The Money Lie We All Believe, And the Truth That Actually Builds Wealth
The Hidden Pattern Behind Wealth, Success, and Opportunity, and How to Use It to Create Breakthrough Results
Are you living by ‘normal’ rules in a world that rewards outliers?
Is 2026 finally the year that you ‘breakout’ of your historical and incremental results?
Today’s insight is all about the formula that dispels the lie and provides you with the formula for how rewards actually get distributed.
Most of us grew up absorbing a quiet assumption about how money works: the idea that life is fundamentally fair, that effort and reward scale together, and that if you simply do “a little more” than average, you’ll eventually end up with “a little more” than everyone else. It’s the great promise of normalcy. Show up, stay consistent, avoid big risks, and let the average take care of you over time. This has been further drilled into our heads by the “bell curve” type analysis that normalizes the distribution of all rewards on a “normal or average” basis.
The problem is that the world you and I are living in today isn’t normal. And it hasn’t been for a while.
A huge share of the systems that determine who gets ahead, who gets seen, and who actually creates meaningful wealth run on something very different from the bell curve we were promised. They run on power laws, which are distributions where the top outperformers don’t earn “a little more,” but 100x or 1000x more than the median simply because the structure rewards outliers, not averages.
Once you recognize that pattern, the entire conversation around compensation, investing, and career strategy flips. You stop trying to win a game the world no longer plays and start positioning yourself in the systems where disproportionate outcomes are not only possible, but expected.
This is where the Wealth Matters 3.0 Law of Compensation framework becomes your steering wheel. I use a simple lens to help people understand why incomes rise, plateau, or accelerate:
The need for what you do,
Your ability to meet that need, and
How hard are you to replace?
Think of those as three dials you can adjust—dials that behave very differently in a power-law world.
A Normal World vs. a Power-Law World
In a “normal” world, most things cluster around an average. Height is the perfect example. You don’t see people ten times taller than the median. The curve is smooth. Outliers barely exist.
But that’s not how most high-impact real-world systems behave.
A small number of cities pull in the majority of people and capital.
A handful of companies own most of the market cap (Mag 7 vs the rest of the S&P 500)
A sliver of investors capture the overwhelming majority of returns
A fraction of creators on YouTube or LinkedIn pull almost all the attention.
These outcomes aren’t broken. They’re behaving exactly as power laws predict, where small outcomes are common, massive outcomes are rare, but far more common than the “normal” curve would allow.
The result is simple: the extreme few dominate the total.
That’s why the 80/20 rule (Pareto’s principle) shows up everywhere. It’s not a quirk, it’s a law of nature expressing itself across networks, markets, attention, and opportunity.
In a world like this, trying to be “slightly above average” is like bringing a butter knife to a gunfight. The structure itself isn’t built to reward incremental improvements. It’s built to reward outliers.
Where Power Laws Already Rule Your Financial Life
Certain parts of the economy still operate on relatively normal dynamics. Restaurants, traditional services, and hospitality represent businesses/industries where averages drive survival. You live or die based on occupancy rates, average tickets, and predictable throughput. One great Saturday doesn’t fix a broken year.
But other arenas are decisively power-law environments.
Software scales because one codebase can serve millions. Media scales because one idea can reach the world. Marketplaces scale because network effects concentrate value at the center. Early-stage investing scales because one winner pays for the last nine misses. Even certain real estate portfolios scale because a few key acquisitions dominate the returns.
In these environments, the outlier drives almost everything. Averages barely matter.
So the first question every investor or entrepreneur should ask is painfully simple:
Am I playing a game where consistency matters more—or a game where outliers dominate?
Because your strategy changes completely depending on the answer.
Using Need, Ability, and Replaceability in a Power-Law Landscape
If you want to position yourself (and your capital) where asymmetric opportunity lives, the three-part compensation lens guides you forward.
Aim for needs that scale.
The world rewards people who solve expanding, compounding problems: AI integration, energy capacity, security, trust, health, aging, and money systems. Even being “pretty good” in an arena with explosive demand creates leverage that being “excellent” in a stagnant field never will.
A simple question to ask yourself:
If I got 10x better at this, would the world care?
If not, you’re in the wrong lane for exponential upside.
Upgrade your ability in ways that create compounding effects.
In a power-law world, being incrementally better than average doesn’t change your life. Compounding skill stacks do. So do systems that perform while you sleep, assets that distribute themselves, and reputational signals that scale far beyond your direct effort.
