
Why Luck Plays a Big Role in Making You Rich - applecore
http://www.bloomberg.com/news/articles/2016-09-01/why-luck-plays-a-big-role-in-making-you-rich
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wpietri
It's nice to see this getting discussed more, especially in a business outlet
like Bloomberg. Warren Buffett has long been honest about how lucky he is; see
his talk about the Ovarian Lottery.

The just-world fallacy [1] is enormously pernicious. I find myself falling for
it all the time, and on both sides of it. My successes are clearly a sign of
my genius; my failures are obvious proof of my permanent cretinism. It was
Nassim Nicholas Taleb's "Fooled by Randomness" [2] that finally got me to buy
fewer tickets for what Kent Beck calls the "genius-shithead rollercoaster".
Perhaps one day I can stop riding it altogether.

[1] [https://en.wikipedia.org/wiki/Just-
world_hypothesis](https://en.wikipedia.org/wiki/Just-world_hypothesis)

[2] [https://www.amazon.com/Fooled-Randomness-Hidden-Markets-
Ince...](https://www.amazon.com/Fooled-Randomness-Hidden-Markets-
Incerto/dp/0812975219)

~~~
saiya-jin
fallacy or not, I do believe that doing good is... good for mankind,
especially long term. it might not come back to you personally, maybe your
kids and maybe not, but it will make a small difference. and at the end big
difference is nothing but a sum of small differences

~~~
wpietri
How does that relate to the just-world fallacy?

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bbctol
The note about technology increasing winner-take-all systems is important, and
one that has applied throughout human history; technology has always run ahead
of our normal capacity for work, so that by increasing the power of any
individual, it ends up increasing the power of whatever individual is lucky
enough to be the first to hit it big. More lines of communication and the
encroachment of AI onto more industries could push this issue into true
unsustainability, with the one hardworking pioneer lucky enough to capture the
market owning more means of production than ever.

~~~
HUSSTECH
I do not think it is possible for me to agree with you more! I've always had a
hard time trying to articulate it as well as that however.

I came at it from a rather clumsy angle of damage/destruction. Imagine 500
years ago, how much damage could one person do to others. Now as humans have
become so much more efficient in almost every aspect, how much damage could be
done by a single person? An erratic leader with nukes, a big global tech
company running essential services, or even heads of financial institutions
and the monetary supply. One wrong move, even if accidental, can be amplified
so much in this day and age.

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Spooky23
Luck is huge, but remember the old saying that "fortune favors the bold".

Timing and good fortune are often presented as a chance, but you have to be in
the game to take advantage of them. Hard work is a big part of that.

~~~
mikekij
It always amazes me how many people refuse to even put themselves in a
position to be lucky. The small amount of success I've had in my life has been
99% related to just showing up.

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AstralStorm
Conflating risk with "position to be lucky". It so happens that to most
people, actual big opportunity is often available only at the levels of
existential risk.

