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How much of our success is due to luck?
As HumbleDollar’s U.S. readers have occasionally noted, we’ve all been lucky in one crucial way: We live in 2024 in what’s arguably the most economically successful nation ever. That’s meant large swaths of the population have enjoyed financial success, even if they weren’t the best students, or the hardest workers, or the most talented employees.
But our luck doesn’t end there. Before we persuade ourselves that our success was solely due to our own talents and efforts, there’s a host of other factors we should acknowledge.
Nature. Do you enjoy good health? Are you good looking? Do you have innate talents that are highly valued by today’s economy? To be sure, if you don’t nurture those talents or take care of your health, all may be for naught. Still, some folks are born with greater advantages than others, and—if you’re among them—it’s important to recognize that your success isn’t solely due to your hard work.
Nurture. Similarly, some of us have an edge thanks to the family we were born into. Did our parents emphasize the value of education? Did they teach us good habits? Did they pay for college and provide other financial support? Again, we should acknowledge that, unlike many others, we started life with a leg up.
Mentors. I got my first job in journalism a few days after my 19th birthday. I had 10 months between finishing boarding school in England and starting university, and what I learned during those months was probably more valuable than what I learned at Cambridge.
A big reason was Leslie Leven, the editor of a small newspaper in Potomac, Maryland, where I worked during those months. Leslie herself had just earned a degree in journalism from American University, and she seized the chance to teach me what she’d learned. Even today, when I’m writing and editing, I hear her voice in my head.
Employer success. My career was defined by four full-time positions. The longest two were 18 years at The Wall Street Journal and six years at Citigroup. Both businesses struggled during the time I worked there, with frequent rounds of layoffs. I often wondered what it would have been like to work for a profitable, fast-growing company like Nvidia or Google, where presumably there isn’t a constant focus on cutting costs.
Indeed, I remember visiting Google’s New York City headquarters, and seeing the well-stocked kitchens for employees and the comfy places where folks could work. No company I ever worked for would have lavished money on such things.
Stock picks. For those with a fondness for picking individual stocks—that wouldn’t include me—it’s important to grasp a crucial concept: skewness. The most a stock can lose is 100% of its value, but the potential gain is infinite. Each year, the market averages are skewed higher by a minority of stocks with fabulous gains.
Most stock pickers don’t own these stocks, or don’t own enough to notch market-beating gains, but those who do can enjoy returns that are the envy of their neighbors. Are the winners smart or lucky? Given that the vast majority of professional money managers fail to consistently beat the market, despite their ample intelligence, “smarts” sure doesn’t strike me as a convincing explanation.
Lifetime sequence of returns. Were stocks in the dumps when you were saving for retirement, allowing you to buy shares at rock-bottom prices, and did they soar as you approached retirement and started moving money into bonds and cash? Consider yourself lucky—far luckier than those who faced the opposite scenario.
Make no mistake: Luck plays a huge role in our financial success. Cast an eye back over your life. What lucky things happened to you?
Both of us chose health care careers in the U.S. at a time when huge amounts of money have been thrown at it by the government and investors. Then, one of us left practice for 2 companies that sold for nice sums to Dow 30 companies. Also, before we knew better, we invested in some individual stocks that have been on 30-year tears. To balance our success with being born in the U.S., health, careers, and largely stable families, house investing has been dismal over and above providing a nice place to live. I’m also old enough to remember more temperate weather, so the warming is a huge negative, to which of course I have contributed.
Definitely lucky when I started my career. I had zero experience in the IT world, but was able to leverage my background in finance to becoming a software engineer for a supply chain software company. This was the mid-90s and I’ve been in the industry about 30 years now. I still shake my head at my good fortune at getting that first role and the investment that was made in me by the hiring manager. His name was Dave and was infinitely patient and willing to teach as needed. Whenever I’m part of a hiring cycle and see how picky people in the industry have become, I just shake my head and think about how lucky I was. Part of me thinks I had no business getting that job, but I made it a success and went beyond it.
I quote Morgan Housel’s, “People’s lives are a reflection of the experiences they’ve had and the people they’ve met, a lot of which are driven by luck, accident, and chance”. Jonathan, you are the embodiment of that quote.
Here’s my story of luck. Right after college, I found this opportunity with a consulting firm. As a young new hire, I was clueless about startup company. Fast forward a few years. The company was bought out by Sprint and as an employee number 100, I got some stock options. I sold those stock options and bought a nice 1-story house in a lower middle class neighborhood. I got married and our family grew to a household of 5. We then moved to another neighborhood and rent out the first property. That rental real estate has been a windfall for us ever since. Talk about luck !
