Personal Finance

Luck Has Nothing to Do With It


It’s very frustrating when people who don’t know us well attribute our decent financial situation to “luck.” As in, “You’re so lucky that you don’t have debt,” or, “You’re so lucky not to have to worry about your bills.” The conversation usually ends with the other person saying something along the lines of, “I wish I could be as lucky as you.” Of course, good manners dictate that I don’t scoff at their kindly meant words, but I want to tell them that they could be in the same situation as I am, even if they aren’t “lucky.” Because luck had nothing to do with it.

Luck is defined as success or failure apparently brought by chance rather than through one’s own actions. None of our financial success came from anything associated with luck. Everything we have accomplished has come through hard work, discipline, and patience, not some random turn of fate.

Do I believe that there is an element of “luck” involved in personal finance? Not really. Most of what happens with our finances is directly related to our actions, not luck. We make the decisions to spend or save, to wait for a purchase or to give in to the impulse to have it now. We decide whether to go to school so we can get a better job, or to remain where we are. We decide whether to buy insurance to protect our belongings or to take the risk of going without. We decide whether to keep an emergency fund in place to ward off so-called “bad luck” or to spend every cent we make now. We decide whether to save for retirement or hope that an inheritance will bail us out.

Some things may seem like luck (good or bad), but they’re really just life events that happen to everyone at some point. Some people say they have bad luck if they get ill or laid off or face some other financial difficulty. I don’t think it’s that you’re unlucky, it’s just life. Everyone has troubles, illnesses, and financial crises at some point in their lives. The downs are as much a part of life as the ups. It’s how you deal with them and prepare for them that determines your financial future. Not “luck.” Is it “good luck” if you get a major inheritance or win the lottery? Not really. You decided to buy the lottery ticket and take the risk, and someone worked very hard to be able to leave you that money. It’s not “luck” that you got that money, it’s tied to decisions made and actions taken.

The fact that we are debt free and financially comfortable is not the result of luck. We worked hard for the money we earned, sometimes working multiple jobs when necessary. We were disciplined enough to always live below our means, however small or large those means might have been. When it became apparent that further education was necessary to earn more money, we went back to school. We were patient and waited to buy things until we saved the money, rather than buying on impulse. We chose our purchases wisely, buying items that were good quality but not the most expensive thing on the market. We looked for deals and bought a lot of stuff used to save money. We saved for retirement and made sure we had an emergency fund so we could weather layoffs, illnesses and other losses. We avoided debt unless it made very good economic sense, such as to buy our home. We educated ourselves about finance and financial products so that we could make informed decisions, rather than relying on the advice of those who didn’t know us or our situations.

We’ve had our share of problems; bad luck if you want to call it that. Life hasn’t always been rosy and sweet with the money rolling in. There have been tough economic times in our household but we’ve kept to our plan, adjusted our spending and, if we haven’t been able to get ahead, at least we’ve stayed even until the bad times have passed. We’ve never had an inheritance or won the lottery. Money has never once come into our lives that we didn’t earn. We’ve worked, planned, and saved to have our current lifestyle. There wasn’t any luck involved.

When people tell me that I’m so lucky to be where I am, and that they wish they could be as lucky, I want to tell them that anyone can be in this situation without luck. It does require discipline and planning. You have to be willing to live below your means, even if that means being uncomfortable at times. You have to sacrifice some wants now in order to secure your financial future. You have to save, both for the short term and the distant future. You have to have a plan and stick to that plan, even when life gets in the way. You have to educate yourself about finances and make informed, proactive decisions. You can’t just wait around and hope that you’ll get lucky and money will fall from a tree as you pass under it. If you wait for luck to make you financially secure, you’ll never get there. Am I lucky to be debt free and financially secure? No. Am I hard working, disciplined, happy, prepared, anxiety-free, and able to enjoy life? You bet.

Image courtesy of cloud_nine

37 thoughts on “Luck Has Nothing to Do With It

  1. One of my favorite quotes on luck is from the movie The Incredibles, Edna states “Luck favours the prepared”.

  2. In principle, I agree.

    By doing the “right” things, you can increase your chances of success. But you can never guarantee success, and even those who make the right decisions may fail.

    You can stack the deck in your favor, but the cards still may play against you.

  3. Pingback: No BS Finance » The Role of Luck
  4. Sorry, but I cannot agree completely. It is quite acceptable to give yourself credit where it is due, but I don’t accept that luck did not play any role at all. In my own case, I do believe that to a large degree my financial security is of my own making (because of hard work, planning, saving, etc.). However, I also acknowledge that role that luck played:

    – I am lucky to have been born where I was, and not in Sudan or some other country where the cards would be stacked against me as soon as I left the birth canal.

