New for 2025, I pretended for a second that my crystal ball was clear. And that I could read the tea leaves and make financial predictions that are worth more than the pretend paper I write them on. I made my best 10 financial predictions that I was most confident in at the moment (January 2025). And I shared a bit about why I thought these guesses would come true.

So now is the time to go back and see how I did. Was I mostly right or wrong? Did my thoughtful explanations and rationalizations hold up? Should I create a “Frey fund” because I am the one exception to the rule that active investing just doesn't work??

Let's see…

N.B.: I am writing this post a few days before January 1. But the general trends should hold up.

Assessing my 10 best financial predictions for 2025 

Let the games begin!

1. My prediction: The S&P 500 will end with positive returns, but less than it has been the past 2 years

The reality: Year-to-date, the S&P 500 is up 16-17%. Still positive but less than previous years which were >20%.

From 2022-2023, the S&P 500 returned 24.23% and 23.31%. I saw a lot of people predict that the S&P 500 will return negative in 2025. Given a recent cache of economic markers that returned more positive than expected in early 2025, I thought the overall market would stay in the positive in 2025.

Plus, if you look historically, there is generally a dip in the positive return of this index before a slip into the negative returns.

My best guess was that returns would be in the 5% range.

The verdict: So I was in the right general direction but way off on the actual number. Let's not fire up the “Frey fund” just yet… I'll give myself 1/2 credit on this one…

2. My prediction: Interest rates will dip, but only a bit

The reality: The current 30-year fixed home mortgage rate is around 6.1-6.3% and the Fed rate goal is 3.5-3.75%.

At the time of my prediction in early 2025, the 30 year home mortgage rate was right around 7%. And the Fed rate was at 4.25-2.5%.

Money has been tight for a while now. And the Fed was expected in the short term to keep rates stable as they rode out the beginning of the new Trump administration. However, inflation did ease in 2025. And Americans remain tired of money being locked up.

My prediction was that rates will drop a bit in 2025. I guessed that we will see mortgage rates get steady in the 6% range.

But I predicted that we wouldn't see things drop into 5% and certainly not into the sub-4% like in 2020.

Verdict: I was pretty spot on with this one! Rates did drop, but not by a ton. And home mortgage rates for 30 year loans are stable in the 6% range. Full credit here!

3. My prediction: Bitcoin's value will finish below $90,000

The reality: BTC is currently valued at $89,537.62

Bitcoin was trading above $100k when I made this prediction. But I called that its value would see a dip of 10% or more in 2025.

Why?

Because I still didn't know what it was. It bills itself as currency. But it trades like a commodity. And it's really neither. Even after I did a lot of research into it, I still didn't totally get it.

My best guess was that the tulip craze surrounding crypto in general and in Bitcoin will calm a bit, dropping its value.

Verdict: Score another one for me! I was spot on here. Even if the value rises a bit over $90k before the year is out, BTC definitely saw another volatile and overall down year after reaching a high near $120k. However, I did not predict that I would start investing in BTC as an experiment in 2025…

4. My prediction: Public Service Loan Forgiveness will survive, but will be altered

The reality: PSLF continues to survive. In fact, I finally received my PSLF in 2025! However, the loan system has undergone dramatic changes detailed here.

When I made my predictions, there was great concern that the PSLF program, in which 10 years of payments while working in a non-profit medical institution, results in forgiveness of the rest of the loan amount, would end in the new Trump administration.

I believed that the PSLF program would survive in 2025. I just couldn't believe that unwinding it completely would be possible or popular.

But I did think that the program would change in significant ways. First, I thought there would be additional restrictions and requirement for successful employment certification for doctors entering into PSLF. Further, I said I wouldn't be surprised if a cap was put on the amount of forgiveness achievable.

Verdict: Another one that I was pretty darn close on. PSLF did survive but the federal student loan program did change significantly and the government did put a cap on the amount of federal loans that a professional student (AKA med student) could take out over their education, effectively limited the amount of loans that could be forgiven.

5. My prediction: Rent prices will not increase

The reality: Rent prices rose on average from 0.4-2.3%. The average rent is now around $1,700.

The average rent in the US when I made my predictions was around $1,500. Now, there was and remains a huge variability obviously. Rent in Buffalo, NY is way less than this amount. Rent in NYC is much, much more than this.

However, rent prices are something of great interest for investors in real estate. For active investors like me, the impact is direct. Higher rents means greater returns. Lower rents means lower returns. Now, for a passive real estate investor, the impact is a bit more indirect but just as important.

A few years ago, as inflation skyrocketed with an influx of stimulus payments, rent skyrocketed as well. I have seen rents stabilize over time. However, they have still increased at a reduced pace. 

But, in 2025, I predicted we would see rents essentially stay the same or decrease. The economy was in rough shape and people were having a hard time. What's worse for real estate investors than lower rents? Evictions and vacancies. The alternative is to lower rents.

The reality: I got this one wrong. Which is good for me as a real estate investor but not great for renters, many of whom I know continue to struggle. I believe the reason for this is the continued lack of affordable housing and the high cost of buying a home that has driven the rental market.

6. My prediction: Bonus depreciation will make its comeback

The reality: It's back at 100%!

By hiring a cost segregation company to “cost segregate” an investment property, you can divide items and parts of your property that actually depreciate to $0 in much less time than the standard 27.5 years.

