What The Wealth Retirement Podcast

The AI Revolution: It's Transforming Industries, Should We Embrace It? (098)

• Jonathan Bednar II, CFP • Episode 98

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The AI revolution is upon us and it's reshaping industries, work-life, and investment landscapes. On this episode I discuss the world of artificial intelligence, and together, we'll explore AI's unique ability to "think" and the duality of its impact—where it stands as both a creator and disruptor of jobs. 

Let's confront the challenges of industries hesitant to embrace automation and understand how adaptation not only ensures survival but paves the way for new opportunities.

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Thanks for Listening!

Jonathan

Speaker 1:

Welcome back to the what the Wealth podcast. I'm your host, jonathan Bednar, certified financial planner and owner of Paradigm Wealth Partners. Today, I'm going to talk about artificial intelligence, ai. This has obviously been a huge kind of buzzword throughout the last year, year and a half, as it has really kind of changed the way that the companies work, that people work, and pretty fast, I mean. It kind of jumped onto the scenes and has really just exploded, and so we're continuing to see more and more and more demand from the likes of artificial intelligence and it's really starting to take hold in society in the way that we use it. There are more and more applications that I know of in our industry and other industries that people use it, and I actually want to use this as a way to kind of just be thinking about it. Obviously, this is a really prominent investing theme right now and you're seeing a lot of money being attracted into artificial intelligence and AI and that being the future, and I do think there is a lot of future there. But it's easy to kind of see lot of future there, but it's easy to kind of see, oh, the tech bubble and the dot-com crash and the hyper kind of growth that we saw on a lot of those dot-com stock names and then a couple of years later they came crashing down. I'm not here to say that I believe AI is going to come crashing down. There will obviously be winners and losers, but AI is here to stay and it is doing things that we've never seen done and a lot of people are quick to dismiss AI. Oh, it's not going to take over our industry, it can't do this, it can't do that.

Speaker 1:

A lot of we saw this kind of talk in the financial advisor world around robo-advisors. There are some online platforms you could use those to invest and it did some things like tax loss harvesting and automatic rebalancing and some things. That kind of made it on autopilot, so you didn't have to do that yourselves. And what we found in this was kind of 2012 to 2015, 16 kind of timeframe, and they're still out there. People still use them, but there's a big kind of scare from advisors. You know is robo-advisor is going to take the place of a financial advisor? And the hysteria kind of wore off and we realized that the answer was no.

Speaker 1:

People really valued those relationships. They wanted someone to guide them through the trials and the tribulations that we see going through life. Am I saving enough? How can I help my child do better? How can I be better prepared for the next emergency or XYZ problem? They wanted someone to have that conversation with, and I think we're getting really, really comfortable with technology. It's obviously changing over the past 20, 30, 40 years and the younger generations are really adopting it. I mean, they trust technology 100%, and so older generations are a little bit more skeptical.

Speaker 1:

And so what we found in the robo-advising case is that it's a tool. It wasn't a replacement. Advisors may or may not use it, or consumers may or may not use it, but it wasn't the end-all be-all going to crash down the financial advising industry and I'm speaking of the financial advising industry here there's obviously the insurance industry and the airlines industry and healthcare and technology and there's all these other industries out there. But I was just using that as an example because I think it's one that, at least in my world, that's easy to think about. So what I think is different about artificial intelligence compared to past industrial revolutions. You know, if we think of technology advancing in the 80s and 90s and early 2000s, we were thinking about that as a technology revolution or another way to have an industrial revolution.

Speaker 1:

And so if we go back all the way to, maybe, when farm equipment was really starting to get utilized more and more and more, that was during the industrial revolution, and we saw tractors make farming more efficient. We saw tractors make farming more efficient. We saw combines and all these other pieces of equipment that went into farming or auto body shops or things like that that just made it easier to work on cars or to farm or work on tractors. And what it did is it created a whole bunch of other jobs to build tractors, to make tires for the tractors, to make the components in the engine for the tractors and all these add-on pieces that go behind the tractors, and so there were some job loss there, but it really transitioned into more jobs, and so that's been the conversation as well.