    – I am lucky that I do not suffer from a mental illness that distorts my thinking, including my ability to make clear financial decisions.

    – I am lucky that I am of at least average intelligence. If I were developmentally disabled, it would be harder for me to earn money, set long-term goals, etc.

    – I am lucky that I am not physically disabled, because that would narrow my occupation options and perhaps cause me to incur greater expenses.

  5. Great post.

    MW, I am not sure what your point is. I didn’t have financial aid, a paid for college, or any loans.

    Reminds me I have a friend who is almost 40, and to this day whines incessantly that her parents didn’t pay for her college. Ruined her life. She just goes on and on and on. I never had the heart to tell her that my parent’s didn’t pay for mine either. I think she finds some strange comfort in blaming her parents forever, rather than taking any personal responsibility.

    I much prefer to suck it up and move on with my life. HAs made me a much stronger person.

  6. Agreed. There are many ways to pay for college without a parent’s assistance.

    * Go to a cheaper school.
    * Get a job. My college had tons of jobs on campus. And there were plenty off campus as well.
    * Earn college credit during high school.
    * Borrow money.

    I couldn’t get financial aid either. Not because I have a dysfunctional family, but because my dad worked hard and thus I didn’t qualify. That meant that, because my dad was successful, I graduated with more debt from college than I would otherwise have had.

    As I posted earlier, I do believe that luck has something to do with it, but I also believe that a lot of whiners blame their own lack of initiative on bad luck.

    Of course perhaps initiative is a learned trait, and therefore those without initiative were unlucky to not be taught it?

  7. I agree with #5 and #7 on this issue. It’s important to remember that we all have a great deal of priviledge in society if we really think that “luck” is no factor at all. It is very typical for someone in a priviledged position to downplay that priviledge(subconsciously) so that they can think that they deserve what they have.

    We are getting too close to blaming the victims here for my comfort.

  8. * Go to a cheaper school.
    * Get a job. My college had tons of jobs on campus. And there were plenty off campus as well.
    * Earn college credit during high school.
    * Borrow money.

    I went to a cheap school, passing up the opportunity to attend a number of highly-regarded schools because I didn’t have the money.

    I got a job – at one point I had four jobs.

    I did earn some AP credits in high school.

    I borrowed money, thereby starting out with student loan debt I have never overcome on my minimum wage income.

  9. ok previously you indicated you applied for an IT job and didn’t get it. And now you say you work for minimum wage. You’re not going to convince me there was only one entry level IT job available and your only alternative was minimum wage employment. If this is the economic condition where you live, its time to move.

    I think you need to be a man and start doing something about your life instead of playing the oh poor me crap.

  10. p.s. i worked minimum wage jobs through college, and it took me 8 years to graduate, and i got out with a crap load of debt that i will be paying on over the next 20 years.

    I had to interview for several positions before I landed one.

    yeah, so shut up you big baby.

  11. Minimum Wage

    You always seem to have an excuse for everything and that is exactly what this article is about. Things aren’t easy, but you are a classic example of someone that believes the world is out to get you. If this was your only post, I would give you the benefit of the doubt, you it’s always the same thing post after post.

    I paid my way through college and came out with debt. I actually worked 2 different jobs while taking classes. I paid off my debt by working two jobs and an extra weekend job when I first graduated.

    Yes, it sucked and I wish I could have done other things, but that was what had to be done at the time to pay everything off. So was I lucky or unlucky?

  12. I recommend the book “Nickeled and Dimed” by Barbara Ehrenreich if you are really interested in this subject. She takes on living on minimum wage on this country by trying it out for three months, in three different cities. I understand that it is hard on this forum to talk about personal experiences, because we all are playing the “I’ve worked harder than you” game. But, in the end, it’s a fact that some people need to work harder than others to accomplish the same things, and that isn’t fair for anyone. She does a good job of showing that it really is incredibly hard to live off of minimum wage from a standing (or indebted) start, and that the average priviledged person probably can’t do it.

  13. I agree with you. I’m debt free, have lots of savings, and a great job. Luck has very little to do with it.

    I have been planning on this since I was 11 years old, and I’m not exaggerating. If people want to trade sob stories, I’m sure there are plenty of successful people who can go toe to toe with anybody, myself included.

    Bad things happen to everybody. Completely true that life throws more curves to some than others. But the fact remains that most of the time, those who decide that life will not keep them down.

    As long as we are quoting movies, I will quote a great line from Rocky Balboa, “Aint nobody gonna hit as hard as life. But it ain’t about how hard you hit. It’s about how hard you can get hit and keep moving forward.”

  14. I seriously wonder what you all must do when you walk by homeless people. Do you lecture them on their bad financial planning? Smile to yourself that you are “more motivated” than them? I am sad that so many people have no sympathy for others in need, no ability to deal with the guilt that we all feel about the fact that our society treats people unfairly.

