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"Blast from the past - Best of Eddie" - This one is originally from December 2010. If there's an old post from Eddie you'd like to see up again shoot me a message.

Sorry for the delay this morning, guys. I'm back in the States and writing this from a CC's coffee shop in New Orleans. It's good to be back in the ol' U.S. of A. Anyway, this is a conversation I've been wanting to have on the site for awhile. Do the rich work harder than the poor in America, or are they just lucky? This Journal article from late September lays out the case.

According to Virgin's Richard Branson, luck has more to do with it than hard work. I can't really say for sure, as I've done fairly well in life and I've worked very hard (at times), but I'm also the luckiest bastard I know. If past is truly prologue (and I believe it is) then being rescued as an infant from a London orphanage by an American family had more to do with my success in life than anything that happened after that. And no one, least of all me, could ever claim that wasn't anything but a giant stroke of unbelievable luck.

A recent study conducted by Nobel-winning psychologist Daniel Kahneman indicates otherwise though. It shows that the rich actually do work harder than the poor, and by a wide margin.

Quote:
His study found that people who earn less than $20,000 a year, for instance, spent more than a third of their time in passive leisure, like kicking back and watching TV. By contrast, those earning more than $100,000 a year (more affluent than wealthy), spent less than a fifth of their time in passive leisure.

I don't think there's any doubt on WSO that the majority of wealthy people are workaholics, despite the Paris Hiltons of the world who receive all the press. Another study by Steven Landsburg indicates that the uber-wealthy consider their work to be their recreation, and therefore eschew what most of us consider leisurely activities in favor of more time at the office.

Quote:
For many of today’s rich there is no such thing as “leisure” in the classic sense — work is their play. They don’t sit around the polo field or lounge around the country club all day like Old Money. The new rich are perpetual-motion machines — young, driven and always working on the next project.

Building wealth to them is a creative process, and the closest thing they have to fun. They’re uncomfortable hanging around the club or sitting on the beach (Several people I interviewed for my book said they’ve never sat through an entire movie, because they get bored.) Their version of “fun” or “leisure” revolves around making money and creating businesses, activities defined as “work” in most economic studies.

While I often admire the gargantuan work ethic of these guys, I can't say I envy them. In a lot of ways, the poor know a lot more about work/life balance than the super rich. And I love my time off.

So I have two questions for you guys, and I'd like your input.

First, does the average rich person work harder than the average poor person? And second, how much of becoming wealthy is hard work, and how much is just dumb luck?

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Comments (62)

  • TNA's picture

    When you bust your ass, get an education and move up the ladder, work is less menial and more impacting. Of course it will be more fun. When you factor in all the work it took for a wealthy person to obtain that position, usually they work harder.

  • monty09's picture

    dinner tomorrow eddie? hit me up on im

  • Merger_Mandrill's picture

    It seems to me that if you are making below $20,000 a year you are probably in a job that makes you not want to work harder - which it sounds like harder is being defined as longer in the quote above.
    It also seems to me that if you are complacent with your $20,000 then you don't have the motivation or drive needed to make more money and become rich.
    I almost feel as though the "hard work" phrase should be replaced by the word motivation or drive. Are the rich more driven? When put it in those words it makes you think about it from a different perspective.


    “Whatever you do, don’t be a victim. If you’re in a bad situation, try to fix it. If you can’t fix it, move on. Don’t whine.” --Jack Welch

  • Edmundo Braverman's picture

    When I was 20 years old, I shared a 1-bedroom apartment with two other guys. It was basically a sick party pad. Anyway, one of my roommates was about 24 and hung drywall for a living. He was a die hard wake-and-baker, and I didn't need an alarm clock - I'd just wake up at 5:30 when I heard his bong gurgling.

    That guy worked like a BEAST and didn't make much. But he spent most of his time high (even at work), so it didn't bother him.

  • Kenny_Powers_CFA's picture

    There's more than one way to earn $20,000.

