Dreams vs. Expectations

There are two ways to look at the future. One is by dreaming, the other by expecting. They are different in some significant ways.

Dreams tend to be positive. We dream of vacations, of promotions, of world peace and a child who pays for their own insurance. They are often visions of an unspecified future, of how we hope the world will be tomorrow, next year, or simply someday. Dreams pull us forward, give us hope, and remind us that tomorrow is always a new day.

Expectations tend to be neutral. We expect a promotion and expect rejection. We expect dinner to be ready when we get home and expect an 8.3% average annual return on our IRA. They are visions of how we know the world will be at a specific time in the future. Expectations allow us to operate today as if tomorrow were not uncertain.

Both dreams and expectations are part of our lives. We run into trouble, however, when our expectations overwhelm our dreams. When our view of the future is framed in expectations, disappointment is nearly guaranteed. Where dreams keep us hopeful, expectations can lead to cynicism, as the world almost never unfolds the way we "know" it will.

So where are you at? Do you have expectations or dreams? What areas of your future need to be shifted from one category to the other?

Net Present Value

Net Present Value (NPV) is a powerful measure that businesses use all the time. For those that do not use it, NPV is the value of all future revenue minus all future costs, both discounted to the present day using the time-value of money. Using NPV, decisions can be made based on a longer-term view than simple up-front cost and benefit.

The trouble is, I ignore this in my everyday life. Yet it can make a huge difference. Paying twice as much for a jacket that lasts four times as long makes sense, except that I am cheap, and I rarely look beyond my wallet.

Two lessons come out of this.

1. Think about the future. It usually does not take much thought or time, but the decisions we make today matter (both purchases and otherwise).
   
2. Buy Avalanche Wear. I bought an Avalanche fleece vest many, many years ago only because it was on sale. Beyond making me think about this question, it has been my go-to mid-weight warmth in the Grand Canyon, on ski slopes, and around town. It has been the best outdoor clothing purchase I have ever made (and I have made a lot).