Five Cents Ten Cents

Posted: 17 Jan 2009 11:11 PM CST

You wake up. Something doesn’t happen the way you want it to. The baby throws up her milk. You burn your toast. You miss your bus to work.

Little things that you “expect” to go your way but doesn’t. It spoils your day.

Sounds familiar?

It’s normal to have expectations

We go through life with all sorts of expectations whether we realise them or not. Many times, we feel frustrated with life because what we expect doesn’t happen. In your journey towards financial freedom, you expect to be able to live within your means. You expect the investment you put money in to double in a few years’ time. You expect to be financially free in 10 years’ time.

There’s nothing wrong with having expectations. It’s important to set goals and strive for targets. I have set targets for this blog in 2009. I’ve looked back at 2008 to see where I’ve done well in my journey and where I need to improve.

But having unrealistic expectations about things you CANNOT control can leave you a very frustrated traveller on this road towards financial freedom.

Don’t cry over spilt milk

This morning my spouse got very upset because my daughter threw up her milk. This meant more washing and also the precious formula we fed her went to waste. I too would prefer my daughter to be able to keep her milk down, but because her appetite is not big, she has to have smaller feeds and sometimes throws up when she ingests too much formula/water without adequate burping.

What got me upset was not so much that my daughter threw up but the way my spouse expected all things to be smooth and perfect. She went a little ballistic and it made the morning more tense that it needed to be.

And so it is with many of us in our journey towards financial freedom which is another facet of our journey in life. I too get upset at times. I remember feeling so tired and frustrated that my daughter couldn’t fall asleep despite me patting her for 20 minutes when she was having a cold. I “expect” my daughter to sleep upon my magical patting technique. It works most days but when my daughter is not feeling well, it’s difficult to get her to sleep.

Life is not a straight road without obstacles and challenges. Our journey towards financial freedom will be disrupted. My net worth has declined during this period of global uncertainty and economic recession. Stock market valuations could take a few years to recover. Sure, like many people, I “expected” my net-worth to grow in a straight line up and up like superman. But the reality is that some of my equity holdings are submerged like aquaman swimming in the depths of the ocean.

Managing expectations

The principles of financial freedom have not changed. I still strive to live within my means. To save and invest as well as seeking ways to grow and protect my means. One of the things that the birth of my daughter has brought me is patience and an attitude of thankfulness. I lost weight and sleep in the initial months of her birth. My life now revolves around her and I have less time for myself. I learn to manage my expectations about the predictability of day-to-day occurrences since she’s around. But she has brought into my life lots of joy as well when I see her happy and playing in her cot!

I have also tempered my expectation for my goals in financial freedom. Because of higher lifestyle expenses coupled with the current economic situation, I would have to work longer as an employee than my target timeframe for reaching the financially free lifestyle. It doesn’t upset me a lot nowadays because I try to live more in the present even whilst planning for the future. I plan. But I enjoy each day too because living in tomorrow but forgetting to taste the simple fruits for today is a recipe for an unfulfilled life.

I enjoy the simple bus/mrt ride to work by focussing on looking at the scenery and people and forgetting about how crammed it is. I enjoy taking a few deep cleansing breaths now and then to center myself despite the tension at home at times. I enjoy the aroma of a simple cup of kopi from the cafeteria. I enjoy my daughter’s cute laughter as she bounces around her cot.

Expect the unexpected

I visit shareinvestor.com forum to learn and share with the investors, punters and towkays on the website. One term that pops up when equity pundits talk about direction of share prices is to “expect the unexpected”.

Really what this statement means to me is to build up the mechanisms to cope with whatever happens. The more I see the world from the view of “The Black Swan” and “Fooled by Randomness” written by Nicholas Nassim Taleb, the more I feel that the world is more random that we think it is.

Since we cannot control the random events, the next best thing is to control ourselves. The way we react to external events. As Taleb puts it, if you are going to be executed, make sure you shave is his advice in confronting events that are outside of our control.

Continue to live within our means, to save and invest, to grow and protect our means. These fundamental principles are enduring. In life, things don’t always happen as we plan, so we need to be aware of our expectations so that we don’t pursue financial freedom for the future but end up day-to-day being terribly unhappy with ourselves.

What is the hardest expectation to manage that you’ve encountered?

Be well and prosper.