On getting your hopes up
It was suppose to snow last Tuesday. It didn't.
Of course, it didn't.
The disappointment of the kids was palpable. I had tried to warn them to not get their hopes up, but when the governor proclaims a state emergency and the school closings comes in one after the other, it was an exercise in futility. For those raised in the Deep South, the prospect of snow is a novelty too great to hold off hope.
Alas, Tuesday was just cold. The kids got a day off, which they didn't complain about, but still, I felt a slight pang of sadness to see their hopes unfulfilled. I don't care for snow, but a child's joy at the frozen wonder is worth a slight weather inconvenience (on occasion).
It seems to me one of the more unheralded roles of a good financial adviser is the managing of expectations. For instance, if you are listening is to a blowhard on the radio talking about his 12% mutual fund returns, you would really benefit from a voice of reason. You might get 12% once and a while but you shouldn't be expecting it. Not these days
If your financial plan is built on getting 10-12% annually from your investments, I suggest you start shopping for another planner, and change the station on the radio. There is disappointment of no snow and then there is going broke, and that, is a whole other level of disappointment.
Facing some financial decisions of my own, I find myself needing to talk to people who can offer a different perspective. People who care about me. People who I trust. People who have demonstrated in their life a history of making more good financial decisions than bad ones.
I want to talk with people who can see my weak spots, where my emotions are interfering with my rationality. I want people who can rein me in when I am overreaching or offer me a push when my fiscal conservatism is actually preventing the growth of my wealth. I want someone who can craft a reasonable expectation. Even advisors need advisors. Not robots, but humans.
There is nothing wrong with hopes, dreams, ambition or risk taking, but keeping your expectations grounded is helpful. Even as I write this, I can hear the arguments.
"You are squashing the risk that drives innovation."
"You are dumbing down or lowering the bar."
"You are anti-capitalist."
"Why you settling?"
Fair enough, I probably need to think through all this. But live in the South long enough and you will have as many "no snow" days as you have days with snow. But when it does snow, the surpassing of expectation allows even an old curmudgeon like me to feel a little wonder. I would prefer to live a life surprised by the joy of expectations passed, than the life of feeling failure, discovering that I once again came up just short of an unreasonable goal.