← So Money with Farnoosh Torabi
So Money with Farnoosh Torabi
1922: The Best of So Money 2025: AI, Money, Work, and What’s Next for Your Career
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Capital One Bank Guy
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Farnoosh Torabi
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Pat Flynn
You to give yourself the gift of.
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Farnoosh Torabi
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Dan Chabell
Birds?
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Capital One Bank Guy
What if you sent your true love.
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Farnoosh Torabi
Two turtle doves plus a partridge in a pear tree?
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Dan Chabell
Sure, but why would anyone want that?
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Capital One Bank Guy
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Dan Chabell
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Farnoosh Torabi
What's in your wallet?
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Pat Flynn
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Capital One Bank Guy
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Farnoosh Torabi
So money episode 1922 our year end review the best of AI and the future of Money and Work.
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Dan Chabell
You're listening to so Money with award.
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Farnoosh Torabi
Winning money guru Farnoosh Torabi. Each day get a 30 minute dose.
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Dan Chabell
Of financial inspiration from the world's top business minds, authors, influencers and from Farnoosh herself.
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Farnoosh Torabi
Looking for ways to save on gas.
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Dan Chabell
Or double your double coupons. Sorry, you're in the wrong place. Seeking profound ways to live a richer, happier life. Welcome to SO money.
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Farnoosh Torabi
Welcome back to so Money everyone. We're continuing our year end look back, pulling some of the most useful, most talked about moments from our year's episodes that tackled the future of work, how we learn, and how AI is reshaping everything from our careers to our financial security. We'll hear from four standout guests. Workplace expert Dan Chabell on what employers really think about college degrees in the age of AI entrepreneur and educator Pat Flynn on how to learn smarter without going broke or burning out. Cybersecurity founder Martha Underwood on the scams and fraud risks accelerating with AI and investing guru Amanda Holden who's to talk about the potential AI tech bubble bursting in 2026 and how we can protect our investments going into the new year. First up, episode 1781 with Dan Sha Bell. He's a New York Times bestselling author, workplace expert and managing partner at Workplace Intelligence. Dan has been tracking workplace trends for more than 15 years, advising companies on what's coming next. And this latest research honestly was a little terrifying. Companies are rethinking the value of a college degree. He and some employers are even saying they'd rather hire AI than a recent graduate. So what does that mean for students, parents and anyone trying to future proof their career? Which jobs are most at risk? What should students be learning right now and how do we make sure education actually pays off? Here's some of my conversation with Dan Shabell. You have been keeping your eye on the trends for your entire career. You're someone who has a lot of understanding of not just what is happening in the workplace, but what is going to happen in the workplace. You have this crystal ball, maybe, but you work with a lot of companies to get the questions answered. And one of the questions you recently went out to get answers to is are college students getting a value for their degrees? What are college graduates saying about their degrees and what they learned in school and the application in the real world? And I want to start with this new survey that you co led which found that 77% of recent grads say they learned more on the job within six months than in their entire four year education. A lot of these students studied business and had hard skills.
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Dan Chabell
What we found we interviewed 8, 800 HR decision makers, HR leaders slash employers and 800 employees. And we found that almost all recent college graduates regret their degree choice. And then 84% of those say that it's affected their financial future. Of course, if you choose the wrong degree, some degrees don't have as much ROI as others. And a Lot of them just almost half feel doomed because of this wrong degree choice. That was a good portion of the study. But some of the other glaring stats, aside from the ones you said, is, you know, almost all employers are saying we don't even want to hire recent college graduates at all. Yeah. And I think that's a big thing. And we also found that a good chunk of employers say that they would rather use or hire ChatGPT or AI over, over employing a grad. And so that that was our other headline, of course. Because.
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Farnoosh Torabi
Are you terrified? Because I'm a little terrified right now.