    Double Journey, and everyone – just because some people are successful is not “proof” that other people with similar situations are lazier, less competent, etc. Plus, do you want to back up your claims with some statistics, or just sit back and use the good ol’ “American Dream” stories as your proof-by-example.

  15. Hilary,

    If you look at my post, you will see that i specifically mentioned that I would have sympathy if it wasn’t Minimum Wage complaining. He/She complains about it constantly and having spent much time making suggestions on steps to take in comments and being told time and again that there is always a reason it can’t be done, I no longer have the sympathy. When a person always has an excuse as to why it can’t be done, then I lose sympathy. Those that try and fail, I have respect and support.

  16. Dan – I understand, and I was there for a lot of the history that you’re referring to. But a lot of the other commenters here were not, yet they are very harsh and critical.

    In general, it is very hard for people in bad situations. When they seek out sympathy, often times people try to find their one flaw or mistake, and then blame the problem entirely on that. It’s a common psychological phenomenon – people do it so they can assure themselves that it won’t happen to them. In order to gain sympathy, one must be absolutely flawless, which is certainly not a standard that we hold normally ourselves up to. And then when someone is flawless, they become the “model minority” that everyone else is held up to. I think a lot of that is happening here.

    Sorry if my earlier stuff sounded harsh… but it is so frustrating that so many people here are passing judgement.

    P.S. Sorry MW that we are having this whole conversation as if you are not here.

  17. I have no sympathy for people that don’t work hard and strive to make their life better. I especially can’t stand homeless people (dan #20) because there are plenty of services available funded by the Socialist leaning citizens they can partake of.

    I have only just now started working a single job because my hard work and determination in school finally paid off with a decent job offer. I hear too many people complain about their position in life, but then they choose to sit and watch the TV instead of going to night classes.

    I gladly adhere to portions of Ayn Rand’s philosophy and I encourage people to read Atlas Shrugged, The Virtue of Selfishness, and Capitalism: The Unknown Ideal.

    I refuse to donate to charity and have started fighting to prevent my tax money from helping people that refuse to help themselves. Luck means nothing, hard work means everything. If you don’t like where you are in life, do something to change it, don’t complain about it.

  18. While good preparation can help in a lot of situations, I know from first hand experience that unexpected illnesses (even with insurance) can destroy a family financially. I would say that preparation enhances “luck” but that it can’t guarantee it.

  19. I have two neighbors who are struggling financially right now. One is divorced and pays child support for his five children. He and his kids have tons of big toys- ATVs, snowmobiles, a motorcycle. he works construction and now that things are drying up he’s struggling to make his mortgage payment. his circumstances are due to his decisions, not bad luck.

    My other neighbor is a single father of an 11 YO handicapped daughter, of whom he has had custody for nearly 10 years. Her disabilites are extremely severe, and there is no day care who can care for her while he works. He is limited to working only while she is in school- and she is frequently home sick from school. I’d say there is an element of bad luck there. The only decision he could have made differently would have been to let her go to a foster home rather than caring for her. 🙁

  20. Between both of my parents only my father received his Highschool diploma in his home country of El Salvador. My mother did not get the chance to attend high school living in Mexico, her family had to work to support each other some even at the ages of 7 or 8. They were a few years younger than I am right now when they came to the United States. They’ve both worked hard and I am extremely proud of everything that they have accomplished. I can’t begin to imagine what they went through just so they could grasp onto a better life. No luck there, just opportunity. They didn’t grow up with half the things they gave me and my brothers and sisters. I’m the lucky one to have them as parents.

    I went to a private University that neither of parents could afford.

    How? Loans, grants, scholarships. I mean it was definitely pricey around 45k a year. Was I being selfish or unrealistic? Absolutely not. If I would have chosen a different route I probably could have gone to a cheaper school, but the difference was that my school was willing to help me out and just because my gpa was well over a 3.5 i had 10k from a CAL grant for every year I was in college. Needless to say my grades in highschool paid my way for college. It wasn’t my parents money.

    You know It’s not impossible, some people just aren’t willing to work a little harder to get what they really want.

  21. If I am to believe what many of you seem to be saying, then I guess I must believe that Paris Hilton is one of the most hard-working, talented, and disciplined people in the world? Allrighty then …

  22. Jason H. – So, homeless people should go to shelters, etc. And obviously, shelters are just rolling in money.. it’s not like they turn away hundreds of people every day because there isn’t enough space, money or resources.

    AND, once you convert everyone in the world to you “non-socialist” ways, then there will be NO money for these shelters (because you have sworn off all charities). So, I guess in that case all the homeless people will just die, but good riddance because they are not hard workers, right?

    I feel like I’ve seen you in a play before… maybe A Christmas Carol?

