Luck – the phenomenon said to bring about success or failure, good or bad, pain or joy in life, based on pure chance.
It's scary to think that major things in life like career, relationships, health, or wealth can be influenced by a force that's outside of our control. A lot of people try to deny it out of fear, saying that hard work alone is enough. The fact of the matter is that if you take a serious, honest look at life, luck plays a big role.
But that doesn't mean all is doomed; it doesn't mean that everything in life is up to chance. It just means that there are some things that are outside of your control. Instead of trying to fight it, the more productive thing to do is to embrace it and find ways to work with luck. That way, luck will help you to achieve your goals.
In learning how to work with luck, we must first understand how exactly luck plays a role in our lives.
Where luck plays
Luck plays a role in your life anywhere that there isn't absolute certainty of the outcome. In other words, unless you know with 100% confidence what the outcome of an action or event will be, then luck is going to be involved.
For example, there are some things that you may do or that might happen to you where the outcome is 100% certain:
- If I hand you a $5 bill, you know for sure that you've just received $5
- If you go for a 2-kilometer run, then at the end of it you'll know that you've just ran 2 kilometres
- If you write 300 words in your notebook, then you know for sure that you've got 300 additional words
In all of the above cases, luck has no effect because the outcomes are deterministic. There is no outside influence whatsoever.
However, those aren't the only kinds of situations you'll experience in life. Most things in life are not so straightforward:
- If you invest your money in the stock market, there's a good chance you'll make money... but there's no guarantee
- If you go to a networking event in your industry, you might meet someone that helps you land your dream job... but maybe not
- If you say hello to that cute guy or girl down the hall, they might like you back... but of course, you don't know that for sure
Such uncertainty becomes even more dangerous when you have expectations as many people naturally do. If you invest money in the stock market expecting to do well all of the time, you're in for a rude awakening. If going to that networking event doesn't work out, you'll leave feeling disappointed and dejected.
It would be nice if we could somehow control luck and guarantee the outcomes. Unfortunately, the world just doesn't work that way. Lady luck does as she pleases.
Some people will try to run away from luck by only participating in the guaranteed things. They won't invest or go to the networking events or ask that good-looking person out. While this may seem safe, it leads to a life of bore and underachievement. If you never take any chances, then you'll never have the opportunity to do or have anything great.
How to increase your luck
We know that we need to take some chances to live a great life. At the same time, such risk-taking will involve luck which we can't control. But there is one thing that is in your control: you can work in such a way that you increase the chances of luck finding you. Once you do, luck will be on your side more often than not helping you to thrive in the long run.
Here are a few ways to get luck on your side more often than not.
Shoot many shots
You can't guarantee that everything you try will work out. There are a whole host of variables outside of your control that are constantly in flux: the weather, the markets, the economy, your health (partially), your own mood, and the wildest of them all: people. The intentions and actions of other people can change on a whim, unbeknownst to you.
But there is one thing you can control: how many times you try; in other words, how many times you shoot.
- You can't know for sure if one networking event will work out. But by going to many, you guarantee that you keep giving yourself a chance to land a great job
- You can't know for sure if your business venture will work out on the first try. But if you keep trying, you always have a shot
We can summarise this as a simple rule:
Not trying gives you a 0% chance of succeeding
Trying gives you a > 0% chance of succeeding
Now that's easy math.
Keep shooting and you always have a chance.
A common piece of advice is to "work smarter not harder." While there is value to that, it doesn't mean that we should stop working hard altogether.
Working harder directly increases your chances of success with every shot you take. The more effort you put in, the better your results will be. The better your results, the more luck will find you.
- If you walk into job interviews totally unprepared, then you'll need a lot of attempts to get a great job. But if you study hard and prepare in advance, then you'll have a better chance of doing well in each interview. Eventually, you'll land in one that is the perfect fit for you
- If you try to start a business but then half-ass it, it will show through in your product. Some people may luck out every once in a while, but it's clear that the more work you put in, the better your product will be, and the higher the chances of people noticing and buying your product
Hard work increases your chances of success with every shot you take. Couple that with taking many shots and you'll be flying.
Go for breadth and diversify
When you work on something, whatever it may be, you are making an investment of your time and energy. You are making a bet that your investment will work out. But what if it doesn't? What if luck decides to go against you, for whatever reason?
The trick to protecting yourself from bad turns of luck is to diversify. Rather than make investments in a single direction, make investments in many different directions.
- Invest your money in different asset classes such as stocks, bonds, metals, real estate, or art
- Have multiple streams of income from a day job, side-job, business, freelance, or investments
- Try many different hobbies, network with people from different professions, experiment with different business ideas
Maximizing your breadth ensures that you never completely lose because you always have other options. It also exposes you to the luck available in all those different areas, in case one of them happens to be really great.
Margin of safety
Great investors like Warren Buffett have what is called a margin of safety – it's an extra buffer for their predictions that allows them to still win even when they're wrong. Instead of making investments based on precise calculations, you invest based on the assumption that you could be wrong by a certain percentage. For example, if you had a 20% margin of safety, then you would invest in such a way that you would still make a profit even if your estimates were off by up to 20%.
Thus, the margin of safety gives you room to make mistakes without losing. This concept can be applied to other areas of life too:
- When planning out your schedule, assume that every task and project will take 20% longer than you expect. If you finish early then great, you've got yourself some extra time! If end up needing extra time, then you'll be glad that you gave yourself that margin of safety
- If you're starting a business, having extra buffer cash goes a long way. It means that you don't have to jump on every average opportunity that comes by. You can wait for the ones that are the perfect (or near-perfect) fit for you and your business
All in all a margin of safety gives you protection to not get too hurt by losses. At the same time, you have the breathing room to focus your efforts on only the best opportunities.
Luck is something we'd all love to have on our side. You may not be able to control it, but you can increase the chances that you get lucky more often than not by:
- Trying many times
- Working hard
- Diversifying your efforts
- Having a margin of safety
Do those things and you'll find luck becomes a friend indeed.