so, after watching several of these YouTube videos, what I came to realize is that there are a lot of lazy folks out there who own a website, who own blogs, who are publishing books, who are making YouTube videos, who are doing podcasts, and all they're doing is typing in a short prompt into an AI tool, letting all of the tools then create and publish that content for them, and they look like they're an expert, when in reality, all they're doing is using AI tools to help them build their business, to build their blogs, their podcasts, their videos, et cetera, and it dawned on me why I now see so many articles I've seen at least four or five recently that say Dave Ramsey warns about 401ks or something along those lines, all written by different authors, published to different websites, and my initial thought was man people just they plagiarize big time now. But no, I think what's dawned on me is that there are individuals out there who are exclusively using AI and they're typing in a prompt letting the AI create the content and publish it. And that is why I continue to see articles that say eight books you should read for the mindset or seven books you should read for personal finance, because the AI is going out there and scanning the databases or the information that it's has accessible on the internet, and it is looking at all of that and basically coming up with the same information for each of these different individuals and publishing similar blog posts, articles, podcasts, and the individual is not even bothering to go through and look to see if the article that the AI tools are creating are identical or similar to something that someone else has generated. And so here's the danger Even more now than ever, you have to be very leery of the information that you are consuming online, because I am convinced that a growing amount of information is not researched by an individual is an individual doesn't use critical thinking skills to sort through the research that they've done, to put together their own argument, their own opinion and write it down.

Chris Hawkins: 14:06

They are relying on AI tools to do it, and my fear is that, as this becomes more prevalent, you're going to start to see a lot of information that is put out there about how to manage your finances is going to be generated by AI that lacks the ability, at least currently, to go out do its own research, do critical thinking, use life experiences to use its own struggles, to use its own failures, its own successes, to use its own failures, its own successes, to make an argument on why you should budget or why you should get out of debt, why you should have an emergency fund all of the various things that we talk about on this podcast.

Chris Hawkins: 15:00

So my message to you is, more than ever, if you're looking for information on the internet, whether it be in written format, whether it be in podcasts such as this, whether it be in video, I want you to be very careful, it doesn't make it bad advice. If you start to see similar advice in other articles, podcasts, videos, etc. Just realize that that's probably not that person's opinion, but rather an AI tool generating information, and I think it's very, very dangerous for you to rely on information that a computer is generating, based on a wide variety of different resources, many of which have differing opinions. To encourage you what you should do, with your money.

Brad Nelson: 15:54

Now listen if you're ready to break free from living paycheck to paycheck which, if you're listening, I hope you are. You want to reduce financial stress. You want to build savings. You want to finally pay off debt for good, but you're not sure where to get started. Don't worry, we've got you covered here at Debt Free Dad, simplify my Money is sent each Sunday to your email. We make it easy and Simplify my Money. It's your step-by-step roadmap to better financial control, and you're also going to get stress-free money decisions that will help you simplify your financial life with proven tips that actually work. You're also going to gain the tools and the confidence to tackle your financial goals head on. You can sign up for Simplify my Money by clicking the link at the top of the show notes. Thanks for joining us on today's show and we will see you guys on the next episode.