A fatalistic view on life: Why most, if not all, of your success is from luck

LES's picture
Rank: Orangutan | banana points 312

WSO's audience is incredibly motivated and driven to succeed, so I thought I'd reflect on success and the role that luck plays in it.

My argument is that a significant portion, if not all, of one's success can be attributed to luck. This has been discussed on this forum before and in books such as Malcolm Gladwell's Outliers, but I just wanted to reflect on this a bit more.

Let's start with a list of things that affect one's success, but are determined pretty much at birth:
- Your citizenship
- Your attractiveness (face, height, voice)
- Your race
- Your family and their wealth
- Your health
- Your personality (at least part of it)

Now, I'd argue these factors alone can explain all of one's success. Even things like work ethic which traditionally would be thought of as an example of something that one can control are really a function of luck.

Consider your attractiveness. If you are a good-looking guy, then growing up you probably were treated better and had more positive interactions with others. This means that you are also more likely to be affable and skilled with social interactions and therefore, more likely to succeed.

Now consider something like work ethic. As a society, we'd like to think that it is the industrious and innovative qualities of a person that makes him/her successful. So how does one become hard-working? Most likely, he had those qualities ingrained in him by his upbringing/family, which is determined at birth by luck. Perhaps he chose by accident to hang out with the right group of friends during recess in the elementary school playground and grew up with a high-achieving circle of friends that pushed him to work hard. Again, this is determined by luck.

What I'm trying to get at is that even things that we think we have control over (like how hard we work) are largely determined by chance. While past discussions suggest that at least a portion, even if small, of one's success is earned, I can't quite think of anything that someone can really "control"? I am thankful to be a Type-A, relatively hard working person. But did I really choose to be this way?

I don't mean to diminish anyone's success, I'm just curious to hear everyone's thoughts, counterarguments, etc. I also don't mean to imply that the just thing to do would be to equally distribute wealth to everyone since no one really "earned" anything. Society has a lot to gain from rewarding those who are lucky, as some of the comments have mentioned.

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Comments (121)

Jan 10, 2017

Which is why everyone should be a Democrat.

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Jan 12, 2017

Even if the reason that some people get ahead in life is because they were lucky to be born with a productive temperament - capitalism still rewards those who are most productive because they can be trusted to produce the most surplus for society if given more working capital. It's not really about complimenting egos with material excess - it's just pragmatic resource allocation.

Maybe some people are simply unlucky to be born helpless drug addicts. That being what it is, they're still going to spend their welfare check on crack and I still don't want to allocate my tax revenue towards that.

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Jan 16, 2017

Which is why you work in "corporate strategy." Doesn't get much lower than that.

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Jan 11, 2017

Even if I accept all that you propose to be true, society still needs to reward those with greater "luck" more compared to those with worse "luck" in order to progress forward. That is, if I buy that e.g. Mark Zuckerberg was very lucky, and everything from his work ethic to his intelligence was a function outside his conscious control, it would countermand progress if society were to proactively or retroactively redistribute his fortunes to those without his level of luck.

Best Response
Jan 11, 2017

Ok you got me! I was born with lucky circumstances, and I really feel bad for the Jack Ma's of the world who were born in less developed countries and looks like a cicada. There's no way that guy can succeed so I should just hand over every dollar I earn for fairness.

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Jan 11, 2017

SB for cicada comment- made me lol

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Jan 12, 2017

Seriously.. MS, because you don't have a sense of humor? WSO needs a built in safe space

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Jan 11, 2017

Relevant: https://en.wikipedia.org/wiki/Role_of_chance_in_sc...
"Psychologist Alan A. Baumeister says a scientist must be "sagacious" (attentive and clever) to benefit from an accident.[2] Dunbar quotes Louis Pasteur's saying that "Chance favors only the prepared mind".[3] The prepared mind, Dunbar suggests, is one trained for observational rigor. Dunbar adds that there is a great deal of writing about the role that serendipity ("happy accidents") plays in the scientific method.[1][4][5][6]"

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Jan 11, 2017

You're just digging down into the philosophical debate of free will vs determinism. In other words, do we ever actually make decisions on our own, or is everything in the universe determined to play out in only one way, with every effect having a recursive cause going back to the crucibles of stars light years outside of our solar system?

Like even your conscious mind is just a deterministic neuro-model responding to stimuli that can, in theory with enough computing power, be perfectly modeled and then predicatively analyzed so that we will know how you respond to any possible situation.

