In Same as Ever, Morgan Housel dedicates a chapter to expectations. He writes:

What generates the emotion is the big gap between expectations and reality. 

When you think of it like that, you realize how powerful expectations are. They can make a celebrity feel miserable and a destitute family feel amazing. It’s astounding. Everyone, everywhere, doing almost any task, is just in pursuit of some space between expectations and reality.

Morgan continues:

Peter Kaufman, CEO of Glenair and one of the smartest people you will ever come across, once wrote: 

We tend to take every precaution to safeguard our material possessions because we know what they cost. But at the same time we neglect things which are much more precious because they don’t come with price tags attached: The real value of things like our eyesight or relationships or freedom can be hidden to us, because money is not changing hands. 

Same with expectations—they’re easy to ignore because their value isn’t on a price tag. 

But your happiness completely relies on expectations. 

Your boss’s impression of your career relies on them. 

Consumer confidence relies on them. 

What moves the stock market relies on them. 

So why do we pay so little attention to them? 

We spend so much effort trying to improve our income, skills, and ability to forecast the future—all good stuff worthy of our attention. But on the other side there’s an almost complete ignorance of expectations, especially managing them with as much effort as we put into changing our circumstances. 

Imagine a life where almost everything gets better but you never appreciate it because your expectations rise as fast as your circumstances. It’s terrifying, and almost as bad as a world where nothing gets better.

Morgan’s closer:

One is the constant reminder that wealth and happiness is a two-part equation: what you have and what you expect/need. When you realize that each part is equally important, you see that the overwhelming attention we pay to getting more and the negligible attention we put on managing expectations makes little sense, especially because the expectations side can be so much more in your control. 

The other is to understand how the expectation game is played. It’s a mental game, and it’s often crazy and agonizing, but it’s a game that everyone is forced to play, so you should be aware of the rules and strategies. It goes like this: You think you want progress, both for yourself and for the world. But most of the time that’s not actually what you want. You want to feel a gap between what you expected and what actually happened. And the expectation side of that equation is not only important, but it’s often more in your control than managing your circumstances.

Expectations don’t only change one lifetime—they can alter the course of multiple generations. The first time I started this exploration was when I read Robert Caro writing about Lyndon B. Johnson’s father buying a ranch and facing two years of drought, plunging his family into destitution. It seemed like a decision based on a false sense of optimism—a dream. 

At the same time, a few years later, LBJ himself made a prediction, “Someday, I’m going to be President of the United States.” His teachers and classmates laughed at him.