What role has luck played in your financial success

[Dr. Doom]

One of the ways I think of these things as luck laddering over time.

The first rung is genetics as I don't have any major physical issues
The second is being born in a western country.  Not that this is a hard-and-fast pre-req but it makes things so much easier than, say, being born in Uganda.
Third:  mostly loving parents.  Although they're financially idiots and they hated each other (ended up divorced), they really cared about me which is the most important thing parents can do, obviously.  This point is important because most kids from bleak homes do not have good life or financial outcomes.
Fourth:  Friends -- a group of amazing, nutty nerds (I say that with 100% affection) brought me into their group in jr. high, and suddenly having non-mainstream interests was not only okay, but completely awesome.  Prior to that I was headed in a much crappier direction (smoking, skipping school).  This was important for personal development and ego.
Fifth: I was lucky enough to have an uncle who was into computers and engineering who got me interested enough in the subject to try for a CS degree, which in turn resulted in high earnings.  Prior to him, I was going to go the English/Teacher route, which would have made this journey much, much different for me.  Not impossible, just different.

At that point, I'm working for the Man and I started making my own rungs -- I think at this point luck's effect was a lot lower and my own drive, consistency and perseverance kicked in.

Some of luck is accepting the opportunities life provides, being open to challenge and change, and taking that next step wherever you see it.  But it's important to recognize that not everyone has the same set of opportunities.   Opportunities and circumstance=luck.

[BlueMR2]

Mostly bad luck in the market, but am making it anyways.  Everytime I've had to pull money out of the market to pay for something, it's been worth less than when I put it in.  I have terrible luck, my long term CDs continue to outperform my stocks.

OTOH, I've had great luck with the housing and automotive markets.  Getting my house at near the bottom (plus the free Obama money), got screaming bargains on all my vehicles, etc.  Great luck with school too, I was able to go for free due to a parent managing to get a job at the school.

As far as my starting point, it was mixed.  Bottom end of the middle class, but taught to save at least a little, preferably more.

[hybrid]

Being a golfer, I'll use a golf analogy. It's a lot easier to make an eight foot putt than a fifty foot putt. Pros make eight foot putts about half the time, and a fifty foot putt a mere 3% of the time. It's simple percentages. The longer the putt, the less chance it goes in the hole even if the putter is skilled and works hard at his game.

http://thesandtrap.com/t/51757/pga-tour-putts-gained-make-percentage-stats

If you are white, male, born in a western country, are smart, have good parents, and have decent opportunities then your "putt" is much, much shorter than someone from the third world. The former has a short putt to make, and the longer a much longer putt. Some people will never even get the chance to putt.

The former still has to work hard at becoming a good putter, you don't get credit just for being close to the hole. The latter needs some good fortune to offset long odds. In both cases balls are going to go in the hole given enough chances. The difference being the closer you are to the hole, the easier it is to make that putt, and the more that go in.

I think a lot of successful people too often forget that the putt they make often starts a lot closer to the hole than for some other people, and that's what luck is. (The baseball saying is some people are born on 3rd base thinking they hit a triple).

[RootofGood]

Being a golfer, I'll use a golf analogy.

To continue the analogy, how many golfers on the PGA tour would attribute their pro status as luck and how many as the culmination of years of hard effort? 

A lot would acknowledge playing golf from an early age and having supportive parents and an environment amenable to golfing.  But I bet all of them practice like crazy and are intently focused on the game. 

Among the ER crowd, you see a lot of people that started out with a merely average life, but worked hard (putting luck to work sometimes) to reach FI, something not attainable by many mere mortals it seems.  That's luck and effort mixed together. 

At a biological level, we're all extremely lucky.  We out swam millions of competing spermatozoa in a literal race for our lives.  So high fives (high tails?) all around for that stroke of luck. 

[thepokercab]

Obviously, luck plays some role, but its just hard to quantify. 

There's obviously the genetic lottery, and its hard to argue that someone who has born with degenerative issues or other disabilities that prevent them from reaching full potential is 'less lucky' than someone who is born healthy. Not a lot of personal choice there.  So for that, I certainly feel lucky. 

Then comes the environment that you were born into, and this is probably more up for debate.  I feel like being born as a white male in America, to two parents who provided me a stable environment counts as "luck". when it comes to my financial success. I certainly didn't choose those things, but nonetheless I feel like they certainly helped me achieve the success I've had today.  Once again these weren't choices I made. 

After that, i suppose it gets more murky.  Obviously I feel like that the choices I've made and the work i've done start to account for my success somewhere along the line.I like to play poker, so for instance, you might get dealt pocket Aces, which is an incredibly lucky hand to get,  but you can't win unless you play them.. so I decided to go to school, get good grades, get a job, do well at the job, start savings money etc..  But, i feel like its important to remember that I got a good head start (Pocket Aces, well maybe Ace/Jack in my case) at the biological and environmental level.   

Obviously sometimes you lose when you get pocket Aces, either because of bad luck and/ or you played them poorly, just as sometimes you win when you get dealt Seven, Deuce- either because of good luck and/or you played them beautifully.  But, it's still easier to win with the pocket Aces.   
   

[deborah]

I had a person who wanted a raise, but who was not performing at the level needed. He did good work - he just didn't take any responsibility. I had a chat to him about the work he had done over the past couple of months, showing him things he could have done that would have justified the raise. After this, he suddenly started working at that level, and in a few months got the raise he wanted. Everyone commented on his new attitude and its suddenness. I believe that our talk was a light bulb moment for him.