I have to admit that luck had a great deal to do with my career being successful, but there was also an element of being prepared to take advantage of an opportunity. If I hadn’t already saved enough $$$ to invest when the opportunity presented itself, I would have been left out.
One of my favorite sayings, “I’d rather be lucky than just good.”
What some call luck, I consider to be Blessings…and I have had a truly blessed life.
Years ago, when Stephen Covey’s classic book, “& Habits of Highly Successful People” first came out, I remember doing the exercise he described in the book, where you list the Ten Worst things that you have endured in your lifetime. I guess I would have been @43-44 years old at the time. My wife and I sat down and independently wrote our lists and neither of us could list 10 things. I think I had 7 and she had 7 or 8. Both of us listed the premature deaths of our fathers and I added the loss of my older brother, killed in Viet Nam, to our lists. A job loss, (from which I recovered by getting an even better job) appeared on my list as did losing a large sum on the sale of a home due to a terrible housing market in the mid 1980s, in Oklahoma. I am not sure than even today I would have 10 different items to list, but if I didm it wouldn’t;t be much more than 10.
My point is that most of us have been very lucky or blessed in our lives. We started with having been lucky enough to have been born in The United States of America and it just gets better from there.
Continued Good Luck, fellow HD readers!
There is no question that luck, good and bad, has great influence over our lives. It starts out with what genes you get, what family you are born into, what town (and country) you live in, what early schooling you get, and what events shape your world view as you grow up. One or two good speculative investments that you made in the 1980s or 1990s (and that you lazily decided not to bother taking profits in earlier) might now provide the core of your wealth three or four decades later. That’s luck.
But one can often defeat bad luck and take advantage of good luck. It can be done in a few different ways. One is to anticipate and prepare for the future. One can look for work and investment situations where you might have special skills and that offer good rewards. When opportunity knocks, it is too late to prepare, but luck somehow seems to favor the person who sees where it might hide. Another is to learn about how to protect oneself from the worst impacts of bad job and investment markets and put appropriate safety nets in place. A third is to maintain a fundamental optimism about life and never, ever give up – being willing to work to get ahead, being able to shrug off any current obstacles or misfortunes and soldier on, and being able to enjoy what you have, whether you are wealthy or not.
I was fortunate to start my career at CompuServe where I was hired by Steve Wilhite, known as the creator of the GIF file format (that’s a soft “g” to you, Mr. President…).
Steve was the most prolific programmer I’ve ever known. He’s mostly remembered for creating GIF, but he spent 30 years writing piles of amazing software which helped set the stage for the Web. I can’t overstate the impact he had on a young me. I’ve written two blog posts about him: Choosy Programmers Choose GIF and It Will Be Done When It’s Done.
I was privileged to have a front row seat to watch a master at work.
I only learned of Jonathan through a recent article in the NYT . I wish I had known of him earlier! I am also 68, having moved to the US from Ireland in 1978, and have been lucky in that both my and my wife’s careers were successful, to the extent that even though she is now in home hospice I can cover the considerable expenses. Due to her situation, and the fact that she was the finance wiz, I have had a sort of parallel path to Jonathan’s, but far less stressful: simplifying accounts, explaining to the two children the various accounts, and preparing everything for the inevitable. Apart from the nature/nurture/etc luck that we have had, I also point to the fact that we were the first generation to ride the 401(k) / IRA wave that began in the ’80s, around the start of our careers. We rode the wave, maxing contributions, never buying a new car, frugal but enjoying life (Europe every summer).
On a side note, after learning about Jonathan I did some research – he lived in Metuchen NJ, not far from me. He (or someone with his name) competed in a 5k there some 20+ years ago, with an impressive time of sub 7 minute miles! I might have been in a 5k with him somewhere in central NJ but was certainly not in his league. I still do races, but sub 10 minute/mile is my goal now.
You make a great point about the luck we had of fully riding the 401(k) wave. My employer (Arthur Andersen) was quick to set up a plan and encourage participation. I jumped on the bandwagon and never jumped off.
By the way, Jonathan also has a sub 3 hour marathon on his resume. I tried for many years to accomplish that goal and always came up short.
I don’t have enough space to write about how lucky I have been in my 68 years, but I will mention two. I have been lucky with my heath. They say if you have your health it’s everything. I don’t know if it’s everything, but it’s the main thing to me. Never had a heath issue, have never even had a prescription. I did my part by always living a healthy life style except for a few stupid teenage boy years. The other has to do with my mom. A year after she reached a much deserved retirement she was diagnosed with colon cancer and lived for two more years. I would think how unlucky she was while going through her cancer treatments and how unfair. But she always thought she was very lucky. She left postwar Germany, raised a family that brought her much joy. And would always say to me that no matter what she went through there is always someone worse off. I am still in awe how she handled things. I am lucky to have been raised by her. That I had nothing to do with.
