Statistically speaking, your dreams won’t come true. Just look at the numbers:
- 77 percent of people dislike their jobs or don’t feel engaged in them. This number isn’t likely to change.
- Only 12 percent of people make the famed optimal-happiness-salary of 75 thousand per year ore more.
- 81 percent of people want to write a book, but few ever do.
It’s easy to dream. We all do it. There’s no lack of wanting in the world. I mean, who doesn’t want a better life?
Whether you want to find the career of your dreams or build something of your own, the odds are stacked against you. How can you structure your life in a way that gives you the highest chance of succeeding?
Today I’m going to share some ideas on how you can increase your odds of hitting the success lottery.
Don’t Diversify
At a young age we learn the importance of having a broad range of talents and skills. We spend equal amounts of time on class subjects. We’re told to become involved in several types of extra curricular activities. We join various clubs in college to look “well-rounded,” on our resume.
But what if everyone focused on strength and aptitude from the beginning? What would the world look like if it was filled with people who chose a path early on and stuck with it?
Maybe diversification isn’t the answer.
Many of the world’s wealthiest people don’t hold diversified portfolios.
In the book Zero to One, billionaire investor Peter Thiel shares the non diverse investing strategy of his hedge fund.
The fund only selects a handful of companies they believe will be able to make an inordinate return on their investment. Even in the small portfolio of companies they own, only one of them will usually make the return they were hoping for.
He notes that other (less successful) funds focus on holding a broad variety of mediocre companies and says they’re ignoring the “power law,” distribution of successful companies.
A handful of companies produce the best results. Therefore it makes no sense to spend anytime investing in a company that doesn’t have the potential to be wildly successful.
Bill Gates holds the majority of his wealth from his company. Warren Buffet doesn’t follow a diversifying strategy either. Buffet says the key is to “put all of your eggs in one basket, but watch that basket closely.”
So what does that mean for the rest of us? When it comes to success in our careers and ventures, perhaps the best strategy might be to focus on one area where we can thrive instead of trying to be “well rounded.”
Take an inventory of your talents and strengths. You can start by answering these questions.
- What do you find easy that others find difficult?
- What do family, friends, and acquaintances compliment you on?
- What have you always been naturally drawn towards?
(For an in-depth look at finding your strengths visit this post.)
After you’ve figured out your strengths, find a field that matches those strengths. From that point on forget about diversification. Hone your skills and continue to work in that field until you reach the level of success you’re looking for.
Are your chances of success guaranteed? No. But they’ll be much higher than your chances of succeeding by bouncing from one thing to the next.
The Barbell Strategy
Now that you’ve figured out the field you want to be in, you need to devise a strategy that “keeps you in the game,” and won’t leave you with a failure to difficult to overcome.
In the book Antifragile, author Nassim Taleb discusses an investing strategy that takes advantage of the volatility in the market. He coined it the “barbell strategy.” The barbell strategy involves keeping the majority of your net worth in cash or secure investments. At the same time you use a small portion of your net worth to make aggressive investments to take advantage of swings in the market.
The strategy is based on the idea that chance plays a large role in the events in our lives. Our job is to protect our downside while being able to take advantage of a potential upside. In terms of our careers or entrepreneurial ventures, we can use a similar strategy.
Here are a few examples of pursuits with low downside and high potential upside.
- Writing books – You can’t sell a negative amount of books. At worst you’ll have to eat the cost of creating the book, which isn’t much in the grand scheme of things. On the other hand, word of mouth can lead to a huge spike in sales, making you a household name.
- Low investment businesses – With a computer and a small amount of capital you can start your own business. Decades ago, your only viable route for starting a business involved an expensive brick and mortar location. You also likely needed a loan from the bank and held large amounts of inventory. Today, you can create a minimum viable product with a high potential upside with little to no downside.
- Content creation – It’s been said that every company is now a media company. Content marketing can make a huge difference in your business or career. Creating content for your business helps build brand awareness. Creating content on your field of interest helps you build expertise and credibility. According to career expert Penelope Trunk, blogging is crucial for your career. Content creation also has no downside. You can’t have a negative amount of views.
Instead of “burning the ships,” behind you and risking everything to make it big, protect your downside and look for ways to take small risks.
Become a Smart Bettor
Warren Buffet’s business partner Charlie Munger delivered a talk to the students at USC business school. During the talk he mentioned Warren’s advice on making smart investments. Here’s what one of the world’s richest men had to say about making smart bets.
“When Warren lectures at business schools, he says, ‘I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had 20 punches—representing all the investments that you got to make in a lifetime. And once you’d punched through the card, you couldn’t make any more investments at all.'”
“He says, ‘Under those rules, you’d really think carefully about what you did and you’d be forced to load up on what you’d really thought about. So you’d do so much better.'”
This advice applies to much more than financial investments.
In every area of your life you want to make calculated investments with careful thought. Decisions about your career or entrepreneurial ventures shouldn’t be made lightly.
Make smart choices about your future. Work on your craft and stay on your path. If you’re persistent and patient, eventually you’ll get what you want.