A few years later, I ran into him, and he had completely forgotten the incident. I feel that some people here are also forgetting "light bulb moments" that actually did change your outlook, and make it much more likely that you would become FI.

[Jamesqf]

To continue the analogy, how many golfers on the PGA tour would attribute their pro status as luck and how many as the culmination of years of hard effort?

Yes, much as I dislike golf, that's exactly the point.  Not whether you were born with or without this or that, or here instead of there, or whether the Earth is going to be hit by a giant asteroid next week.  Those are things absolutely beyond your control, and in most cases they're meaningless questions, akin to the old pro-lifer one of asking where you'd be if your mom had had an abortion.

There's another issue here, the one of self-fulfilling prophecy, which comes out of the question of whether or not there is such a thing as free will.  Now I don't think it's possible to give a definite answer to that, because the no-free-will camp can always claim that any instance of free will is simply an illusion.  (Much as your diehard Creationist can answer any question with "Well, God made it like that!")  However, if there is free will but you are convinced that it's all uncontrollable fate, you will never make choices to improve your lot, thus proving to yourself that you were right...

[ender]

Obviously sometimes you lose when you get pocket Aces, either because of bad luck and/ or you played them poorly, just as sometimes you win when you get dealt Seven, Deuce- either because of good luck and/or you played them beautifully.  But, it's still easier to win with the pocket Aces.   
   

There are a surprising number of people (imo, a very high percentage when it comes to this topic of financial success) who fold pocket aces before the flop, too.

[MrsPete]

Being a golfer, I'll use a golf analogy. It's a lot easier to make an eight foot putt than a fifty foot putt. Pros make eight foot putts about half the time, and a fifty foot putt a mere 3% of the time. It's simple percentages. The longer the putt, the less chance it goes in the hole even if the putter is skilled and works hard at his game.

http://thesandtrap.com/t/51757/pga-tour-putts-gained-make-percentage-stats

If you are white, male, born in a western country, are smart, have good parents, and have decent opportunities then your "putt" is much, much shorter than someone from the third world. The former has a short putt to make, and the longer a much longer putt. Some people will never even get the chance to putt.

The former still has to work hard at becoming a good putter, you don't get credit just for being close to the hole. The latter needs some good fortune to offset long odds. In both cases balls are going to go in the hole given enough chances. The difference being the closer you are to the hole, the easier it is to make that putt, and the more that go in.

I think a lot of successful people too often forget that the putt they make often starts a lot closer to the hole than for some other people, and that's what luck is. (The baseball saying is some people are born on 3rd base thinking they hit a triple).

Excellent analogy. 

[obstinate]

I was lucky to be born with a certain kind of mind that is good at certain types of problems. I was lucky to have parents who could afford to send me to a good school. I was lucky to meet like-minded people at school and win a programming contest. I was lucky that a certain company recruited heavily from the winners of that contest, and lucky that that company needed engineers the year we won. I was lucky to get placed on a team where the more senior people actively developed the new talent, and lucky to get projects where I could grow my skills and demonstrate that growth.

Luck was a HUGE component on the income side. On the expense side, I don't think there's very much luck involved, besides the accident of my genetic predispositions and financially conservative upbringing, although those are huge factors too.

Anyone who can look at their life from behind the veil of ignorance and say, "Yeah, it'd have gone that well either way," I think, is just deceiving themselves.

[Jamesqf]

I was lucky to be born with a certain kind of mind that is good at certain types of problems.

Would you be you if you didn't have that kind of mind?  So how is it luck that you're you?

I was lucky to have parents who could afford to send me to a good school.

I bet some of your classmates were about as successful as you were, even though they were unlucky enough not to have parents who paid for their college.

I was lucky to meet like-minded people at school and win a programming contest.

It's not entirely, or even mostly, luck when you made a deliberate choice to be in an environment - a university CS department, no? - where there are many like-minded people.  And was it luck that won you the programming contest, or superior skill?  I think the latter, unless the judges made their decision by flipping coins :-)

I was lucky that a certain company recruited heavily from the winners of that contest, and lucky that that company needed engineers the year we won.

Luck, or a deliberate choice by the company to recruit from a pool of demonstrated talent?   A good business practice which contributes to the company's success, leading to their need for more engineers.

I was lucky to get placed on a team where the more senior people actively developed the new talent, and lucky to get projects where I could grow my skills and demonstrate that growth.

Again, was it luck, or good business practice by the company, and your choice to develop your skills?

[waltworks]

He just answered those questions, by saying that he does, indeed, believe that many of the situations he was able to take advantage of were due to luck. Was that not clear?

-W

[Dr. Doom]

Quote from Michael Lewis (author of Moneyball, Liar's Poker...)

People really don’t like to hear success explained away as luck — especially successful people. As they age, and succeed, people feel their success was somehow inevitable. They don’t want to acknowledge the role played by accident in their lives. There is a reason for this: the world does not want to acknowledge it either.

Yeah.  That's about how I feel about it.

[trailrated]

It seems like the general consensus is that luck does play to certain role in most regards because there are a lot of things out of personal control (genetics, where you were born, etc.)

At the end of the day I think what one does with those advantages is even more important than being given them in the first place.

For example: Roughly 70% of lotto winners are broke within 7 years. We can all agree winning the lotto can only be contributed to luck. But having the skills to deal with a windfall or luck of another nature is equally if not more important than receiving the windfall to begin with. I would argue that the 30% that can handle a windfall would end up eventually being financially stable if they had never received it to begin with, while the 70% would most likely not be financially stable either way.

[Jamesqf]

He just answered those questions, by saying that he does, indeed, believe that many of the situations he was able to take advantage of were due to luck. Was that not clear?

