Planning for retirement. Investing. Managing your finances.

Are you scared yet?

Money is stressful. It just is. You’re expected to grow your portfolio, diversify your assets, and know what a Roth IRA is – even if math makes you feel like a gazelle gazing into the eyes of a lion.

But technology might just be able to help.

A new class of companies called ‘robo-advisors’ have become increasingly popular in recent years – and offer to help manage your investments using software and algorithms, with minimal human involvement.

You’re still in control of your money, the ‘robot’ just provides all
of the services of a human investment adviser. Usually, at a fraction of the cost.

Jon Stein, the founder of Betterment, says that what his company, and others like it, are doing is taking a lot of the human error out of investing. And Wall Street is taking notice.

Here’s how automation might change your relationship to your money in the coming years:

Robots are going to help with your investments

No, don’t imagine HAL 9000 giving you hot stock tips. (I'm sorry Dave, I'm afraid I can't put your money into IBM.)

As Stein notes, “The average investor underperforms the market by around 50 per cent… people are terrible at investing.”

The most important thing technology may do, then, is turn your investments from being actively managed (you buy and sell stocks) to being passively managed (algorithms buy and sell for you).

Advice is going to be much easier to come by

When should I buy a house? How much should I save for retirement? Am I spending too much on rent?

These are all important, stressful questions (so stressful, in fact, that even writing about them is making me a little nervous).

Right now, getting advice on questions like these can be both complex and expensive.

But Stein thinks that these questions are going to be easier to answer in the future, because we’ll all have automated assistants who know enough about us to provide solid, easy-to-understand answers.

“Because the way that you save and invest, and how much of your paycheck you save, is related to how much house you can afford, and what life insurance you should have,” and on and on and on.

You’re going to think less about finances

All this automation, in Stein’s mind, leads to one thing: you’re probably not going to worry too much about your money.

You might still want more of it, but the question of what to do with it, will likely be a lot clearer.

Stein puts it in simple terms.

“I think about my daughter, who’s 18 months old, and I know that when she graduates from college, she’s never going to have to think about what percentage of her paycheck she should put away versus how should much she be spending on rent, versus how she should think about retirement. She’ll have agency in all of this, she’ll be able to make the call, but all of the low-level decisions are going to be solved and handled for her.”