10 Ways to Get Lucky With Money (Also, Why Luck Is More Important Than Talent and Hard Work for Financial Success)

If you have at least a few hundred thousand, you’re probably feeling at least a bit nervous about the stability of your savings accounts. Well, wipe the smile off your face. New research suggests that your success may have more to do with luck than your skills or even how much effort you put into the job. (Though luck can be manufactured. See below for 10 ways to increase your luck.)

However, let’s start by looking at the distribution of wealth and talent.

Distribution of Wealth and Skills to All People

Researchers A. Pluchino, AE Biondo, and A. Rapisarda noted that although wealth is not distributed equally to all people, people’s skills are shared. Talent and ability generally follow a normal distribution that is approximately equal to the mean. They see that the distribution of wealth should reflect the distribution of talent. But that is not a common occurrence in the world.

Wealth Is Distributed Equally

Wealth inequality – the uneven distribution of money across people, with some people having a lot and others having very little money – is a well-known pattern. Most of us know that in the United States, the richest among us have a greater share of money than the poorest.

However, it turns out that this pattern occurs in all societies and at all scales.

The distribution of wealth follows a pattern in which a small portion of the population has a disproportionately large share of all wealth. This concept is often referred to as the 80/20 rule, which describes 20% of the population controlling at least 80% of the wealth. And, indeed, the ratings are getting worse. Here are a few statistics:

According to Federal Reserve Statistics, the top 1% of US households hold about 31% of total household wealth – a share comparable to, but slightly less than, the combined wealth of the bottom 90% of households.

Talent Is Distributed Equally

Unlike wealth, the distribution of talent (including factors believed to drive wealth such as intelligence, skills, effort, and risk-taking propensity) tends to be evenly spread across nations.

Intelligence and skills are not limited to a certain segment of society, and people from different backgrounds can have different levels of talent. Risk-taking initiatives and behaviors also affect different groups of people, as people from all walks of life engage in hard work and entrepreneurial endeavors.

Do Luck and Randomness, Not Talent or Effort, Drive Wealth Inequality?

It is often believed that the richest among us got there because they are somehow more powerful: they are smarter, harder working, and better than the rest of us. However, research shows that the real key to success is luck.

Data scientists have created a computer model that accounts for the analysis that suggests that luck and randomness, not personal qualities such as talent, intelligence, skills, initiative, or risk-taking, are what drive financial success.

They developed a simple agent-based model to investigate how talent and luck contribute to individual success over time. The model incorporates the assumption that both talent and luck play a role in shaping a person’s career, and examines the dynamics between these factors.

Key findings from the study include:

Both talent and luck contribute to success

The model suggests that both talent and luck are important factors in determining success. Talent increases the chances of success, while luck introduces random fluctuations.

Luck has a major impact on individual success

Research emphasizes the significant impact of luck on individual success. Even highly skilled people may experience variation in their success due to random events or chance.

Luck plays no small part in long-term results

Over time, the effects of luck tend to diminish, and the influence of talent becomes more apparent. However, luck can still play an important role.

Uncertainty

The research highlights the inherent uncertainty in each field of work, emphasizing that success and failure are affected not only by talent and effort but also by external, unpredictable factors.

In summary, this study provides insights into the complex interplay between talent, luck, and success. It suggests that while talent is important for long-term success, luck plays a larger role, especially in short-term outcomes. Research emphasizes the importance of acknowledging randomness and external factors when understanding success and failure in various fields.

Much Success Does Not Correlate with High Talent and Vice-Versa

Luck plays a very important role in success, especially in extreme areas.

The researchers noted, “Great success does not always correspond to great talent, and vice versa.”

They demonstrate this by ranking people according to the number of lucky and unlucky events they have experienced over the course of their 40 years. “It is clear that the most successful people are the lucky ones,” said the researchers. “And the most unsuccessful people are the unlucky ones.”

So, How Do You Get Lucky With Money?

But, guess what! Luck doesn’t happen by chance. Luck can be generated. Below are 10 clear opportunities to improve your luck, as well as your chances, of good financial results.