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Dan Chabell
I think it's lack of workplace pre. And I also think the part that's also terrifying would be the automation of entry level jobs, especially in certain sectors. And I think that's kind of a call to arms. And right now employers are starting to prioritize more soft skills to things that can't easily be automated. But I would say in the future, honestly, I think a lot of these soft skills will be automated by AI as well. And I never have thought of that. And there has been a separate study that came out several months ago that says employers value the soft skills like we found as well. Almost 100% said communication, willing to learn, collaboration, creativity, critical thinking. But I think as AI continues to improve and be elevated and get smarter, you might rather brainstorm with AI than your colleague potentially. I think the things that we thought could not happen are slowly going to happen to a point where we're not even going to be thinking about it. And thus I think that it's gonna get harder and harder as a recent college graduate to get a job. Yet at the same time as it's like $1.8 trillion of student loan debt, right. The cost of going to school goes up 2 to 6% a year. So if the cost keeps going up and this, the loans keep going up, yet it keeps getting harder to get a job because there are fewer jobs and those the skills you need are changing and colleges can't keep up. We have a huge crisis on our hands. So that that's like the bigger picture of what's going on.
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Farnoosh Torabi
So let's say you're in college right now or you are a recent grad. We don't want this news to completely deflate you. What would be your advice to someone right now? You need to pay off those loans. You need to get out there and make an impact and make money. How do you do that? Obviously gotta learn AI, but what else is there to it?
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Dan Chabell
It is hard to give General advice, because everyone's in a unique financial like aid situation and what people can afford. And also like you or have a college senior as a son or daughter versus someone who's a freshman. And if you're a freshman, you probably still get freshman or sophomore, you probably still get to choose your major. So this should affect your major choice. But if you're a senior, let's say, and you're already in this major, if you can do a minor in a topic that's more relevant now, that could be beneficial. Or unfortunately, like outside of work, nights and weekends, you should learn some of these new skills. And a lot of these skills can be learned through either freelancing or through online courses or finding people who have those skills and trading something with those individuals. Like, you have certain skills, they need certain skills, and vice versa, and you form a kind of a partnership or a mentorship opportunity.
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Farnoosh Torabi
So is AI going to be the ultimate disruptor to college as we know it? Do you think that university presidents and board of trustees, are they going to listen to any of this and adjust the way that they're approaching academia?
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Dan Chabell
In the early days of when AI was being rolled out and students were using it to write papers and all of that, I feel like a lot of colleges and schools pushed back and they said, you're not allowed to use AI. But now I think that things are drastically changing. And our survey actually focused on that aspect as well. With a lot of college graduates know that using AI would help them become more efficient, more innovative, improve their decision making and advance their career so that the students value it. And they think that AI is just going to disrupt almost every profession in the next one to two years, we found 86% said that. So I think that between that and then employers demanding these type of skills with like almost a hundred percent saying that it's important to have these new hires with a foundation in technology skills, namely AI and data analytics. I just think if you connect all the dots, that the demand for these AI skills, knowing how to partner with AI to accomplish tasks is only going to grow. And AI and future technologies could be so disruptive that it changes how people are learning in the classroom, how much time they spend in the classroom. There's so many aspects to it that could evolve over time. But colleges for sure know that if they want their students employed, and that's their big metric, if you want to get rank high on the US News list, which is the most important thing to these colleges, right? Unfortunately, that is by far the most important. They'll do anything to get higher on that list is you need to equip them with the skills so they get hired so your placement rates are higher or stay the same. Because if those start dropping, then the ROI of those schools does. And therefore it's going to be harder to get higher on those lists. Especially that new Wall Street Journal list that came out, what, last year where it ranked schools based on ROI basically for their degrees. And it's going to be harder. Those schools are going to have a tough time because it's going to be harder to recruit and because there's so many schools and with the expense of going to those schools constantly increasing, the schools that are not performing at the highest level, they're not Ivy League or they're not yielding enough, high enough placement rates, they're gonna just go under because no one's gonna take out. I was calculating. I don't know if, I don't know if you've ever done this before, but obviously I just had a kid, so I'm five, 29, plans everything. So I'm looking at what is the cost of College for a four year private school in 18 years and $730,000, forget it. So you have to save, you have to save $18,000 a year for those 18 years. About almost those 18 years to be able to do it. And that's like the, I guess you could say that's the most expensive situation you get yourself into because obviously they can go to public and it won't be as high as that, but AKA the dumbest.
