Do Less Predicting, Do More Preparing

Abstract：The text emphasises preparing over predicting in the face of an uncertain future. Morgan Housel and Nassim Taleb advocate building extra buffers against unforeseen risks, such as saving more and assuming lower returns. Managing expectations is equally vital; high expectations can undermine happiness even in times of growth. Citing Charlie Munger, the piece notes that low expectations foster resilience and contentment. Housel’s formula—Happiness = What you have / What you expect—reminds us to focus on expectations we can control, treating gains as bonuses and losses as normal, thus enhancing satisfaction and stability in life.

Facing an unpredictable future, what should we do?Morgan Housel’s advice is: “Do less predicting, do more preparing.”The logic behind this is straightforward: since accurate prediction is impossible, relying on forecasts has little value. As The Black Swan author Nassim Nicholas Taleb says: “Reduce your investment in prediction, increase your investment in preparation.” Moreover, “do more preparing” means preparing beyond what you think is enough, because we often only prepare for foreseeable risks, while the real dangers are the unseen ones. Preparation should include extra buffers. For example, in personal finance, your savings should exceed your planned target. Debt should be lower than you think you can handle. If you expect an 8% annual investment return, base your plan on a more conservative 4%–5%, so it works even under lower returns.

Beyond “do less predicting, do more preparing,” Housel also proposes: “The first rule of happiness is low expectations.” Studies show that income satisfaction largely depends on comparisons with others. Even if overall income rises, if expectations grow faster than the economy, happiness can decline. The same applies to stock markets and careers: good news above expectations triggers positive reactions, while growth below expectations can lead to disappointment.

Therefore, managing expectations is essential. When asked about the secret to happiness, Charlie Munger replied: “Low expectations are the first rule of a happy life.” He stressed that unrealistic expectations lead to misery, whereas reasonable expectations and acceptance of outcomes foster resilience and contentment.

When thinking about the future, Housel reminds us of this equation:Happiness = What you have / What you expect.We often focus on what we will have, neglecting expectations—a factor we can control. Sometimes, instead of anxiously chasing more, it’s better to lower expectations: treat “not getting” as normal and “getting” as a pleasant surprise. This mindset can make life much happier.