    My cousin used to make around that after dropping out of college working on a loading dock, moving loading crates of bottled and canned drinks on and off of trucks. He was physically exhausted every day and it was hard for him to muster the energy do to anything BUT passive leisure, even though he preferred golfing and swimming to watching TV. The fact that he was such a hard worker eventually showed through and he now has a good job going as an assistant manager of a department store with 1/4 of a college education-pays his bills with a good amount left over and he works around 60 hrs a week, leaving him time with his wife and kid.

    My high school buddy never started college and makes about that delivering pizzas and working in the kitchen of the same place he's worked since HS, not even full time. He spends probably 6-8 hours a day minimum playing videogames. I have a hard time seeing him breaking that cycle.

    There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.

  • GOB's picture

    Fist- Eddie I'm sure you were an adorable young lad and luck had nothing to do with your adoption.

    I think the achievement of mega-wealth and success is a blend of luck and hard work. Take my dad for example, non target, poor background, and mediocre grades. What he does have going for him is his farm boy work ethic. He is where he is today because he ALWAYS worked hard and well and this opened the door for luck to play a role- which in his case were international assignments coupled with promotions.

    Hard work is the necessary foundation; luck is what opens those amazing opportunities up rather than the mediocre opportunities.

  • Matt_SF's picture

    ""First, does the average rich person work harder than the average poor person? And second, how much of becoming wealthy is hard work, and how much is just dumb luck?""

    I think the average poor person might work a little harder than the average rich person, but with the caveat that first generation (nouveau riche) wealth tend to work much harder than anyone else on the planet. They usually have an internal drive for success, refuse to personally compromise, their work is more play than actual work, etc., that most of the general population don't appear to have.

    I also think luck, at least in some quantities, is required to become wickedly successful/rich. There are a few solid psychology/sociology writers out there who discuss this at length. One example, I believe it originates from Malcolm Gladwell, covers the story of Bill Gates who has/had stellar personal drive, but also had the good luck to attend a school that provided access to computers that many other schools didn't. So if Gates hadn't had early access to computers, would we live in a Mac only world?

    So much like the primordial ooze that generated the first macromolecules... and later us (the dumb monkeys)... it's a synergy of what's there and timing.

    __________________________
    Attempting to be the chess player, not the chess piece @ Steadfast Finances

  • Bob Saget CFA's picture

    Wealth seems to a byproduct of both hard work and luck. I think about it this way:

    Let's say Person A has a 5% chance of becoming wealthy (through sheer luck). This person gets average grades in school, goes to the average amount of college at an average school, works average hours at an average job, etc. This person, though, could get rich through wealthy family, the lottery, a lawsuit, etc.

    Then say that Person B is the high school valedictorian, gets into Harvard where he makes a 3.9 while spending summers building houses in rural Kenya and working at Goldman Sachs. This person still has a certain "luck" factor associated with becoming wealthy, but because of his hard work that "factor" has increased to, say, 90%.

    My point is that luck certainly plays a part, but you can certainly stack the odds in your favor by working hard.

  • brokencircle13's picture

    The average rich person does work more than the average poor person. Just imagine how many people are ready to take over our jobs (well, since I'm not working yet... your jobs). You really have to stay on your toes in finance, and that take a lot of work.

    And reiterating what Bob Saget CFA said earlier, some people get lots of lucky breaks, and some people get only one lucky break. Edmundo, you got lucky, but you didn't slack off either. I would say averaging the people in the world, 50% luck, 50% hard work.

    --Meliora sequimur

  • Walkerr's picture

    I think a part of becoming wealthy is just plain luck. It's being at the right moment at the right time. For instance when you meet someone; you could meet someone (on the street for all I know) and they could just be talking about business. You find it interesting and decide to butt in. This could lead to anything (you might want). This is being at the right moment and the right time. Of course it was also up to you to join the conversation.

    I think people wanting to be wealthy will lead people to be busy with getting wealthy. So they're alway looking for opportunities. If you always looking for opportunities you could see it as being busy. Therefore getting wealthy can be hard work.

  • In reply to sofib09
    APAE's picture

    sofib09 wrote:
    "I'm a great believer in luck, and I find the harder I work, the more I have of it." - Thomas Jefferson.
    I love that quote, SB.