After doing the cost segregation, bonus depreciation allows you to claim much more depreciation of value for your property. You can use these massive passive losses to offset more passive gains or carry them forward to future tax years. The TJCA of 2017 introduced 100% bonus depreciation which began to decrease and then phase out in 2023.

You can learn more about cost segregation, bonus depreciation, and Real Estate Professional status here.

I believed that 100% bonus depreciation will come back. Before the 2024 election, there was bipartisan legislation to bring this back. As a housing crisis remains prevalent in the US, I expect the government to incentivize the creation of housing. 100% bonus depreciation is a powerful incentive.

I felt strongly that we would see it come back in 2025.

Verdict: I was spot on! 100% bonus depreciation came back as part of the OBBB.

Now for some quick hitters…

7. US stocks will outperform international stocks

The US seems pretty unstable or at least less unified than ever at the moment. But the rest of the world is maybe even less stable in a geopolitical sense. I think this will impact world economies and we will see higher returns here than abroad.

Verdict: I was dead wrong here. International stocks outperformed US stocks, highlighting the importance of global diversification in your portfolio. Thankfully, I still carry a highly international component in my portfolio…

8. Small value stocks will continue to outpace the market

Small value stocks have historically outperformed the overall market returns. The reason is that they incur greater risk. And greater risk should be compensated with greater potential return.

And while potential return does not mean real return, I expect this relationship to persist in 2025.

Verdict: Wrong again! Small value stock indexes like VBR gained 10-11% in 2025. Still good returns, but trailing the overall market.

9. Cathie Wood's ARK fund will trail the S&P 500…again

Her ARK fund was the hot fund in the early 2020 and Wood was hailed as the next investing guru. 

Ah, but yet again, she ended up just being in the 20% that outperformed the market average by sheer luck. And that luck eventually ran out. While her fund returned near 11% in 2024, it trailed the S&P 500 which returned near 24%. 

That means everyone who invested in ARK received half of the returns they could have by investing passively like I talk about here. Yikes.

So, for the one I went purely by the odds. There's an 80% chance that the market does better than Cathie. I'll roll those dice.

Verdict: I'm taking a beating here at the end. ARKK actually has seen returns >40% in 2025 YTD. Doesn't mean I'm changing my stance on active investing. But she did outpace the overall market in 2025…and it still doesn't mean a thing for 2026…

10. The New York Jets will win the Super Bowl

As I made this prediction, my team, the New York Jets, had 10,000:1 odds of winning the Super Bowl next year. 

And like Kevin from The Office says, “if anyone ever gives you 10,000 to 1 odds, you take it!”

Verdict: This would have been a very bad investment. The Jets stink again this year. But maybe next year?

How did I do and what am I doing after reviewing my predictions?

In terms of how I did, it turns out that 45% of my predictions came to fruition. And that is about what you would expect by chance alone!

And in terms of what I am doing about it…Nothing!

Hopefully I got a little chuckle out of some of you for my last prediction. It seems ridiculous right? Of course the Jets wouldn't win the Super Bowl. But, imagine that by some miracle they actually did? We could have made a killing by betting on them!

Thankfully, most of us are sensible enough to not wager anything financially significant on that however.

But conversely, many of us remain willing to gamble our financial future based on either our own predictions or those of our financial advisors, friends, or even colleagues in the physician lounge.

That is not a recipe for optimizing your path to financial freedom.

So what should we do?

It's natural to make predictions and forecast everything in our lives. No matter how rational we think we are, we do it anyway. And we all fall into the fallacy of believing that we really “get it” and can make accurate predictions. 

But the reality of it is that we can't. And we don't. And no one is an exception. Especially when it comes to financial predictions. The data proves it.

This dichotomy between our rational and irrational selves presents a conundrum. No matter how much we say in the moment that we will be rational, when push comes to shove, we can't trust ourselves to actually do it.

How can we combat this in our personal finances so that we stay on the path to financial freedom?

The answer is simple, it's your written personal financial plan

Your written personal financial plan is your guide to your financial goals as well as how you will achieve them.

And the beauty is that you can write it when you are rational and not tempted by any of your “can't miss” financial predictions. If you create a plan that wins no matter which prediction comes true, then you cannot lose. For example, I thought US stocks would outperform international stocks. But I still invested a portion of my portfolio in international. Win-win.

This way, when your irrational mind takes over, you can just review your plan and remind yourself that you are already pretty much guaranteed to reach financial freedom as long as you keep following it. There's no need to chase waterfalls. Just stick to the plan.

Problem solved!

And that is exactly what Selenid and I do. Despite feeling confident in my financial predictions at the time, I got over 1/2 wrong. And I enjoy reading and educating myself on this stuff! So it's a good thing we are not adjusting any aspect of our financial plan to reflect my predictions now or in the future. (And you can find our actual written financial plan right here!)

Instead we just keep calm and invest on.

In the meantime, here are some other posts to help you create your own written financial plan:

• How To Create Your Financial Goals and Priorities
• The 7 Biggest Financial Enemies of Doctors
• The 7 Step Basic Formula for Wealth as a Physician
• How Doctors Can Calculate Their Expected Net Worth?

What do you think? What financial predictions do you have for 2025? How confident are you in them? Would you alter your financial plan based on them? Why or why not? Let me know in the comments below!