Of course what he believes is clear, but belief is not reality.  I am trying to get him, and others here, to think about whether and to what degree it really was luck.  That's the point of discussion, isn't it?  To think about things, rather than (metaphorically) shouting one's opinions into the yawning vastness of cyberspace?

We can all agree winning the lotto can only be contributed to luck.

Well, not entirely luck.  There are, after all, a good number of people (of whom I am one) who will certainly never win the lottery, because they will never buy a lottery ticket.  I would guess that these people are, on average, somewhat more financially successful than those who do play the lottery.  So is this attributable to luck?

[hybrid]

Well, not entirely luck.  There are, after all, a good number of people (of whom I am one) who will certainly never win the lottery, because they will never buy a lottery ticket.  I would guess that these people are, on average, somewhat more financially successful than those who do play the lottery.  So is this attributable to luck?

Yes, entirely. Winning any lottery, raffle, or drawing one is in (whether you purchase a ticket or not) is random chance. Buying lottery tickets in the first place is a separate decision.

What trailrated was going after is how one deals with unexpected windfalls, whether it be lottery, gift, inheritance, whatever. Surely there are many people who did nothing to gain an inheritance other than have the good fortune to have rich relatives (AKA dumb luck) but don't have the right skills to manage one (which props up the argument concerning why inheritance taxes are ultimately unnecessary). Just as there are some people who receive an inheritance and do manage it properly, to which much of their station is in fact just dumb luck (which props up the argument concerning the necessity of inheritance taxes).

[Beridian]

I do not believe in luck, but I certainly beleive that the universe operates in a completely random fashion.  So whether or not good fortune smiles upon someone is a matter of randomness.  I believe that a person’s degree of financial success are roughly a 50/50 mix, where the first 50% is made up of hard work and good decisions and the other 50% is catching a few good breaks here and there or avoiding the bad ones.  So many successful people like to thump their chests and ascribe all of their success to their superior character.  Such folks fail to acknowledge  all the factors in their lives that helped to set them up for success.  Things like having competent parents, a decent community,  good influences, and an adequate education to name a few. 

Conversely most successful people have dodged quite a few bullets that have cut the legs out from under other less fortunate people.  Who hasn’t got behind the wheel a little tipsy a time or two and gotten away with it, while other folks get killed or arrested with the consequences spiraling them downward from there.   Small fateful moments that fall one way or another can have lifelong consequences.   Also don’t overlook the blessings of good health.  While much of good health is due to behavior, a great many totally on-the-ball people get crushed with illness that can derail the best laid plans if not outright kill them.   

One thing that bothers me is the way that so many people get judgmental and critical regarding some of the destructive behaviors of poor people.  Yes, a lot of poor people do behave rather badly, but walk a mile in their shoes.  How would you be doing if you grew up in a broken, abusive, dysfunction house hold with crappy abusive or addicted parents?   How would you do if you went to the worst possible schools and live a life submerged in a violent blight infested neighborhood?   How would you do if all those people who were good influences in your life were replaced by gang bangers and drug pushers?   A select few people can rise above such circumstances, but the odds are stacked highly against them.

Yes, you did much to earn your wealth, but you also caught more than a few lucky breaks along the way, most of which you are probably completely unaware of.

[trailrated]

What trailrated was going after is how one deals with unexpected windfalls, whether it be lottery, gift, inheritance, whatever. Surely there are many people who did nothing to gain an inheritance other than have the good fortune to have rich relatives (AKA dumb luck) but don't have the right skills to manage one (which props up the argument concerning why inheritance taxes are ultimately unnecessary). Just as there are some people who receive an inheritance and do manage it properly, to which much of their station is in fact just dumb luck (which props up the argument concerning the necessity of inheritance taxes).

Spot on, thank you.

[kite]

What's getting lost in the discussion here is that the original premise wasn't merely average success,  but wealth.   Even among those who start and compete on an entirely level playing field, results will follow a random distribution curve.   Overwhelmingly,  most people will achieve average results.   To be wealthy is to be in the far right tail,  and mathematically it is just not possible for everyone who works hard and desires wealth to get wealthy.  Whatever a majority can achieve is merely average.   Admittedly, some do have limitations at the outset, or along the way, or they manage to fuck up what might otherwise have been a decent outcome.

[waltworks]

I think at least some of it is obviously not a choice: the company happened to be hiring for the position he wanted when he was graduating, so if he'd graduated a year earlier or a year later, no job. He had no power to create that part of the situation, what would you ascribe it to? Of course he made good choices to take advantage of the situation, so it's again a pair of necessary conditions - choice and chance.

-W

He just answered those questions, by saying that he does, indeed, believe that many of the situations he was able to take advantage of were due to luck. Was that not clear?

Of course what he believes is clear, but belief is not reality.  I am trying to get him, and others here, to think about whether and to what degree it really was luck.  That's the point of discussion, isn't it?  To think about things, rather than (metaphorically) shouting one's opinions into the yawning vastness of cyberspace?

We can all agree winning the lotto can only be contributed to luck.

Well, not entirely luck.  There are, after all, a good number of people (of whom I am one) who will certainly never win the lottery, because they will never buy a lottery ticket.  I would guess that these people are, on average, somewhat more financially successful than those who do play the lottery.  So is this attributable to luck?

[Jamesqf]

Yes, entirely. Winning any lottery, raffle, or drawing one is in (whether you purchase a ticket or not) is random chance. Buying lottery tickets in the first place is a separate decision.