    I feel like the people who are self-made wealthy are those motivated to succeed and therefore are less complacent than someone who sees no immediate incentive to work harder, no reward for greater effort. i.e. I have a huge disconnect with a ton of kids at my school because of the attitude of entitlement and general apathy so pervasive amongst everyone. I have something in common with Eddie, apparently; I'm an adopted kid who found my way into a family, came up out of the wrong part of Philly, know and witnessed kids, peers, and friends of mine get shot, cut, hurt, or swallowed up by crime and gang life, and got out by the grace of God and the talents he gave me. I got into a target, a number of great schools, work my ass off to put myself through school with a maximum credit load, and you know what, I just got an offer as a sophomore from Morgan for two summers in both IBD and S&T along with a scholarship for the next two years of school, my choice for either division too.

    I'm a firm believer in the fact that the people who want something and are made of any character worth mentioning at all will find or create a way to succeed. So many things fell into place for me and I'm incredibly blessed to have the opportunities I enjoyed, but just as much was in my way too.

    Most people do things to add days to their life. I do things to add life to my days.

    Browse my blog as a WSO contributing author

  • econ's picture

    How rich are we talking? Maybe becoming a billionaire is more about luck, while becoming a millionaire is more about hard work? I'm not even sure if I believe that, but I did hear Nassim Taleb say something along those lines, so at least it's food for thought.

  • TheBigCheese's picture

    If we are talking the ridiculous rich than it is more of a case of luck They are clearly an outlier when compared to the majority and were in the right place at the right time with the right background. However, if we're talking about the upper class individuals who have several millions, than I would venture to say its about hard work. Having that defined, I am one who has experienced in my life time that the "poor" have a tendency to be lazy, lack ambition, and would rather live poor than exhaust themselves trying to keep up with those that they consider smarter than them. It is these characteristics that force them into blue collar jobs that don't require the knowledge that a white collar job does. I think we can all agree a blue collar job is laborous and taxing on the body. However, just bcause it is more laborous does not mean it is harder than studying for an undergraduate degree, pursuing a Master's while working full-time, and sitting for the CFA to finally have the credentials necessary to pursue your dream job. Simply put ... The rich work harder!

  • In reply to econ
    eokpar02's picture

    econ wrote:
    How rich are we talking? Maybe becoming a billionaire is more about luck, while becoming a millionaire is more about hard work? I'm not even sure if I believe that, but I did hear Nassim Taleb say something along those lines, so at least it's food for thought.

    Totally agree. Millionaires generally are professionals like lawyers, bankers, health professionals and other notable professions. These people work long hours and often have to climb some sort of ladder.

    Billionaires, especially tech billionaires were at the right place at the right time. The only reason why Bill Gates is wealthy is because he was the first to market with an OS for computers.

    I am not cocky, I am confident, and when you tell me I am the best it is a compliment.
    -Styles P

  • Logger54's picture

    I agree with the general concensus here that if we're discussing being further up the bell curve that's hard work, if you're at the far spectrum, that's mostly pure dumb luck.

  • In reply to Logger54
    Gekko21's picture

    Logger54 wrote:
    I agree with the general concensus here that if we're discussing being further up the bell curve that's hard work, if you're at the far spectrum, that's mostly pure dumb luck.

    Alright, but don't think that a person just ends up on the far end of the bell curve. If you want to call it "luck" then it is "luck" that someone already on the far end of the bell curve with lots of other hard working people was able to jump ahead of them.

    "Greed, in all of its forms; greed for life, for money, for love, for knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA."

  • Kools's picture

    I don't think Daniel Kahneman's study gives a fair comparison. People making under $20,000 a year are typically hourly workers and most likely part-timers. If he looked only at poor people working full-time, I'm sure his results would be different.

    In my opinion and experiences, average poor people work harder. Most of the time however, the reason they're not "richer" is because they're not working "smarter." Average poor people generally don't look for advancement and just focus on doing well where they're at.