The counter-point to this is a great quote from Roderick Chisholm -- "If we are responsible, and if what I have been trying to say is true, then we have a prerogative which some would attribute only to God: each of us, when we act, is a prime mover unmoved. In doing what we do, we cause certain events to happen, and nothing -- or no one -- causes us to cause those events to happen." In other words, when we make an action on our own basis of free will, we are fucking GOD -- we are a prime mover that sets in motion a chain of events stemming from us and not going back to any other cause.

Anyway, rather than post this stupid shit here you should just read through the Wiki man https://en.wikipedia.org/wiki/Free_will

"I did it for me...I liked it...I was good at it. And I was really... I was alive."

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Jan 12, 2017

Yeah except for the small problem that the academic community agrees with a significant majority that free will is most likely an illusion

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Jan 12, 2017

[citation needed]

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Jan 12, 2017

Source: McKinsey analysis.

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Jan 12, 2017

see below

Jan 12, 2017

From a purely physical (as in physics) perspective, there is also an answer beyond a metaphysical one -- the uncertainty of quantum mechanics (When electrons are in a super position of being positive and negative or whatever). So the Hisenberg uncertainty principle and the randomness of quantum mechanics means that actually the universe might not be determined because we cannot know the position and speed of an electronic or other sub-atomic particles.

"I did it for me...I liked it...I was good at it. And I was really... I was alive."

Jan 12, 2017

Good to know.

Jan 12, 2017

Lol @ all the butthurt college kids throwing MS who think they are the sole reason for their imminent succes and unmatched analytical skills

@-caP -- Yeah, the point you're trying to make is actually that the world is on a quantum level probabilistic, not deterministic. Nevertheless, that doesn't matter for the case of no free will. Free will implies that you make your own choices. However, many experiments have shown that the action potentials, due to the electrochemical imbalances in the brain, are present before you are aware of your action. Due to the complexity of the brain we're at the moment not able to prove free will is an illusion as the chain of command within the brain is too complex for current techniques. There is vey strong evidence that this is the case though. Patrick Haggard is potentially the most renowned scholar in this field, so if you want to start reading go there.

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Jan 20, 2017

Making metaphysical conclusions about general matter based on what quantum mechanics says about sub-atomic particles is fucking stupid.

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Jan 12, 2017

Yes a lot of it is luck but worrying about luck isn't the best use of your time/energy if you're trying to succeed.

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Jan 12, 2017

Your thesis, that luck determines everything is beyond ridiculous. If your thesis was right, no Blacks would ever get anywhere in life (because statistically Blacks are usually the biggest minority group in poverty, living on welfare, etc. and if what you did depended on "friends" and other such things since most of someone's friends who lives on Wellfare/grew up in the Projects are other people like them the chance of getting anywhere would be 0), Trump would have never won the election, and neither would Obama (again, based on stats and an absence of free will), and what's the "lucky" odds that the Rothchilds would be the richest family in the world for 500 years? (They've been in banking since the 1400s or 1500s.) Or for that matter, if you take music as a whole--the only way you get anywhere in that industry is hard work--talent means nothing when you have thousands of people who have the same level of talent fighting at the same level, literally dollar for dollar for people's attention/plays/listens etc. Sure, the musicians with the most money get the most plays, but even then they have to get to that level to start with--so even if you think they have it made once they're in the majors it still takes hard work to get there to start with. And my last example, our industry. IB can be hard to get into hence the work thing--no luck involved since even people who aren't from "target" schools get in with enough hard work, and let's face it--if traders knew their chance of making money would depend on "luck" how many people do you think would want to be traders? For that matter how much money do you think banks would put into prop trading? Answer: 0, because banks wouldn't put money into anything that wouldn't give them a good return. To put it simply--there is no such thing as luck. If the entire world depended on luck no one would do any work.

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Jan 12, 2017

You're missing the point. The OP is claiming that your willingness to do hard work came from some combination of your parents and your environment, which you have no control over.

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Jan 12, 2017

Could have phrase it better, I think. The lack of free will doesn't mean that you can just sit in bed all day and eventually you'll learn how to speak Japanese; this is missing the point. The argument always devolves into republican versus democrat (I have no idea why...)

The point is that you can't truly identify the "Self" as being responsible for your actions. If you go on a rampage, and you don't know why, but we find a golfball sized tumor on your hypothalamus, that certainly helps to explain why you did that. Eventually, we are going to get to a point in neuroscience that we can 100% map the brain with certainty, and will be able to point out to individual variables that explain behavior.

We don't fault a 6 year old for psychopathy, but we do find it necessary to jail 13 year old's for life. How do we reconcile this?

The simple fact is that you are no more in control of the next thought that arises in your mind, than you are for how tall you are.

