Throughout human history, certain years stand out more than others. This can be attributed to economic factors, technological advancements, political events, or unexpected occurrences. While predicting when such a year will come is challenging, few years present as much potential as 2025.
In this article, I will explore some factors that could make 2025 significant and how you may benefit from it.
1. Economic Factors
Since 2008, governments worldwide have increasingly relied on easy money through lower interest rates and increased government spending. Originally, this was intended to help their economies recover, but it later became a way to satisfy citizens. The COVID-19 pandemic only sped up this trend, ultimately resulting in rampant inflation and rising deficits.
Higher interest rates tackled the inflation problem, which worsened deficit issues. It’s easy to see why. Deficits are just a more complex way of saying you need to borrow money, and as anyone with a loan knows, being in debt is challenging when interest rates go up.
The next step involves reducing deficits and borrowing. This means raising taxes or cutting spending. Europeans are emphasizing higher taxes, including wealth taxes. Meanwhile, the U.S. intends to cut spending through initiatives like the Elon Musk-led DOGE. Both strategies carry risks, such as public backlash and the potential for slowing economic growth, possibly leading to a recession.
2. Technological Advancements
Technological innovation is progressing swiftly, with several key areas poised for breakthroughs in 2025:
• Artificial Intelligence (AI) is rapidly transforming industries from healthcare to finance, and 2025 is anticipated to bring further advancements with the release of the next generation of Large Language Models (LLMs). This will have significant implications for productivity, employment, and social stability.
• Self-Driving Vehicles: After decades of unmet expectations, fully autonomous self-driving vehicles have finally arrived. Alphabet, the parent company of Google, is already operating its Waymo taxi service in several U.S. cities and expanding rapidly. Tesla is not far behind. As I’ve noted many times before, changes in transportation systems will impact sectors ranging from retail to real estate.
• Robots: With self-driving technology already available, autonomous robots are not far behind. There’s a reason Tesla has a robotics division.
3. Politics
Trump, the most unpredictable U.S. President to date, will be in charge during this period. He was elected on a radical platform that included promises of mass deportations and a restructuring of the federal bureaucracy. Meanwhile, established political parties in Europe and Asia are losing ground to rising populist movements.
Nigel Farage’s Reform Party in the UK is currently polling either equal to or above the Conservatives. In France, Marine Le Pen’s National Rally is the largest single party, while the AFD in Germany is experiencing unprecedented support. In Japan, the LDP, which has held power almost continuously since the 1950s, has lost its parliamentary majority, and in Korea, the President was recently arrested for allegedly attempting insurrection.
4. Black Swans
We may have already encountered our first black swan. The California fires have caused hundreds of billions of dollars in damages and could permanently alter the insurance and real estate industries in the wealthiest state in the U.S. Don’t expect this to be the last black swan event we witness in 2025.
