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If there's one thing that I've taken from reading "The Psychology of Money" (a good book, by the way, I'll post my book notes shortly), it's this quote:
"Tails drive everything."
All events can be visualized on a distribution curve. Some events happen quite commonly, other events happen rarely.
Those rare events are part of the "long tail" of the distribution curve - the part of the distribution curve where probability is close to 0, but not quite.
Rare events often have an immense impact that outperforms the aggregated impact of many more common events.
Some tail events from my life:
- after 12 years of working for the same company getting a job offer to work on the other side of the world
- after publishing close to 2000 tweets, publishing one tweet that went viral and increased the number of my Twitter followers by 10%
- after two years of writing "common" blog posts, writing a handful of lucky blog posts that drive 80% of the traffic to my blog
- after 2 years of writing "common" blog posts, writing a book that opened up new opportunities
- doubling the value of my shares in one company in 2020, more than making up for losses in other shares
- ...
The takeaway?
The longer you keep doing something, the more likely you will experience a tail event that has great impact.
The more things you try, the more likely you will find something that really pays out.
Very rare events happen to people every day!
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