How do you figure that?  Winning a lottery is not possible unless you first buy a lottery ticket.  If a person has chosen, as a matter of fixed principle, never to buy lottery tickets, then how is not winning a matter of random chance?

I'm guessing that people who don't play the lottery have, on average, a rather better understanding of math & finance than those who do play (because, after all, that's WHY they don't play), so it seems reasonable to expect (again, on average) that they'll manage their finances better.

What trailrated was going after is how one deals with unexpected windfalls, whether it be lottery, gift, inheritance, whatever.

Sure, but that's a different question.  It's certainly possible to gain such 'windfalls' through means other than pure luck (though perhaps then it's not right to call them windfalls), as for instance working for a startup which becomes successful thanks in part to your hard work, so you cash in valuable stock options.

What's getting lost in the discussion here is that the original premise wasn't merely average success,  but wealth.

I don't think so.  The OP asked "What role has or has not luck played in your story?"  Now I doubt that most of us could be considered truely wealthy: I'm certainly not, though I'm way ahead of where I started.  As you say, most people should achieve average results, which I think means an economic level not much different from what their parents enjoyed at the same age, or endowed them with when they were kicked out of the nest.  So the question is, or should be, what part did luck play for those of us who've wound up considerably above (or below) that level?

I think at least some of it is obviously not a choice: the company happened to be hiring for the position he wanted when he was graduating, so if he'd graduated a year earlier or a year later, no job.

No job?  When he was obviously near the top of his graduating class, and most if not all CS majors find decent jobs after graduation?  Maybe there's some luck in the fact that he got that particular job, but almost certainly he would have found some job in his field, and probably had some success in it, because he'd worked hard to attain skills that were in demand. 

[waltworks]

We're not talking about *some* job, we're talking about *that* job. Did he choose the circumstances or not?

-W

[Ottawa]

Regarding Luck.  I must agree with James on this one.  Luck is such a bullshit word.  It is very ill defined and means a lot of things to different people: It is a word that really shouldn't exist.

Shallow men believe in luck. Strong men believe in cause and effect.

- Ralph Waldo Emerson


James is really talking about the relationship between cause and effect.  He wants you to examine this. 

[Letj]

I do not believe in luck, but I certainly beleive that the universe operates in a completely random fashion.  So whether or not good fortune smiles upon someone is a matter of randomness.  I believe that a person’s degree of financial success are roughly a 50/50 mix, where the first 50% is made up of hard work and good decisions and the other 50% is catching a few good breaks here and there or avoiding the bad ones.  So many successful people like to thump their chests and ascribe all of their success to their superior character.  Such folks fail to acknowledge  all the factors in their lives that helped to set them up for success.  Things like having competent parents, a decent community,  good influences, and an adequate education to name a few. 

Conversely most successful people have dodged quite a few bullets that have cut the legs out from under other less fortunate people.  Who hasn’t got behind the wheel a little tipsy a time or two and gotten away with it, while other folks get killed or arrested with the consequences spiraling them downward from there.   Small fateful moments that fall one way or another can have lifelong consequences.   Also don’t overlook the blessings of good health.  While much of good health is due to behavior, a great many totally on-the-ball people get crushed with illness that can derail the best laid plans if not outright kill them.   

One thing that bothers me is the way that so many people get judgmental and critical regarding some of the destructive behaviors of poor people.  Yes, a lot of poor people do behave rather badly, but walk a mile in their shoes.  How would you be doing if you grew up in a broken, abusive, dysfunction house hold with crappy abusive or addicted parents?   How would you do if you went to the worst possible schools and live a life submerged in a violent blight infested neighborhood?   How would you do if all those people who were good influences in your life were replaced by gang bangers and drug pushers?   A select few people can rise above such circumstances, but the odds are stacked highly against them.

Yes, you did much to earn your wealth, but you also caught more than a few lucky breaks along the way, most of which you are probably completely unaware of.

Excellent post and spot on.

[PKFFW]

Regarding Luck.  I must agree with James on this one.  Luck is such a bullshit word.  It is very ill defined and means a lot of things to different people: It is a word that really shouldn't exist.

Shallow men believe in luck. Strong men believe in cause and effect.

- Ralph Waldo Emerson


James is really talking about the relationship between cause and effect.  He wants you to examine this.

The problem is that cause and effect, in the context of this discussion, also mean different things to different people.

It is obvious, to Jamesqf at least, that the effects of everything can be directly linked to actions, inactions and decisions taken by the individual.  Therefore all results are directly influence-able by the the individual in question and by extension the responsibility for all results lie squarely with the individual.  In short "luck"(however that is defined) plays no part in results, you get what you deserve plain and simple.

Others believe there are circumstances and situations outside the direct control and influence of the individual.  The obvious examples being genetics and upbringing.  Other examples are less obvious.  For example you might take all reasonable precautions whilst crossing the road and yet still be hit by a car.  I'm sure Jamesqf would reply you could have chosen not to cross the road at all but then who is to say what consequences would have followed the decision not to cross not to mention that if you need to be on the other side of the road what point is there in not crossing?  You might enter a business meeting one morning and not close the deal because the other person just had an argument with his boss and has decided to sabotage his company by refusing you.  Another day you might have closed that big deal because the same person got lucky with his missus that morning and is in a great mood.  The list could go on endlessly.

Quite frankly, anyone who doesn't want to acknowledge the role of chance in the world is living in a fantasy world designed solely for their own ego stroking.  Hard work, good choices, resilience, determination, talent......these are all necessary and, in all likelihood, far more important than chance.  But to deny chance plays a part is to deny reality as evidenced every day.