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Farnoosh Torabi
AKA the dumbest. Who is going to pay that Unless you're just bankrolling that and you've got 800,000 more dollars a day coming in. That is, it's a crime. That is even an asking price. But those who are paying it should know better. That's just. You're entering a fraudulent, corrupt deal at that point. Correct.
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Dan Chabell
But the. There's always this but. And there's been so many articles that are like, is a degree worth it? And the reality is, as of now, if you don't have a college degree, you'll still earn less in your lifetime. That's still.
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Farnoosh Torabi
I also think college is a gateway to meeting people who can help you advance in your career. And also not just in your career, like in your personal, personal development life. It's a, it's, it's not just where you go to learn about chemistry or finance. It's where you learn how to be a leader potentially. Or you learn about people skills or the social skills that you didn't necessarily build in high school. You learn about yourself. You get to maybe travel abroad. So there are these other benefits to going to college. That was Dan shaw Bell Episode 1781. I'll link to that in our show. Notes what I took away from our conversation is that college isn't dead, but it's that the old assumptions about degrees, jobs and stability are shifting real quick. And if you're a student, a parent, or someone thinking about a pivot, the goal now is to stay adaptable, build real world skills, and keep learning in ways that translate to the market. And speaking of learning, if the world is changing this quickly, then knowing how to learn efficiently may be one of the most valuable financial skills we can build. Which brings me to my next guest from this year. Episode 1838 features someone who needs little introduction if you spend any time in the world of online entrepreneurship, and that is Pat Flynn. Pat is the creator of the Smart Passive Income Podcast. He's the host of multiple top ranked podcasts. In fact, he's a sought after speaker, the author of best selling books like Will It Fly And Super Fans. And he came back this year with a timely new book called Lean how to Achieve More by Learning Less. In an age where we're drowning in information and getting pulled in so many directions by algorithms, Pat offers a practical framework for mastering skills without overwhelm and without draining your bank account in the process. In this excerpt, I asked Pat to speak directly to the person who wants to build expertise, wants focus, wants momentum, but also has bills to pay and financial responsibilities. Take a listen. Speak to the person who is worried about money. Right? They want to lean learn. They want to become experts, forensic experts in something. They don't want to be scattered. They don't like the being on the hamster wheel. But they also have financial responsibilities. And I don't have to tell you, like the uncertainty right now. Again, it's an echoing issue. But how would you advise that person?
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Pat Flynn
Yes, I have a strategy called the One one one strategy and this works for many of my students who are just starting out in business. They want to get in and like you said, they're scared. They know that it's going to take a long time to build an audience. They know it might take a little bit of time to create a course. And who am I creating this course for anyway? It's often the first question I get is Pat, should I create a course or should I write a book or should I do coaching? You're asking the Wrong questions. The first question you should ask is, which group of people do you want to step forward into and serve? Because that's what all good businesses do. They step forward and serve in some way, shape or form. And all you need to do is find one person in a community market of interest that you might have. You might already be in a community or have interests in a space, and maybe in an online forum or a group on Facebook or just a community within your hometown, whatever it might be, find one person in that space, find one problem that they have and get them one result. Just one person, right? Not a thousand, not ten thousand, or a million subscribers like we all think we need. Just find one. And if you can't find one, you can't find more. So let's start in the beginning again. If this were easy, what would it look like? That in and of itself, just finding that person is going to be an exercise, which is really important. It's going to help you learn where these people exist and where they show up. It's going to help you understand the language that they speak and what questions they're asking when you try to determine their problem. Reaching out to that person and seeing what they might need help with is going to be an exercise in and of itself, which is good training for business, which is to interact with people, not just hide behind your keyboard, but actually go out there and see what people need help with. And finally, when you get that person, that result in whatever way, you don't even need a website to do this. You just do this in a way that can help them. Whatever it might be, from learning how to present, to singing on stage, to playing an instrument, whatever it might be, this the skill that you have that you can help another person with and make something more convenient for them or unlock something for them. There is value in that. Not only are you going to get that result and that testimonial, which you can then utilize later, you're going to unlock the confidence that this is actually something that can happen. And that is the biggest hurdle that most beginner entrepreneurs have, is I don't know if what I'm doing is going to work. Which is why this one, one, one strategy helps you literally, like shoo that thought away by actually getting a real life case study and you actually getting out there and in the process empathizing with who it is you're serving and getting to know them. Not just like making up an avatar and saying, oh, my ideal customer is 32 and a half years old with 2 and a half kids, and they no find a real person. It's going to fast forward all of this, and that's going to then help you be able to scale it up and amplify. Or what sometimes happens for nuts is people go through that process, they get a result, and they're like, okay, I learned that I don't really want to help these people. Like, I, I, I, I love people and I want to help people, but just, this isn't my people.
