Success is a tail-end event

I just finished reading the book ‘The Psychology of Money’ last night. I don’t usually pick up books on investment or financial planning – mostly because I don’t understand a lot of the things that are being said, and even when I do, it isn’t something I naturally enjoy reading. But this book came highly recommended to me by people I admire. So, I decided to give it a shot.

Unlike other books on investment planning and general financial advice, I actually really enjoyed this book. I love how Housel (the author) dumbed everything down and made it interesting with anecdotes and stories. I recommend everyone check out this book if they have the time. It is filled with a lot of good advice.

More than anything I liked the chapter in which the author talks about how we only acknowledge the few specific instances of phenomenal success without looking at all the other times a person may have failed. He states that whenever we talk about successful people – what we see on the surface is rarely the whole story. Most successful people fail a lot more than they succeed. We just don’t see the times they fail. Or even when we do see it, we don’t apply it to our own lives. Often, we are our own harshest critics.

He gives the example of Warren Buffet, arguably the most successful investor of all time. What we see is a multi-billionaire and master investor. What we don’t see is that Buffet’s portfolio is majorly made up of stock that does not perform that well. It just has a few marquee stock options that account for most of his success. What we also fail to acknowledge most of the times, is that he made almost all of his fortune after he turned retirement age, even though he has been investing since he was 10. What we see as a success and measure ourselves again, is a tail-end event. He invested thousands, if not millions of times, failed most of the times, and succeeded a few times. The success makes up for the wrong decisions in hindsight – but you have to understand, at the time of making them, they still were incorrect decisions ! No one is successful all the time. You make a ton of bad decisions, and then you eventually make a few good ones that offset the bad. The important thing is to keep at it.

I know it is hard to reconcile this with the image of successful people and celebrities we see out there. For example, I recently started my YouTube channel, and I’ve been binging on videos by other content creators talking about how they got to where they did, how to grow on YouTube and what not. One of the biggest YouTubers, and perhaps one of my favourites – Pewdiepie – has the nicest video on this topic. He doesn’t bother getting into how consistently you need to post, or how you can beat the algorithm etc. No, none of that. Instead, he talks about his own journey and the things he has learnt on this journey. He ends the video with saying you should get into this if you enjoy making videos. That ways, if you blow up, it will be organic and people will like you because you have fun with what you do. On the other hand, if you never make it, you’ll at least have had fun ! He is one of the few individual creators who has consistently uploaded every single day for the past couple of years. I think he has been making videos for 10 years now. There is something to be said about this. It ties in with the idea of success being a tail-end event, just as Housel mentions. Yes, these people have become successful. But they kept at it, and they were consistent with it for far longer than they have been successful. I often see images of icebergs online as metaphors for success. The part we see above sea level is the success someone has already received. What we don’t see, and what is often the most important part, is all the effort they put in to get there – all their failed attempts, all their bad decisions and all their hard work.

With life, as with investing, you’re going to have to keep at it. That is all there is to it. Successful people, according to Housel, are people who often have outrageous ideas, and always act on all of them.

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