How Do You Know Where You Are?

Mike Peluso
9 min readNov 13, 2023
The Normal Distribution (Fishing Lures Not Typically Included)

My brother loves tackle boxes. It’s a fetish of his that started as a small child and persists to this day. He currently has almost a dozen of them packed with overpriced lures, nearly all of which are still in their packaging. Aside from his enjoyment of fishing, I don’t know why he developed a fetish for tackle boxes. If I were to guess, he would have asked for a very nice one when we were children, and most likely was shot down by our parents. That’s a typical experience for many children, they see something, they ask their parents, the parents say no, and the kid becomes obsessed with the thing they can’t have. I’m sure adults who can’t afford something they want share a similar experience as it’s part of human nature. One of the offshoots of my brother’s obsession with tackle boxes, at least when he was a child, was that it became a family joke when discussing the pricing of anything. Go out for dinner at a moderately priced restaurant? “You could buy a tackle box with that!” My brother would exclaim. A household repair, well that was eight tackle boxes. A new car? That’s like six hundred tackle boxes. There were some benefits to using the tackle box method, but I don’t like it. I use something else.

In a world where so many things are measured in billions and trillions, it’s really hard to understand the scope of these numbers. There are definitely techniques you can use to better grasp what the big numbers mean. My brother used a rule called “the power of one” where you break down a very big number into something you can easily comprehend. If you were looking at the national debt, it’s hard to wrap your head around what, at the time of this writing, 23 trillion dollars means. If you say that every American citizen owes 90,000 dollars, that’s much easier to comprehend. For an eleven year old boy, 600 high end $50 tackle boxes is easier to process conceptually than a $15,000 new car. This technique is clearly great to figure out the scope of pricing but in my mind it doesn’t really show where you are compared to the rest of the world. It’s why instead of something like tackle boxes I think in terms of everything based upon where it sits on a bell curve.

Of course most people don’t think in terms of bell curves. In the same way my brother adopted his tackle box metric from his interests, I think I adopted my metric from the things I pay attention to. In my case it’s economics, psychology, and information technology. All topics that have tons of charted measurements as part of the discipline. The more I saw them, the more they entered into my thinking for my conceptual understanding of life. For the benefit of blog readers and podcast listeners who don’t look at bell curves, a good way to describe them comes from the Simple Psychology website. The site describes the Normal Distribution, i.e. the foundation of the bell curve as:

“The normal distribution is a continuous probability distribution that is symmetrical on both sides of the mean, so the right side of the center is a mirror image of the left side. It’s called the bell curve because when data is plotted on the chart, it looks like a bell.”

If you were to draw a big chart to represent something, say the home size of 1,000 random people, you’d write information on the chart to represent each data point, i.e. the size of each home you are looking at. The highest point would be the average size or something close to the average size home. Right now the average size home in the US is 2300 square feet. The tallest list, which would be in the center of the graph would be the homes right at 2300 square feet. Some people would live in homes that are 100–2200 square feet in size and some people would live in 2400–4500 square feet or larger. Their points on the graph would be to the left and right respectively When it’s all plotted out it’ll look like a bell.

You can see this concept nearly everywhere. Again to quote simplypsychology.com:

“The normal distribution is the most important probability distribution in statistics because many continuous data in nature and psychology displays this bell-shaped curve when compiled and graphed.”

What they are saying is that there is always an average in every data set, and then, by the nature of an average there is an above average and a below average, and it’s often balanced. Most people get familiar with this concept as children with their grade point average. Your in the 70 percentile. Your in the 30 percentile, etc.. It’s a very easy way for parents to see where their kid is expected to perform on standardized tests and to know where the kids need help. In my experience most parents only use it to boast when their kids are doing well. My kid is in the 95th percentile in math!

My home is 3200 square feet, I know from a quick internet search that I’m in the top 25% of homes. If my home was a standardized test, I’d be in the top 75 percentile. I guess if my housing performance was being monitored by my parents, I would have earned a McFlurry for that on the way home from work today. I like the bell curve because of this and I think it’s what makes the bell curve so powerful. You can almost immediately see where you are compared to everyone else without the human distortions that we often get from our surrounding community. What are human distortions? They are how we have a tendency to distort our understanding of the world based upon what we perceive around us. One example can be seen when you look at that housing number. A close friend in my neighborhood has a 6500 sq foot house. His place makes mine feel very small. On top of this my buddy only has two people living in the house where I have four. In truth every house in my neighborhood is bigger than mine so it’s easy to see why I would think my housing situation is inadequate. Yet, I can console myself knowing my house is 33% bigger than most homes in America.

