Editor’s note: This article was first published in June 2013, and its survey figures are from 2013: over 98% of people worth more than 5 million cite hard work and smart investing, and over 50% say they were in the right place at the right time.
Michael Lewis, author of the best-sellers The Big Short and Moneyball, believes that we shouldn’t underestimate the effect of luck on companies and on each person’s success.
In his speech at Princeton University, he said that success often comes from luck and chance, yet many people tend to explain their own success as the product of talent, hard work and intelligence.
It’s a view I don’t really agree with, even though it’s partly right. Personally, I don’t believe in (good) luck, but I do believe in bad luck: it can happen, and I suppose it often does, that many people or companies give their best, do things well, and run into circumstances beyond their control that lead them to failure. Of course, it would be unlikely for someone who does things very badly to succeed (by luck).
For me, luck is hard work, taking risks others won’t take, and then an absence of bad luck in the risks we take.
A recent study looking at the views of millionaires, business owners and CEOs shows that some of them say luck played an important part in their success, but for the vast majority, hard work, education and preparation, as well as risk-taking, played a much bigger role.
Among people worth more than 5 million, over 98% named hard work and smart investing as the biggest driver of their personal wealth.
Of course, more than 50% admit that “they were in the right place at the right time”, and that this was a very important factor in their financial success.
Business owners, however, are the ones who most often mention luck when they talk about their success.
Still, it’s clear at this point that some people may be confusing luck with seizing an opportunity that is open to everyone but that only a few are able to spot and take advantage of. Opportunities are there for everyone, and lots of people have lots of ideas, but very few end up turning their business ideas into a company, simply because they’re afraid of failure or averse to risk.
Funnily enough, the luckiest people (the ones who say they have the most luck) tend to be better prepared than the rest, with habits of continuous learning. It doesn’t matter whether we’re talking about business or investing. In either field, the best-prepared person is the luckiest.
As we’ve said before, there isn’t a single millionaire on today’s scene who hasn’t worked very hard and spent entire days getting up to speed on what they needed to succeed. In other words, they were preparing themselves to receive luck.
In short:
- Hard work + preparation = success (good luck)
- Laziness + apathy + neglect = failure (bad luck)
Further reading
- The secret of millionaires, told by millionaires
- Five steps to getting rich, by Charlie Munger
- What financial education really is, plus 8 habits of millionaires
Featured image: Justin Hoch at http://www.jhoch.com, CC BY 2.0, via Wikimedia Commons.