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Jan 12, 2017

Why do you bother posting this on a site where the vast majority of users believe "small loan of a million dollars" had the deck unfairly stacked against him?

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Jan 12, 2017

Let's inject politics into everything. Nice.

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Jan 12, 2017

I mean, the topic of this post is related to many contentiously debated political issues. Examples: whether those requiring government handouts are lazy and entitled, whether illegal immigrants and foreign nationals are "stealing" jobs from Americans, whether affirmative action is truly reverse discrimination and so much more.

Given that you yourself appear to be quite a fan of discussing politics on this site, I highly doubt your concerns about my post arise purely from the injection of politics into the discussion.

Jan 15, 2017

All politics aside, you are a shitty troll or a pretentious dick in my humble opinion.

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Jan 12, 2017

What you don't realize is that your entire hypothesis is backwards looking. You look back in time, realize that the population, sliced in certain ways, seem to be correlated with "success" as you deem it. Then you postulate that success is related to these correlations. Of course it is. You are, however, doing a disservice to each of those buckets because what you fail to do, as many fail to do these days, is account for the great variance that occurs intra-bucket. You cannot simply impute the mean from such large categories. While your statement is factual, I vehemently disagree with its spirit.

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Jan 12, 2017

How are you defining success? It seems your post contemplates career prospects.

With that, life is a series of decisions, each of which has its own consequences and leads to other breakpoints requiring further decisions. The most valuable asset, one that everyone is born with, is time, and how one decides to allocate that time will largely impact their "success." For example, based on the criteria you provided, I would consider myself as having the "privilege of success"; however, the career I decided to pursue is one where I am realistically capped around $200k. Peers on this board make that three years out of undergrad. My career prospects are determined by the decisions I make, and the career track I am on is a result of the decisions I have made. I am not sure how you can take credit from those who have committed their lives to studying and 70+ hour work weeks.

Based on your post, i am sure you have not finished university yet, but when you do, take a look at those you went to high school with and your peers throughout university. You will realize there is more to life than how you started it.

Jan 13, 2017

The last paragraph was all you needed to write....much respect.

Absolute truths don't exist... celebrated opinions do.

Jan 12, 2017

Luck or circumstance plays a lot, but you forget what really makes someone successful - determination.

Luck or lack thereof cannot be controlled, but your reaction to both can be. If you're unlucky and just give up that's not luck, that's a choice.

As for luck, look at the ppl who win the lottery and end up broke. Luck is great, but without knowledge, effort and discipline, it is wasted.

Life's about preparing to endure the bad times and capitalize on the good times.

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Jan 12, 2017

Appreciate the reply, but I feel that you are missing an important point, which was the purpose of the post. Feel free to let me know if you disagree. It's interesting to hear different thoughts on this topic.

You say that "determination" makes someone successful. But determination is similar to work ethic -- the key question is, what makes someone "determined"?

Again, I could say that how "determined" someone is is largely a function of factors out of his or her control, that is to say, they are a function of luck. For example, someone may have been born with extremely caring parents, who instilled these qualities in him/her.

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Jan 14, 2017

Do you choose to go to the gym or lay on the couch? Do you choose to eat McDonalds or pass and eat a salad? Do you choose to have one more drink or go home buzzed, but not smashed?

Reality is success in life is a string of small choices that compound. Luck makes life easier or harder, but end of the day you get out what you put in.

Your entire premise is utterly defeating and provides an excuse for literally every bad behavior. I suppose a rapist could fall back on not being hugged as a child.

The majority of people have a choice in how successful they are within normal bounds. Outside of medical issues and other hereditary problems (depression, alcoholism), people do have a choice.

People who blame nothing but luck on their failure are losers in the truest sense. People who blame nothing but hard work on their success are delusional.

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Jan 12, 2017

From a philosophical perspective I feel you but from a pragmatic perspective I don't care WHY some people suck, I just don't want to be around those people that suck or give anything to them.

This type of stuff is the reason I can't smoke pot anymore. I start questioning life and get depressed.

Jan 12, 2017

I think you've taken an important point and gone too far. Luck DOES determine a lot of our success in life but it doesn't determine everything. I suggest you read Robert Frank's book "Success and Luck". It's a good primer on this topic and a quick read. He has a very good example in the book about luck vs. hard work. Imagine a competition with 100,000 participants where each one has a "score" out of 100 and the highest score wins. That score is composed of the following two components: 98 points for hard work/skill, 2 points for luck. So, for the most skilled person, their score would be 98+a random number between 0-2 determined by chance. The second most skilled person would be 97.999 + a random number between 0-2, the third person 97.998, etc. In every single version of this simulation, the majority of the winners will be those with the most luck. The differences in skill are so small that they are swamped by the variations in luck.

