Predicting the future is a waste of time. Here's what to do instead.

As the year draws to a close, predictions for 2023 are flooding in. Professionals are divided in their opinions by a wide margin.

Just look at the two articles above from CNBC. Will bitcoin be $5,000 or $250,000 next year? The difference is a factor of 50.

Can anyone accurately predict the future? Is it even feasible?

Do you have time to think?

As some of you may know, or maybe have picked up on, I started a crazy new habit in Mexico.

Waking up very early every morning (at 5 am), to have time for myself and my personal projects (like this newsletter 😉) before the day starts.

This new habit has been the topic of active debate among my friends, and as I learned this weekend chatting with them, it’s certainly not for everyone.

One thing I personally like about it very much though, is the time for reflection I get every morning.

Waking up before the sun brings solitude. (Thinking about it now, makes me realise that “waking up before the sun” is not much of an achievement here in the Netherlands, given the fact that the sun only starts to show its face after 8:30 am 🤦‍♂️) But I digress.

In my early morning sessions, I always take a moment for reflection and journaling.

This morning, my thoughts turned to the end of 2022 and the beginning of 2023.

What will happen next year? Apart from the fact that it will take me until at least May 2023 to stop writing “2022” in the date field of any paper contract, what else lies ahead?

What does the future look like?

As we’ve seen, predicting the future is so challenging that paid experts have vastly different results.

Here are some of my favourite historic predictions for you:

In Watson's defence, computers were the size of large rooms back in the day.

Predicting the future is difficult. You may be right occasionally, but I have yet to observe people do it with high accuracy and reliability.

Hopefully, this shows you you shouldn’t worry too much about the performance of your investments today or tomorrow, or even next year.

If you have a long horizon (at least 10 years) and invest in a diversified manner, you don’t have to worry about the day-to-day.

Focus instead on making sure you can save and invest in the first place. By building up wealth for the future, you get optionality.

Whatever that future may hold, your money will buy you options to live your life as you see fit.

If that’s not the best use of money, I don’t know what is.

Who will you be next year?

That’s the financial side covered. But what about you personally?

Typically, the end of the year also heralds to the arrival of NEW YEARS RESOLUTIONS.

Are you a resolution-kind of person? Do you manage to stick to them?

Do you set them, only to give up by February? Or do you avoid setting them altogether, knowing it may be a futile effort?

Many of us fail to form effective new habits.

To understand why, I am currently reading Atomic Habits by James Clear (thanks for the gift, Ale!).

I highly recommend reading the author’s book; it contains many interesting points.

What has stayed with me most is the role of our identity, or how we perceive ourselves.

Let’s say you want to quit smoking.

If a friend offers you a cigarette and you say: “No thanks, I am trying to quit.”, then you are in your mind still currently a smoker (who just isn’t smoking right now).

If you say instead “No thanks, I am not a smoker”, the results are mind-blowing.

It might feel weird to say “I am not a smoker”, if even yesterday you went through a full pack of cigarettes. Still, it works.

Mentally, you create an image of yourself. This image then influences how you behave; you will start behaving in a way that fits the image.

(I am personally putting this idea to the test by telling myself I am a rich person. Can’t wait to see the results 😂)

Jokes aside, it is a good idea to view yourself as a healthy person (so you make better health decisions) and a financially-smart-person (so you make better financial choices in 2023).

I believe you can do anything you put your mind to.

Why it matters

Predicting the future is difficult, if not impossible. In the grand scheme of things, it may not even be as relevant.

Don’t worry about what to invest in for next year. Ensure you diversify your investments and save so you have options for the future.

Spend your energy figuring out who you want to be next year. Leverage the power of identity to become an even better version of yourself in 2023!

The best is yet to come

Whether through psychology, better habits, more knowledge or any other method, I do hope 2023 will be your best year (and your best you) yet!

Thank you for letting me be a part of your (financial) betterment journey.

Your biggest fan,

Jonne