    I've seen some hard working waiters, janitors, customer service people, etc... that have incredible work ethic that I would hire in a heartbeat.

  • In reply to sofib09
    Bravo's picture

    sofib09 wrote:
    "I'm a great believer in luck, and I find the harder I work, the more I have of it." - Thomas Jefferson.

    ...My sentiments exactly

    I don't actually think one works harder than the other per se. I think it has more to do with ones drive and desire to succeed against all the odds in front of them. I view it from the perspective that one creates his/her own destiny.

    "Think and Grow Rich" by Napoleon Hill is a great book for this topic

    Please don't make me talk to you like an asshole...

  • In reply to Kools
    DikaiaUpotheke's picture

    Kools wrote:
    I don't think Daniel Kahneman's study gives a fair comparison. People making under $20,000 a year are typically hourly workers and most likely part-timers. If he looked only at poor people working full-time, I'm sure his results would be different.

    In my opinion and experiences, average poor people work harder. Most of the time however, the reason they're not "richer" is because they're not working "smarter." Average poor people generally don't look for advancement and just focus on doing well where they're at.

    I've seen some hard working waiters, janitors, customer service people, etc... that have incredible work ethic that I would hire in a heartbeat.

    I agree with you 100%. It's the hard workers that make the smart choices that go far. Just because you run fast doesn't mean that you're running in the right direction.

  • In reply to APAE
    goalieman688's picture

    I feel like the people who are self-made wealthy are those motivated to succeed and therefore are less complacent than someone who sees no immediate incentive to work harder, no reward for greater effort. i.e. I have a huge disconnect with a ton of kids at my school because of the attitude of entitlement and general apathy so pervasive amongst everyone. I have something in common with Eddie, apparently; I'm an adopted kid who found my way into a family, came up out of the wrong part of Philly, know and witnessed kids, peers, and friends of mine get shot, cut, hurt, or swallowed up by crime and gang life, and got out by the grace of God and the talents he gave me. I got into a target, a number of great schools, work my ass off to put myself through school with a maximum credit load, and you know what, I just got an offer as a sophomore from Morgan for two summers in both IBD and S&T along with a scholarship for the next two years of school, my choice for either division too.

    I think you highlighted a greater issue with the American society today. The sense of entitlement stretches all the way down the socioeconomic chain. Peopel with no skillsets expect to make 25 dollars an hour or teenagers view as working at McDonalds as to below them. Yet somehow all believe that they deserve everything they could ever want and more, but not have to work for it. I think at its most basic levels "financial" success boils down to two items. First having a desernable (sp) skill set and the willingness to work hard. For example, look at all of the U.S. automotive manufacturing jobs who are seeing their wages cut back to 14 - 16 dollars an hour to make them cost competitive with other parts of the world/regions of the country, yet the machining technicians or other skilled labors are still making $35 + an hour, because they have a defined skillset that is needed.

  • Matt the Tiger's picture

    A base level of luck plays into everything in life.

    I live by the mantra:

    IF YOU DON"T TAKE A SHOT YOU'LL NEVER SCORE

    I think this plays out for a lot of financially successful people, they work to put themselves in positions where things can fall there way. They work to maximize options also

  • Ryu Banker's picture

    First, I agree that the wealthy work harder, but you have to acknowledge that they have more opportunities to begin with. Life is a race and we all don't start at the same place.

    Second, how do you quantify "working harder?" Obviously, poorer folks will have to do more physical labor and will thus probably work harder in a physical sense. On the other hand, white collar workers will definitely use their brain more.

  • Gloomberg's picture

    IF YOU DON"T TAKE A SHOT YOU'LL NEVER SCORE

    Losers always whine about their best. Winners go home and fuck the prom queen

  • Gekko21's picture

    Carla was the prom queen.
    ...................Really?

    "Greed, in all of its forms; greed for life, for money, for love, for knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA."

  • In reply to TheBigCheese
    econ's picture

    TheBigCheese wrote:
    If we are talking the ridiculous rich than it is more of a case of luck They are clearly an outlier when compared to the majority and were in the right place at the right time with the right background.