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Farnoosh Torabi
Yeah.
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Pat Flynn
What an amazing thing to learn now rather than five years down the road. When you've dedicated time, energy, and money into this and you're like, oh, I'm, I've climbed the ladder, but it's the wrong ladder.
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Farnoosh Torabi
Yeah, you're absolutely right, Pat, about the question. You're asking the wrong question. If you're first going to the medium, it's really about the audience, the person you want to serve. But there's so much to this that requires consistency. We just started talking earlier about how we met 10 years ago, and I started podcasting in 2015. I had a good feeling that this was gonna be something that I could stick with. I was right. But I also find that when people ask the question of where to begin, part of it should be at least, like, where can you find yourself showing up day in and day out? Not to say you're not allowed to change your mind and quit, but that's important too. How do you identify? I guess maybe this is getting into the another aspect of your book, which is the inspiration matrix. Because when you're inspired, you will show up day in and day out, you will skip lunch, you will not sign in a good way. Like, you will be so into it. Tell me about that model and how it can also help people identify their lean learning path.
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Pat Flynn
Yeah, the inspiration matrix, which is more toward the beginning of the book, is a great filter to use to understand of all the things that you have interested in, that you're putting energy and effort into and thought into. Where do they fit in terms of the area of your life that matter? And there's a few parts of this, so the upper left hand corner, which is the sort of less priority, less mandatory, if you will, but high energy, high excitement is going to be what I like to call your recreational inspirations. This is something like a hobby. And like, it's interesting, when I run this profile through a number of entrepreneurs, what I often find is that this one is empty. And when it's empty, it's dangerous because that means there is nothing that you could go back to, to recharge with. It's something that you enjoy that doesn't require heightened stress or energy like a, like a commitment, a required commitment or mandatory commitment would require. Right something a critical commitment that you have to do the less exciting thing, but like you have to do it. So you're going to put time and energy into it. The recreational inspirations are important. So having a hobby that you can go back into and understanding and what a person can do. Now even listening to this as I talk about this matrix or as you go through the book perhaps is you can take an audit of your life right now and consider where do certain things lie on this matrix? And you might find that you don't have really anything exciting that isn't high pressure. To take yourself away from the high pressure things, that balance is key. And that's been really helpful for me too. Right now it's golf and fishing are my things that help me escape, but then also come back into the requirements with much more energy and effort and excitement. Then you have your passion pursuits. These are the things that you just cannot stop thinking about, that you want to pursue that are not things that you've mastered yet. And this is where you're going to put a lot of time and energy and effort. And again, just having one or two of these things is important. And oftentimes you'll find that a lot of entrepreneurs, especially those of us who are more renaissance type, multifaceted, multi interest kind of people, we have multiple things here. And it looks so clear when you look at this graph often that there's no way any of these are going to do well. When you are putting yourself in three different passions and you're dividing that across so many things. Probably the easiest thing where you can see results faster, however, is when you start to mark what are your junk sparks. These are things that give you some excitement in the beginning but don't necessarily will give you long term excitement or are just fleeting distractions. And this is something that's common in today's world because we're so connected to everybody on social media and with all the content that we're creating. This is why controlling what comes in, only allowing yourself to as much as possible learn about what matters to you right now. And your next step is important because if you don't do that, you're going to have a lot of junk sparks like junk food that's going to weigh you down. And again, take your time away from things like some junk sparks that I've personally had recently were related to basketball. Love basketball. It wasn't going to be a passion pursuit of mine and it was something that I do enjoy, but I knew that I could take that energy and put it somewhere else to get more results. And again, I'll still dabble in it just for fun if their friends are hanging out. But I was getting a little too much into it where I was starting to download a ton of basketball content. I was buying like special basketballs that you could dribble in your house because they wouldn't make noise. And in my mind I was eventually took an audit and found, wait, what do I want to do here? Is this something that I really want to dedicate more time and energy into? Even though I liked it, I enjoyed it. It was a junk spark. It wasn't something that long term I was going to turn into a business or something, that I wasn't going to join the NBA or anything. I'm not saying that's not a reason to enjoy it, but my recreational inspirations were already full. And if I divide myself too much, not only in my business and passion pursuits am I not going to have time and energy, but even in my my recreational stuff, like I really enjoy fishing and really enjoy golf. And this is now by saying no to basketball, for example, I now have time for things that I really do enjoy. Like I said, fishing.