It's an interesting thought experiment and a good way to get people to understand the role luck plays in their lives. However, the way to ACT (not think) is as if luck does not exist. You cannot control that 2% of random chance (or 50%, or 60%, pick a number). You CAN control the rest (skill, work ethic, etc). So while you should always be aware how much of a role luck can play (being aware tends to make people more humble, less arrogant and more generous), you should BEHAVE as if it does not.

Jan 12, 2017

Well said. What's that old quote? 'The harder I work, the luckier I seem to become.'

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Jan 12, 2017

I finished Outliers less than an hour ago on my way to work.

Yes, we are a product of our great great great great grandparents' circumstances and all of the decisions and circumstances that shaped my family since then. HOWEVER, what Gladwell points out is that while Asians may be predisposed to be better at math, their heritage as rice farmers has instilled a great work ethic in them. If you don't work hard, you are very likely not going to be successful, with few exceptions.

If you want to think that others have won the genetic/birth place lottery then go ahead, but I've known kids who have started with nothing, had parents who had no work ethic, etc and they've gone to good schools and have been successful. It's all about taking the opportunities you get and maximizing them through hard work. If you want to call that luck, then whatever, but working hard creates opportunities and opportunities open doors where working hard creates more opportunities and the cycle goes on.

In short, you can make your own luck through hard work.

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Jan 12, 2017

My boss who literally keeps nothing in his office has a Chinese fortune cookie saying:

Luck is where hard work meets opportunity.

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Jan 12, 2017

To those injecting a political reading: virtually none of those "lucky at birth" factors are redistributable.

More broadly: moderate achievement or mediocrity is generally a function of skills and merit (or lack thereof); extreme comfort or destitution is generally a function of luck and circumstance (or lack thereof).

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Jan 12, 2017

Interesting topic. Let's not forget that you're merely the one lucky sperm, from a load of jizz, that happened swim fast enough.

Jan 12, 2017

The chant of losers.

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Jan 14, 2017

I feel like this is truly an American, born into opportunity, concept. This entire thought process is one that immigrants to this country would scoff at.

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Jan 15, 2017

This has been my observation as well. Immigrants are focused on making moves and escaping poverty, while Americans are fixated on their privilege and white guilt. It's kind of funny, actually, when you observe the whole situation from a distance.

Jan 15, 2017

Totally agree. It's always middle/upper class white kids bitching about the past generations fucking them, how they have it hard, etc. Total lack of awareness, work ethic and/or understanding how truly lucky they are to have the opportunities available here.

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Jan 12, 2017

I think your theory has an extremely hard time explaining how two people who are born into roughly the same situation can have such drastically different outcomes. I'm not talking about two people who grow up on the streets of Detroit growing up differently, as obviously an extreme success from a situation like that is unlikely. I'm talking about two middle class, or even upper middle class, individuals. Hell, even two brothers can have extraordinarily different outcomes.

Jan 13, 2017

I'd say that it can account for those born into the same situation but have different outcomes because this is not really a possibility under my theory. Different outcomes can almost always explained by some sort of difference in luck/difference in "situation." Perhaps they are born with different personalities. Perhaps they met the right people. The list of possibilities goes on.

Jan 12, 2017

You should read: Fooled By Randomness, if you haven't already.

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Jan 12, 2017

Great book. Makes you appreciate small things which are out of your control.

Jan 12, 2017

Good call. I highly recommend this book.

Jan 12, 2017

it's all a simulation...mannnnn

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Jan 15, 2017

+1

I certainly fucking hope so.

Jan 12, 2017

I'm not sure if you comprehended Outliers correctly. Yes Gladwell talks about people being in the right place at the right time, but they also still needed to take advantage of that "luck." I'm a strong believer that you make your own luck by being aware of opportunities presented to you.

Gladwell talks a lot in Outliers about how the most successful people put in a ton of work and comes to the conclusion that 10,000 hours is a good number needed to work a craft before you become exceptional at it.....

With your outlook, what's the point of even living life? Basically everything is out of our control and we are all victims....? Why live.. That's not the definition of living, with that outlook, we are all just dying slowly...

BTW, Outliers was one of my favorite books I read in 2016, only read 8 books in 2016 was hoping for at least 12, goal is 12 again this yr, currently reading Flow, which is an awesome concept to be aware of...

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Jan 12, 2017

"With your outlook, what's the point of even living life? Basically everything is out of our control and we are all victims....? Why live.. That's not the definition of living, with that outlook, we are all just dying slowly..."