    A minor point, but being an outlier does not necessarily imply luck. Are Michael Jordan, Lance Armstrong, Warren Buffet, Bill Gates, etc. right-hand-tail outliers because they're lucky, or because they're exceptional in some non-stochastic, deterministic way? No one will ever know.

  • ieatbananaforlunch's picture

    I think self-made rich people usually worked hard. However, that's skill hard to say. For instance, Mark Zuckerberg may not be the hardest working man, but he came up with an innovative idea and got rich. People who inherited from their parents usually don't work as hard. Obviously, most people who work in the blue collar jobs won't get rich no matter how hard they work. I do believe that on average, self-made rich people work harder.

  • cphbravo96's picture

    For the most part, the rich certainly work harder than those without. I can't tell you how many times I've heard someone (poor) say, "I'm taking my hour lunch no matter what and I'm not coming back 1 minute early" or something along those lines. I've always worked longer and harder than my co-workers based simply on the desire to do more...like many of you pointed out "driven" and things of that nature. I just know, anecdotal-ly, that the people I know that have done better in life are often the ones who stay just a little later and who often eat lunch at their desk just so they can get a couple of extra things taken care of.

    To each their own. It all comes down to opportunity cost. I have friends swear up and down that they don't need/want an exotic sports car or expensive clothes/vacations, etc...but it's more likely they don't want to have to put in the work to get their. And that's fine, that's their choice, but it just irritates me when they act like they are more humble for not wanting more, or something of that sort, yet they are the first ones trying to get free entrance to the VIP area or free drinks/shots. Whatev, that's their choice. I will just go back to letting this hooker snort blow off my bean bag...man I work too hard.

    Regards

    "The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so."
    - Ronald Reagan

  • LetsGoSailing's picture

    Some of the work I do is in Post- Katrina New Orleans, and I sure see a lot of able-bodied folks sitting on the porch all day watching me work from across the street. And they all have TVs nicer than mine, so I am confident the rich work harder and smarter... And I'm lucky I didn't grow up in a culture that looks down on education and self-reliance.

    A good friend will come and bail you out of jail...but a true friend will be sitting next to you saying, "Damn...that was fun!"

  • drunktrader's picture

    the line between rich and super-rich comes down to appetite for risk, factored in with some luck and creativity

  • trazer985's picture

    Rich people took actions that gave them a higher probability of getting rich than poor people. Statistical truism but all you can do is find mispriced opportunities in the world and seek to profit from them, if you want to be richer than the rest.

  • frgna's picture

    Jefferson was spot on

    The very most successful people, the truly special ones, work hard and got lucky too. There are lots of things you just cannot foresee. The even more special ones are able to move beyond the hard work and have a great life/work balance. $1mm a yr sometimes is not worth the stress.

    Take risks. Have balls. Work hard. The world owes you nothing - make yourself.

    if you like it then you shoulda put a banana on it

  • In reply to econ
    DCDepository's picture

    econ wrote:
    TheBigCheese wrote:
    If we are talking the ridiculous rich than it is more of a case of luck They are clearly an outlier when compared to the majority and were in the right place at the right time with the right background.

    A minor point, but being an outlier does not necessarily imply luck. Are Michael Jordan, Lance Armstrong, Warren Buffet, Bill Gates, etc. right-hand-tail outliers because they're lucky, or because they're exceptional in some non-stochastic, deterministic way? No one will ever know.

    I know a lot of people in the tech field who work their asses off, but they don't have the right idea at the right time. Bill Gates has revolutionized the world and I definitely think he "deserves" his wealth, but the difference between Gates and all his poor counterparts is that he got 1) lucky to have the right opportunities, 2) his skill set and interests were in the right field at the right time and 3) he made good decisions. I don't see the difference between Gates and everyone else as hard work.

    Michael Jordan absolutely worked hard. So do a ton of guys in the NBADL who are not as naturally gifted as Jordan. And the list goes on. For every super wealthy person there is a poor or middle class counterpart. My guess is that hard work is not the defining characteristic in super wealth or even super success; rather, good decision making, appetite for risk and dumb luck would probably be the separating characteristics.

