Bill’s Blog | January 9, 2025
I hope you had a great Christmas, Hanukkah and holiday break. Thankfully, I had both!
As we launch into the New Year, one thing is crystal clear, the world continues to have significant “Uncertainties and Crisis”. We witnessed major political shifts in multiple nations, wars rage, debt levels rise, inflation won’t go away, and our purchasing power diminishes with each passing year. Globally, we see slowing economies and recessions mainly due to years of excessive borrowing and poor political policies and agendas.
A question that you may ask, “Is what can I do about any of this”? Your next thought could be, especially if we become depressed or hopeless, we will default to, “I can do nothing about all this mess.” Yes, there are indeed many things we have no control over. I have always believed we can do our part (even though sometimes small) and focus on improving our financial situation and wealth creation. Here is an idea that I have suggested to clients many times: “No one should care more about finances than yourself.” We must take personal responsibility to learn and improve managing and building wealth.
So, what are the most vital steps you can make in 2025 to improve your financial health and protect what you have worked so hard to build? Or, maybe you are just starting. Let me share a few ideas with you. It is best to focus on 1 to 3 at most.
- Have you considered taking a wealth-building course or studying a specific asset class that interests you before you invest?
- Do you have a simple budget that you regularly track your spending and priorities? A budget is critical for business owners and individuals. Businesses regularly go belly up simply by avoiding monitoring monthly income and expenses, and the same is true for individuals.
- Do you have savings accounts for goals and emergencies? Do you have a TFSA?
- Is your wealth properly diversified into multiple asset classes? (5 to 7). What could you add in 2025 to diversify your wealth and protect it? Are you hedging your portfolios?
- Are you taking advantage of tax strategies to reduce your taxation? Tax is your number one cost for Canadians unless you make 30K or less.
- Do you have a proper Will? Dying intestate (having no will) leaves a mess for family or friends. Are all of your investment, insurance and vital documents safely stored in one secure place? (Please let your executor know where they are stored and how to access them). So your executor does not have to go on a wild goose chase to find them?
- Do you have adequate life insurance to offset debts and protect your loved ones? Have you considered life insurance products and strategies for a new asset class? Life insurance investments can be effective for multiple purposes and significantly improve wealth creation, diversification, protection and estate planning.
- If you became critically ill or you were disabled, do you have at least two years of savings to get you through this crisis? Have you considered Critical Illness insurance or Illness/Injury or Disability Insurance?
- Are you planning to travel in 2025, out of the Province or out of the country? Do you have proper Travel Insurance?
- If you are a business owner, do you have health and dental coverage for you and your employees? Consider a Health Spending Account or comprehensive Group Benefits plan.
- Are you a business owner with partners, and do you have a Buy-Sell agreement? Do you have key man insurance to protect your company if a key person passes away or leaves the company? What if you became critically ill as the owner, and how long could your business survive without your leadership?
- Are you carrying too much debt? What are you going to do about it in 2025?
- Do you have a well-thought-out retirement plan?
- Do you have an Estate Plan to ensure all debts are relinquished, burial or cremation costs are covered, and your wishes are complete? If not, the government has a plan for you that will be very costly to your wealth and estate.
- Conversely, what is one habit you have that self-sabotages your wealth creation? If you are not honest with yourself, nothing will change or improve. Are you indecisive or constantly putting things off? Are you continually chasing too many rabbits? I often say, “Not all opportunities are opportunities, but most are pure distractions from your success.” Consider building one venture at a time until it is mature and successful. None of us does wealth creation perfectly, and no one knows it all. We can all improve, make better decisions and develop good habits that replace the destructive ones. How do I know this? Being honest with myself, making changes to myself and superior choices, and committing to ongoing learning have all been part of my financial journey. Remember, building wealth is a lifelong endeavour and not an event. I hope change will be part of your story in 2025!
The Lord bless you in 2025,
Bill Westmacott: Life Insurance Broker (BC) and Wealth Solution Provider.