[MoneyCat]

A lot of my success is due to luck.  I was lucky to be born in the United States instead of being born in a third world country where I would have practically no chance of ever being successful.  I was lucky enough to have a good public school system, even though I grew up in a rural area, which included an offered AP course that saved me some money for college.  Even though I was unlucky enough to be born into poverty, I was lucky to have two parents at home, which greatly improved my chances of success statistically.  I was lucky to be born in a state with an inexpensive and highly rated public university system with strong financial aid for needy students.  Hard work is extremely important, but luck will always play a role in success.  Hard work often puts you in the position to capitalize on luck.

[Insanity]

I think a side question is: Do you believe in Free Will? 

As for me, I am very lucky for many reasons:
1) I've loved the field of computer programming on my own with no influence from my family since I was a teenager.  They let me do what I wanted with it. I graduated at a  time when the WWW was coming up and I happened to be good at it.
2) After programming, I've gotten into computer security which is also now in hot demand.  I am one of the few who has a very good security understanding, and an understanding of software engineering.  This is a great combination.
3) After my sophomore year of college, I was coming home from my co-op program and fell asleep at the wheel.  I crossed a double yellow line and woke up with branches flying at the windshield.  I crashed into a tree.  I got no tickets.  I was not hurt.   The first vehicle I saw coming the other direction: a dump truck.
4) In 2008, I had emergency surgery and was put in a medical coma for 3 days.  I should have died.  I don't know if the lord was saving me because I didn't go to the hospital in order to not leave my wife stranded or if he did it for me to suffer with the difficulties of my marriage.  All I know, is that I was hours from death and I made it.
5) In 2009, I ran a red light by almost 3 seconds.  My wife was in the hospital 6 months pregnant with our first.  We didn't know what was going on.  I had to run home because she was going to be staying the night and I was freaking out.  Nobody at the cross street started.  A cop was at the intersection and pulled me over.  I did the right thing - pulled right over as soon as I saw him in my mirror (I don't think he turned his lights on till after I had pulled over), hands on the wheel, flashers on, window down.  I told him what happened with my wife and that I know I ran the light.  Gave him my license and insurance card and he let me go -- claimed to be out of tickets.


Life is a bunch of random acts driven by physics of a very complicated system.  We have some impact in how much force we apply to make changes to those events.  Sometimes it takes those random events to make a force strong enough in us to change.

[thepokercab]

Regarding Luck.  I must agree with James on this one.  Luck is such a bullshit word.  It is very ill defined and means a lot of things to different people: It is a word that really shouldn't exist.

Shallow men believe in luck. Strong men believe in cause and effect.

- Ralph Waldo Emerson


James is really talking about the relationship between cause and effect.  He wants you to examine this.

So how does one determine cause and effect in an open, complex system? I think we can agree that the human experience is complicated, with multiple overlapping variables, which make it difficult to come to deterministic conclusions.

Or are we going to argue that we live in a linear, deterministic world where X causes Y, so X must ALWAYS be followed by Y? 

Of course sociologists and other social scientists conduct experiments and research that aim to find causality in the social world- I'm sure James puts a ton of faith in their results :)

[Jamesqf]

We're not talking about *some* job, we're talking about *that* job. Did he choose the circumstances or not?

No, we are talking about success - or at least I am.  If you're having a different discussion, that could explain a lot of the confusion :-)

Of course I'm not saying that luck plays no role in life, just that is in general* a minor determinant of ultimate success.  The bottom line is that he chose courses of action that greatly increased his odds of getting a well-paying CS job.  Then if he makes the choice to improve his skills, he greatly increases his odds of career advancement; if he lives below his income and invests the rest sensibly, he greatly increases his odds of becoming FI, etc.

*And the other nonsense argument about it being 'lucky' to be born into particular circumstances, when you wouldn't be you if you hadn't.

How would you be doing if you grew up in a broken, abusive, dysfunction house hold with crappy abusive or addicted parents?

And exactly what makes you think I didn't?  Replace urban blight with way back in the hills, and the drugs with fundamentalist religion, and you're pretty darn close to my childhood.

[Ottawa]

In short "luck"(however that is defined) plays no part in results, you get what you deserve plain and simple.

I agree with the first bit, but not the second.  The implication that people get what they deserve is a little too karmic for me.  It suggest that (good or bad) there is an invocation of explanation by deity...which I am strongly against.

Others believe there are circumstances and situations outside the direct control and influence of the individual.  The obvious examples being genetics and upbringing.  Other examples are less obvious.

 

Yes, there are plenty of things (most) that are outside your direct control. 

Quite frankly, anyone who doesn't want to acknowledge the role of chance in the world is living in a fantasy world designed solely for their own ego stroking.  Hard work, good choices, resilience, determination, talent......these are all necessary and, in all likelihood, far more important than chance.  But to deny chance plays a part is to deny reality as evidenced every day.

Yes chance!  As long as you define it as the mathematical probability of an event occurring (or not occuring).  We don't necessarily have to understand the cascade of events that enables such an occurrence.  It would be arrogant to think that we understand much of the complexities around us at all.  Just because we don't understand something fully, it doesn't mean we should start lobbing words like CHANCE or LUCK or GOD or GHOST.   

[Ottawa]

A lot of my success is due to luck.  I was lucky to be born in the United States instead of being born in a third world country where I would have practically no chance of ever being successful.  I was lucky enough to have a good public school system, even though I grew up in a rural area, which included an offered AP course that saved me some money for college.  Even though I was unlucky enough to be born into poverty, I was lucky to have two parents at home, which greatly improved my chances of success statistically.  I was lucky to be born in a state with an inexpensive and highly rated public university system with strong financial aid for needy students.  Hard work is extremely important, but luck will always play a role in success.  Hard work often puts you in the position to capitalize on luck.