I have been blessed many times throughout my life due to events that I did not plan nor expect. God has been very good to me.
I graduated from HS in 1962 and the last thing I wanted to do was go to college. My mother managed to get me to go to a business college and I completed the equivalent of an associates degree. While at school, a professor got me a part time job with Eastern Air Lines. I soon transferred full time with EAL in Charlotte and eventually got a job at their world class data center. That launched a 44 year IT career. I eventually got my degree which helped me to advance into management roles.
There is no way someone with my background back then could have ever landed the jobs I got in today’s competitive job market. In fact, back then most colleges were just starting computer science programs and they determined computer aptitude through tests.
Another blessing is living in an age with medical advances that successfully deal with so many health problems. I do not believe I would be alive at age 79 if I had been born 100 years earlier. I am a lifelong asthmatic and have other issues that I may not have survived back then. Average life expectancy in 1924 was 58 versus 79 in 2024. As it is, I enjoy pretty good health despite my issues thanks to medical advances and good doctors.
I have been lucky most of my life. As others have said, I was born American. My father was a Naval Intelligence officer who did a great deal of writing, and my mother was a professional librarian, and both had taught school. I never had to think about how to use correct grammar, because perfect grammar was what I always heard from my parents, so that came naturally.
I did not apply myself in high school, being more interested in peace, love, and rock and roll. Despite that, I got into college based on SAT scores. I was very fortunate to be living with my beautiful girlfriend in my freshman year. Her father was a professor at UNC, and she had great study habits, which I quickly assimilated just by spending all my time with her. I became a perennial dean’s list student, even after she left me behind.
I tried various directions in college, finally ending up with a Masters in Computer Science. Not having any interests in specific research areas entering the graduate program, I was given a graduate assistantship in the department’s computer support group, where I excelled. Just as I was about to graduate, the person for whom I worked moved to another department. I applied for and got her job, and eight years later I was the IT Director.
As Jeff Bond said, I was lucky when my first wife left me. Less than a year later, I answered one personal ad in a local entertainment guide. That was how I met my second wife, and we celebrated our 25th anniversary this year. Batting 1000 on personal ads has to be one of the luckier things in my life. In addition, I was lucky in another way: My wife was a clinical social worker, and they don’t get paid a lot. Because of her limited income, she was (and still is) quite thrifty and a good saver. As with my college girlfriend, I assimilated her thriftiness, or at least some of it. As my career progressed, I got raises, and we just plowed the additional money into savings.
Around 2000, I started reading the Work and Money section of the Raleigh News and Observer’s Sunday paper, which included several pages from the Sunday Wall Street Journal. It was there that I found Jonathan Clements’ articles on all the subjects that are dear to Humble Dollar readers: establishing goals, asset allocation based on risk tolerance, diversification, rebalancing, regular saving, using low-cost index funds, and “ignoring the noise”. Jonathan’s articles were certainly a lucky find, and they have served me well.
I was also lucky when I decided to rebalance on the second lowest day of the COVID market crash. I think I might have just read one of Adam Grossman’s articles where he suggested having a plan to rebalance when the market dips by a certain percentage. Previously I had just rebalanced quarterly. I got lucky with my timing that day.
I was lucky to have many mentors helping me along the way. I am now trying to mentor others. Hopefully, they would feel lucky when they look back on their lives.
My wife will tell you that I sometimes marvel at how fortunate I am. Obviously, it’s not all happenstance, but I still wonder sometimes how much of it has to do with being in the. right time, right place. As others have mentioned, I was born in the US to middle class parents.
I’m lucky that the owner of the company where I had my second-to-last job decided I needed to become a salesperson instead of an engineer. It inspired me to look for another job and was offered a position with a company that became my final employer for 20 years.
I’m lucky that I was able to finish engineering school with no debt, largely due to my parents. By the time I finished graduate school I actually had savings.
I’m lucky my first wife left me. I worked for a long time with a therapist that helped me realize that I deserved better. I then met my current (wonderful) wife at a group activity for divorced and separated people. Now I have two amazing sons, and also two wonderful stepdaughters.
For whatever reason, I have a lucky body. Other than replacement of my right knee and left hip, I have no health complaints. I’m shrinking, probably due to 30 years of running, but my weight has been stable for decades. I can physically do pretty much anything I want.