Speaker 1:

Ai will be a prominent way to create new jobs, and so that's been the conversation as well. Ai will be a prominent way to create new jobs. They may be in technology. We may be some job loss, but it will create more and more jobs. I do think that is true. I think the difference with AI today versus past industrial revolutions or revolutions, technology revolutions, is that AI thinks for us and in the past there wasn't a revolution that did its thinking. It made our work easier, it made our lives easier, but it didn't necessarily do our thinking for us and didn't exponentially increase its ability to think and learn, and so I do think AI is different.

Speaker 1:

I do personally think AI is going to change a lot of people, and if you go look at the port strike that just got announced this week, they're saying you know automation, you know we don't want to lose our jobs to automation and you know you should come together as a union, as a group, and protest in order to fight the automation. I support the livelihood and them wanting to have their jobs and protect their jobs, and they have families and their communities, but automation is coming to every industry. Automation has been around a lot of places for a long time, but we're seeing it almost hockey stick up, where it just gets bigger and bigger and faster and faster, and so I do think we're going to have some job losses. I do think there'll be jobs created from automation and from artificial intelligence, but I just think that it is really, really interesting to think about kind of this industrial evolution that we're living in and we talk about every day, and this is the only one, to my knowledge at least, that does the thinking for you, and so I think that there's some things at risk Now as an investor. It's really, really exciting. There's new technology coming around, there is new ideas being created, there are new artificial intelligence being created. We're really close to autonomous vehicles, and it was just five, seven, eight years ago that everyone was kind of laughing at that and thinking we're 20, 30, 40 years down the road. I think it's happening faster and faster and faster than we realize.

Speaker 1:

I do think there's a lot of benefits here. I think it's going to make healthcare better. I think it's going to make manual labor better. I think it's going to help some of our decision-making and understanding better. But it's going to have some negative impacts as well. So I really just want to kind of spend some time talking about that. I don't think it's something to be scared of, but I think it's something to be aware of, and the way that you use artificial intelligence and not be left behind is to get comfortable with it, to understand that this is the way technology and revolutions happen and that it will have a positive income for society as a whole, but it's not going to be necessarily totally easy. So be thinking about that. You're going to have more and more artificial intelligence be used.

Speaker 1:

I do think that we're in the early innings of artificial intelligence and I'm not making a recommendation on, you know, run out and buy artificial intelligence or buy you know XYZ company, but I do think it's the new technology and, frankly, I personally believe you know, technology is the new utilities, if you will, and it's why, even over the last several years, technology has done well, because technology is in everything we do today, and so it's really, really important that you embrace technology and you embrace AI. I don't mean you have to just go all in, but the more that you push back, you dig your heels on the ground, the harder it's going to be for you in the next two, three, four, five years. So just be thinking about that. I think about that with an open mind. How can I embrace technology, embrace artificial intelligence? So that's what I've got for this show.

Speaker 1:

Thank you for listening to the what the Wealth podcast. If you haven't already subscribed on Spotify or Apple Podcasts or one of those, please subscribe. If you haven't already subscribed on YouTube, please subscribe and follow us there. Be confident in your retirement. Have a wonderful day.

Speaker 1:

Thanks for joining me on another episode of what the Wealth. If you enjoyed the episode today, smash that subscribe button. It helps me more than you think. Also, if you found this episode insightful and a light bulb went off, share it your friend, aunt Judy, the random guy in the office who's always talking about investments. Wealth isn't about just the chain. It's about our choices, chances and changing our financial futures. The information in this podcast is informational in general in nature and does not take into consideration the listener's personal circumstances. This podcast does not intend to be a substitute for specific financial, legal or tax advice. You should consult the approved qualified professional prior to making a final decision. Securities offered through LPL Financial member FINRA SIPC. Paradigm Wealth Partners is the other business name for Independent Advisor Alliance Investment advice offered through Independent Advisor Alliance, a registered investment advisor. Independent Advisor Alliance and Paradigm Wealth Partners are separate entities for LPL Financial.