  • prudentinvestor's picture

    Here is my argument for luck playing a huge if not bigger factor:

    If Mark Zuckerberg or Bill Gates were born into different families, say families with moronic parents living in poverty, would they be in the same position they are in today? If Zuckerberg's dad didn't teach him programming when he was a middle schooler or Gates parents didn't buy him a computer as a child (which back then was kind of like owning a helicopter) would they be the same guys? If they both did not attend high schools that on a adjusted basis cost ~30K a year, would they both still be billionaires?

    Success is when you use hard work to capitalize on all the luck you have. You can obtain more luck by worker harder though (self-fulfilling).

    Let's flip the script. Where do any of you guys think you would be if you were born into substantially worse/more impecunious families?

  • In reply to prudentinvestor
    DCDepository's picture

    prudentinvestor wrote:

    Let's flip the script. Where do any of you guys think you would be if you were born into substantially worse/more impecunious families?

    I see what this question is trying to say, but I don't think the question matters. We are born into what we are born into, and our interests are shaped by our genetics, socioeconomic status, geography, friendships, etc. If I were born 4 inches taller I probably would have played college baseball somewhere, which would have no doubt changed the course of my life.

    The point is, our life is shaped by events. Whether those events are dumb luck/happenstance or ordained by a sovereign God of the universe, we're shaped by things outside of our control. One could easily say that Bill Gates is lucky because he was born with the intelligence to do what he did. Others could say he's lucky because his interests--probably shaped by his friendships and his experiences as a youth--happen to be in an industry that could make mind numbing sums of money. What if the same Bill Gates had been passionate about ballet because his friends were also interested in that during his formative years? What if Gates was born into a family that had $50 million and they pushed him into the family business rather than Gates having to meet certain people and work out of a garage?

    Our lives are shaped by things out of our control. What we do with those life shaping events are where we're measured. If a man is born to poverty and he turns to crime as an adult then that's on him.

  • Mr.Saxman's picture

    Luck definitely has something to do in the equation. But the harder you work, the luckier you get. So work hard!

  • huanleshalemei's picture

    I think it's both hard work (~70%) and luck (~30%).
    The rich I know seldom engage in aimless activities - work is life. You may see them playing pokers, dinning and drinking all the time, but it's usually with business partners/clients/politicians, and they can get deals done over the dinner table.
    Meanwhile family means 'company'. A guy treats his wife as an employee - he's seldom home but gives $$ to his wife to operate a small business, and periodically wires bonus as a % of profit to her. He talks about nothing but 'to-do list' to her over the phone, quite hilarious.

    The Auto Show

  • In reply to DCDepository
    prudentinvestor's picture

    DCDepository wrote:
    prudentinvestor wrote:

    Let's flip the script. Where do any of you guys think you would be if you were born into substantially worse/more impecunious families?

    Our lives are shaped by things out of our control. What we do with those life shaping events are where we're measured. If a man is born to poverty and he turns to crime as an adult then that's on him.

    Well then by this logic, luck is inherently a massive factor if not slightly larger than hard work when determining magnitude of success. If you believe your life is shaped by things out of your control (which is inherently true) then there is effectively a cap on experience and opportunities. By that I mean, certain experiences lead to greater and better experiences down the road. An easy wall street example is IBD --> PE (I never worked in IBD but do work in PE so there are exceptions).

    Each experience is the byproduct of another (possible axiom not sure) but due to things outside your control, a.k.a. your family, there is a cap on those experiences and what you can achieve.

    Maybe I'm ranting but I can honestly say even if you work your ass off, there are a few things you will need to go your way that will be outside your control.

  • anon

    "Nothing is work unless you would rather be doing something else". I think, rich may not even consider what ever they do as work. may be they are addicted to the process of making money not the money itself.

    It's not about the money. It's about the game between people.

  • anon

    "Nothing is work unless you would rather be doing something else". I think, rich may not even consider what ever they do as work. may be they are addicted to the process of making money not the money itself.