As in "you may become homeless" level of risk.

~~~
mikekij
Not necessarily. Sometimes all it takes to be in the position to be lucky is
to reach out to executives at companies you are interested in via a cold
email. Some people are too afraid of rejection to do something like that. But
I've found that in 1% of those cold email attempts, something really amazing
happens. Just gotta put yourself out there.

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Terr_
Self-repost from another thread [0]... This reminds me of a bit from "The
Dilbert Future" (1997):

> Most people won't admit how they got their current jobs unless you push them
> up against a built-in wall unit and punch them in the stomach until they
> spill their drink and start yelling, "I'LL NEVER INVITE YOU TO ONE OF MY
> PARTIES AGAIN, YOU DRUNKEN FOOL!"

> I think the reason these annoying people won't tell me how they got their
> jobs is because they are embarrassed to admit luck was involved.

> I can't blame them. Typically the pre-luck part of their careers involved
> doing something enormously pathetic. Take me, for example. I'm a successful
> cartoonist and author because I'm a complete failure at being an employee of
> the local phone company.

[0]
[https://news.ycombinator.com/item?id=11123374](https://news.ycombinator.com/item?id=11123374)

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davidf18
Conversely, bad luck can play a big role in making you poor. For example, Nick
Leeson singlehandedly brought down the world's second oldest merchant bank,
Bearings Bank which was founded in 1762. Lesson was working in Singapore in a
bank that was purchased by Bearings and was allowed to do rogue trading
because the bank's controls weren't yet put in place in the subsidiary.

 _What brought everything down was Lesson placed a short straddle on the Tokyo
and Singapore stock markets on January 16, 1995 betting there would not be
significant market movement. The Kobe earthquake hit early in the morning the
next day, Jan 17._

That was the beginning of the end.

Lesson did serve jail time, but published a book, Rogue Trader, and a major
movie was made as well. Also a documentary.

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sidlls
That was an interesting read. I wish people in our industry were less hostile
to the notion that luck plays a large role in determining success.

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squozzer
In regards to a progressive/punitive consumption tax --

"The most successful people will still be able to afford the best stuff–the
waterfront homes, the front-row seats, the haute couture—but they’ll feel less
pressure to spend and they’ll have less competition for the rarest luxury
goods."

Or put another way, tranfer of consumption from consumer goods to
public/lobbyist-influenced goods.

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pipio21
Most of the wealthy people I know are not lucky, but the opposite: They were
bullied, sexually or physically abused, had their parents die as kids...

People like Elon Musk for example had lots of problems as a kid, he was
bullied a lot.

Steve Jobs also had a lot of problems and as a person he was very difficult to
manage.

Steve Blank had lots of problems in his childhood too.

I personally know well one of the richest persons in the planet, because of a
common hobby. I am not that rich, I don't envy this person and what he went
through.Life becomes so easy after that, even in hard times.

It is fairly common, it looks like if you survive such strong experiences it
can benefit or punish the rest of your life. Some will go to the streets ,
others will rule companies.

In particular, I believe it has a lot to do with your attitudes toward risk.
And of course luck, but most of these people can help but keep trying.

If you try 10 times and fail most people just leave. But if you continue and
success in the 12th, it is no luck. In fact if you never succeed your behavior
will be called and obsessive compulsive and pathologic.

How many times Elon Musk tried to launch and then land a rocket?, the personal
risk that he took was astronomical, most normal people will leave soon under
the same circumstances.

I have seen people doing that, succeeding only at the end, for example when
normal people did it in search for gold it was called the "gold fever",
because people kept trying and trying, even with failure after failure.

Of course when you succeed everybody knew you were the man(the same people
that criticized you when you failed), everybody wants to be your friend, and
politicians want the money you have(and want to raise your taxes with excuses
like how lucky you are or not being fair).

~~~
granfalloon
"But if you continue and success in the 12th, it is no luck. In fact if you
never succeed your behavior will be called and obsessive compulsive and
pathologic."

You say that if you eventually succeed after many failures, it's not luck. But
then you also acknowledge all of the people who never succeed despite their
dogged persistence. How do you reconcile those two statements?

~~~
AstralStorm
There are failures and there are critical failures...

For the less well off (initially lucky), the line between those is much
thinner.

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quickpost
> Which would you rather drive, he asks, a $150,000 Porsche on a well-
> maintained highway, or a $333,000 Ferrari on roads with deep potholes?

Great way to sum up paying higher taxes. I'm going to try and remember that
one the next time I get in a similar discussion.

