“[Success] is 10% luck, 20% skill, 15% concentrated power of will, 5% pleasure and 50% pain”.

One of my favorite songs in high school :) But is it true? I think Fort Minor might have gotten the right mix of ingredients, but not the right weighing ratios.

Many successful people downplay the external factors and luck in their journey, and over-estimate the skill factor. Some even go as far as calling themselves “self-made” men, which I think is just delusional. There is no such thing as a self-made man.

I recently came across a case study on Coach Popovich, one of the greatest coaches, and probably one of the smartest guys in the NBA (he was rumored to be a former Soviet spy 😜). Under his leadership, the San Antonio Spurs has won 5 NBA championships in 20 years. The remarkable thing was that they have gone through many changes but were able to always adapt to new situations and kept coming up with innovative ways to win (Popovich even took advantage of the Globalization trend before everybody else), all the while maintaining a great culture at the core.

I was pleasantly surprised to learn that one of his messages to his players when facing adversity was: Be grateful. Understand that it’s a miracle that you can even play basketball at a high level at all. It’s amazing because these were some of best players in the NBA, guaranteed future Hall of Famers, and probably some of the most competitive people you can find on the planet. And he was telling them straight to their face that “hey, lose that f***ing ego, y’all are just lucky to be here.”

“Think about it. It all starts with the accident of birth. Because you were born to these parents or this area geographically, or this situation, you deserve more than somebody else? PUT THAT NOTION AWAY. That’s the most false notion one can imagine. But I think a lot of people forget that. They think they’re entitled to what they have. They don’t understand the opportunity that they have compared to somebody else. And they don’t understand the other person’s lack of opportunity, why he or she is in a certain situation they’re in.”

His message reminded me of Warren Buffett’s theory of the Ovarian Lottery. All his life, Buffett never believed he was special, he always understood that a large part of who he is totally depended on Lady Luck.

“I’ve had it so good in this world, you know. The odds were fifty-to-one against me being born in the United States in 1930. I won the lottery the day I emerged from the womb by being in the United States instead of in some other country where my chances would have been way different. “Imagine there are two identical twins in the womb, both equally bright and energetic. And the genie says to them, ‘One of you is going to be born in the United States, and one of you is going to be born in Bangladesh. And if you wind up in Bangladesh, you will pay no taxes. What percentage of your income would you bid to be the one that is born in the United States?’ It says something about the fact that society has something to do with your fate and not just your innate qualities. The people who say, ‘I did it all myself,’ and think of themselves as Horatio Alger— believe me, they’d bid more to be in the United States than in Bangladesh. That’s the Ovarian Lottery.”

Later on, Buffett and his good friend Bill Gates went on a tour to China. There he saw men whose job is to pull boats that carry others back and forth across the Shennong Xi river, day after day, night after night. It bothered him deeply, and he said to Bill Gates:

“There could have been another Bill Gates among those men pulling our boat. They were born here, and they were destined to spend their lives tugging those boats the way they did ours. They didn’t have a chance. IT WAS PURE LUCK THAT WE HAD A SHOT AT THE BRASS RING.”

So to summarize: there is no such thing as a self made man. Success in life depends largely on external factors and luck. Unlike Fort Minor, I believe the true percentage lies somewhere between 50% and 100%.

But it doesn’t mean you cannot improve your odds at winning.

Improving Your Odds: Put Yourself in the Position to Win and Avoid Being “Under the Gun”

Above I discussed the fact that most people underestimate external factors and luck in their successes. Now I will talk about the things I learned that we could do within our control, in order to maximize the odds of winning.

In poker, your position on the table is one of the most important things you have to be aware of. “Under the gun” refers to the position to the immediate left of the big blind, and is the first to act. Because this person has to act before seeing how everyone else reacts, he has the least amount of information and therefore has zero advantage. On the other hand, the person “on the button” has the biggest advantage because he is the last to act.

The term “in position” generally refers to a situation where you get to act after your opponent. Your odds of winning go up substantially when you play in position.

I believe the same concept applies in real life, with a few small differences.

  1. In poker, you get to be “in position” for free: simply by sitting for a few turns. In life, you have to work for it.
  2. You should strive to be “in position” as much as possible, and avoid being “under the gun” as much as possible.
  3. When you are “in position”, be aggressive. When you are “under the gun” or “out of position”, minimize risky plays.

Another interesting similarity between poker and real life is that luck typically compounds. It gets easier to win more hands when you are the big stack. Similarly, when you open one door via sheer luck, that door might lead you to another 10 doors that you did not have access to before. If you were born in Bangladesh but won the lottery to go to school in America, now you get access to things that millions of Bangladeshis couldn’t dream of. So luck compounds. The lucky gets luckier. (Unfortunately, it also works the other way around, misfortune compounds.)

The first time I became aware of being out of position in real life was when I escaped the confines of school. In a traditional and structured environment such as school, there are always clear goal posts and people who constantly remind you whether you are in or out of position (“hey if you don’t pass this midterm, you’ll fail the class”). But in the real world, there’s nobody to tell you. Heck, most don’t even know themselves whether they are in or out of position. The reasons: real life is complicated, there are no clear goal posts, unlike school. People value different things differently. And there are also so many possibilities that it’s impossible to know whether you are in position relative to everything. You could have a secret advantage that even you yourself are not aware of.

In terms of financial wealth, I first became painfully aware of being out of position when the 2008 financial crisis hit. Everyone can agree that was a bad thing to happen. However, if you were an investor, it was the perfect time to strike. “Be fearful when others are greedy and be greedy when others are fearful,” as Warren Buffett once said. There were many clear indicators that the market was massively oversold. I wanted to get into this opportunity so bad that I asked my parents to loan me some money, but they didn’t have any to give me. I just started my first job 3 months prior, and didn’t have any money either. I think many others were in a similar position like me, knowing that investing in an overly bearish market is likely a good investment, but couldn’t fork up the cash to do so. So there it was. One of the biggest investment opportunities available to the masses in a century. And it flew right by me.

Another example I’ve seen of being out of position is when people unintentionally put themselves “under the gun" by living on credit and buying things that they can’t afford. Many were clearly living beyond their means. The Atlantic reported last year that ~47% of Americans would have trouble coming up with $400 cash for an emergency. Some of those probably didn’t have a choice, and circumstances were outside of their control (as I have addressed above). But a large number of people also made bad financial decisions even when they DID have a choice.

Living beyond your means is a surefire way to be out of position for the rest of your life. You’re betting that your lucky streak will continue forever, which is never the case.

When I was little, I was mesmerized by the story of Mencius (Mạnh Tử) and his mother. As a little boy, Mencius enjoyed going out to play. His first house was next to a graveyard, so he would come home and copy what he saw, and would dig tombs and perform burial rituals. His mother was horrified, so she moved their home. Their second house was next to a market. This time he would go home and pretend to be a merchant. His mom was horrified too (historically merchants were perceived as the lowest and looked-down-upon class of people in Chinese society) and she moved again. Their third house was next to a school. You can guess the rest of the story :) He went on to become one of the most influential scholars in Chinese history (second only to Confucius). Needless to say, his mother knew how to play life “in position.”

(*Disclaimer: getting in position is not always about making money. There are other things you can get in position for, such as building up your knowledge base. But IMHO money enables you to do many other things you can’t possibly do without it :) At the minimum, it allows you to not stress out all the time and use your time more effectively. So financial independence is critical.)

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