‘Total bloodbath’: Barefoot Investor Scott Pape issues ChatGPT warning
Personal finance guru Scott Pape has issued a blunt warning to those who think they can use this seemingly simple AI money hack to get rich quick.
There is no denying that artificial intelligence can do a lot when it comes to making your daily life easier.
Automating repetitive tasks like email sorting and scheduling, brainstorming ideas, creating itineraries for trips, personal budgeting and meal planning are just a few of the seemingly endless ways people can use AI to help with daily tasks.
However, Barefoot Investor Scott Pape has declared there is one thing AI will never be able to do: make you rich.
In his most recent newsletter, the personal finance guru described a recent catch up he had with a friend, Barry.
At one point during their dinner, Barry proudly showed Mr Pape 25 different stocks he had recently invested in, all companies he couldn’t name.
“ChatGPT picked every single one,” the friend said.
“I’m crushing it.”
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Mr Pape explained that Barry had gone “balls and all” into AI, using it for everything from writing friendlier sounding emails to figuring out whether he has enough fibre in his diet.
Now, Barry has decided to take his AI usage a step further, asking ChatGPT where he should be investing his hard earned money.
When the personal finance expert asked his friend what the businesses he had invested in even do, Barry reportedly stared at him with a blank expression.
“Let me just ask ChatGPT …” Barry responded, to which Mr Pape declared, “Enough!”
“Mate, you reckon your AI can pick winners? Fine. Let’s bet. Your ChatGPT portfolio vs. my boring portfolio of index funds. Ten years. Loser buys dinner every month for a year,” Mr Pape said.
The finance expert said he knows he is a “shoe-in” to win the bet, noting it is the same one American investor and philanthropist Warren Buffett made more than a decade ago.
In 2007, Mr Buffet bet $1 million that a low-cost S&P 500 index fund could outperform a selection of Wall Street hedge funds over 10 years.
He comfortably won the bet, with his chosen fund yielding an astonishing 125.8 per cent return, while the hedge fund returns varied from 2.8 per cent to 87.7 per cent.
Mr Pape described it as a “total bloodbath”.
He went on to point out that everyone has access to ChatGPT these days and if it was as simple as asking it to pick your investments then “we would all be rich, which means nobody would be”.
“Here’s the thing that ChatGPT fails at: Getting rich isn’t about being clever. Its about resisting the urge to be clever,” Mr Pape said.
This is far from the only AI warning people have been issued this year.
In September, the man known as the “godfather of AI” issued an ominous warning about the disproportionate impact the technology is likely to have on the world.
Geoffrey Hinton is a renowned computer scientist who was awarded the 2024 Nobel Prize in Physics.
He is celebrated for developing neural networks, which helped lay the foundation behind many of today’s artificial intelligence (AI) models, including ChatGPT, facial recognition and self-driving cars.
In an interview with the Financial Times, Professor Hinton claimed AI advancements could result in widespread job losses, leading to people becoming “poorer”.
“What’s actually going to happen is rich people are going to use AI to replace workers,” he said.
“It’s going to create massive unemployment and a huge rise in profits. It will make a few people much richer and most people poorer.”
However, Prof Hinton said this wouldn’t be AI’s fault, claiming that it is just “the capitalist system”.
Originally published as ‘Total bloodbath’: Barefoot Investor Scott Pape issues ChatGPT warning