    It's not about the money. It's about the game between people.

  • Black Jack's picture

    We are talking about luck only in the sense of the things that happen to you once you are already on the right path. How about luck in the sense of the situation you are born into? I'm not talking about being born into a millionaire family vs. born into an average income family. I'm talking about being born into a middle income family vs. being born into a poor family. The number of opportunities this potentially closes for you are drastic. There are certainly poor people who do not work very hard, but there are plenty who have been in a constant struggle to break free of a situation they were born into.

  • In reply to Black Jack
    prudentinvestor's picture

    Black Jack wrote:
    We are talking about luck only in the sense of the things that happen to you once you are already on the right path. How about luck in the sense of the situation you are born into? I'm not talking about being born into a millionaire family vs. born into an average income family. I'm talking about being born into a middle income family vs. being born into a poor family. The number of opportunities this potentially closes for you are drastic. There are certainly poor people who do not work very hard, but there are plenty who have been in a constant struggle to break free of a situation they were born into.

    I concur, those were the points of my posts. Like I said, I consider success capitalizing on your available luck via hard work but some people are just born with a lot more of it. Most never consider the fact they're lucky if their born into a middle income, stable family with good moral ethics/parents with common sense. Idiot parents will forever screw a person's future potential drastically in ways that are difficult to recover from.

    I'm not saying poor parents can't be good parents per se, there are impecunious parents that made one too many life mistakes but instill a good work ethic in their kids while providing a "mentally" stable environment allowing their kids to prosper.

  • In reply to DCDepository
    econ's picture

    DCDepository wrote:
    econ wrote:
    TheBigCheese wrote:
    If we are talking the ridiculous rich than it is more of a case of luck They are clearly an outlier when compared to the majority and were in the right place at the right time with the right background.

    A minor point, but being an outlier does not necessarily imply luck. Are Michael Jordan, Lance Armstrong, Warren Buffet, Bill Gates, etc. right-hand-tail outliers because they're lucky, or because they're exceptional in some non-stochastic, deterministic way? No one will ever know.

    I know a lot of people in the tech field who work their asses off, but they don't have the right idea at the right time. Bill Gates has revolutionized the world and I definitely think he "deserves" his wealth, but the difference between Gates and all his poor counterparts is that he got 1) lucky to have the right opportunities, 2) his skill set and interests were in the right field at the right time and 3) he made good decisions. I don't see the difference between Gates and everyone else as hard work.

    Michael Jordan absolutely worked hard. So do a ton of guys in the NBADL who are not as naturally gifted as Jordan. And the list goes on. For every super wealthy person there is a poor or middle class counterpart. My guess is that hard work is not the defining characteristic in super wealth or even super success; rather, good decision making, appetite for risk and dumb luck would probably be the separating characteristics.

    Let's stick with the Michael Jordan example for a moment (because I think it is very illustrative of this topic, in general).

    I agree with you that tons of guys in the NBADL work very hard. However, I never claimed that Jordan got to his position solely by outworking other people. All I said was that it's probably not luck (it's a false dichotomy to say that we only have luck or hard work). You referred to Jordan's "natural talent" in your comments above, but in what way do you mean "talent"? Plenty of people were/are as athletic or even more so than Jordan, but they're nowhere near as good. Plenty of people also shoot the ball better than Jordan. It's also interesting to point out that nobody saw his "natural talent" as being good enough to be the best basketball player in the history of the game. He didn't even make varsity as a freshman in high school. Many people told him not to play basketball at UNC because they said he wasn't good enough. He was a #3 draft pick. Sure, people saw talent throughout his life, but most people didn't see enough talent to predict that he would wind up anywhere near as good as he did. If I had to try and characterize why Jordan is so great, I would say that his mindset plays a huge role. The guy is competitive as hell, and just has some sort of killer instinct. I wouldn't really call that luck. Again, I agree with you that it is not all due to hard work, but I'm just saying that I wouldn't call it all luck either.

  • In reply to prudentinvestor
    econ's picture

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