The Logical Error Of Success
The culprit of logical error of success is survivorship bias. Survivorship bias is an error in logic where you heavily concentrate on a person who made it past a selection process while overlooking those who did not, often because of their lack of visibility. In plain English, since you only focus on people who succeed, you don’t pay attention to the overwhelming majority of people who don’t. It is extremely important to know what survivorship bias is because it will make you analyze the success rate and failure rate of a larger system as a whole. Your standard financial advisor, entrepreneurial guru, news anchor, or favorite entertainer will tell you that they succeeded because they had an insane work ethic and unbreakable motivation. Not taking anything away from successful people, but when you listen to their stories, I encourage you to think of two words and two words only: survivorship bias. Nothing less and nothing more.
Financial advisors, media talking heads, and entrepreneurial gurus will tell you that you shouldn’t associate with “losers” because, after all, they are “losers,” and “losers” can’t teach you anything except how to lose. That is simply not true, an overwhelming number of people who fail can teach you about the selection process of the system they are trying to get through.
For example, less than 1% of American actors make more than $50,000 per year in the entertainment industry. Think about the 1% of those who survived the selection process: Kevin Hart, Steve Harvey, Taraji P. Henson, Viola Davis, Kerry Washington, etc. Do you believe that 99% of comedians trying to succeed in the industry ARE NOT funnier than Kevin Hart? Do you believe that 99% of actresses trying to succeed in the entertainment industry are not as talented as Kerry Washington?
Or is it more likely that they had the resources and/or the willingness to comply with the “underbelly” (unwritten rules) of the industry to make it through the selection process? Survivorship bias is very dangerous for your finances and your overall well-being. It leads to the following errors in logic:
Logical Error #1: Overly Optimistic About Chances of Success
Survivorship bias typically leads to an individual being overly optimistic about their chances of success because they have ignored failures and because the individual often is unaware of the unwritten rules of a system.
Logical Error #2: We Made It Because We’re Special
Another common error in logic produced by survivorship bias is the false belief that a person or object has some special property, attribute, or characteristic rather than just acknowledging it as a coincidence.
Wikipedia provides an excellent example of how this error in logic plays out. So, we’ll just use the example that Wikipedia uses. If three out of five students with the best college grades came from the same high school, one might falsely believe that the high school has an incredibly strong educational curriculum.
Instead of following this false belief and automatically enrolling your child in this elite high school, let’s deconstruct this scenario more carefully, acknowledging survivorship bias.
- First, it simply means that the three students just survived the selection process of the college in question. So, the next logical question would be, how many students didn’t survive the selection process? What were the “written” and “unwritten” rules of the selection process?
- Do we have a full data set of the high school in question? Do we have the grades of EVERY single high school student who attended that particular high school?
- To which college did the high school students with the HIGHEST grades apply? Did they apply to diﬀerent colleges? If they didn’t apply to that particular college, they naturally wouldn’t be a part of the selection process.
Logical Error #3: Believing There is a Causal Relationship Between People, Objects, or Events Rather than a Correlative Relationship
A causal relationship means one event CAUSES the other event to happen. Using the example above, the causal relationship would be that the strength of the education caused the students to have high marks. Then the high marks of the students caused them to be accepted into the college. This is simply not true. If we deconstruct this scenario with the questions presented above, we see that there is simply a CORRELATIVE relationship. A correlation is when there is a connection between two or more independent people, objects, events, or occurrences.
As you can see, it just so happens that the same students from the same school applied to the same college and were selected. That doesn’t necessarily mean that the students had the highest grades in the high school. For all we know, they could have had the lowest grades. It simply tells us that they survived the selection process of the college to which they applied.
So, the next time you hear someone tell you that he came from nothing and forged his path against all odds, remember that you are simply listening to someone who survived. There is nothing wrong with listening to a survivor as long as it doesn’t skew your perception of the likelihood of success. Instead, it’s much wiser to know WHY the majority of people fail and then strategically plan accordingly to circumvent the systematic failure.