The notion that you are lucky to be born in the US is a fleeting snapshot - if the cold war had gone nuclear and Russia beat the US to the button...well you wouldn't have been so lucky right?  Your attribution of luck to all the things that brought you to typing some shit into the computer today sells you short.  Luck is a bullshit word.  You have likely sought opportunites that fit with your life view...and avoided those that didn't -  on average.

You are also making an incredibly sweeping generalization that being born in a third world country is necessarily bad.  There are plenty of places RIGHT HERE in North America that you may not have wished to be 'born into'.  You are projecting YOUR experience onto what you believe the experience of someone else might be.  You are equating happiness or satisfaction with success*.

I would argue that hard work isn't even necessary.  That is what people who achieve results through hard work would want to believe though.  They wouldn't want to believe that you could be successful* without hard work.  One can also adopt smart work..or quite frankly enjoyable work. 

* What the hell does success even mean?  What is the framework in which this is answered?  Can it be generalized at all or is it extremely personal?

[Ottawa]

I think a side question is: Do you believe in Free Will? 

Life is a bunch of random acts driven by physics of a very complicated system.  We have some impact in how much force we apply to make changes to those events.  Sometimes it takes those random events to make a force strong enough in us to change.

Whoah - steady there Insanity, some folks are still not out of the relatively simple luck maze!  Free will is a complicated discussion. 

[kite]

If you don't like the word "luck" then you can substitute the word "chance".  And please read "Fooled by Randomness: the hidden role of chance in markets and everyday life" to put the role of chance into perspective. 
There is a popular philosophy among personal finance people that most stuff is within your control and the cause and effect formula is foolproof.   This is reinforced by books like Millionaire Next Door and The Secret; and is popular among a lot of mustachians, it seems.  MND is hugely entertaining,  but the frugal farmers who did all the right things and still went broke weren't interviewed.  And they are the majority: the ones who lost the generations old family farms.  Taleb calls this "ignoring the graveyard" and rightly points out the error of survivorship bias in Stanley&Danko's logic.   I'm saying that Ramsey is making the same mistake.   Will I be better off financially if I skip Lattes and stay out of debt?  Certainly.   Will doing so make me wealthy?  No, with one exception.  If I can write about my special latte skipping method and convince others to buy my book, I might get wealthy. ..aka.. Greater Fool theory. 
Admittedly,  I'm not perfectly versed on Ramsey.  He might have been saying that Americans are already lucky enough so quit screwing up already.   That may be what everyone who dismisses the role of chance intends.   Or maybe they suffer from fatigue at the notion of privilege checking as has become such an awful college campus admonition to white males.  None of the above negates the powerful impact of chance.

[dude]

I acknowledge that "luck" has played a big role in my success, primarily in the form of opportunity, but I think taking advantage of those opportunities instead of squandering them is what often separates the "lucky" from the "unlucky."

How "luck" has aided me:

1. As others have mentioned, the birth lottery -- "Born in the USA, I was, born . . ."

2. When things looked bleak for financing my soph year in college as I was working two jobs that summer (framing houses by day, bouncing at a nightclub by night) to try to save, a letter came in the mail offering me a full academic scholarship based on my frosh year success.

3. While applying to law school and generally setting my sights outside the top tier, I encountered a counselor at school who scolded me for my choices, and pushed me to aim higher.  The result was getting into a Top 10 law school.

4. Second year law school, working for a law firm, did not get the funnel offer for employment post-law school.  This turned out to be a blessing in disguise, as I ended up in my current career as a result, and it's been a perfect fit for me as far as law jobs go.  Oh, and graduating law school during a hot legal market.

So a little luck in each of these instances for sure, but largely because I'd set myself up to take advantage of the opportunities that came my way.  W/r/t (2) hard work toward earning a high GPA led to the opportunity, (3) an upper-tier LSAT score and high undergrad GPA led to the opportunity, and (4) law school success, life experience (incl. military service) and solid interviewing skills led to the opportunity.  So yes, luck, but not without preparation and the willingness to seize opportunity.

[dude]

Being a golfer, I'll use a golf analogy. It's a lot easier to make an eight foot putt than a fifty foot putt. Pros make eight foot putts about half the time, and a fifty foot putt a mere 3% of the time. It's simple percentages. The longer the putt, the less chance it goes in the hole even if the putter is skilled and works hard at his game.

http://thesandtrap.com/t/51757/pga-tour-putts-gained-make-percentage-stats

If you are white, male, born in a western country, are smart, have good parents, and have decent opportunities then your "putt" is much, much shorter than someone from the third world. The former has a short putt to make, and the longer a much longer putt. Some people will never even get the chance to putt.

The former still has to work hard at becoming a good putter, you don't get credit just for being close to the hole. The latter needs some good fortune to offset long odds. In both cases balls are going to go in the hole given enough chances. The difference being the closer you are to the hole, the easier it is to make that putt, and the more that go in.

I think a lot of successful people too often forget that the putt they make often starts a lot closer to the hole than for some other people, and that's what luck is. (The baseball saying is some people are born on 3rd base thinking they hit a triple).

Excellent analogy!

[hybrid]

Yes, entirely. Winning any lottery, raffle, or drawing one is in (whether you purchase a ticket or not) is random chance. Buying lottery tickets in the first place is a separate decision.