I’m lucky I have friends. I have a HD article scheduled for publication in September that talks about this. My friends come from a wide range of groups: church, family, former employer, previous jobs, and Boy Scouts. I’ve gained new friends through my old friends.
I could go on and on. 🙂
As a statistician I view “luck”; given a large, random sample, tracked over a long period of time as a random variable. In other words given these criteria, it averages out, and everyone gets the same amount of “luck”. The posts from folks I see here would constitute a biased sample, not a representative random sample of the general population. Non-the-less you are fortunate to have “lucked out”. Nothing wrong with that but what about the rest of the population?
This makes some sense, but the cards don’t get reshuffled, so those who are unattractive or unintelligent, for example, don’t suddenly get a new random hand to play in life. We’re stuck with the hand we’re dealt. Some people still overcome these challenges and that’s not luck.
This article and the many comments here are a positive testament to the outstanding character of the Humble Dollar community. Sorry, I can’t even find the right words to type here. This article really hits home as its content is something I’ve often reflected on and it truly resonates with me.
The only thing I’d add is that, over many years, I’ve come to learn that not all inconveniences or what I think of as bad luck in the moment are, upon reflection over time, are not necessarily so. Blessings in disguise perhaps. The quickest way I’ve found to “rehumble” myself and refocus when feeling cocky about what I’ll label as success or good luck is to ask, “Now, what can I do with this good fortune to help others?” It isn’t always about money. Time, the most precious of all, shared with others in many different ways, along with your experience and knowledge (mostly, when asked for but not always) can be a tremendous help to others, even if it takes years before having an impact.
Best to all!
G W, I think you nailed it. Whether our success is pure luck, our own initiative, or some unknowable combination, I guess it doesn’t really matter. Our response should be to help others less fortunate.
As Matt says, born American. Incredible luck right there.
Got a deadly cancer right at the moment a new treatment was approved, and became one of the first breakthrough survivors. Insane luck.
As a reporter, interviewed a new CEO, John Chambers, for a company I’d never heard of called Cisco Systems. I was so impressed I immediately bought all the stock I could with my entire $5000. It went crazy. A few years later I reluctantly sold it at what turned out to be the absolute peak price, never approached again, to buy a house in California that eventually almost doubled in value and started me on my way to financial security. Unbelievable luck.
Yet that isn’t even the best one.
The woman I bought the house for… divorced me a few years later. Served me papers on Valentine’s Day. I walked over to the computer and signed up for the Valentine specials on three dating sites. I was pinged by a woman who liked my smile and my profile describing my travels in China. She was a Chinese immigrant like my ex. Not interested. She was 2000 miles away in Milwaukee. Not interested. We were both getting divorced at the same time. Not interested.
Then she sent me photos. You know what we men think with. Okay, maybe we can talk on the phone. We laughed a lot. She was personally timid and culturally reticent, yet somehow she mustered the courage to get on a plane to go meet a strange American. That was 18 years ago next week. She has made my life.
Right now she’s tapping on my door with a bowl of soup to ease my first encounter with Covid. As Dean Martin sang, how lucky can one guy be?
Let’s not lose sight of the fact there’s a reason we are lucky to be born in the US. It’s because we are ruled by laws, not people. We have freedoms, rights, privileges, and opportunities people in most other countries do not have. This “luck” was hard won by sacrifices of other people who came before us. We are lucky to be US citizens, but we owe it to them, not random chance.
I like to read things that make me think. That is why I visit Humble Dollar every day. In our American Culture, we like to believe in self determination; that anyone can be successful with just hard work. While there is some truth in this notion, we all know that seeds that fall into fertile soil do better than those that fall into less desirable environments. And, even then, the percentage of those seeds that reach maturity and carry their genes into the future is small.
Just being alive at age 78 when less than 55% of those who were born in the US in 1946 are, is proof that chance has a bigger impact than we like to admit.
Even the existence and success of homo sapiens as a species is chance as it occurred during the, very short, most environmentally favorable period in the 4.5 billion year history of our planet.
So, what are some of the things that might have contributed to my current very comfortable life? I think if you just look at the demographics of which segment of society has most of the wealth you could easily describe me. I am male, white, had two parents throughout my childhood, have a college degree, worked for one company for 30 years, married only once and am still married, have lived in the same owned home for over 40 years, had homeowner parents who were children of the Depression and who taught and lived thrift as a way of life.
So, how much of your financial success or lack thereof is your responsibility/fault? How much is just luck?