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Farnoosh Torabi
I can appreciate this as someone who is a bit of a wants to do it all, but I find that what you're doing is you're giving us like a. You're giving us a way to organize all of this and so identify. Okay, this is a passion. This is maybe a junk start. This is a. This is actually the thing that's going to lead you to impact and money. That was pat Flynn episode 1838. So if you're feeling scattered, I really appreciate Pat's reminder that confidence comes from evidence. And evidence comes from doing one small real thing for one real person. Not from consuming endless content, buying another course, or waiting until you feel quote unquote ready. When it comes to holiday gifting, I really want to give things people will love. Pieces that feel special they'll wear for years. That's why I'm going with Quint Year. From Mongolian cashmere sweaters to Italian wool coats, everything is premium quality at a price that actually makes sense. Quince honestly has something for everyone. Those Mongolian cashmere sweaters I was talking about, they're $50, but look and feel like the designer versions. They've got beautiful silk tops and skirts if you're dressing up perfectly, cut denim for every day and outerwear that actually keeps you warm. And I'll just say the cashmere feels incredible. It's soft, structured and it doesn't pill. It's the kind of quality I' expect from a 200 sweater, not $50. And they're not just about clothing either. Quinn's has amazing home bath and travel pieces. I've been eyeing their set of hotel quality towels and honestly, I might be gifting those to myself this year. Fine gifts so good you'll want to keep them with quince. Go to quince.com sewmoney for free shipping on your order and 365 day returns. Now available in Canada too. That's Q U-I-N-C-E.com somoney to get free shipping and 365 day returns. Quince.com so money I'm Farnoosh Tarabi, host of so Money and this episode is sponsored by ghelt. Feeling like your CPA is always one step behind, causing you to miss valuable tax advantages? Questioning if your tax plan is truly as optimized as it should be? That's where gilt comes in. Gilt is a tax planning and strategy solution for you and your business. They're the modern alternative for entrepreneurs who feel like their CPA is reactive, not tech forward, and maybe not asking the bigger strategic questions about how your business is growing. What I love about GHLT is this they make taxes part of the business plan. With Ghelt, your partner in taxes, CPAs and AI align your tax strategy to how your business grows. That includes the real levers that matter. Choosing the right entity structure, maximizing retirement contributions and uncovering hidden credits and deductions. All handled alongside your business and personal compliance. And GHELT is proactive. Your tax strategy gets revisited every quarter by a dedicated cpa, not just a tax time. No more slow replies, no more surprises, no more spreadsheets and email chaos. Just a slick dashboard, clear next steps and year round support. Schedule a call@joingelt.com today and learn how your taxes can become a lever for growth that's joining join G-E-L-T.com and schedule your discovery call today. Farnoosh tarabi listeners get 10% off their first year of service. Just mention my name on your intake form. If you love to travel, Capital One has a rewards credit card that's perfect for you. With the Capital One Venture X card, you earn unlimited double miles on everything you buy. Plus you get premium benefits at a.
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Amanda Holden
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Farnoosh Torabi
Book on Capital One Travel and with Venture X, you get access to over 1,000 airport lounges worldwide. Open up a world of travel possibilities with a Capital One Venture X card. What's in your wallet?
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Capital One Bank Guy
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Dan Chabell
Lounge access is subject to change.
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Capital One Bank Guy
See capital1.com for details. With no fees or minimums on checking accounts, it's no wonder the Capital One bank guy is so passionate about banking with Capital One. If he were here, he wouldn't just tell you about no fees or minimums. He'd also talk about how most Capital One cafes are open seven days a week to assist with your banking needs. Yep, even on weekends, it's pretty much all he talks about in a good way. What's in your wallet? Terms apply. See capitalone.com bank capital1NA member FDIC.
- [27:25]
Farnoosh Torabi
Now let's talk about the other side of AI. Not how it can help us work and learn faster, but how it can make it easier for criminals to exploit us. Because as AI evolves, so do the scams episode 1883 from earlier this year featured Martha Underwood, who's the founder of a company called Prism, and she's someone who is on the front lines of protecting our financial identity and legacy. She joined me to walk through what's happening right now in the fraud world, from spoofed IRS texts and fake PayPal micro deposits to increasingly sophisticated scams powered by AI voice technology. And most importantly, she shares concrete steps we can all take to guard our money, protect our families, and reduce our exposure, especially during peak fraud season when we're busy, distracted, and clicking a little too fast. Here's a bit of our conversation. While you're a cybersecurity expert, Martha, and you just mentioned one of the things that you do that probably most of us don't, which is this rotation of debit cards. What else do you do that more people should because you actually know what can be compromised and how we're most vulnerable.
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Martha Underwood
I wouldn't say I'm a cybersecurity expert. I would say that I am paranoid. And especially being in banking and in tech for so long, everything can be compromised because it's code, right? And so you can crack code. But I always say change your passwords as often as you can, sometimes use a password generator that will create a long, unique password for you. Don't click on any links online if you are not sure of who sent it to you. If you get free offers, Google the vendor, Google the addresses and make sure that they are Free. The one thing that I will say also people with children, because I have children, I have sons, and they're playing all the time on their games, and they're in these chat rooms with people putting links out there. I tell them, do not click on anything. If you're playing, just play the game. Do not click on anything because they can be playing on the home computer and they can compromise the home computer because you have bad actors in there saying, oh, you're in here. You can get this free thing. And kids are innocent. They're like, oh, free, I don't have to ask my mom for money. Going to click on this. And now your computer is compromised and they've downloaded keystroke software. And as you're going on to it, you're typing in your bank account information into something, and now they have your bank account information. And so there's so many different ways that people are being targeted through children, through your emails, through the breaches, that you just need to be diligent. And I say that we need to be our own archivists of our own data, knowing what our information is and rotating it as much as possible. I rarely give out my Social Security number these days. If you absolutely need it, why do you need it? And I question, why do you need it? Right. A lot of times they don't. They should already have it. They shouldn't be asking for it again. And so just be very diligent about the information that you share and make sure that you can protect your information and rotate it as much as possible.
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Farnoosh Torabi
We haven't even touched on AI, the advances that fraudsters now have at their fingertips to absolutely manipulate and trick us. You know, they have the use of voice technology. They can use that to make fraudulent voice calls. And this has been happening for a while. It's only getting more and more prevalent. But I remember a story where my husband told me his grandmother, now this was years ago, she gets a phone call and it sounds like it's one of her grandsons who's in trouble and needs money.
- [31:23]
Martha Underwood
And.
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Farnoosh Torabi
And she had the wherewithal, thankfully, to hang up and call him directly, and then found out I was obviously fake. And that was back, you know, 10 years ago at least. So I can't even imagine what's going on today. But tell us how some of this AI is working its way into the identity theft world.
- [31:44]
Martha Underwood
Yeah, so again with the AI, the voice is one of the leading ways that they are basically fraud, committing fraud with the elders because they're our most vulnerable. Population right now. And if grandma or grandpa hears that grandchild or child is in danger, they're going to do whatever they need to do in order to keep that child or grandchild safe. And so I always say, have a safe word. Also, be careful about what you put online because you have bots that can go and scrape information off of your Facebook page, off your Instagram page. So if you say, hey, my dog's name is t', Challa, and I put that out there on Facebook and it got scraped then, and that's my secret code name, then the AI will know that. And so you need to be more thoughtful in how you're going to authenticate, even family members, because it's okay, who threw up on the ship during our cruise to the Bahamas, like someone who wouldn't know, like, that type of stuff. And you just throw it in there and say, mom or hey, Dad. I just wanted you to know that it's truly me because there's so many. There's so many tools out there that can capture your voice and get very sophisticated and the types of scams that they are putting out there. And voice is one of the main ones. The other is, again with the emails and how they're spoofing websites. Because now you can create beautiful websites using AI. You can use a prompt and create a website. Like you said, the IRS one looked legit. They can model it almost to the T. And so be very careful and diligent. And that's why I say just Google or try to research the URLs that something is coming from Google, the phone numbers that they say call you back from. Because a lot of the times even the phone numbers can be spoofed, right? Like it's a real phone number to the irs. But that's why you have to call them and say, hey, did you initiate this? And they will. They'll say, no. So it can be. People will say, oh, man, this is annoying, because I have to go through all of these other steps, but always assume that it might not be legit because you want to err on the side of caution and keep your data safe and keep your information safe, especially when you can't trust your eyes or your ears anymore because of AI Truly.