~~~
AstralStorm
Except there aren't any in the air or on water. One of the favourite ways of
spending guide amounts of money is a yacht or private plane.

~~~
quickpost
Good point - still have to take off and land in the airplane right? I used to
fly in my Dad's two seater, and I can remember him being very grateful there
was a small, municipal airport in Dubois, WY where we could land and fuel up.

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Klockan
Being lucky is mostly about attitude:

[http://www.scientificamerican.com/article/as-luck-would-
have...](http://www.scientificamerican.com/article/as-luck-would-have-it/)

"Lucky" people are those who looks for innovative ways of doing things while
"unlucky" people are those who just blindly does what they are told. There are
opportunities everywhere, you just have to open your eyes to see them!

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davidf18
But there are certain ethnic groups that if you are a member, you have a
higher likelihood of being wealthy. For example, take a look at the Forbes
400.

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joshuaheard
Luck = Skill + Opportunity

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sidlls
Could you explain how that isn't circular? As I see it, opportunity is
infrequently in one's control. Whether one can take advantage of it is less
infrequent, but still often enough outside of one's control. The only thing
about opportunity that isn't heavily influenced by luck is whether, having the
means, one takes advantage of the opportunity.

~~~
hackinthebochs
The point is that there no such thing as luck as we generally understand it,
but rather it is equivalent to opportunity plus skill (or better,
preparedness). That is, you need to be prepared for the opportunity when it
presents itself. Most people aren't and they deem themselves unlucky.

~~~
sidlls
My point was that you're kind of defining luck as a form of opportunity, which
is itself a product of chance. I think maybe you're just describing luck in
different terms without altering what is meant by the concept.

~~~
hackinthebochs
Well luck is usually thought of as favorable chance occurrences, usually as a
way of rationalizing why some people have success in some area and some don't.
The argument is that this form of "luck" doesn't exist. Certainly chance
occurrences are a part of reality, and some of those happen to be favorable
for some people. But ultimately "favorable chance occurrences" isn't a good
explanation for the observed disparity of success. What is a good explanation
is chance occurrences plus preparedness. And so what we generally refer to as
luck is really better understood this way.

~~~
sidlls
How is your explanation better? What studies and research support that?

~~~
hackinthebochs
I don't think the meaning of concepts are the types of things studies
generally shed light on. It's just a philosophical argument. Feel free to
accept it or not.

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maxharris
If you really believe that luck plays such a big role in making you wealthy,
why not quit your job, spend all the money you have on blackjack and lottery
tickets, and hope for the best?

Go on - what's stopping you?

~~~
mikestew
_Go on - what 's stopping you?_

The fact that I understand context and false equivalencies, which you
apparently don't.

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aaron695
Rubbish

> There was a car accident a few hundred yards away from where Frank
> collapsed. Two ambulances responded but the injuries were minor and only one
> was needed.

Or could it be he was on a tennis court (in the slums perhaps?) that had great
medical reply rate, two ambulances sent when one wasn't even needed.

Unless you badly loophole it, via the luck gene or luck parents, which are
part of 'YOU' so I don't think that's allowed.

Your future is what you make of it don't blame or rely on luck, that's a fools
game.

~~~
Retric
Two ambulances where sent to a different, but very close location. Only one of
those where needed. If that other ambulance was sent somewhere else or stayed
at base he would probably have died.

At best his location, health, and timing may have raised his survival from the
default rate of around 2% to around 10-50%, but that's still not great odds.

~~~
aaron695
> cardiac arrest..kills 98 percent of its victims.. most of the rest
> permanently impaired. .... two weeks later... back on the tennis court.

You really buy into this?

It's 6%-18% depending where! You can chose where you live :) and bloomberg
.... 6% is the lower end not relevant to the story.

[http://www.telegraph.co.uk/news/health/news/9687421/Cardiac-...](http://www.telegraph.co.uk/news/health/news/9687421/Cardiac-
arrest-survival-rates-dire-and-not-improving.html)

~~~
Retric
Sudden cardiac arrest is a much more dangerous type of heart attack. There is
none of the pain in extremity early warning and it has very low survival odds.
Remember you normally get some blood flow in a heart attack but this is normal
to zero in seconds.

Much like how blood clots are dangerous but getting a blood clot in your
lungs, brain, or heart are far worse than average.

PS: You could be sitting and talking to your Doctor and it would still have
good odds of killing you.

