Lucky or Good?

[gardenfun]

I'm enjoying reading the responses on this thread. I did my doctoral dissertation in social psychology on this very topic 35 years ago: To what do people attribute their successes (and failures)--to internal or external factors?

A whole field in psychology called "causal attribution". Of course, the attributions being made depend on a number of factors, including how much evidence we have for being lucky or being good.

Most of the folks posting here have evidence of how one or the other (luck: external, or being "good": internal) have played a part in their lives.

There is also research on how we make causal attributions for others: "Oh, he was just lucky..."

Thanks for sharing! Brings me back to graduate school days.

 

[Mulligan]

The luck part was entering a profession with a generous pension, as it had no bearing on my reason I chose it. The skill part was deciding to end a relationship 10 years ago with someone younger than me eager to start a family which would have been my next go around... I would still be working now instead of being retired 5 years if that had happened!


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[photoguy]

I'm enjoying reading the responses on this thread. I did my doctoral dissertation in social psychology on this very topic 35 years ago: To what do people attribute their successes (and failures)--to internal or external factors?

I suppose there's a huge dollop of bias in attributing success (I worked hard but that other guy was just lazy). What is the technical term for this?

When I look at myself I had a huge amount of LYBM, working hard to get a degree in a remunerative field (actually multiple degrees), endless hours spent learning about investing, etc.

But I also had quite a bit of luck: parents who valued education and sent me to an expensive semi-private school, not getting arrested for vandalism, dad managing to flee north korea, having the 2009 recession hit during my peak earning years, winning scholarships that paid a big chunk of my education, etc.

 

[growing_older]

Sure, I had lots of middle sized luck. Good parents, a stable childhood, good education that I didn't mess up too badly, I happen to like computers so even if I didn't plan any career and didn't really get one I was able to find work fairly easily, no company I worked for made it big so no windfall there, but when they went out of business I was willing to take lesser jobs so usually wasn't unemployed for long. Lucky with a good stock market and no world war in my lifetime. Only a few big investing setbacks, and learned form them to not take that kind of risk.

So I guess that's a kind of lucky. But I mostly just do LBYM and keep doing it no matter what, so that's also a kind of good, too. Not that I made any smart moves to capture brilliant gains, or was anything special at work to get top salary. I'm a plodder, but I'm apparently good at it, and that was good enough. Perhaps not the kind of lucky or the kind of good intended in the original question.

 

[gardenfun]

I suppose there's a huge dollop of bias in attributing success (I worked hard but that other guy was just lazy). What is the technical term for this?

When I look at myself I had a huge amount of LYBM, working hard to get a degree in a remunerative field (actually multiple degrees), endless hours spent learning about investing, etc.

But I also had quite a bit of luck: parents who valued education and sent me to an expensive semi-private school, not getting arrested for vandalism, dad managing to flee north korea, having the 2009 recession hit during my peak earning years, winning scholarships that paid a big chunk of my education, etc.

Hi photoguy--you got the technical term correct--it's "causal attribution bias". Goes the same way for failure: "hey, it wasn't my fault!!".

These kinds of attributions are only human, though. If we didn't take at least partial credit for our successes and take only partial blame for our failures, we wouldn't be able to get out of bed in the morning! We'd be too depressed.

Often we make different causal attributions in public (to others) than in private (to ourselves). That was the thrust of my dissertation project.

Gee, it's kinda fun to be reminded of the work I did 35 years ago--still interesting to me. Thanks for listening!

 

[MRG]

I was lucky, working in a job that was horrible, in a horrible industry. Two disgusting bosses(both making big money) made my job a total nightmare. Not having other opportunities in this area I worked full time there, and 6 hours at night school. Then the coursework on weekends.

When I interviewed at Megacorp, they mentioned long hours. Explained I was partially prepared due to my schooling. Worked for a wonderful person, actually a few. I earned respect at senior levels, was constantly challenged and rewarded.

Along the way, because of people at Megacorp, I learned the power of investing. Megacorp funded profit sharing, later a great 401k. Thanks to what I had learned, fully funding my 401k was a no brainer.
Several option grants, not huge money, it was invested.

MIl/FIL left us some inheritance, not a huge amount, but it had a big impact. We became debt free. The biggest benefit was it changed my DWs thoughts in money. She became very LBYM, because her DF had worked so hard. She was not going to unwisely spend her parents money.

After close to 30 years, management changes had me working again for 2 disgusting bosses.

Once again I reinvented myself, this time ER.

Those fist two disgusting bosses, that were making big bucks. They blew it all, both are FRA, working to eat.

I consider myself blessed, disgusting people helped me earn a better life.