- [34:24]
Farnoosh Torabi
And I'm just like, I'm thinking now, you know, I have a podcast. My audio could easily be scraped and reinvented and replicated. And I'm out there. I have information about my out there, my life, my children. And I feel like as much as we are giving our Kids, these devices, my kids don't have phones yet, but when we do, we don't educate them enough on these frightful things. We need to scare them, right? That these devices can be portals to exposing yourself to fraudsters, criminals. That was Martha Underwood, episode 1883. And if there's one through line there, it's this. We can't rely on instinct anymore. The safest approach is to slow down, verify independently, and assume that what looks or sounds real may not be real, especially when urgency is involved. And finally, we've talked about how AI is changing hiring, how is changing the way we learn, and how it's changing the fraud landscape. There's one more place AI is changing up in a big way, and it's our portfolios. Because whether you're investing directly in tech or you're in index funds, AI is becoming a bigger part of the stock market story. We're going to talk next about what this moment means for investors in episode 1915. Recently, I sat down with Amanda Holden, investing expert and author of the new book how to Be a Rich Old lady, who laid out a practical playbook for navigating the stock market. As we head into 2026, especially with so much attention, excitement and money flowing into AI, there's been growing talk of an AI asset bubble. And in this excerpt, Amanda breaks down what a bubble actually is. Why hype can move markets in the short term, why profits matter in the long term, and what investors can do right now, not by trying to time a crash, but by understanding concentration, risk, and making sure they're truly diversified.
- [36:26]
Amanda Holden
So right now, there is talk of an AI asset bubble. And so specifically, companies, AI companies for which you can own stock, are seeing these huge influxes of cash that is being invested in these companies. And that's what a stock is, right? A stock is a share of ownership in a company. Now, what's interesting is it is not as if when a company profits, the profit fairy comes and waves a wand over the stock and the stock goes up. Instead, the mechanism that drives stock prices up or down is our buying and selling. So when we all, en masse, buy into a stock, that is what drives a stock price. And so what we are seeing right now is a moment where a lot of people are, are very excited about these AI companies and their future potential profitability. Now, that's all fine and good, except for most of these AI companies do not have a clear path to profit. They might not even have a viable product right now. And so it is feeling right now very reminiscent of the dot com bubble that we saw in 1999 and 2000, it was almost the same exact thing. People were so excited about just even the very prospect of these companies being able to make money on God's green Internet. And so all of this money flowed into these Internet stocks. But eventually investors need to see profit or they're going to be uninterested. Profit is really the engine that drives prices over longer periods, over short periods. It's human emotion, baby. It's drama that drives markets up and down. But the stocks that we're still talking about 10 years from now are going to be the stocks of the companies that figured it out and figured out how to be profitable. And so the concern is that at some point investors are going to be questioning their initial calculus, especially the big time investors, and they're going to wonder if maybe their money would be better elsewhere. They start to sell, that drops prices lower, that causes more selling, and then we have an out and out panic. And so that's, that's the anatomy of a bubble and then a bubble bursting. So, right, a rise and then a crash. And so there's just concern that if these AI companies don't figure it out, then we will see the bubble burst. And so that's what people are talking about right now. I do think that there is some legitimate concern around what is happening with the AI bubble. The problem is there's not really that much we can do about it in terms of, of timing the market. Now I want to talk a little bit about what we can do to protect ourselves. One of those things that something that is not available to us is knowing when this is going to happen. Is it going to happen next month? Is it going to happen three years from now? Is it never really going to happen? Because maybe there are other companies that do end up being profitable and those cancel out the companies that aren't profitable. And so anything could really happen moving forward with this AI bubble. We just don't know. For me, a moment like this is a great time to take a look at our strategies and make sure that we understand exactly what we're invested in and make a decision as to whether