The bell curves power to help back people away from human distortions isn’t limited to just me. I have a family member who is always comparing where he is in his career to those around him. For years he’d complain that he didn’t hit the big time yet. His income, measured in the hundreds of thousands per year, puts him very close to the top 1% of wage earners in the country. He couldn’t comprehend how phenomenally wealthy he was until I showed him where his income was on a bell curve. He’s still bitching about the people around him with more stock options, but his rhetoric about his income disparity has gone down substantially after a few reminders that he’s in the top 1%.

So I use the bell curve regularly. Where is my income compared to others? What is my weight compared to others on the curve? It really does help ground me (my income), and show me where I need to improve(my weight). That being said, the bell curve isn’t the be-all end-all to understanding your place in the universe. It’s a tool, and like every tool if used improperly, it may break things more than it fixes things. The way you can mis-use this tool is with the data set. If I measured my home size using a bell curve based on the homes in my neighborhood, then mine would be far to the left and I’d be paranoid that I’m a failure in life because my home is so small. Another example could be when the whole data set is meaningless. My go to example here is retirement. If you want to retire in the traditional sense, meaning you don’t have to work and have enough money to do what you want, you need a good deal of money from various sources. If I were to plot where I am in terms of retirement savings using a normal distribution on the bell curve, I’m probably in the top 75 percentile. That would be great except that I’m still woefully underfunded for the aforementioned goal. Even though I used everyone in America as my data set, the nation’s retirement system, i.e. the 401K, is hugely flawed. We are severely underfunded for our collective retirement. The top 75 percentile is simply not enough, well not enough if you want to enjoy the benefits the world offers in your retirement like you did during your working years.

There is also the challenge of using a normal distribution as a self fulfilling prophecy. I’m in education and when grading students the literature talks about the grading curve, i.e. the bell curve with a normal distribution. In theory, some students will get A’s and B’s, the Average Student will get a C, and there will be a few with D’s and F’s. I’ve had a class where year after year the majority of the students got A’s. I felt like I was making it too easy, so I made some changes in what I expect out of the assignments and now when I look at my gradebook it’s a normal distribution, or it more closely matches a normal distribution. Still, this leads to some questions. I ask myself: Is the course more fair now or was the material simply the type that is easy to grasp. Is my data set (my students) the right set? Should I be looking at all my students’ grades across all their courses? I know there are some courses where the majority of students fail. This is by design. It’s better for a student to fail in the early part of some especially rigorous programs. It’s because these programs usually include things like clinicals with very limited space. You need to make sure those spaces aren’t reserved for a student who will fail out further down the line. So if I take all of those into consideration the students’ grade distribution may not be skewed when considering the “easy A” they were getting in my class.

The normal distribution, or more specifically understanding where you, or the person you are observing, sit in any bell curve is a really powerful visual tool. That’s why I love it. It grounds you and helps you understand what the reality of the situation is. It also helps you understand what questions to ask. Numbers don’t lie. When you are feeling like you haven’t done enough, or don’t have enough, ask yourself where are you in the distribution? Are you far to the right? If so, maybe you aren’t doing so badly. Are you far to the left? Then what is keeping you there and can you change it? Do you even want to change it? The key to success in all of this, as I’ve said, is using the right population to measure your position on the curve.

This tool is used in practically any situation where there is a body of data, not just with people and personal progress. It’s a fundamental tool used by nearly every mathematician, statistician, quality control professional, and really any other person who cares about data. That’s why I wrote this article. I think many professionals use it in their day to day work life but it’s one of those tools that you can use to really gauge where you are in your personal life too. Clearly there is a ton of value when considering your life and really thinking about where you sit on the various bell curves. If you haven’t done it yet I would recommend you take some time to do just that. You’ll need some place where you can get away with your thoughts. One activity I can recommend that will give you the time to think is fishing. If you don’t have any fishing equipment don’t worry. I know a guy who has a few hundred extra rapalas. I’m sure he’ll let you borrow a few if you ask nicely.

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Mike Peluso

Mike Peluso writes is about the collision between the professional world and life. Read more at www.pelusopresents.com or listen to the Peluso Presents Podcast