“Think in decades. Plan in months. Execute daily.” Simon Alexander Ong

Hey there, good morning

Last week of school for the kids! As the seasons of life seem to change so quickly, so too do our days and weeks sail by.
We are always in a state of growth and change and today, it seems, there are economic and social forces in play that have us amid an unprecedented generational transfer, socially and economically.

In our work at Henderson Family Wealth, I have the privilege of working with clients from all walks of life and experience. Despite the fact that we all come from a different place, there are certain commonalities that we all share. One common theme that threads between us all, whether we are entrepreneurs, executives, or enterprising families, is that we all benefit from maeking time for planning, particularly given the fact that we are always preparing for or entering a “next chapter” or “next act” in this one precious life.

Despite the fact that 99% of us would agree that planning for the future and being prepared for the opportunities and challenges ahead is prudent for our future…..and the future of your family and perhaps your business. Yet, according to a recent CEPA survey, 94% of us have no written personal plan for our next chapter in our lives. Next chapter transitions take many different forms; a business exit, a family transition, a retirement, a career shift, or a life change. Any transition – positive or negative, expected, or unexpected – can leave you unmoored.

“Plans are of little importance, but planning is essential.” Winston Churchill

Of course, as change approaches us, you’ll want to find your footing, but you also want to make sure you’ll be standing in the right position. It doesn’t matter who we are, we are all preparing to exit one chapter and move on to the next leg of our journey. Your life is a long series of exits and entrances, a long series of new beginnings. Only as we become more self-aware, as we mature, and as we develop our life’s wisdom through experience, it’s then we can reflect back and understand the string of experiences and the importance of being prepared. While also ensuring that you are living a life that provides you purpose and meaning.

The Japanese have a wonderful word for exactly this – ikigai – the intersection of what you are good at and what you love doing. Your reason to jump out of bed every morning. It’s thought to be the secret to a long and happy life too, and centers on the central core of making life meaningful. Ikigai is a Japanese word that roughly translates to “a reason for being”. This concept is a compound of two Japanese words: “iki”, meaning life, and “kai”, meaning something to the effect of fruit or result. Most have taken this to mean a reason for living or a meaning for life.

Psychologist, Katsuya Inoue, has identified ikigai as a concept related to two branches: first, the “sources or objects that bring value or meaning to life” and second, “a feeling that one’s life has value or meaning because of the existence of its source or object”.

So, ikigai can be a person, place, thing, or feeling…..it can take many forms, but in any of its forms the results are positive. Your ikigai is what gets you up in the morning and the secret to creating your next chapter may be within your ikigai. Whatever you do to create a sense of meaningfulness in your next chapter, it could be something small or as big as you choose to make it. What matters is that it fulfils you and provides a sense of purpose. But connecting with that will enable you to create the magnificent new chapter in life that you crave. I have some tips below that can help get us started, and what better time to sit down and think about what your next act will be and understand that you have the power to write the script. It’s time to start planning.

“Not in doing what you like, but in liking what you do is the secret of happiness.” J.M. Barrie (August 1933)

And now, to the Markets

Global markets continue to behave reasonably well as measures of equity volatility sit near multi-year lows. This is encouraging given some new uncertainty around interest rates. The U.S. Federal Reserve, Bank of Canada, and European Central Bank all provided policy updates over the past few weeks. While there were some differences as one would expect, there was one consistent message: inflation remains an issue and they aren’t quite done with rate hikes.

The Fed decided to keep interest rates on hold for the first time since early 2022 (previously, it had hiked rates at ten consecutive meetings). This action had been well telegraphed and came as no surprise to the market. Nevertheless, comments and projections made by the committee caused a bit of a stir as investors were left to digest some new information. First, Chairman Jerome Powell tried to indicate the pause was aimed at slowing the speed at which interest rates have been rising over the past year, rather than officially marking an end to their rate tightening campaign. Those comments were supported by the Fed’s updated projections which suggest the committee still expects to raise interest rates by as much as half a percent through the rest of the year. Moreover, the Fed raised its estimates for economic growth and inflation and lowered its forecast for unemployment this year as it acknowledged the resilience of the U.S. economy in the face of much tighter financial conditions. They did lower their forecasts for 2024, believing challenges will eventually arise as rate hikes take their toll.

Meanwhile, the Bank of Canada, which was one of the first central banks to begin its rate tightening campaign in 2022, and one of the first to pause earlier in 2023, resumed its rate increases just over a week ago. More interesting were comments made in the official statement which suggested they have concerns inflation could get stuck materially above their target, and that policy may still not be restrictive enough to cool demand. This clearly leaves the door open to more interest rate increases in the months to come.

Most recently, the European Central Bank continued with its rate hiking campaign by increasing rates for the eighth consecutive time. In some ways, the ECB is playing catch up as it was slower to initially raise interest rates last year. The region continues to see various measures of price pressures that are higher than what are being witnessed in North America. As a result, the ECB was clear with its intentions going forward, saying that “we are not thinking about pausing”. It remains committed to getting inflation back closer to target but acknowledged it will take time as it doesn’t expect that to happen until 2025.

These recent updates highlight the quandary that faces central banks. On the one hand, the resilience of the economies can be construed positively as it suggests consumers and businesses have adapted reasonably well to higher interest rates. But on the other hand, the strength may mean underlying inflationary forces continue to percolate. The longer these pressures persist, the greater the risk they become entrenched in longer-term inflation expectations. As a result, we expect central banks to continue to prioritize getting inflation under control. We are hopeful this can happen without too much more intervention in the form of rate hikes but remain mindful that further increases raise the odds of an economic capitulation at some point in the future. One thing to keep in mind as we head into the next chapter of the markets is that, with the right game plan, there is opportunity in a higher rate environment and there is always opportunity amid uncertainty.

“Plan for what it is difficult while it is easy, do what is great while it is small.” Sun Tzu, The Art of War

As we head into the week, and you start to think of that next chapter in front of you, here are a few quick tips for finding purpose in your planning

Know your priorities and approach the future with intention

Spend some time getting clear about the future that you would like to create. What are you looking for that you don’t currently have? Do you want more time to spend with your family? Do you want more financial security? Are you dreaming of starting your own company? Do you crave more freedom to pursue your creative interests? Figuring out what your priorities are is a critical place to start. Know what you truly want, then you can feel confident taking the next step. Once you figure out what you truly want, ask yourself, what am I willing to give up in order to achieve these goals?

Do a little exploring

Once you figure out what you want to do, spend time doing a situational analysis to gather context and data. Meet with as many people as you can to learn how to best chart a course. Ask for introductions to their colleagues who can provide even more context to help you decide where you want to be spending your time, and your energy.

The key is to give yourself walkaway permission

You may have thought you wanted to write a book, only to find you don’t like the writing process. Or after taking one class, you could decide you didn’t want to get that PhD after all. You might take a job at a startup and learn that you miss the structure of a large institution. You might want to travel the world in retirement, but realize you enjoy being close to your family and friends. It’s all part of the learning process. Stay loose, and keep learning as you go.

A few more life next chapter planning suggestions…..

• Take some time for yourself and reflect on who you want to be
• Discover your priorities and make time for them
• Give yourself some space from past routines
• Make a list of all the things you want to accomplish in your next act
• Read new books
• Keep an open mind
• Be patient with yourself and change

“Experience is not what happens to you; it is what you do with what happens to you.” Aldous Huxley

Be well and enjoy the moments

Derek