How do you figure that?  Winning a lottery is not possible unless you first buy a lottery ticket.  If a person has chosen, as a matter of fixed principle, never to buy lottery tickets, then how is not winning a matter of random chance?

You've never been given a lottery ticket? My letter carrier wife gets them as Christmas presents. I've won raffles at events where no one had to buy a ticket. Entirely luck.

If you are going to pick nits James, pick the right ones. You are simply trying to change the narrative to one that fits your view better, that hard work overcomes most anything, as you have experienced firsthand. Yes indeed, it often can for some people. It often doesn't.

Every parent who has sacrificed to give their child better opportunities knows where I am coming from. You cannot guarantee success for your child, but you damn sure can improve their chances. One can in fact create a winning birth lottery for someone else, their kids. Their kids "putt" will be shorter than yours apparently was. Give yourself some credit, you made a more difficult "putt" than some. On the flip side, I am sure you will acknowledge how many children from your circumstances never escape them. Some of those kids surely would if their road was less bumpy. And that would have been the birth lottery manifesting itself. Or, simply put, those kids experienced good luck.   

[CarDude]

Being a golfer, I'll use a golf analogy. It's a lot easier to make an eight foot putt than a fifty foot putt. Pros make eight foot putts about half the time, and a fifty foot putt a mere 3% of the time. It's simple percentages. The longer the putt, the less chance it goes in the hole even if the putter is skilled and works hard at his game.

http://thesandtrap.com/t/51757/pga-tour-putts-gained-make-percentage-stats

If you are white, male, born in a western country, are smart, have good parents, and have decent opportunities then your "putt" is much, much shorter than someone from the third world. The former has a short putt to make, and the longer a much longer putt. Some people will never even get the chance to putt.

The former still has to work hard at becoming a good putter, you don't get credit just for being close to the hole. The latter needs some good fortune to offset long odds. In both cases balls are going to go in the hole given enough chances. The difference being the closer you are to the hole, the easier it is to make that putt, and the more that go in.

I think a lot of successful people too often forget that the putt they make often starts a lot closer to the hole than for some other people, and that's what luck is. (The baseball saying is some people are born on 3rd base thinking they hit a triple).

There needs to be a "best of" section in the forums so posts like this can be archived.

[Jamesqf]

You've never been given a lottery ticket? My letter carrier wife gets them as Christmas presents. I've won raffles at events where no one had to buy a ticket. Entirely luck.

No, I've never been given a lottery ticket.  Must be one of the perks of being a mail carrier :-)  Of course in that situation, it would be a matter of luck, but...

If you are going to pick nits James, pick the right ones.

"Great nits have little nits...", if you'll excuse the paraphrase, and you're picking really little ones.  Of course you can find situations, or (as you do here) create hypothetical ones, where significant things happen through luck, good or bad.  (As for instance the California couple who stumbled across a hoard of gold coins while out hiking: http://time.com/13071/saddle-ridge-hoard-gold-coins/ )  But that doesn't mean that luck controls everything, or even most things.

You are simply trying to change the narrative to one that fits your view better, that hard work overcomes most anything, as you have experienced firsthand.

No, I am not trying to change THE narrative, because there is no single narrative.  I'm simply saying that your narrative is mostly wrong.

And as an aside, it's not necessarily hard work that produces success.  It's more often smart work, or making intelligent decisions.  When I was doing farm work & construction (which count as pretty hard work), I could have spent all my paycheck at the bar on Saturday night, or bought fancy pickups &c on credit.  If I had done so, I'd probably still be doing hard work.

Every parent who has sacrificed to give their child better opportunities knows where I am coming from. You cannot guarantee success for your child, but you damn sure can improve their chances. One can in fact create a winning birth lottery for someone else, their kids.

The point, though, is that this is not 'luck'.  It is a deliberate choice on the part of the parents.

[hybrid]

Every parent who has sacrificed to give their child better opportunities knows where I am coming from. You cannot guarantee success for your child, but you damn sure can improve their chances. One can in fact create a winning birth lottery for someone else, their kids.

The point, though, is that this is not 'luck'.  It is a deliberate choice on the part of the parents.

It's absolutely blind luck from the kids perspective. No one gets to choose which family they get born into. Many posters have noted that they won a birth lottery (including myself), and it helped shaped their lives. 

[hybrid]

There needs to be a "best of" section in the forums so posts like this can be archived.

Thanks everyone for the kind words about that post. They mean a lot coming from this crowd.

[waltworks]

I think maybe some folks just get hung up on the word "luck". Call it "chance" or "randomness" or "uncontrollable circumstance" if that works better.

Putting analogy FTW, btw. That was a great one.

-W

[PKFFW]

agree with the first bit, but not the second.  The implication that people get what they deserve is a little too karmic for me.  It suggest that (good or bad) there is an invocation of explanation by deity...which I am strongly against.

To be clear, that is not what I think and I did not use the word deserve to invoke karma or a deity.

Yes, there are plenty of things (most) that are outside your direct control.

Yes chance!  As long as you define it as the mathematical probability of an event occurring (or not occuring).  We don't necessarily have to understand the cascade of events that enables such an occurrence.  It would be arrogant to think that we understand much of the complexities around us at all.  Just because we don't understand something fully, it doesn't mean we should start lobbing words like CHANCE or LUCK or GOD or GHOST.

Nowhere did I lob the words GOD or GHOST.

If it makes you feel better call it chance, call it randomness, call it uncontrollable events, call it whatever you like it doesn't really bother me as much as it seems to bother you and James.

