Small Expectations

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One of my favorite movies of all time is titled, “The Theory of Everything”.

The biographical drama chronicles the tumultuous life of English Physicist Stephen Hawking, beginning with his doctoral studies at Cambridge.

When Hawking was just 20 years old, he was diagnosed with Amyotrophic Lateral Sclerosis (ALS), a degenerative motor neuron disease that swiftly reduces one’s ability to have voluntary control over their body. Interestingly, the disease does not affect one’s intelligence or brain capacity.

At the time, doctors told Hawking he had only 2 years to live.

Undeterred, the young academic continued with his ambitions to change how we think about the universe.

Not only did Hawking earn his Ph.D., but he ended up living to a shocking 76 years old, 50+ more years than doctors originally presupposed. Along the way, he made incredible discoveries on black holes & quantum physics that laid the very fundamentals of how scientists view space today.

Despite being wheelchair-bound and only able to communicate using a specially made device, Hawking was known for his unwavering sense of humor and positive energy.

In interviews, he is quoted multiple times saying how he became a happier person after he developed the condition.

How could someone in Hawking’s debilitating situation have such a positive spirit?

In one of his final interviews in 2004, the renowned scientist beautifully laid out why.

You see, Hawking understood very early what many people today go to the grave without realizing: your level of happiness is dictated almost entirely by your expectations.

Humans today, hands down, across the board, are better off than any other generation in history.

From life expectancies to deaths from natural disasters, to purchasing power, humans have endeavored to create a reality that (though still far from perfect) puts those of the past to shame.

People today romanticize historical times in the U.S. like the 19th-century Antebellum period or the Roaring Twenties as these eras of great prosperity and high quality of life for all.

Yet, compared to now, it’s not even close. Think about all of the inventions that have improved standards of living in the past 150 years.

Aspirin

GPS

Chemotherapy

Airplanes

Television

Computers

Phones

Sliced Bread (game-changer)

The list could go on and on and on.

The business tycoons of the Gilded Age had all of the money in the world but none of these modern inventions that are so crucial to life today.

Prominent oil barons, steel magnates, and bank financiers at the time were worth tens of billions apiece in today’s dollars.

Industrialists like Rockefeller or Carnegie were wealthy beyond comprehension, yet likely had a standard of living similar to or even lower than that of the middle-class American today.

That being said, do you think that either of these billionaires would trade to live a middle-class life in the 21st century?

I doubt it.

Compared to everyone around them, they were on the top of the world. Life couldn’t be richer.

Stick them in 2024 as the average American and despite having many more luxuries than they had in the 19th and early 20th century, they would likely be miserable.

In his podcast, author Morgan Housel lays out the idea that it is unlikely that middle-class Americans would want to live in Rockefeller’s shoes in the 19th century given all the modern luxuries we have today.

I feel the exact opposite.

In our status-driven and comparison-rampant world, the overarching goal for many is the same reason why most people would kill to live in Rockefeller’s shoes: to be better off than those around them.

We routinely set the benchmark of our success against our peers.

Intrinsically, we know that the “stoic” thing to do is to only compare yourself to the version of you the day before.

Despite this, it is incredibly difficult to avoid stacking up your merits and expectations against others.

The career promotions of those closest to us are plastered across LinkedIn while their 2-week “resets” in the south of France or Italy are all over our IG feeds.

The internet at large has exposed us to an even grander pool of people than those we know who are living lives of opulence and success we can only dream of.

It seems to me that across our personal lives and careers, we as a society hold these fantastically unrealistic expectations that are going to consistently lead us to disappointment.

I remember reading an article from CNBC last year that spoke to what college graduates expected to earn as their starting salary out of undergrad.

The average number was a little over $85,000 across all majors.

The real average salary?

$56,000.

For many graduates, they will be making more money than they ever had in their lives but will still be left with almost $30,000 of discontent.

This delusion between expectations and reality isn’t just apparent in starting salaries.

As tax season rolls around, many people are banking on thousands of dollars in withholding returns. A recent poll found that almost 2/3 of respondents expect to receive the same or more from Uncle Sam than they were granted the year prior.

Interestingly, the IRS reported that the average tax return this year is tracking at 29% less than the year prior. Just like college graduates entering the real world, taxpayers are in for a disappointing realization.

For many, this means that they can’t cover the credit card debt they thought they would be able to pay off, and more trips that will have to wait till “next year”.

When we rely on overinflated expectations to inform our decision-making, we put ourselves in dangerous positions.

If we come to expect outcomes in our own lives that are not guaranteed (like the value of our tax returns), we may not only disappoint ourselves but end up in financial ruin.

One of the most prolific examples of this is in investing.

This past week, the two largest cryptocurrencies by market cap, Bitcoin and Ethereum, reached their highest levels since 2021.

The adoption of crypto as a tradeable asset class by big banks in January of this year has created a seemingly euphoric buzz around these two tokens.

Hordes of retail investors pour thousands of dollars of their savings into these assets every day, with the expectation that if prices are going up, they will only keep going up.

To assure ourselves, we seek out opinions and Reddit threads that only affirm our position.

Before the crypto market crashed in June of 2022, millions of investors, some of which put their entire life savings into “shitcoins” like Shiba Inu (INU) and ApeCoin (APE), were utterly convinced their investments would pay off despite these tokens holding no intrinsic value.

Phrases like “HODL” and “Diamond Hands” created a mob mentality that everyone was in it together and nobody could lose. Even those who had seen their money grow to multiples of their initial principal chose not to sell, fearing that they could miss out on an even bigger rally.

When the market did crash, wiping out more than 2/3 of its total value in months and hundreds of billions of dollars for investors, lives were upended, jobs were lost, and retirement funds were wiped out.

Note: While I am no financial advisor and this is certainly not investing advice, when our expectations outgrow reality, we are frequently greeted with a kick in the a**.

When we set our expectations, “to the moon”, we are preparing ourselves for emotional disaster.

Now, I don’t think the solution to this problem is to simply set all your expectations to zero.

I can see how this would be effective, but living in a way where you struggle to believe anything is going to turn out how you want it to would be pretty miserable.

If we don’t believe we have the power to change our outcomes or make our lives better, it’s unlikely our actions will show otherwise.

I just believe we need to tone down our wishful thinking in favor of being rationally optimistic.

Like the stock market, most things in life go up and to the right over time.

Stay the course and what is good will turn out better, what is bad will turn out good, and the ugly will have you second-guessing your standards.

-John Henry

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