What is the hidden ingredient in the recipe for success? Turns out it’s a little…
Alessandro Pluchino, an Associate Professor of Theoretical Physics, was curious as to why human intelligence and skill follow a “normal distribution” across the population, but wealth seems to follow the famous Pareto principle (the “80:20 rule”).
When it comes to money, it seems that the wealthiest 20% of individuals own 80% of the world’s wealth (and the other 80% of the population own 20% of the world’s wealth).
For example, is it skill or luck that Chris Larsen made $60 billion in only 5 years?
Probably a little of both…
But Pluchino and his team at the University of Catania in Italy wanted to prove it.
So they created a computer model.
The model was part of a research project that confirmed that indeed, distributions of wealth and talent are very different.
It turns out that talent is a factor, but not as much as luck when it comes to creating massive wealth.
In particular, we show that, if it is true that some degree of talent is necessary to be successful in life, almost never the most talented people reach the highest peaks of success, being overtaken by mediocre but sensibly luckier individuals.
How to Improve Luck with Money
So if you’re at least “mediocre” like most of us, the question is…
How do you become luckier?
When it comes to money, there are five ways I can think of to improve luck.
And none of them involve buying a lottery ticket.
1) Have a Clear Money Goal:
If you want to improve luck with money, have a clear goal about what you want.
A clear money goal is not something vague, like, “I want more money”, but something like “I will earn $150,000 in 24 months.”
Remind yourself of this goal every day, and track your progress… Like a pilot on a cross country flight.
The fact is, you are like an airplane on a journey.
You are off course 99% of the time… And you must make constant course corrections.
A pilot who is just one degree off course when flying from JFK to LAX would miss his target by 50 miles.
Combine this daily course correction discipline with luck improvement rules #2-5 below.
Scott Adams, the creator of Dilbert, describes in his book “How to Fail at Everything and Still Win Big” that he repeated his goals and wrote them down every day.
This helped him not only keep his goal in mind, but he believed the act of writing using a pen and paper helped make it real.
He believes that having the clear goal, and writing it down day after day, had a positive effect of making his goal(s) come true.
2) Meet as Many People as Possible Who Can Help You Meet Your Goal:
That pretty much sums it up. If you want to improve luck with customers, meet customers. Go where the customers are.
If you want to improve luck in meeting the person of your dreams, get out and meet more people.
Get out of your house, or office.
Stop staring at your phone… Start dialing instead.
Go to meetings.
Attend or start a meetup group.
Provide free consulting sessions around your business.
Ask for advice from smart people.
Do all these things… The idea is to put yourself in the path of the people who can help you get luckier in your pursuit of money and goals.
3) Become a Better Decision Maker
Decision making is a skill.
And there are several factors that can negatively affect your decision making skills… These could include your personal experiences or cognitive biases.
Indeed, your preconceptions about your abilities in certain areas may need to be revisited.
One way to improve luck with decision making is to frame decisions using the “10/10/10 rule” created by Suzy Welch.
The 10/10/10 rule requires that you ask three questions about your decision before deciding:
- How will I feel about this decision in 10 minutes?
- How will I feel about this decision in 10 months?
- How will I feel about this decision in 10 years?
Asking yourself these three questions puts distance between you and any emotions that may be unduly influencing your thinking.
If something seems risky now, but really it’s smart when you take the long term view, you might be better off taking the risk.
4) Try to Predict the Future
Advances in technology have been responsible for almost all the wealth creation in history.
From the Whitney’s “cotton gin” to Ford’s assembly line to Microsoft’s DOS system to Google and Facebook, technology has the power to create massive, power law type wealth.
What technologies could you start a business around, or expose yourself to, or write about or learn?
The Gartner “Hype Cycle” for Emerging Technologies from 2017 is a good place to start to try to improve luck when predicting the future.
What technology could you get involved with today that could create massive wealth 10 years from now?
5) Work Harder
Jocko Willink’s book “Discipline Equals Freedom: Field Manual“ is a fantastic guide for anyone looking to work harder.
A former Navy SEAL, Willink is one of the most disciplined, hard working and straight talking people I’ve ever heard or read.
He also has a great podcast.
Jocko advocates people improve luck by being more disciplined with themselves, which leads to freedom.
And freedom by itself is many people’s definition of success.
He advocates getting up early, working out, staying away from sugar, pushing yourself and taking “extreme ownership” of your life and responsibility. In other words, don’t blame anyone else for your problems (or successes).
A great quote, often attributed to Thomas Jefferson about luck and hard work is:
I am a great believer in luck, and I find the harder I work, the more I have of it.