Money, The Navigation of Luck and Risk

The Secret Map of the Great Navigators

Have you ever felt your heart race at the stories of legendary explorers? Like Columbus, who crossed unknown seas to discover the New World, or Magellan, who succeeded in circumnavigating the globe. We admire their genius navigation skills and indomitable courage in the face of their great achievements.

Of course, their outstanding skills are undeniable. But what if their journeys never had a favorable wind? Or if unpredictable massive storms had swallowed their ships?

Strangely, when we navigate the vast ocean called ‘money,’ we tend to ignore the presence of these favorable winds and storms—that is, ’luck’ and ‘risk.’ When a sailor achieves tremendous wealth, we try to find only the inevitable formula for success in every page of his log. Conversely, when someone wrecks on the rocks of bankruptcy, we blame their recklessness and greed, promising ourselves we won’t fall into the same fate. We want to believe success is 100% skill and failure is 100% incompetence. It makes this rough sea feel predictable and fair.

But is that really true? Today, even if it feels uncomfortable, we will talk about the secret map every sailor must unfold. It is the story of the two great currents that determine the course of our lives and money: ’luck’ and ‘risk.’ At the end of this journey, you will likely see the sea of money with entirely different eyes. Now, let’s raise the anchor and set sail together!

First Voyage: The Invisible Forces, Luck and Risk

The Boy Who Met a One-in-a-Million Favorable Wind, Bill Gates

Our first exploration looks at how the legendary captain named ‘Bill Gates’ was born. If young Bill Gates hadn’t docked at a very special harbor (high school) called ‘Lakeside’ in 1968, could the massive ship called ‘Microsoft’ have ever set sail?

At that time, among countless harbors worldwide, almost none allowed students to freely touch and learn to operate the latest navigation equipment called ‘computers.’ Borrowing Morgan Housel’s expression, Bill Gates was literally a boy who met a one-in-a-million powerful favorable wind.

Of course, he honed his navigation skills through sleepless nights and was a crew member with unmatched passion. We usually focus only on the sail called ’effort.’ But pause and think: if he had never been given the chance to board a ship and sail out to sea, where could his great talent and passion have blossomed?

This is the terrifying power of ’luck.’ Luck is not just a seasoning that slightly increases sailing speed. Sometimes, it is the very ‘starting point’ that allows the voyage to begin. For Bill Gates, Lakeside High School was like a vast ocean where his talent ship could set sail.

The Genius Lost to an Unforeseen Storm, Kent Evans

If Bill Gates’ story is a record of favorable winds, every voyage log must also record the story of storms. This is the story of another genius sailor we do not remember, ‘Kent Evans.’

Kent Evans was Bill Gates’ closest friend. Bill himself recalled he was “the smartest kid I knew.” They promised to explore the seas of the future together, and perhaps the Microsoft fleet would have set sail under the name ‘Gates, Allen & Evans.’

But Kent Evans passed away before the voyage even began, swept away by an unexpected storm—a climbing accident. His tragedy had nothing to do with his skill or effort. It was pure unavoidable ‘bad luck,’ that is, ‘risk.’

We remember Bill Gates, who successfully completed his voyage, but forget Kent Evans, who sadly disappeared. This is due to the ‘survivorship bias’—we listen only to the stories of survivors and generalize the secrets of success. Kent Evans’ story warns us that in the sea of life and money, there are always hidden reefs called ‘risk’ that no amount of effort can control.

Another Voyage Shaped by Waves of Chance

• Case 1: A Failed Map Opens the New World (3M Post-it Notes)

  

  In 1968, 3M researcher Spencer Silver sailed toward the destination of a ‘strong adhesive’ but repeatedly failed, landing on an unexpected island of ‘very weak adhesive.’ His voyage was officially a failure. Years later, colleague Arthur Fry, troubled by hymnbook bookmarks constantly falling out, recalled the failed voyage record (weak adhesive). This ‘chance encounter’ led to the discovery of a new continent called ‘Post-it.’

• Case 2: The Sinking of the Greatest Fleet (Nokia’s Failure)

  

  In the mid-2000s, Nokia was an invincible fleet in the mobile phone market. Their technology, or navigation skills, were unquestionable. But in 2007, a new type of ship called the ‘iPhone’ appeared. Nokia dismissed it as a ’toy ship targeting a small niche market.’ They stubbornly clung to their successful navigation style of ‘hardware’ and failed to read the massive current shift toward the ‘software ecosystem.’ Ultimately, their past great success became an ‘inherent risk’ that blinded them to the future and sank the invincible fleet.

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Second Voyage: The Broken Compass of the Mind That Leads Us Astray

Now, we have confirmed the existence of the two great forces governing the sea’s currents: luck and risk. But why do we rarely feel these obvious forces in daily life, and even try to ignore them? The reason is the ‘cognitive bias’—a broken compass installed in our minds.