1. Set goals for yourself

“If you don’t know where you’re going, you’ll end up somewhere else.” – Yogi Berra

When you set clear and specific goals, you have a compass to where you want to go that can guide your actions and increase your chances of success. It is important to define short-term and long-term financial goals. Whether it’s buying a home, financing education, or a comfortable retirement, clearly defined goals provide guidance for your financial plan.

Learn more about setting financial goals.

2. Be consistent

In fact, consistency in financial habits, whether it’s saving, investing, investing, or developing a career, establishes a strong financial foundation and increases the chances of achieving long-term financial success. It is the cumulative effect of small, consistent actions over time that often lead to significant financial accomplishments.

Check out 17 financial habits for more wealth and peace of mind

3. Be brave

“Luck favors the brave.”

Being bold and tenacious in pursuing one’s goals can attract favorable circumstances and unexpected benefits. Luck is often associated with those who step out of their comfort zones to pursue ambitious goals.

4. Diversity

By allocating funds across different asset classes, such as stocks, bonds, and real estate, investors can reduce the impact of underperforming assets on their overall portfolio. This risk mitigation strategy ensures that potential losses from one investment can be offset by gains in others, contributing to a more stable and robust portfolio. Diversification not only protects against unexpected market downturns but also allows investors to capture growth opportunities in different sectors. This well-integrated approach can lead to consistent and favorable returns, providing a measure of luck in navigating the unpredictable nature of the financial markets.

5. Be brave

Chances are you will meet with bad luck. If you have the strength to resist the negative effects of bad luck, you can put yourself in a position to take advantage of the opportunities that come your way.

6. Persist

“There is nothing in the world that can take the place of persistence. Talent will not; there is no such thing as unsuccessful men of talent. Genius will not; intelligence that cannot be rewarded is almost a proverb. Education will not; the world is full of educated fools. Persistence and determination alone are all powerful.

The slogan ‘Press Forward’ has solved and will always solve humanity’s problems.” – Calvin Coolidge

Many “lucky” moments come to those who persevere and struggle to face their challenges. Don’t get confused by the bad speed bumps.

7. Always learn and be open to opportunities

Stay curious and commit to lifelong learning. Gaining new skills and knowledge can open doors to unexpected opportunities. Also, train yourself to recognize and take advantage of opportunities when they arise.

Being open to new ideas, awareness, and reactions can increase your chances of luck.

8. Maintain and monitor a financial sustainability plan

“Luck is what happens when chance meets planning.” – Thomas Edison

If you want to dramatically increase your chances of financial luck and success, creating and maintaining a comprehensive financial plan is a great place to start. Creating a financial plan is an important step in achieving long-term financial success and security. A comprehensive financial plan provides guidance to guide your financial decisions, help you meet your goals and navigate life’s uncertainties.

The program is a guide to “luck” and success.

Build and monitor your plan with the Boldin Retirement Planner.

9. Have a plan B: Be prepared for the worst

“If Plan A doesn’t work, the bullets have 25 more bullets.” – Claire Cook

The unpredictability of life means that not all strategies work out as expected, and setbacks are inevitable. By having different courses of action or contingency plans, people can navigate unexpected turns with ease and flexibility. This flexible mindset not only helps reduce the impact of failure but also opens up new opportunities and avenues for success.

Backup programs encourage a faster approach, allowing people to stay focused on their goals while better preparing themselves to overcome obstacles, ultimately increasing the likelihood of positive outcomes and, in effect, cultivating a sense of “luck” in navigating life’s uncertainties.

Use the Boldin Retirement Planner to not only create a plan, but also have the flexibility to adjust when things go wrong, because things will go wrong.

Check out 21 things that can (and probably will) go wrong in your financial plan.

10. Monitor and Modify Your Plan

“Plans don’t help, but planning is important.” – Dwight D. Eisenhower

The program only shows what you know today. You can increase your chance of luck if you change your plan often, as you and the world change.