Here is one little final anecdote: I had a colleague who was transferred to WA from TX and bought a home in this little 2 sq mi town. During the decade he lived here he was stopped by the local police at least 17 times without ever getting a ticket. I have lived here now 45 years and have never been stopped. During the time he lived here, he was the only Black man in the city…..
I guess that I was just lucky.
I voluntarily changed out a flat tire for the internship interviewer who was on campus in a business suit on a bitter cold and snowy February day. I didn’t get this or any other internship because my grades generally weren’t good enough. I ended up working as a painter that summer.
On Thursday night July 1, the interviewer called advising that they had a summer project that needed someone with mechanical aptitude as one of their interns had suddenly quit. The interviewer thought of me and wondered, could I possibly move there on July 4 and start early on Monday, July 5?
I retired from this company 41 years later after a successful internship and nice career. Luck, destiny or divine providence?
The interviewer, Ron Billings, was my Leslie Leven.
This question made me think of the tongue-in-cheek definition of luck being Luck is when preparation meets opportunity. However I just came across an interesting article that suggests that it really isn’t that simple. Here’s a link: https://medium.com/@RationalBadger/luck-preparation-opportunity-1d68a43655f2
I feel extremely lucky to have been born in the United States. We take so much for granted here……and few of us are willing to leave this environment (as crazy as it can be sometimes!) for another.
First and foremost being born in the USA. Secondarily, the harder I worked the luckier I became.
Luck or good Fortune does play an important role in our financial success, as well as our overall success in life. Some people do appear to have been given everything.— fine face and figure, good personality, cheerful disposition, and intelligence. No doubt life isn’t fair. We have to accept the fact that there isn’t any relationship between the equitable and the actual.
there is no rational reason why sometimes misfortune strikes, and things don’t work out. Although life isn’t fair, we have an obligation to do our best anyway. We have all been blessed with strengths and talents to help us deal with the various difficulties Life likes to throw our way.
The best of luck to you, Jonathan. Thank you for a thoughtful article.
Great reminder. However, as much as luck plays a big part in our success, there’s no denying the choices we make and our daily habits also play a big role. I’m not sure where one stops and the other begins.
Great article Jonathan. Perhaps my biggest stroke of luck was attending a HS graduation party in 1980, and meeting the love of my life. During my career, I went through 5 major mergers, with attendant plant closures and layoffs, a sale to PE, and major changes in the industry and government contracting. Somehow I stayed employed during the tough transitions, and offers was able to improve my job. It requited hard work, and flexibility, but it always seemed like something popped up at the time I needed it. No doubt there was a significant amount of luck at each juncture. My wife, and extended family supported me so much, and made it possible to accept some positions which required extensive travel.
I am intrigued by the notion that we can improve our chances of being lucky. I wrote about the concept of luck surface area in this article.
My wife traveled from San Diego to Atlanta for grad school. I met her on a blind date through her classmate with whom I shared an internship, from just a casual comment I followed up on five months later. My future wife had a return ticket home for the day after graduation. But the night of our first date she called her brother to tell him, “I met the man I’m going to marry.”
I’m glad she let me in on the secret!
Yes, we have a a responsibility to nurture our talents and make good choices, but we must recognize something outside of ourselves. That’s true whether we call it luck or providence. What we have has been given to us, and we have no reason to boast.
As I look backward, I realize that even after being born in a great country to wonderful parents with good genes, at a safe, comfortable time in history, I mostly stumbled into a growing profession, happened upon money habits that many of my peers ignored, and met perhaps the only woman that would tolerate me over the long haul.
When I first heard the enigmatic name, HumbleDollor, I was attracted to the incongruity of those two words. Most folks that I knew claimed all the credit for their dollars. And I am still attracted to a man who can remain grateful despite a providence that would embitter many, and cause them to forget all that they had been given.
Well said, Edmund! I second that emotion, most especially your last paragraph – exactly what I was thinking.
Luck only applies when it’s bad, surely the other side is our skill and brilliance?
I’m pretty sure most workplace self-appraisals are written on this delusional basis.
Here’s a relevant verse from the Bible (I Corinthians 4:7) that I’ve meditated on for decades: “For who makes you different from anyone else? What do you have that you did not receive? And if you did receive it, why do you boast as if you did not?”
Thanks for the reminder, Jonathan, about how much luck plays a part in our lives, and that we should therefore remain humble and help those who haven’t been so lucky.
That’s the most important lesson that my husband and I tried to instill in our children and one that I’m now trying to instill in my grandson. I see that my adult children help others a lot and I’m grateful for that. Sometimes our helpful endeavors don’t pan out as well as we hoped, but that doesn’t mean we should quit trying. We just try to learn something and move on.