I don't think anyone here is claiming luck controls everything or even most everything as you an James seem to be implying they are.  The topic of the thread is "what role has luck played in your financial success" NOT "tell us how luck is the sole contributing factor to everything about your financial success".

[Insanity]

I think a side question is: Do you believe in Free Will? 

Life is a bunch of random acts driven by physics of a very complicated system.  We have some impact in how much force we apply to make changes to those events.  Sometimes it takes those random events to make a force strong enough in us to change.

Whoah - steady there Insanity, some folks are still not out of the relatively simple luck maze!  Free will is a complicated discussion.

LOL.

I guess the thing that I have started to believe is that there isn't really luck, there is just an appreciation that things have fallen a certain way.  All of us are impacted in someway by our surroundings and our chemical make up to that reaction.  Some people require more force to see things a certain way and some just have chemical make ups so strong they can't be swayed.

[Ottawa]

Nowhere did I lob the words GOD or GHOST.

I know...it was a warning to others thinking about it :)

If it makes you feel better call it chance, call it randomness, call it uncontrollable events, call it whatever you like it doesn't really bother me as much as it seems to bother you and James.

I don't think anyone here is claiming luck controls everything or even most everything as you an James seem to be implying they are.  The topic of the thread is "what role has luck played in your financial success" NOT "tell us how luck is the sole contributing factor to everything about your financial success".

The reason I like to define words that are so ambiguous and misused is that discussions tend to go to hell straight out of the gate otherwise.  As long as you don't use the word luck...and you offered some excellent choices in your first paragraph...I'm good. 

[Jamesqf]

I don't think anyone here is claiming luck controls everything or even most everything as you an James seem to be implying they are.  The topic of the thread is "what role has luck played in your financial success" NOT "tell us how luck is the sole contributing factor to everything about your financial success".

I'm sorry, but that is exactly what many people have been saying: that not only their own financial success (or lack thereof), but everyone else's, is nothing more than a matter of being born in the right country, having the right parents, and so on.

[PKFFW]

I'm sorry, but that is exactly what many people have been saying: that not only their own financial success (or lack thereof), but everyone else's, is nothing more than a matter of being born in the right country, having the right parents, and so on.

Then I apologise as I must have missed the posts in which people stated their own and everyone else's financial success was "nothing more than a matter of being born in the right country, having the right parents, and so on."

Could you please link to the posts I missed where anyone stated this?

[Insanity]

I'm sorry, but that is exactly what many people have been saying: that not only their own financial success (or lack thereof), but everyone else's, is nothing more than a matter of being born in the right country, having the right parents, and so on.

Then I apologise as I must have missed the posts in which people stated their own and everyone else's financial success was "nothing more than a matter of being born in the right country, having the right parents, and so on."

Could you please link to the posts I missed where anyone stated this?

Most of life is nothing but a series of events that one has no real control over.  You have the perception of having control over it, but you really don't.  We are all the product of our environment and our genetics.  That is it. 

The perception that you could have the same success elsewhere would imply that you had the same education, the same life events, the same consequences for the same actions.  That is just physically impossible. 

[Daisy]

There is a saying:
"Luck is when preparation meets opportunity."

So some of it is beyond your control (opportunity) and some under your control (preparation). Although either can be argued as well.

You can increase your opportunity by what your particular society provides, and also by being open to different situations. For example, I have gotten jobs by casually mentioning that I was looking for a job to someone that then hooked me up with an interview.

You may have access to preparation (education, etc.), but not take advantage of it.

Also, success is relative. One person's 4% SWR of $30,000 @ investments of $750,000 is another person's misery (someone with a high spending lifestyle).

I'm sure there are a lot of people who consider themselves successful because they have achieved their goals (not someone else's more loftier goals), even in third world countries.

And success is not just financial. Someone working until regular retirement age with a large family and lots of love and meaning in their lives might feel more successful than someone who has achieved financial success earlier in life.

Be happy that you have achieved the best you can under the circumstances life has thrown your way.

[Supertaster]

I would attribute a great deal of my success to luck. Even beyond the typical white, male, middle class, US-born demographic.

In after a couple of years in my current job (computer programming) I saw my salary jump by over 50% after a particularly timely bout of depression. I would show up to work focused on ignoring what I perceived as a meaningless life I was living. So I would focus on solving bugs and adding new features. Once I ran out of assigned tasks I would pick up old forgotten tasks. Once I started to run out of those I started scanning the code for anything I though could be better or more clearly documented. I buried myself in work so I wouldn't get into a loop of reminding myself how useless I was. But from a 'performance' stand point I was off the charts.

I was shocked when I got the raise. I really hadn't seen what I was doing as anything more than a way to keep myself occupied, so I wouldn't really describe it as taking advantage of an opportunity. I wasn't even in a mindset where opportunities existed.

If it wasn't for that raise I never would've seen a reason to start learning about personal finance, or investing after that, or the possibilities of early retirement after that. I don't know if anything other than 'luck' can describe such a negative mindset pointing my financial life in a more positive direction.

[PKFFW]

Most of life is nothing but a series of events that one has no real control over.  You have the perception of having control over it, but you really don't.  We are all the product of our environment and our genetics.  That is it.

Personally for as long as I can remember I have had not ascribed to the illusion of control.

I believe we can influence our circumstances though our decisions, work, education etc but we can not control our situation.

The perception that you could have the same success elsewhere would imply that you had the same education, the same life events, the same consequences for the same actions.  That is just physically impossible.

Exactly. 

So wouldn't that argue for the idea that "luck" or chance or whatever one wants to call it, does indeed play a role?  Particularly the fact that there is no guarantee the consequences will be the same even for the same actions?