You Will Lose All Your Money If You Embrace AI Without Common Sense. True or False?

Anthony B of Cashflow Living Standards on AI, investing, and the one filter a machine cannot give you. Plus my answer to the same question.

A joint post with Anthony B of Cashflow Living Standards.

The question

I asked Anthony B a question I keep turning over: do you think you can build a better financial and income-earning future without embracing AI? His answer is below, in full.

“No, you cannot build a better financial future without embracing AI—but you will lose everything if you embrace it without common sense.”

— Anthony B, Cashflow Living Standards

Anthony writes Cashflow Living Standards from Hong Kong, and he has only been at it since June. His approach is what he calls a dual-mandate portfolio: money that pays for the life you are living now while it protects the one you will need later. His line is that you don’t have to wait until 60 to live. And he shows his work: the actual funds he holds, the math on covered-call ETFs, and how he handles sequence-of-return risk, the danger that a crash lands in the first years you are drawing income. If you want a working investor’s view rather than a sales pitch, he’s worth finding early. You can follow him at @cashflowlivingstandards.

I come at the question from the other side of the desk. Since 1994 I’ve mostly met money after something went wrong.

His answer comes first, then mine. Neither of us read the other’s before writing. Read both, and tell us which one sounds like you.

Anthony’s answer

My brain split in two when you asked that question, Steve.

Personally, I use AI for research, but I use it to test my logic, never to make my investment choices.

AI is powerful.

It is like having the entire world as a single, common brain—a friend sitting in your pocket, working 24/7 to answer your questions. But within that crowd of “friends,” many are full of crap.

Since the beginning of time, common sense has been the ultimate filter to spot the difference between a real expert and a fake one. Common sense is the one thing AI cannot bring to the table.

AI is trained by flawed humans who have their own biases and interests. It does not give you absolute truth. It just mixes massive amounts of data to give you the most satisfying answer. AI is great for quick learning. It helps you grab big concepts and look deeply into how things work.

For example, I am using AI as a tool to clean up this text right now. But if I asked the AI to answer your question entirely on its own, it would just write 1,000 words of boring, generic pros and cons. It would have no real human judgment.

Every tool has its limits.

As an investor here in Hong Kong, I can use AI to find a great list of cheap, diversified ETFs that fit my local tax bracket. But the final decision is mine. I am the one who has to sleep at night when the market goes up and down.

I would never give my hard-earned money to a “pseudo-AI trading robot.” Think about it: who actually wins with those big, easy promises? The person selling the dream, or you? Is there any long-term success story to prove they work? No. If someone found a magic machine that prints money, they would not share it with you. The big fund managers just see everyday investors as a pool of cash to trade against.

The world has always been unfair. The smart benefit from the weak. Once you accept that, you can see AI for what it is: a tool to learn, compare, and adapt to your own life.

AI will never replace common sense.

But there is a second part to my answer.

As an industry, AI is an unstoppable economic wave.

Technology companies are spending aggressively, with a recent Gartner Report forecasting that total global AI spending will surge to $2.7 trillion. The market data firm Statista reports that the core AI industry revenue will cross $1.2 trillion by 2030.

To put that massive scale into perspective, the cash tech giants are pouring into AI infrastructure represents the largest infrastructure project humanity has ever undertaken.

This spending trajectory completely dwarfs traditional asset markets like the entire global smartphone sector and matches the total standalone value of individual corporate empires like Apple or Microsoft.

And why is this money pouring in?

Because AI holds the promise of infinite possibilities. This goes way beyond my daily understanding of what is possible. We are talking about the technological singularity—the moment machines help design even smarter machines, accelerating human progress at a speed we can barely grasp. Think about the grand scale of it.

We are looking at AI calculations that will guide human travel into deep space, chart new galaxies, and operate heavy machinery completely free of human error. In medicine, AI is already solving the laws of biology to permanently fix and eradicate cancer.

What better promise is there than a tool that unlocks infinite innovation?

It is fundamentally redefining our performance ceilings and human longevity. That massive future is worth the financial excitement today.

Yes, people are talking about an AI bubble and a market crash. Honestly, I cannot advise you on which specific company will be the ultimate winner. The current consumer bubble might even burst because average people simply do not need to buy a $20 ChatGPT Premium subscription right now.

But the underlying technology is a guaranteed growth engine.

Look back at the 1999 Dot-Com crash. Back then, early internet companies like pets.com went totally bankrupt because regular people “didn’t need them yet,” exactly like the consumer AI market today. But the underlying technology—the Internet—still survived the crash and completely conquered the global economy over the next two decades.

This industry is just the beginning of a brand-new era for humanity. Even if the market corrects, the technology will not just survive—it will thrive. Tomorrow, AI will be absolutely everywhere and way beyond our wildest expectations.

