I went skiing this morning with a buddy. It is the end of ski season here in New Hampshire so we went out after to have a celebratory breakfast at our favorite local diner. The next table over was having a spirited discussion on their ski season and I found one of their comments interesting. He said, “you know how much I love to ski, but I am ready for this season to be over and spring to come.” Then the others at his table started laughing. “Last year you were complaining about the short [ski]season and now you are done early?” “”There is no pleasing you.” They all had a good chuckle at this. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free Expectations Drive our EMOTIONS This ski season was far from exceptional, probably could best be described as average. Last season was really short. Had the short season last year re-set his expectations for this year? Probably. This happens to us all. Back in the late 1990s, I remember hearing and seeing people discuss how Warren Buffett was old news, because the knew normal was 20% annual returns from the stock market. People actually thought that they were going to get 20% annual returns from tech stocks for the rest of their lives! Pretty funny, but that was what their expectations were set at because that was what was happening in the late 1990s to tech stocks. When I first started selling EIULs the 20 year look back was around 9%. I actually had people tell me that was way too low for them to consider because they were going to get 15% annually from their mutual funds. Fast forward to 2010. Since then I have had a healthy dose of folks whose expectations were around 6% annual return for the stock indexes. When they get better than that in their EIUL they are happy. Of course I always like it when my clients are happy, but the point is our expectations drive our emotions and ultimately our decisions. All those people who thought they were going to get 15% or 20% from their portfolio of stocks [or mutual funds]are pretty bitter now. They are most likely out of the stock market now. What they are doing with their money is anyone’s guess, but I bet it isn’t productive. Examine your Expectations A good exercise is to really examine your expectations. Are they based on what has happened most recently? What should they be based on? Setting you expectations properly is fundamental in being able to make proper decisions going forward. I often wonder if all those “gurus” in the financial world know how much damage they do when they set people’s expectations, for whatever strategy they are selling, off the charts. The same for the mutual fund sales people of the world. How many times have they shown clients a chart with a 10% annual return going straight up? What happens to their clients when that doesn’t happen? Well, we know, they quit or they sell at the wrong time or they get involved in fraudulent “get rich quick” strategies. Having reasonable expectations is CRITICAL If you have reasonable expectations, then you can expect good results. Unrealistic expectations [separate from positive dreams]lead to bad outcomes almost all the time. Spend some time with your expectations. Write them down. I do this every year and find it incredibly helpful.