My Voyage Is Skill, Yours Is Luck: Fundamental Attribution Error

It’s easy to think this way: “I succeeded in investing because of my excellent navigation skills (analysis).” But when a friend succeeds, we think, “They just got lucky with favorable winds.” Conversely, when I fail, I blame unexpected storms (market conditions), but when a friend fails, I say, “See, I told you it was reckless sailing (aggressive investing).”

This psychological tendency to attribute one’s own success to skill and failure to bad luck, while attributing others’ success to luck and failure to incompetence, is called ‘self-serving bias’ and ‘fundamental attribution error.’ It is an instinctive defense mechanism to protect our self-esteem as ‘a great navigator.’ But this defense prevents us from properly learning from our successes and failures.

Arrived at the Destination, So Everything Was Right: Outcome Bias

Imagine a captain recklessly steering into a storm and miraculously arriving at a treasure island. Judging by the result alone, he looks like a ‘great navigator.’ People praise his decisiveness.

But the process was a foolish gamble that had a 99% chance of shipwreck. Yet the result of ‘arriving at the treasure island’ transforms his reckless process into a ‘wise decision.’ This is ‘outcome bias,’ judging everything solely by the result rather than the rationality of the process. Following the navigation skills of a lucky gambler only increases the chance of sharing the gambler’s miserable end.

The Heroic Sea Shanty We Like to Hear: Narrative Bias

The human brain instinctively weaves complex and random events into a ‘plausible story.’ It’s much easier and more enjoyable to understand Bill Gates’ success as a smooth hero narrative—“a genius boy who loved computers and changed the world despite adversity”—rather than a dry list of facts like ‘genius + effort + luck + …’.

In this process, the crucial element of ’luck’ is downplayed to something like ‘his foresight not to miss opportunities’ or deleted altogether. The more we get used to such hero tales, the more we fall into the illusion that the world is predictable and develop unrealistic expectations that we can achieve everything just by trying hard like the hero.

Third Voyage: How to Build a Ship That Won’t Sink Even in Storms

So, what should we do? Should we fall into nihilism thinking ‘if everything is luck anyway, why row at all?’ Absolutely not. Rather, acknowledging the existence of luck and risk is the true first step to building a wiser and sturdier ship of your own. The key is to focus on the ‘sails and rudder we can control’ instead of despairing over uncontrollable waves.

Don’t Covet the Hero’s Secret Map, Learn Universal Navigation Skills

No one can follow Bill Gates’ route exactly. The special favorable wind called ‘Lakeside High School in 1968’ will never blow again. Imitating an extreme success case of a particular hero is like trying to imitate their luck, which has a high chance of failure.

Instead, we should focus on ‘universal principles’ proven effective by countless captains over a long time.

• Consistently save and invest a portion of your income (regularly maintain the ship and stock up provisions)
• Look at the long-term destination without being shaken by short-term waves
• Avoid carrying the heavy burden of unmanageable debt
• Diversify cargo (assets) instead of betting everything on one

These principles may not be shortcuts to a huge treasure island, but they are the most reliable navigation skills to help most of us safely reach the peaceful harbor called ‘financial freedom.’

More Important Than Speed Is Not Sinking: Securing a Margin of Safety

The most important thing to survive the sea of investment is not to have the fastest ship but to have a ship that never sinks. A single fatal shipwreck can take everything from you.

Therefore, we must always prepare for unexpected reefs (risks). This is the concept of ‘margin of safety.’

• Emergency provisions (cash reserves): Extra funds for sudden storms or calm seas.
• Diversified cargo (diversified investments): So that if one cargo hold floods, the whole ship doesn’t sink.
• Conservative route planning (conservative forecasts): Planning routes with the worst weather in mind.
• Manageable load (manageable investments): Not carrying more weight than the ship can bear.

A sturdy margin of safety is the strongest shield that allows you to continue sailing without being forced out of the sea when hit by unpredictable attacks.

Leave Room for ‘What If’ in Your Voyage Plan

We often tend to plan our future voyage too tightly. But the sea of life never flows exactly according to our plans.

Acknowledging the existence of luck and risk means leaving a relaxed margin in your voyage plan for the question ‘What if ~ happens?’ Somewhat flexible goals, routes that can be adjusted, and mental preparedness for unexpected changes in life—these are the wisdom we need to navigate the uncertain sea.

The Greatest Captain’s Condition

We have sailed the sea called ‘money’ together, examining records of dazzling favorable winds and tragic storms. At the end of this long journey, there is only one conclusion: humility.

Humility that does not arrogantly claim my success is solely due to my excellent navigation skills. Humility that does not just blame rough waves for my failures but admits my own errors in judgment. And above all, humility that acknowledges the great forces of luck and risk beyond my map.

Such humility is the most powerful driving force that makes us more cautious, see farther, and build sturdier ships.

In the end, the true winner in the world of money is not the smartest person but the one who survives the longest. And the one who survives the longest is the person who knows how to be grateful for favorable winds and humble before storms.

Now, where does your ship stand between luck and risk? The journey to find the answer to this question will itself be your greatest voyage leading to the new continent called financial freedom.