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Luck And Preparedness

It’s a common argument. Do successful people succeed because of luck or preparedness? There are many arguments on each side. Our last president was famous for inarticulately saying “You didn’t build that” implying that successful people are lucky and benefit mostly from society. Meanwhile popular culture has this romantic picture of the self-made man and his pickup truck getting ahead simply on the merits of his own actions. But what is the reality?

Evidence to Support Luck

There is certainly plenty of evidence to support luck. For example, where were you born? If you were born in the US your chances of success are probably infinitely higher than if you were born rurally in a third world nation. If you were born with 2 parents or even one that pushed you to succeed you have a leg up. This is before we even get to whether you were born with wealthy parents or parents with connections which society regularly associates with getting lucky. The point here is no matter what you have, some aspect of it is likely due to luck. We are a product of our past experiences good or bad, and not all of those experiences were things we planned for, expected, or even wanted.

So the Answer is Luck Right?

It’s not that simple though. I had friends in high school born to rich parents. You know the type, the ones with the brand new car in high school. The kids who have everything handed to them on a silver platter. You know what though, I had the opportunity to see some of these folks a few years back at a reunion. And you know what, many of them were abject failures. They just never tried to succeed.

Similarly I had a roommate in college who was light years better at our field then I was. He could do things with a computer I could only hope to ever do. However, he never applied it to the assigned task. The last I heard he’d been fired from Google. These people all had one thing in common, despite all the luck in the world they did not convert. They simply didn’t apply themselves and as such they were not prepared to execute on the opportunities luck brought them.

Luck Favors the Prepared

If you can not tell by now I’m a huge fan of the saying “Luck favors the prepared”. Simply put luck is a very real factor, but those who are truly successful put in place the plans and structures to take advantage. For example they mitigate the potential downsides with:

  •  Insurance: Life Insurance helps your family if you die early. Disability insurance helps if your health fails. Umbrella insurance covers you if your sued. All of these are mitigations for situations triggered by bad luck.
  • Emergency Funds: An emergency fund handles surprise financial costs. By definition an emergency is bad luck.
  • Diligence in understanding their own position.

While planning to take advantage of the upside, for example:

  • Taking advantage of educational opportunities. You should always be learning new skills so when an opportunity presents itself you can raise your hand. The opportunities are not limited to class based education of course, but any means of forwarding your skill set.
  • Asking for pay raises. He who asks for a pay raise is the one most likely to receive it. Especially if you ask what you need to get there and then follow through. A raise by itself is luck, but you can increase your probability.
  • Pushing your brand and career. Only you care about your career. Some promotions and movements will likely be caused by being in the right place at the right time. But, often you’ll be in that position because of preparedness. Always present your best brand forward and keep an eye out for new job career opportunities.

Our Recent Spate of Luck

My household has recently had a lot of luck. My wife’s new business fell into her lap, with them asking her if she was interested. No searching for customers here, just luck based on knowing the right people. But my wife was prepared with years of education and the drive to fulfill the job. She also performed exemplary in previous work where those connections observed her drive and abilities. She received the opportunity and was able to execute on them based both on luck and preparedness. That is the way it should be.

Luck should be Recognized to Avoid Judgement, but not Used as an Excuse Not to Prepare

Which really brings me to the reason it matters. There are a lot of people who use preparedness as a justification for giving tough love to drive people to improve. To a degree they have a point. Many people do need tough love to turn around their financial position. They need that push to get control of their finances. They are their own worst enemy. Most people with financial problems are shooting themselves in the foot and need to be told that.

But… It’s a fine line between pushing people to improve and realizing they might have started from a tougher situation in some ways then your own. As you give advice you can not judge them based on your own results. In fact you should not judge others at all. When giving financial advice attempt to do so judgement free and constructive. You’ll have higher probability that your subject will listen and improve based on your advice.

Do you consider success more of a factor of luck or preparedness? How do you keep judgement out of financial advice?


  1. SMM
    SMM August 30, 2017

    I’d also add patience and an appetite for some risk. In the case with your wife, she worked hard and I’m sure management saw that. During that process (patience), she received the new opportunity.

    • FullTimeFinance
      FullTimeFinance August 30, 2017

      Very true. It all worked out in the end.

  2. Gary @ Super Saving Tips
    Gary @ Super Saving Tips August 30, 2017

    That last paragraph is key. Reserving judgment not only gives a higher probability that your advice will be heeded, but without walking a mile in another’s shoes, you really don’t understand all the realities they live with.

    • FullTimeFinance
      FullTimeFinance August 30, 2017

      So true, you never know what someone is truly experiencing. Judgement has no place in constructive advice.

  3. Mustard Seed Money
    Mustard Seed Money August 30, 2017

    I feel like I am prepared but a lot of what has happened to me has been out of my control. My college roommate ended up helping guide my career. If I ended up going to another college I would have never met him. On top of that he indirectly helped me meet my wife. I then was fortunate when I started to work to get selected into a program another friend told me about to get an MBA. So while I was actively doing the right things along the way, I wouldn’t be where I am without the help of others.

    • FullTimeFinance
      FullTimeFinance September 4, 2017

      No doubt a lot is out of our control. But then again you took the steps to make things happen once those opportunities rolled in. An action usually has to follow an opportunity.

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