True wealth has cash value of nil

Covid has made us realise just what’s important

What a year it’s been. Here are my reflections on some of the events of 2020, and what we can take forward into 2021...

The unexpected interruption

We started 2020 in a strong economic position, following good growth the year before. Investors were enjoying an outstanding run by the world stock market with a nearly 23.5% annualised return.

And then, from a town in China few of us had heard of, came a virus which caused a global health crisis and severely impacted our economy.

I talk to my clients about catastrophes that could derail their financial plans every day, but I didn’t often discuss pandemics.

However, our personal financial position can be derailed by the sudden death of a loved one, a prolonged period of illness or an interruption to our income.

We can’t always mitigate these risks completely but with careful financial planning, many risks can be transferred to an insurer and controlled.

Let’s make 2021 the year we decide to live life on purpose and take control

Making the best of it

The one bright spot of the first lockdown was the wonderful weather, which really helped as we all tried to make the most of the situation by enjoying the beautiful country we live in.

The strapline of my financial planning firm, Lexington Wealth, is that true wealth is what money can’t buy, nor death take away, and this period brought that to the fore. The pandemic was a leveller in many ways. Whatever your financial status, you were affected by the lockdown, and I think this solidarity made us slow down and appreciate what is important in life.

We clapped for our wonderful carers, we appreciated each other a little bit more and we all started to realise how precious life really is.

Looking ahead

As we move into the next year, it’s important to appreciate that our life is not a continuum.

We all have an end date and we need a sense of urgency to enjoy our precious life before it’s too late.

I was shown a metre ruler once, and told it represented my life. I was asked to mark my age in centimetres, then the ruler was shaded from the start to my age.

Then someone coloured in the last 10cm and told me that in these years, I’d be less able to do the things I love.

When I looked at the ruler, less than half of it was left unshaded. I was then told the ruler was a metaphor for life, assuming we’re able to live to 100.

Seeing how much of your life is left to enjoy certainly imparts the urgency of what’s important.

So let’s all make 2021 the year we decide to live life on purpose, and take control of our circumstances.

Wishing you a Happy New Year – and see you in 2021.