Mindset: The 4 Levels of Luck: How You Can Become Luckier in Life
I’ve been exposed to luck my entire life.
Walk into any Asian person’s house and you’ll see all these different items designed to attract luck and shield against bad luck.
I remember waking up on Chinese New Year’s one day, ready to eat some breakfast.
Mom: What are you wearing?
Me: Huh? This is my favorite shirt. It’s Bart Simpson.
Mom: Ai-ya siu jai!!! (Oh my god you bad boy!) Go change into red clothes before you give everyone bad luck.
It was this magical force that you could attract, and if you had enough of it, good things would happen.
Me? I’ve always hated the word luck.
It’s probably because I’ve seen people use the term as a defense mechanism or ego protection. Has someone else obtained some massive success? Just say that they got lucky.
Saying someone’s lucky is a way to discredit their hard work and intelligence, and blame it on an external factor that no one has control over. That way if you’re not as successful, it’s not your fault…just blame it on your “luck.“
Have you ever worked really hard for something and had someone else say you were lucky? Sucks right?
Something that I have wondered about is how much of success IS luck vs. how much of it is hard work. We all intuitively know that it’s a combination of both.
Well, afew weeks ago I listened to a podcast episode that gave me a framework for understanding luck and its relationship to work.
Listen to the Podcast: Naval on Luck
I’m going to explain the four levels of luck and give you some ideas on how you can become “luckier” in life.
The Four Levels of Luck
Most people lump luck into one thing when there are actually four types of luck. Not only are there four types, but there are four levels which build upon each other.
Level 1: Blind Luck or Dumb Luck
This is what your average person thinks about when they hear the word “luck.”
An amazing outcome happened to someone where they had zero influence or control over it.
- You receive a $200,000 inheritance from a distant relative you didn’t know existed.
- You won the genetic lottery! You’re born with physical features that society values like height and a chiseled jawline.
- Poker. The villain has a 99% chance of winning, and the river gives you the one card that you need to win.
Welcome it when it happens, but don’t rely on it.
Level 2: Luck Through Hard Work A.K.A. Fortune Favors the Bold
Sometimes luck happens because of the work that you’ve put in.
- Your cosmetics company has been selling lip plumpers for several years.
All of a sudden, Kylie Jenner makes plump lips the hottest trend for women. The demand for your product explodes.
- This is a story that I heard on a podcast recently. Someone was a mobile games developer who was about to be bankrupt. They had a “hail mary” idea to build mobile games for famous properties. They thought that “Family Guy” would be the perfect game.
It took them months to pitch the proposal. Fox narrowed it down to three companies that they wanted to work with.
Unfortunately, his company was the smallest one competing against giants like Electronic Arts.
His company has multiple advisors. As luck would have it, one of the advisors was actually the mentor to the person who would make the decision on which game studio to work with.
They got it.
- YouTubers. You create a ton of videos that go unnoticed, but then a Celebrity tweets your video and makes it go viral.
There’s luck involved, but it would have never happened unless you put some work in first.
Level 3: Luck that You Discovered
As you develop knowledge and expertise, you’re able to spot opportunities that other people can’t.
It looks like blind luck to outsiders.
- The real estate agent has come to the conclusion that Amazon will be another headquarters in a certain part of town. They double down on building commercial real estate near where the HQ should be. Amazon does indeed build the HQ there and the property values 10x within five years.
- You’re studying trends and realize that a certain toy will be the hottest selling item for Christmas this year. You strike a deal to become the exclusive online distributor for this product.
December comes and you sell out of this toy.
Level 4: Luck Becomes a System
This is the hardest level of luck to understand.
This is where if other people become lucky and you’re able to benefit from it because of your knowledge, brand, and reputation.
Naval uses the example of a famous deep-sea diver.
If other people get “lucky” and find treasure in the ocean, they’ll need a diver that can help them obtain it. Because this diver has developed a reputation of integrity and excellence, he’ll be the first person that people call.
Most people don’t realize that he used to be a prolific angel investor. He has invested in Uber, Shopify, Evernote, Taskrabbit, etc. in the early stages.
There are other people in the space that have more money than Tim Ferriss does to invest. However, he developed a unique brand and reputation as someone who understands conversion optimization and he has a massive following.
Tim offers an X factor that no one else on the planet can offer, and it gives him massive “deal flow”.
I’ve benefited a lot from this concept with my own career.
Even though there are thousands of people who are great at affiliate marketing, only less than a handful have a personal brand.
I’ve worked hard to build a reputation as an affiliate marketer and being professional in everything that I do.
This has presented me with countless opportunities that I would never have gotten if I was “underground.”
After a certain point, it stops becoming luck. Instead, people have built systems for attracting opportunities.
The Luck Generation Machine
You now understand that there are four levels to luck.
Two things to think about:
1. How can you generate more luck
2. How can you take advantage of it when it strikes.
Here are some ideas on how you can do that.
