Financial Stability When the World Feels Unstable

The first quarter of 2025 has felt pretty unstable, from a geopolitical perspective. As Canadians, the threat of tariffs from our Southern neighbours and the impact that these tariffs may have on our economy have been anxiety-inducing.

We’ve been talking with you as much as possible to help navigate through these changes. There are a few things we want to make sure that you know.

Taking Action is one way to alleviate stress

But, it’s not necessarily the best way to manage your finances.

Many people are asking if they should change their overall plans, the philosophy of their investing approach, and more.

It makes sense to think about these things, because sometimes taking action is a valuable approach.

However, if we’ve created a financial planning and management approach that works, most or all of your plan won’t change.

It didn’t change when we experienced a pandemic that drove most of us indoors and away from our friends, families, and communities for much longer than we expected.

It didn’t change when 2022 hit us with negative market returns in every single asset class.

It didn’t change when 2023 and 2024 provided outstanding market returns.

We have never known what is going to happen next

That’s why we create plans and do boring things like shore up cash reserves, whether as an emergency fund during our working years or a cash wedge during our retirement years. We have always known that something weird is going to happen.

Examples of “weird” in Julia’s finance career

I started working in financial services in 1997, just as tech stocks were taking off. I kept asking senior folks in the industry why this was happening when so many of these companies didn’t have business plans, strategies… or profit. That’s not what I was taught made a viable investment. I was told I just didn’t understand. This was new. This was different.

What followed was one of the longest bear markets in history, sometimes known as the Tech Wreck.

In 2001, terrorists attacked the U.S., resulting in a closure of financial markets between September 10 and September 17. I definitely started to wonder if I may have picked the wrong profession.

In 2008, the markets crashed while I was at a company conference in Phoenix, Arizona. Everyone left the pool to run to their hotel rooms and start trying to take action. I stayed in the lazy river for a while to figure out what my next moves were. The Great Recession that followed lasted through 2009, and the involvement of national banks around the world in interest rates continued for much, much longer.

Then, of course, 2020… and 2022… and today.

Stuff gets weird. Every new event is, in fact, a new event. We don’t ever know, and have never known, what was going to happen next.

So what do we know?

We know that something weird is going to happen. Probably every few years, if not every year. It just does. We could try to alleviate our stress and anxiety by meeting this “different” event by doing something different with our personal finances.

But doing things like going to cash when the market crashes (crystalizing that loss) is the wrong approach. We know that taking speculative bets with the money that’s meant to last a lifetime is incredibly risky. We know that there are only a few things within our control, which include:

• How we choose to react or not react
• What our lives cost from day to day, and how we deploy that money
• Whether we have built safety nets like emergency funds, cash wedges, and other boring things like insurance into our financial system
• What we value in life, which is—more often than not—the people we love, the communities we live in, and how we choose to invest our most valuable resource: our time

Actions You Can Take

If you’d like to alleviate some anxiety by taking action with your financial situation, here are some great options:

• Check Your Emergency Fund or Cash Wedge: Do you have 3 months’ of essential expenses available if something goes weird? If you’re living off of your portfolio, does it have a safety net of 1 or 2 years of your planned spending set aside in very, very boring investment vehicles that can’t lose money, and probably don’t make a whole lot?
• Get Real About Your Spending: What’s the bare minimum you need to stay afloat? That will tell you what you need in your emergency fund or cash wedge. If you’re not there, what changes could you make to start building that safety net?
• Assess Your Financial Wiggle Room: When you look at those bare minimum expenses and you look at the money you have coming in, how big is that difference? Can you use some of that to create more safety in your emergency fund? Is it big enough to absorb changes like the increased cost of grapes? If it’s not enough, and you feel stressed about it, can you make cuts that don’t sacrifice your quality of life?
• Think Long-Term: Are there any upcoming big expenses or financial moves you have been considering that may need to be adjusted? Or are you well-equipped to manage it even if things get weirder?
• Review your job and benefits:
  • What happens if you get laid off? What does your contract say?
  • Would your employer or your business be impacted by tariffs?
  • Is leadership’s approach strategy or panic? What is your approach?
  • Should you start polishing your resume?
  • Maybe get that massage, some glasses, and a solid clean on your teeth
• Consider past crises: You’ve been through some sticky stuff before. Market crashes, pandemics, recessions. You came out the other side, perhaps a little weary, but all that got you here. What worked for you? What didn’t? What tools will you use today?
• Engage with Your Community: Don’t turtle. Be social. Engage with people you love and people you like. One of the best things you can do to alleviate your own anxiety is to help someone else. Thriving societies support each other through difficult times. How can you help?

Remember, the world has faced a lot of pretty wild stuff, and recovered. Adaptability and preparation wins, hands down, over panic. So feel your feelings – they’re real and they’re fair. But don’t let them run your money, or your life.
Of course, if you need a little help feeling confident about your steps, you know where to find us.

Your Spring Planning Team

Practice Notes:

Julia is heading to the Future Proof Conference! She’s looking forward to connecting with industry leaders, exploring new ideas in wealth management, and bringing fresh insights back to our team. If you’re attending, be sure to say hello!

We’re gearing up to start our annual income planning proposals for Fall 2025. If you’d like income planning this year, reach out to us at [email protected]—we’d love to help!

Spring in the News:

Toronto Star Article

In October 2024, Julia shared the stage with Jessie Bobinski of Burgundy Asset Management for their conference on the gaps between lifespan and healthspan, covering demographic change, health care costs, and so much more. Julia and Jessie’s session discussed all the ways we can work with our financial and family systems to navigate all the changes we are experiencing. The talk was condensed into an article, which you can read right here.

Julia joined the Financial Planning For Canadian Business Owners podcast, hosted by Jason Pereira, to talk about her role at the Financial Planning Association of Canada, and the work FPAC is doing to professionalize financial planning, creating better outcomes for Canadians. Watch the full podcast here.

Please check out our media page here for videos, podcasts, interviews and more.

Planning News Digest:

• U.S. Estate Tax Under a Second Trump Administration – With Trump’s inauguration, U.S. estate tax reform is uncertain, but potential changes in 2025 could significantly impact Canadians with U.S. assets making it crucial to stay informed and plan ahead. Read the full article here.
• Requirements for Canadians Staying in the U.S. – A new U.S. executive order may require Canadians staying for 30 days or more to register upon entry but key details remain unclear as Snowbird Advisor breaks down what we know so far. Find out the current details here.
• Canadian Banks can now disclose customer information without consent – Amendments to regulations under Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act will come into force in March 2025. The amendments will authorize Canadian banks to disclose customer information without consent. Check out the full article here.

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