Life sure is funny,
MRG

 

[W2R]

I was definitely lucky - -

1) Lucky to be located in the USA where so much is possible to accomplish

2) Lucky to born at a time when opportunity abounded for women more than in the past

3) Lucky to have a big brother who told me firmly that I could figure out how to retire, when I thought it seemed too impossibly tough to even try

That said, I think that I would never have been able to retire if I had not made it a top priority in my life. It all comes down to math, and one must be willing to spend what is mathematically feasible and consistent with retiring at the specified time. That means no more, "gosh, I couldn't live on THAT", "I couldn't do without THAT", and more thinking about ways to cut back that maybe never came to mind before.

Then after doing all that, on the verge of my retirement I came into an unexpected modest inheritance. There's some more of that lucky stuff! But I was all set to retire in 2009 with or without it, despite the crash, so haven't spent any of it yet.

 

[Dash man]

I was definitely lucky - -

1) Lucky to be located in the USA where so much is possible to accomplish

2) Lucky to born at a time when opportunity abounded for women more than in the past

3) Lucky to have a big brother who told me firmly that I could figure out how to retire, when I thought it seemed too impossibly tough to even try

That said, I think that I would never have been able to retire if I had not made it a top priority in my life. It all comes down to math, and one must be willing to spend what is mathematically feasible and consistent with retiring at the specified time. That means no more, "gosh, I couldn't live on THAT", "I couldn't do without THAT", and more thinking about ways to cut back that maybe never came to mind before.

Then after doing all that, on the verge of my retirement I came into an unexpected modest inheritance. There's some more of that lucky stuff! But I was all set to retire in 2009 with or without it, despite the crash, so haven't spent any of it yet.

I don't believe it's luck. Millions have those same opportunities and fail to capitalize on them. You made decisions along the way that allowed you to accomplish what you did. You performed the work needed to get yourself where you are. Everyone has choices, but too many look for immediate gratification rather than thinking long term. Some learn from every opportunity whether successful or not, while many never try or give up. Even lottery winners often lose their winnings within a few years, yet most on this board never won the big jackpot. Successful early retirement has little to do with luck.

 

[FIREd]

A bit of both, although I would not presume to call myself "good". We worked hard, planned, made some sacrifices, and painstakingly saved most of our income over many years. Still, luck played an important part. We have enjoyed a high income throughout our careers without working harder than many minimum wage workers. We made money with stock options granted at a fortuitous time (2008-2009). And family has been very generous in their bequest to us.

 

[Walt34]

Pretty much the same kind of luck everyone else here had. Born into a more-or-less stable family, didn't screw up so badly I went to jail, picked a stable job and employer with a pension, educational opportunity.

Living within or below our means had a lot to do with it. I know a lot of guys with the same chances I had are still working and not because they want to.

 

[Zorba]

I'm enjoying reading the responses on this thread. I did my doctoral dissertation in social psychology on this very topic 35 years ago: To what do people attribute their successes (and failures)--to internal or external factors?

In my working life I have often quoted T. Jefferson. "I am a great believer in luck, I find the harder I work the more I have of it."

 

[sengsational]

I don't believe it's luck. Millions have those same opportunities and fail to capitalize on them. You made decisions along the way that allowed you to accomplish what you did. You performed the work needed to get yourself where you are. Everyone has choices, but too many look for immediate gratification rather than thinking long term. Some learn from every opportunity whether successful or not, while many never try or give up. Even lottery winners often lose their winnings within a few years, yet most on this board never won the big jackpot. Successful early retirement has little to do with luck.

A lot of the background luck stuff is necessary but not sufficient. I love the Thomas J quote!

 

[ERhoosier]

Fortune favors the prepared mind.
----------Louis Pasteur

If it wasn't for bad luck, I wouldn't have no luck at all.
---------------------------------Booker T Jones

Most fall somewhere in the middle.

 

[clifp]

Getting a marketable degree Good
Entering the job market at very good time Lucky

Working for company that gave stock options. Good
Having those stock options go up 5-50x. Very lucky

Maxing out my 401K and LYBM good
Having my peak accumulation period be during the go go 90 lucky.

Selling tech stocks and buying bonds in Jan 2000, good and lucky.

 

[34rlsa]

Luck is the residue of desire.

 

[Badger]

I worked long hours in my low paying career choice that had no bonuses, stock options, incentive pay, etc. However, I was able to do something that I loved and something in which I was good. Eventually learned a little about investing that was enough to realize that LBYM was going to be a necessity if I was ever going to eat more than cat food if I could ever retire. Found free or inexpensive ways to enjoy my off time and ignored the more free spending habits of friends. Learned how to repair things when they broke (car, house, appliances, etc.). Made it a point to not owe money to anyone. There were a few bumps in the road but I survived. I was lucky three times. I had loving parents. They found a small liberal arts college that was the best choice for me. My wife worked with me on a plan to be financially secure when we retire. Anything else we earned.