This isn’t just about talent, it’s about leverage.
Work to become difficult to replace in a way that matters.
Replaceability is destiny. You become irreplaceable not by being unique in the abstract, but by sitting at the intersection of disciplines that rarely meet: i.e. “AI + estate planning; Bitcoin + real estate; tax strategy + software; commercial real estate + programmable finance”.
This “bridge position” is where preferential attachment kicks in. The more you become the trusted node in a niche, the more others connect to you by default. That’s power-law economics operating inside your career. At some point, you hit escape velocity from the gravitational pull of the levelers.
A Practical Way to Play the Power Law as an Everyday Investor
You don’t need to be a VC or a quant trader to use these dynamics. You just need to structure your financial life in a way that benefits from asymmetric upside while protecting downside.
Start with a solid base.
Keep boring, reliable assets that protect you from catastrophic losses.
Build your emergency reserves, ensure the non-negotiables, and
Diversify your long-term backbone.
Separate your “average” bucket from your “outlier” bucket. The goal is resilience, liquidity, tax efficiency, and compounding.
Your average bucket includes:
index funds,
core rentals, and
your existing business’s day-to-day stability.
Your outlier bucket includes the bets where power laws rule:
Early-stage investments
Scalable IP, thought leadership, or media
Software, automation, or licensing
Deep expertise in a rising market
Asymmetric trades like Bitcoin with a capped downside
Only a small slice of your portfolio needs to live here to change your life if one of these hits.
Design outlier bets so that failure is cheap, but upside is uncapped. You don’t eliminate small losses—you encourage them. You run small experiments. You learn, pivot, and iterate. What you avoid is the hidden, unacknowledged risk that threatens everything at once.
The goal isn’t perfection. It’s survival until the right tail event shows up.
Power Laws in Your Career and Business
Money isn’t the only arena where power laws rule. Your time, attention, and opportunities follow the same pattern.
Move toward leverage. If 100% of your income depends on your next hour of work, you’re locked inside a normal curve career. Leverage (through media, systems, people, automation, or ownership) is what unlocks the tail of the distribution.
Tie yourself to outcomes, not just effort. W2 wages are built on fairness. Whereas equity, royalties, profit share, and rev-share are built on asymmetry.
Combine your skills into a stack that’s hard to replicate.
This is where real differentiation happens, and where networks begin to pull you upward.
Play for persistence, not just consistency. In normal worlds, consistency wins. In power-law worlds, persistence wins. The outliers are almost always the ones who stayed in the game long enough to let one moment, one idea, or one introduction change everything.
The Mindset Shift That Makes All of This Work
Power laws can feel unfair until you realize the truth:
The world doesn’t reward effort; it rewards impact, scale, rarity, and connectivity.
The world doesn’t care how long you’ve been waiting. It doesn’t care what you “deserve.” It certainly doesn’t care if you’re slightly better than average.
What it cares about is:
solving big problems
at scale
with rare skills
inside networks where value concentrates
Fairness is nice. Asymmetry is real.
Once you let go of the idea that the world is normal, you stop waiting for a fair system to show up and start designing a life that benefits from the way things actually work.
That’s where the compounding begins.
Bringing It All Together
If you want to start applying this today, here’s the short version:
Ask yourself whether each opportunity is a normal game or a power-law game—and choose intentionally.
Use the Need / Ability / Replaceability lens to evaluate every major commitment or investment.
Build the foundation that keeps you in the game.
Allocate a small but meaningful portion of your energy and capital toward outlier opportunities.
Let small failures happen so big disasters don’t.
Focus on leverage, networks, and compounding—not just effort.
You don’t need to predict the future to benefit from power laws. You just need to be standing in the right places when the outliers show up.
The truth is, most people don’t lose because they’re not smart enough or talented enough. They lose because they keep playing a normal game in a world wired for outliers.
It’s time to play the real game in 2026.
~Chris J Snook
Sources
Veritasium — The World Is Not Normal (YouTube):
Pareto Principle overview (Wikipedia): https://en.wikipedia.org/wiki/Pareto_principle
Pareto income distribution analysis (American Economic Association): https://piketty.pse.ens.fr/files/Persky1992.pdf
Barabási & Albert — Emergence of Scaling in Random Networks (Science): https://www.science.org/doi/10.1126/science.286.5439.509
Berkeley D-Lab — Understanding the 80/20 Rule: https://dlab.berkeley.edu/news/explaining-80-20-rule-pareto-distribution