  23. Hilary –

    If you want to give money to shelters, feel free, but don’t tell me I need to help the “unfortunate” or “unlucky” when they don’t see a need to help themselves. There are plenty of opportunities for everyone to earn a living, they just need to actually put forth some effort.

    The Christmas Carol was a great tool for demonizing people that put themselves first in life. I am selfish in the true denotation of the word; concern with one’s own interests. If you attach moral evaluation to it and call it your conotation of the word, fine, but don’t try to make others live by it. I don’t accept the ethics of altruism in the least.

  24. Jason H – You completely side-stepped my criticism. There is not enough money in shelters, etc. for all of the homeless people in our nation. You have no right to say that those people do not try to “help themselves.” How is a homeless person supposed to get a job? They have no good clothes, no ability to bathe themselves, no address to which the companies can correspond. It is not a simple as you wish to see it, but you continue to do so, so that you can feel less guilty about treating them with contempt and congratulating yourself on your hard work.

    I don’t think I’ve ever heard someone defend Scrooge, but whatever. I need to stop reading this blog, it puts me in a bad mood. Have a great Christmas, but that’s probably not possible because it involves giving to others and engaging in other altruistic activities.

  25. Although i’m 100% percent on your side on that i’d just like to add that maybe you can tell that you have had luck to earn the present knowledge and strenght… knowledge + hard word makes you go anywhere ( and way further than credit-cards ownership)

  26. Think Rust Belt, 1981. The regional economy was in the tank. I had a liberal arts degree with a minor in comp sci. Most IT employers wouldn’t even talk to me because they thought I didn’t have “enough” CS.

    Two-thirds of graduating students were leaving the state to find jobs because the area economy was so bad.

    The emerging PC soon rendered my mainframe skills obsolete, or at least unsaleable – there were far more experienced mainframers than the shrinking number of available job openings.

    As if my lack of skills weren’t bad enough, now my age and job stsgnation surely must be powerful obstacles to advancement.

  27. Minimum Wage –

    Yes, I have flipped burgers. That, along with tutoring college math, working at a local computer store, and tutoring high school math paid for my undergrad tuition.

    You woe is me act is old. I was offered store manager within a year of starting at BK, and BK corporate offered to pay all my tuition if I would accept a regional assistant manager job with corporate after school.

    Hillary –

    I did not sidestep your criticism, I said that if you wanted to give money to homeless shelters, go right ahead. I just don’t like hearing how it’s my responsibility to “help the less fortunate” or other rubbish like that. I choose to keep my money, as I believe a vast majority of the “homeless” could obtain gainful employment if there weren’t so many enablers giving them handouts.

  28. That’s nice, and I probably could have become a hamburger manager if I had wanted to, but I never had any desire to do so. I was flipping hamburgers solely to make some money to take classes in the fall.

    So any “solution” for me would have to involve doing something else. And I don’t see others similarly situated getting management-track positions at 50+.

  29. Well, finally an admission at least. You could have improved your lot, but chose not to.

    Nothing wrong with that, but it’s not going to get you a lot of sympathy points either.

  30. well, the fact is that is luck and there is work.In most areas of life (like the financial one) you can use lots of work to succeed using whatever skils you have. yes some may see it like luck and you can explain that although luck had a saying in that, it is you actions that made the situation permanent. Of corse that doesn’t mean that luck does not exist in this situatuations too.And there are many people that use luck to succeed. But let’s talk about other areas l;ike socials. For instance: you have an arbitrary choice to go on two rutes to get to work: by choosing one you are going to meet the girl of your dreams by chance , by choosing the other you are going to just go to work. This is luck in my opinion: When an arbitrary choice that has no actual relevance by itself turns in your favor! For instance you forget to close the water in bathroom and you go back for it. As so you are late 5 minutes, you loose the bus that is going to have a terrible accident that very day. This is luck : arbitrary choice that turns in your favor or not: if you hadn’t come back you have lost your life…

    Istroongly believe luck is there, and you can grab it if you want, but for that you have the “inspiration” to make the right arbitrary choices. That is what lucky people are in my opinion. For instance in your case, you didn’t apply to all the jobs available, and didn’t go to all the interviews: that would be rather hard to do. So the fact to you applied for that job, and went to that interview it is just luck. Yes , the fact that you got the job and you succeded in it it is your work, but the initial step was an act of luck. you might have overlooked the firm for various reasons or not go to the interview because something happened , or got to late because of a traffic jam and thus lost the job. This is luck. To succes the start is usually pure luck, and the rest (keeping it) is usually work! Sometimes though no matter how much you work you just can keep it. This is luck again! So don’t say there is no luck. To be no luck you should know all the possible outcomes of your arbitrary actions. That is so far impossible….

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