Cheers!

 

[keegs]

being good is easier when you're lucky.

 

[Shanky]

I think most folks on this forum recognize the amount of good fortune allowed their success to happen. There are still a few who believe all it takes is pulling your self up by your own bootstraps or some such gibberish.

There are many who are more virtuous than you, smarter than you, and worked harder than you who will never be in a position to retire at all. Serious illness, disabled child or family member, born in the wrong country at the wrong time etc. The list is endless. Count your blessings and support those less fortunate.

 

[imoldernu]

“Here's the thing about luck...you don't know if it's good or bad until you have some perspective.” ~ Alice Hoffman

Am into 25th year of gaining perspective.

 

[MBAustin]

Pretty much the same kind of luck everyone else here had. Born into a more-or-less stable family, didn't screw up so badly I went to jail, picked a stable job and employer with a pension, educational opportunity.

Living within or below our means had a lot to do with it. I know a lot of guys with the same chances I had are still working and not because they want to.

Pretty much sums it up for me. Also, two things about my late father helped a lot:
- he was very much into investing (got into mutual funds in the 1970s when he finally made enough money to have something to save) and pounded the value of compounding into my head from the time I was a young teenager. So I started my own investing about 6 months out of college.
- he also pounded it into my head never to take out a car loan, always pay cash. It certainly helped that they started me off with my first car while in college, but after that it's been cash all the way (I made sure DH was in agreement with that before we got married). That sort of sets the "LBYM" tone for us.

So thanks, Dad!

 

[FUEGO]

Quantitatively, we weren't that lucky with respect to investments. In fact we probably had some $hitty luck. Our returns over the last 9 years were 8% per year (geometric mean), compared to 7% per year for the S&P 500. We took on a small amount of additional risk with a slice n dice portfolio of high flying emerging markets, small cap international, REITs, etc. The standard deviation of our portfolio was just a percent or two more than the S&P 500.

The way we created our own luck was by continuing to dump money into our investments as the sky fell around us (according to almost everyone around us, except some of you guys here).

This question of "were we lucky or good?" is an interesting one. I recently penned an article ("I Have a Luck Making Machine") that dealt with this theme. Perhaps just a little tongue in cheek.

 

[CaliforniaMan]

My father used to always tell me that "luck is when perpetration meets opportunity"....... I just wish I didn't have to prepare so damn hard to get lucky!!

LOL. Unless you're related to Willie Sutton, my guess is that your father said 'preparation'...

I agree but I just had to look up perpetration anyway:

noun
the doing of an action <the perpetration of a series of pranks that resulted in an expulsion from school>

Synonyms
accomplishment, achievement, discharge, enactment, execution, fulfillment (or fulfilment), implementation, performance, perpetration, prosecution, pursuance

Kind of works too even if you aren't Willie Sutton (which I had to look up also)!

 

[Derslickmeister]

I wonder what the distribution looks like for someone that was a saver, just stuffing everything into fixed income products: CDs, saving accounts, money markets, treasuries. I'll bet the end result is very close (within 1-2%), too close to really justify the extra risk and fees associated with the market...

 

[Al in Ohio]

I wonder what the distribution looks like for someone that was a saver, just stuffing everything into fixed income products: CDs, saving accounts, money markets, treasuries. I'll bet the end result is very close (within 1-2%), too close to really justify the extra risk and fees associated with the market...

Ah no.


Thats a simple calculation and its not even close to just 1-2%. Certainly not over a 30+ year timespan.

 

[SVHoper]

Very grateful to say that for us, it was definitely more lucky than good:

Lucky: Started in orphanage in a developing country, adopted by parents and taken to first world where the value of LBYM and education were instilled.
Lucky: Completely lucked into superb spouse
Lucky: Read Rich Dad, Poor Dad which had more impact on my management of $$$ than an MBA
Lucky: Benefited from real estate appreciation
Lucky: Fell into job with stock options which are paying for 3 kids' college
Lucky: Spouse parents left sizable inheritance (no plans to spend it at all), which combined with stock options provided FI a decade? or more earlier than we would have by ourselves.
Lucky: Found financial education which hopefully will allow us to be good stewards of inherited $.

Good: Hard work, perseverance and scholarship for degree
Good: Worked hard (enjoyable) and gave value to all employers
Good: $ went to house mortgage rather than luxury spending

I think the Good would allow us to be comfortable middle class, but the Lucky is what gave us FI, opportunity to ER and made up for some unlucky and dumb moves (and also allows us to now drift into being less Good and a fair bit indulgent).

Lately focusing a bit more on being Gooder.