On Sunday I went for a bike ride with Ami (my 3-year old daughter) along the river to a café and playground. Because my phone is now also a credit card, I don’t have to take a wallet, just my phone and some cash.

I put my phone in the pocket of my cycling top … and lo and behold, there was $50 from the last bike ride I’d been on. Bingo!

I noticed I was irrationally happy about it. So I did an experiment, and looked up the ASX 200 Index (roughly the Australian equivalent of the S&P 500 for my American friends). Turns out over the last 2 days it’s dropped 86 points, which has effectively wiped about $12k off our superannuation (our retirement savings).

Here’s the bizarre thing. I was over the moon about finding $50, and couldn’t really care about the stock market dropping. My net position over the two days was minus $11,950. If I found $50 in my pocket every week, it would take over four and half years to make up for the stock market loss of these two days.

Why is it so?

I think it comes down to expectations. I expect the market to move up and down. I don’t pay much attention, and don’t really care what happens day-to-day or month-to-month. I hope that over a decade it goes up, but beyond that I don’t have any expectations.

But I certainly didn’t expect $50 in my pocket, so that made my day.

Which once again goes to show we are all irrational about money.

And more importantly, it shows what a big role expectations play. Happiness around money (and maybe everything) has very little to do with an actual number, and an enormous amount to do with whether it’s more or less than you expect. So manage your expectations very carefully.