"Success is a lousy teacher. It seduces smart people into thinking they can't lose." — Bill Gates
Ask anyone in a MBA college or a corporate office: "How did Bill Gates become the richest man in the world?"
They will tell you: "He was a coding genius," "He was a visionary," or "He worked 18 hours a day."
All of this is true. But it is not the whole story. In Chapter 2 of The Psychology of Money, Morgan Housel introduces us to the invisible sibling of success that we hate to admit: Luck.
And he introduces us to Luck’s dangerous twin brother: Risk.
1. The Bill Gates Equation
Let's look at the math of Bill Gates' life. It’s frightening.
In 1968, Bill Gates was a student at Lakeside School in Seattle. This was the only high school in the entire world that had a computer terminal. Not even colleges had them.
- If Gates had lived in any other country... No Microsoft.
- If he lived in any other city than Seattle... No Microsoft.
- If he went to any other school than Lakeside... No Microsoft.
In 1968, there were roughly 303 million high-school-age people in the world. Only 300 attended Lakeside. The odds of Bill Gates getting access to a computer were one in a million.
Bill Gates himself admits: "If there had been no Lakeside, there would have been no Microsoft."
2. The Tragic Tale of Kent Evans
This is where the story gets dark. At Lakeside, Bill Gates had a best friend named Kent Evans. Gates says Kent was the smartest student in the class—even smarter than him. They planned to conquer the world of computers together. They were future partners.
But Kent never graduated.
Before high school ended, Kent died in a mountaineering accident. The odds of a high school student dying on a mountain are roughly one in a million.
The Equation:
• Bill Gates experienced 1 in a Million Luck.
• Kent Evans experienced 1 in a Million Risk.
Same magnitude. Opposite direction.
3. Real Life Examples: The "Jio Effect" in India
How does this apply to us in India? Let's look at the "Jio Revolution" of 2016.
The YouTuber's Luck
Imagine a talented comedian in 2014. He uploads videos on YouTube, but data costs ₹250 per GB. No one watches. He quits.
Now imagine the same comedian starting in 2017. Jio gives free 4G data. Suddenly, 500 million Indians are online. His video goes viral. He becomes a millionaire.
Did the 2017 comedian work harder? No. He just had better Luck (Timing).
The Restaurant Owner's Risk (COVID-19)
Imagine you took a loan and opened a beautiful restaurant in January 2020. You worked hard, hired the best chefs, and had a great menu.
Two months later... Lockdown. Your business hits zero revenue. You go bankrupt.
Were you a bad businessman? No. You just experienced Tail Risk. You were Kent Evans.
Why This Matters in 2026
In 2026, we live in an "Algorithm Economy." Your success often depends on whether the Instagram or YouTube algorithm decides to push your content.
Recognizing the role of Luck prevents you from becoming arrogant when you win. Recognizing the role of Risk prevents you from destroying yourself when you lose. If you lost money in the stock market, don't just say "I am stupid." Maybe the odds were just against you this time.
Key Takeaways
- Be Humble: When you are winning, realize that not everything is because of your hard work. You got lucky too.
- Be Forgiving: When others fail (or you fail), don't assume they were lazy. They might have hit a "Risk" pocket.
- Focus on Patterns: Don't try to copy one person's success (Bill Gates). You can't copy their luck. Copy patterns of successful people instead.
Frequently Asked Questions (FAQ)
Q1: Does hard work not matter then?
A: Hard work is essential to play the game. But Luck decides the outcome of the game. You cannot win without hard work, but hard work alone doesn't guarantee winning.
Q2: How can I increase my luck?
A: Naval Ravikant says, "Luck is when preparation meets opportunity." By taking more chances (starting more projects, meeting more people), you increase the surface area for luck to strike.
Q3: Should I avoid risk?
A: No. You cannot get rich without risk. The goal is to avoid "Ruin" (Risk that wipes you out completely) while taking calculated risks.
Up next: Chapter 3 – Never Enough (When rich people do crazy things).
📚 Credit & Disclaimer:
This post is a summary based on the bestseller "The Psychology of Money" by Morgan Housel.
Comments: