The disruptive events of 2020-21, often described as a Black Swan occurrence, served as a crucible for invaluable lessons. Those entrusted with managing finances and legacies had hoped that the profound impact of the COVID crisis would impart crucial financial wisdom. The question lingered: would this unprecedented experience prompt a shift in household financial paradigms? After years steeped in the culture of “cheap money and low interest rates,” such introspection became imperative.Top of Form
Lulled into the illusion of a definition of a new norm, the prolonged period of low interest rates created an exuberant consumer-based economy. One that was brutalized during the 2-year shutdown as it exposed how North America and especially Canada had allowed itself to significantly move to a service-based economy. This sector was decimated and to this day has not recovered. Over 80% of all jobs were tied up while agriculture was less than 1.5% and industry 19%. It remains one of the main reasons why we see a serious employment issue ahead and a compelling drop in the average household income in Canada.
Investors of all ages, consumers and hopefully sage investment stewards like us have retooled to tackle a plethora of issues to change challenges into opportunities as we continue to move forward.
In the following series, I will address a number of critical key fundamentals both new and old that Canadians/ North Americans of all ages should embrace. The world is fraught with change. But if we take a few sensible moments to look at history, every disruption allows the wise to turn a negative(s) into profitable positive(s). Right now, I/we see several avenues opening up that are both bright and prosperous to those who wish to participate. But we must start with a walk-through process to resetting the road to prosperity in “changed times”. Time to break those old habits and not repeat them. I’m already hearing from some people, “I thought rates had peaked, why haven’t they dropped back to normal?” That kind of comment keeps me up nights! What is this “normal” and goes back to how consumers were conditioned by prolonged periods of low interest rates.
First up we will tackle the simplicity of Budgeting 101 and the difference between “Needs vs Wants”. Whether you are 25 or 65, it never hurts to go through the exercise. Many are starting out but many are also part of the Grey Tsunami in N.A and miss many line items like ancillary healthcare costs once they walk out the employment door. I was recently asked by a major Canadian news source to comment on this issue as it is catching many people off guard.
If you wish to receive email updates as opposed to having to check back for the new releases, please contact me directly below and I will add you directly to my/our mailing list. I also provide counseling services to our client’s children, grandchildren, nieces and nephews on Financial Literacy 101 as it is something sorely missed in our education system.
Stay tuned.