we are appropriately diversified now. Something that, you know, if you ever get any investing education from social media, what you've been told to do in the last 10 years is buy an S&P 500 index fund. Buy an S&P 500 index fund. That's all you have to do to be a diversified investor. Which I can appreciate that this advice. It's like the idea is to just get people started and get people invested. But having come from investment management, there is no universe in which any investment manager worth their salt would ever tell you only to invest in the US In US Stocks as a total diversified strategy. Now, of course, it's very popular to do because for the last 15, almost 20 years, US stocks have outperformed all other categories by a lot. And so anybody that's only bought The S&P 500 index fund is feeling pretty great about their choice of strategy. And if that's you, honestly, good for you. You did amazing. But it also tricks us into believing that this is how it's always going to be, which history also tells us that is not the case. Instead, what we see is the these big sea changes in the markets where one decade it's US that does best, then European stocks do best, then maybe it's bonds, right? Bonds do go through pure. They outperform. And so the idea behind diversification is of course, don't load yourself all up in one area of the market. But I would think about it like this. You don't get to have both. You don't get to have both the performance of only the best performing asset class. So let's say U.S. stocks, right? You don't get to have the performance of only that asset class and protection if the worst happens within that asset class. And so you get to take your pick. Do you want to put all your eggs in that basket or do you want to spread it out across multiple different asset classes in order to diversify? Now, now, something that is also happening right now, so sorry if this is like getting a little bit too into the weeds, but something that is also happening right now with these tech companies and AI companies getting so big, they are now dominating something like an S&P 500 index. So something you should know about an index which is just a way to measure a market, but now we can buy funds that mirror the index. So something like an S&P 500 index fund that mirrors this measuring stick that measures the 500 biggest stocks in the US is that they are what we call market cap weighted. You can just think size weighted, which means that Microsoft is just a much bigger company than Chipotle and so it has much more weight or power to move the index. Microsoft probably makes up 7% of the S&P 500. Chipotle probably makes up 0.2% of the S&P 500. So a 10% move in, Microsoft is going to have a lot more power over not only the index, but also the fund that you own that mirrors the index. And so right now we are in a moment where US tech companies make up, specifically the seven biggest tech companies make up about 40% of the S&P 500. And so there is also a really interesting question that is being risen is should we be considering strategies outside of what traditionally qualifies as passive investment strategies in order to protect ourselves from single stock risk? Because if you only own AN S&P 500 index fund, then 7% of your strategy is in Microsoft, probably more than that is in Nvidia, like more than that is in Apple. Right? And so that's a lot for the average American to be having in, especially for their retirement, invested in just one company. And so we're definitely having conversations about whether it might also make sense to overweight or to integrate something like a small or mid cap US Stock index fund. Those are just smaller or mid sized companies. And even though if you were overweighting them, let's say 10 or 20% of your strategy was weighted to a small cap index fund, you would technically no longer be utilizing a strictly passive strategy. You would be be overweight small stocks. But that might be something that is worth considering in this moment where we are all taking a lot of single stock risk and single industry risk.
- [44:25]
Farnoosh Torabi
That was Amanda Holden, episode 1915 Big takeaway. You don't need to predict the next crash to be a smart investor. You need to know what you own, understand where you're concentrated and make sure that your strategy matches your risk tolerance. Because the goal isn't to dodge every downturn, it's to stay invested long enough to participate in the upside. And that's our show if you want to go deeper. I've linked all of the full episodes in the show Notes with Dan Shabell, Pat Flynn, Martha Underwood and Amanda Holden. Thanks for being here everybody. Thanks for listening. Hit that subscribe or follow button. Leave a review if you like and I hope to see you here on Friday and all of 2026. I'm Farnish Tarabi and I hope your day is so money foreign. This holiday Verizon is giving you incredible.
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