In the market, optimism wins over the long run.

I am not playing this sector for the next few months or a couple of years. I am in it for the next decades. AI is the next big revolution. It will completely change our economy, our habits, and what it means to be human.

So to directly answer your question, Steve:

No, you cannot build a better financial future without embracing AI—but you will lose everything if you embrace it without common sense.

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Steve’s answer

I hate to ruin the surprise and skip straight to the punchline, but here it is: AI didn’t make me a better investor. It made me a better earner and a much harder guy to fool. And no, I don’t think you can build a better financial future without it.

That isn’t a new idea, either. AI isn’t all that new, at least not in the money business.

The kind of software that flags your credit card when a strange charge pops up at 2 a.m. has run on neural networks, an early form of AI, since 1992. By 2017, JPMorgan had software reading commercial loan contracts in seconds, work that used to eat 360,000 hours a year of lawyers’ and loan officers’ time. And Bank of America’s chatbot, Erica, has now handled more than 3 billion customer conversations.

So the banks and brokers you deal with have been using it for decades. The only new part is that you can use it too, for about the price of a streaming subscription, from the phone in your pocket.

Like anything else, it can be used sloppily, unwisely, or with some thought. You’ve heard plenty about the slop. There’s good news buried in all of it.

Every major AI learned what it knows by reading the internet. Shocker: not everything on the internet is true. That means some of what an AI tells you with a straight face is wrong, and it needs checking before you lean on it. Since 1994 I’ve watched wrong money advice spread because it got repeated enough times to sound right, and AI learned from that same crowd. The answer isn’t to walk away from it. The answer is to check it. I wrote about that for my fellow retirees in Don’t Turn Your Back on AI Just Because You’re Retired.

And let’s not fool ourselves that using AI means you have to become a day trader. For a lot of people, that kind of investing is just gambling with an excuse.

I know because I tested it with my own money. I built a trading engine with AI, gave it real dollars, and let it hunt every single day for the hidden gems with the most opportunity. Right beside it, I tracked what the same money would have done sitting in a plain S&P 500 index fund. Three months in, the boring index fund has done the same, and even better. A fund with almost no fees and no cleverness at all.

As I write this, the AI’s $1,000 is worth $1,013. The same $1,000 left sitting in an S&P 500 index fund is worth $1,029. And here’s the kicker: after three months of hunting for hidden gems, the AI now has 60 percent of the money parked in… an S&P 500 index fund.

Another non-shocker: the tortoise still wins the race.

Where AI changed my life wasn’t picking stocks. It was earning a living.

At one point I had 70 employees. I was just away on vacation, running my three companies with AI and my phone. No employees. AI keeps a research library of more than a hundred books on money and debt that my writing can pull from and cite. It keeps a watch on consumer complaints, court filings, and government enforcement actions around the clock. It helped me clear more than 25,000 posts I’d written since 1994 down to the 14,000 or so still worth reading. Work that used to take a payroll now takes curiosity.

But it all comes back around to where I started. There’s a lot of good in AI if you use it wisely and check its work. So I built myself a way to check it. I call it my AI gang.

It’s three different AI systems from three different companies. When something matters, I ask each of them the same question on its own and tell them to find what’s wrong with my answer. When they disagree, I dig. When they all agree, I still go read the original source, because three machines that learned from the same internet can be wrong together. Agreement feels like proof. It isn’t.

So no, I don’t think you can build a better financial and income future by ignoring AI. And I say that as an old dog who took his first computer class in 1975, feeding punch cards into a machine and waiting for a printer to tell me what I did wrong. I’m still learning new tricks every day.

You don’t need to learn prompt engineering, and you don’t need to write code. You need to know how to ask a good question, how to doubt the answer, and how to dream a little. It’s no joke that a future of real abundance can be sitting at the edge of your keyboard. It was for me.

Where to go from here

Two people, one question, and neither of us read the other before writing. We agree on more than I expected. We both say yes to AI, and we both say it should never make your investment choices for you. Common sense stays yours.

Where we part ways is where the money goes. Anthony is betting on AI as an industry for the next few decades, and his reasoning is worth sitting with: the internet survived the dot-com crash and went on to reshape everything. My three months of receipts say let the plain index fund do the investing, and use AI to earn more and to check what you’re told.

Which one sounds like you? Nobody can hand you that answer, because it depends on your money, your age, and how well you sleep when the market drops.

If you have a view of your own, Anthony and I would both like to hear it. Comment, reply, or forward this to the person you were thinking about while you read it. And if Anthony’s half made you think, go subscribe to Cashflow Living Standards. Newer writers grow one reader at a time.

Steve