Is financial success more about planning or luck?
In the book Rich Kids, Tom Corley discusses three different kinds of luck:
Random luck is the kind of luck we can’t control. Random good luck includes winning the lottery or getting an unexpected windfall. Conversely, examples of random bad luck include sudden illness or being struck by lightning.
Opportunity luck is good luck created as a result of your actions. You can create good luck by following positive “rich” habits that enrich your lifestyle and protect you from fiscal harm. An example of this would be getting an unexpected bonus from work, based on your diligent work. If you hadn’t worked hard and made yourself indispensable to your company, you may not have received a reward. In other words, your hard work created this piece of good luck. By following good practices, you are able to create your own good fortune.
Detrimental luck is the dark side of opportunity luck. This is when, as a result of following “poverty habits,” bad things happen. For example, poor money habits, such as overspending and not saving, can bring you to a financial crisis. If your bad financial habits mean that you don’t have an emergency fund, then you can easily find yourself in a financial crisis.
What is the best way to create your own good luck?
Random luck will never be within your control. But you can create better opportunities for yourself and head off potential crises by adopting rich habits. Following a positive lifestyle gives you a positive outlook and the tools to create better opportunities for you.
Acquiring good habits may be easier said than done. To learn how to create habits that really stick, listen to this six-minute podcast.
Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.
Published September 6, 2016.