1. Cultivate a Unique, Personal Brand
You should work on your personal branding.
People are googling you and checking out your social media. What does your personal brand say about you?
We’ve all heard the horror stories about how some people have lost potential jobs because of what recruiters found online.
You don’t have to start a blog or start speaking on stages to build your personal brand.
My advice would be to specialize as much as you can.
My friend makes beautiful websites and wants to make more money. The problem is that there are overseas agencies that charge less. It’s hard for him to compete with them on price.
Here’s an important lesson: don’t compete.
Change the game.
There are far too many people who make websites. Why not specialize further?
He mentioned that he’s starting to have companies hire him to design their Shopify store. If he wants to specialize further, imagine if he was focused on Shopify stores with a focus on design and conversion rate optimization.
There’s going to be far less competition vs being a generic website agency.
2. Surround Yourself With Winners
I had some friends that seemed to always be “unlucky.” In hindsight, none of their situations had to do with bad luck.
They were always making horrible decisions. By re-framing their decisions as bad luck, they denied themselves the ability to learn and improve.
If you’re surrounded by winners, then naturally more opportunities happen to you.
A rising tide lifts all boats.
Lebron James is the man in basketball. Did you know he’s also crushing it in business? He keeps a close inner circle when it comes to his business dealings.
You can imagine the benefits of being a close friend of someone like Lebron. Rich Paul is a close friend of Lebron. He owns Klutch Sports which is one of the top player agencies in the NBA.
3. Ride the Trends
There’s simply more opportunity for luck to happen in industries that are on the rise.
Are you in a space that’s rising or dying?
Taking Advantage When Luck Strikes
Don’t waste your luck.
You need to make sure that you can take advantage of luck when it does strike.
It seems as if there are new internet stars created every single week through memes and viral videos.
Some of them are one-hit wonders and they disappear into obscurity.
Others ride the momentum and turn it into a career.
This isn’t the best example to follow, but The Kardashian Empire started off a leaked sex tape. That’s impressive.
When it comes to taking advantage of luck, it’s important that you’re financially stable.
Finally got an interview with your dream job? That’s great.
You’re on your way to the interview and your car breaks down. You don’t have the money to get your car towed, and you can’t afford the Uber ride an hour away. You just missed your opportunity.
A company wants to sign an exclusive deal to distribute your product. You can’t get approved for the financing involved for such a large order. They choose to work with someone else.
Next, live where the action is.
Imagine that you’re creating a startup.
If all things are equal, are you more likely to be successful if you were living in Silicon Valley, or in a rural village in Asia?
Being where the action is encourages Serendipity.
Find out where the action is for your industry and spend time there.
And this goes without saying, but you should work hard. Develop your brand, knowledge, and reputation, and then luck will keep coming to you.
Most Bad Luck is due to Bad Decision Making
It’s important to understand the difference between bad luck and bad decision making.
You bought a house. A thunderstorm occurs and your house is the only one struck by lighting. That’s bad luck.
You’re driving to work and your tire blowouts on the way, you end up missing the most important meeting of your life. You think it’s bad luck.
However, the tires needed to be replaced half a year ago. That’s a consequence of bad decision making.
If you think it’s 100% because of bad luck, then you’re bound to have more issues like this in the future. But if you realize this was due to poor decision making, then you can learn from this.
You’ll keep up with your car maintenance from now on and you’ve given yourself a slight edge in life.
You’re Lucky if You’re Reading This
I use to be a jealous person growing up.
I remember meeting my college roommate and finding out his parents got him a brand new BMW. Let’s just say that the car that my parents got me wasn’t getting any panties wet.
Man, he’s so lucky.
Every weekend, I had to work at the gas station. It meant that I couldn’t study as hard for a final exam. It meant I had to stop partying at midnight so that I could get some sleep before my 6am shift began.
Why couldn’t I be as lucky as that one guy who didn’t have to work and got a $1,000 a month allowance from his parents?
Can you relate to these feelings?
One of the best things I’ve ever done in my life is packing up my bags and spending a few years in Southeast Asia.
It was my first time seeing poverty up close and not on those sponsor a kid TV commercials. This is real life.
Holy shit, I’m so lucky that my parents left Asia to go to America. What would’ve happened if I grew up in Asia? A lot less opportunity for sure.
I’m not built to get straight A’s in school and probably would’ve ended up re-selling used iPhones in Asia.
How else was I lucky?
- I never went hungry as a kid.
- I didn’t have to worry about disease or war.
We can’t say that about everyone, unfortunately.
Working at the gas station on the weekend taught me how to better communicate with people. There’s something humbling about taking out the trash and scrubbing toilets every weekend.
I have no trouble working hard when I’m tired these days because I did it for so many years at that Gas Station.
If you don’t struggle, then you don’t build character.
It’s easy to wish that you had better circumstances.
Realize that you’re already lucky and you are in control of your own destiny.
Featured Image by 3D-Agentur