1. I understand that risk plays a role in every facet of my life.
It’s everywhere! I have learned to make tradeoffs with which I’m comfortable. I’ve accepted that not everything is going to turn out the way I wanted. My first attempt at getting a network sitcom on the air was over 20 years ago. I have a show on the air now, but I might not next year. That’s what I signed up for. And it takes me to my next point…
2. I’ve learned to set realistic expectations.
I’m going to work as hard as I humanly can to achieve my goals, but I understand that there are so many things outside my control. Three years ago, I created a show about an Afghan interpreter who lives with his Marine best friend, but I didn’t know that, at the start of Season 2, Kabul would fall in a weekend and half my staff would need to devote all their time to saving their siblings while the rest of the staff wrote an episode inspired by their actions. I didn’t plan for that. There are many, many things in all our lives for which we cannot plan. But we can hope for the best and plan for the worst. The last 18 months of this pandemic have demonstrated that to all of us in a uniquely powerful way. Part of having realistic expectations is understanding there are things that we can control and there are things that we cannot control. One of the things I’ve learned from Dimensional founder David Booth is that I should think of my achievements in terms of the quality of the decisions I make, not necessarily their outcomes. Because, in many instances, the outcomes don’t depend on our actions.
3. I’m optimistic because I trust markets.
All these people and companies are trying to buy and sell different things—houses, phones, insurance. All available information gets put into the price. The market price is what something is worth right now. If it’s higher or lower tomorrow, that’s because of new information. Now I don’t pretend to have any idea whether markets will go up or down tomorrow. That tends to be where I think people get into a lot of trouble, because they’re trying to time the market. There’s just no evidence that people can buy low and sell high, time and time again, at a rate greater than luck.
But this doesn’t mean that investors should throw in the towel. History shows that, over the long haul, markets have trended upward. No guarantees, of course—you have to have the realistic expectations that I talked about in point No. 2. But if I can be a long-term investor in my investment portfolio, my home, my relationships, my children, my work—absolutely everything in my world—then I have a greater chance of success.
I know I might fail in any one of these different categories at any given time, because I understand risk. I understand what it means to have realistic expectations, and I’m comfortable with my approach to trying to harness the power of markets.
This is a way to hold my breath when I am under the water and smile when I am riding the waves.
This year was supposed to be my 20th wedding anniversary. But my marriage ended six years ago. The divorce was the worst thing that ever happened to me. Until it was the best thing that ever happened to me.
After many stumbles, I met a partner whom I love and with whom I have made a life I could never have imagined. All thanks to uncertainty. We met on a dating app. (See No. 3—I am optimistic because I trust markets!)
Uncertainty can pull you under the water, or you can choose to ride its wave. Most of us will experience both. Human beings are subject to more uncertainty than we’d like. But the sooner I accepted this truth, the sooner I found a way to hold my breath when I was underwater and smile when I was riding the wave. And you can do it, too.