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May 13, 2009

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"Working hard" never meant just putting in lots of hours--it means working hard at doing things that make a difference.

If you want to make money, you need to work hard at things that make money. Work hard in school, major in something that will get you a viable job, get that job and then work hard to excel in that job and also move up the career ladder.

Unfortunately, killing yourself doing housework will get you nowhere economically. Same for working hard at being a musician, social worker etc. If you want to have even a middle class lifestyle, you better do something different for a living (or have rich relatives & a trust fund).

I always assumed that people who are musicians, social workers, etc are not driven by money--they do what they do for other "rewards". I can't believe that any of them are actually surprised that they don't make any money!

Luck is great, but I don't believe it makes much of a difference for the vast majority of people. The number who get rich by winning the lottery is vanishingly small.

People who inherit wealth shouldn't be defined as "lucky" in my opinion, they just got born into rich families--there's no mystery where their economic security come from.

What percentage of wealthy people attained that by inheriting their wealth? I bet most wealthy people worked hard for it, but the stats would be interesting.

The study should also clarify the group of "rich" people they're talking about: young people with $500K of assets are very different from retired people with the same amount. If you have that much at 26, you're definitely rich and probably either lucky or you inherited it. In contrast, working and saving and investing your whole life can often get you that much eventually. Big difference!

What often appears as "luck" to one person is actually "being prepared for the opportunity when it comes along."

Life could hand the same great opportunity to two people at the same time. One of them is ready to grab it by the horns, the other is worried about "what if's" and "after the kids are out of school" and "after I pay off the car loan" and therefore lets the opportunity pass. Naturally, one becomes wealthy and the other does not.

Is the first person more lucky? I don't think so. The adage "luck favors the prepared mind" is an adage for a reason.

One of my favorite aphorisms is "luck arises when opportunity and preparedness meet."
I have a friend who is a self-made multimillionaire. Listening to some of his stories about ways he made money, one would think, "Boy, he's the luckiest fellow in the world!"
But, he's worked twice as hard as most other folks I know, and has put himself in positions where the "lucky" opportunities came along. When these chances came his way, he was prepared to take advantage of them, and did so.
I've seen all kinds of "lucky" opportunities in my life, but I haven't always done the preparation to be able to take advantage of them when they arose. Therefore, I haven't achieved anywhere near his level of wealth.

Other than the general notion that working hard and being skilled (with the 'right' skills) will increase your probability of succeeding financially, it seems kind of a silly philosophical problem to try to separate and quantify some essence of luck out of the equation. Heck, I'm 'lucky' that I was born with an IQ greater (though probably not by much) than 100. I'm 'lucky' that my genes and my upbringing instilled in me the desire to work hard, which then increased my probability of attaining above average success. I'm 'unlucky' that I'm uncomfortable with the sales side of things.

People who think luck has nothing to do with it are certainly welcome to go back and start over their lives as, say, a woman in Afghanistan, or a low-caste person in India. If you are born a straight white able-bodied male citizen of the United States, you have hit the world-historical jackpot. I'd rather be you than a medieval European king.

I think both luck and hard work alongwith reasonable intelligence is required to make a person rich. But I do tend to agree that luck does play a much larger role in making a person rich or otherwise than most people give it credit for. One definitely needs to be at right place and get right opportunity to deploy his skills to make him /her financially rich.

Without lady luck on ones side its difficlut to imagine being happy while walking to one's bank.

Yes, I do think luck plays a part in everything we do. Wherever there are factors that influences us, but we have no direct control over, luck is at the helm. I could be in the wrong place at the wrong time, unable to stop an incoming bus that will end my life tomorrow, who knows?

That said, luck isn't always random. Sometimes, we do make our own luck. We do steer our ship so to speak, even if we can not control the storm. And I believe that does make a difference.

In the end, we can only do the best we can to make the most of our lives. Let's focus on what we CAN do, and let the rest fall where they may.

I think it's likely a combination. While being at the right place at the right time certainly helps, you also need to be capable of capitalizing on the opportunity.

Almost anybody except for the most unlucky can become financially stable - which would be defined as "money success" by many folks.

You mention getting into the right school and finding the right spouse being factors of luck, and I disagree. Marrying somebody who is going to spend you into the ground or steal or be addicted to drugs or whatever is usually a bad choice - not bad luck (though not always). Just as marrying a responsible, hard working, smart person is a good choice - not good luck.

To become "rich," though, luck is usually factor. In fact, the richer you are the more luck you probably had to have in the process. Consider how many different "right times" and "right places" had to come together for Bill Gates to get where he is.

I feel that Luck certainly plays a role in everything we are and everything we do.

A small amount of good or bad luck can have a big impact. I can trace most of my current life including my job, state of residence, marriage, etc. back to one day when I happened to wander into the job office and see a job listing for the company I now work for. What if that day my car broke down and I couldn't leave home? I don't know if I would have seen the job offer or be where I am today.

Its not all luck though. Hard work, planning, smart choices can all often help you overcome bad luck. But not always.

But then as others have pointed out our intelligence, work ethic and who we are are all impacted by the luck of being born with the abilities and in the home we were.

I don't think that the act of building wealth has much luck involved, beyond the luck of not getting into a major accident that destroys your ability to make a living.

But if you want to become truly rich. As in ditching your 9-5 rich, then you need luck. Real luck that puts the right circumstances in front of you so that you can take advantage of them.

I definitely think that wealth (at least at a younger age) has a lot to do with a mixture of luck, preparedness, opportunity, and just plain being in the right place at the right time.

When I was just a few years out of college my fiancee and I saved like mad to afford a 5% down payment on a condo (we borrowed an additional 5% from our parents). That 5% amounted to only $12,000 but it seemed like it took forever to save. After only 2.5 years we needed to move for work and ended up selling that condo for about $180,000 more than what we paid for it. After paying back our parents we still had a larger chunk of cash than either of us had ever seen before. We've been financially sound ever since (it's true, making money is a lot easier when you have money) and I really think that making that initial condo purchase was the single event that put us there.

No one has mentioned yet how "lucky" we all are to have been born in the United States of America. With the freedom to be "lucky".

Anyone who is successful would be able to recall many lucky breaks they have received throughout their life. This is true whether or not people have admitted it. I've been incredibly lucky as I've been given access to great work opportunities early in my life and I was able to take them and meet the expectation of the role.

Hard work plus intelligence plus opportunity plus luck usually equals success. With patience all elements can be cultivated until luck strikes and makes it all happen.

-Mike

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