I like to use the analogy of going to see a movie. Before you walk into the theater you know that the movie will proceed only one way. That doesn't mean the movie isn't worth watching. The key point is that you don't know how the movie will turn out. Same with life - even though I have no free will, there's still value in living my life, proceeding down the path that was laid for me and seeing how everything unfolds, with all the ups and downs of emotion.

Jan 12, 2017

Agreed with your analysis of Outliers. Example: Peyton and Eli may have been been gifted a lot (NFL player dad, good supportive family, etc. AKA "luck") but let's not pretend that they didn't bust their asses from childhood through their NFL careers.

Jan 12, 2017

Makes ya think

Jan 12, 2017

The one thing I will comment on in this thread, in regards to luck, is that environment and circumstances growing up beat out genetics almost all the time. I have seen kids who were highly intelligent and picked up on things fast but due to a lack of guidance and growing up in a troubled environment, they weren't the ones who got into the fancy Ivy League schools and managed to get that six figure job out of college. The environment they were raised in (often impoverished) managed to make them get into trouble with the law and miss out on so many promising opportunities.

On the same token, I met kids who were fairly average kids, not exceptionally good looking or intelligent but managed to do well on standardized tests due to coaching/test prep as well as go to high schools were teachers always cared for them.

Even the poor kids everyone on here brings up as succeeding in life, they did so because they met the right person at the right time and managed to catapult themselves to success. Maybe they were in a big city where even though they might have been from a poor family, at least the opportunity was there. Perhaps they ran into a sympathetic well off person who wanted to help them succeed (out of good will and the need for being recognized as someone that helps poor kids succeed).

Over the years, I've found this to be the one truth about success in life.

The environment you grow up in, the people you meet growing up, the kind of family you have, the kind of city or town you're raised in, and the type of high school you go to have the biggest say on how much you succeed. You will beat out people with better looks and higher intelligence almost all the time.

Call it sour grapes on my part and I will get a lot of dislike for this but I truly truly believe that a good number of kids working in investment banking and B4 consulting have benefitted from ideal circumstances growing up as opposed to being gifted. Most kids with their circumstances growing up would have ended up in the same situation.

Jan 13, 2017

This reminds me of the film, "Trading Places" with Eddie Murphy.
I think the title is self-explanatory...

Jan 13, 2017

I work hard because I have goals and am internally driven not luck.

Jan 13, 2017

What about all of those special schemes SEO etc. which set about reversing these trends - is the average person who doesn't qualify for these schemes but doesn't have connections or wealth still lucky because of the factors which mean they don't qualify?

Jan 14, 2017

For those looking to get beyond a first year psych perspective, this OP is talking about the "locus of control". Those with a highly internal locus of control, like many on this board, believe they have significant control over their environment, where the OP has an external locus, postulating that outcomes in their life are mostly impacted by factors outside their control, such as chance, luck, or other people.

People who go to ivy league schools and work on Wall Street are self sorting just like everyone else. It takes a certain type of person to seek a Harvard MBA, so naturally have an internal locus. These people all work hard, so naturally they believe in the impacts of strenuous personal effort because they have seen first hand results from hard work.

Those who try very hard and do not have these successes are likely to believe an outside force overcame their hard work and defeated their efforts.

Jan 15, 2017
  • high IQ never hurt
  • personality or high EQ (empathy, ability to get people to relate, sign on to your message. Think Hillary vs Trump)
  • luck/circumstance/ right or wrong place at a time (Think 'Me before You' and 'My Left foot' or those w familal cancer, visited by the ALS fairy)

Too many gamechangers to list. If I were to pick 3, 1-Sense of humor, 2-robust love of life combined with 3-force of Personality/fire in the belly, whatever you want to call it. It will bend the universe In your direction...it conquers ALL: country of origin, family, race, looks, brains, everything else are rendered meaningless.

IME, you have to know what you want (and it better be worthwhile for the universe to bless it.)

Jan 15, 2017

Natural intelligence helps a lot IMO. Sure, socioeconomics and a poor upbringing can derail an otherwise gifted person. Challenges growing up can also harden the resolve and increase motivation for naturally gifted people.

In my own anecdotal case, at our company, most of the people who are executives are extremely naturally gifted intelligence wise. Granted I'm not at an IBank and am at a medium size multibillion dollar company.

Our CEO is a genius. But I would say most billionaires are. He's the only one I've spoken to at much length in my life and he is intellectually superior to anyone I've met in my life. The VPs and Directors are in true awe to his decisions he's made. His depth of understanding of our industry is such that he is almost regarded as an oracle with the gift of premonition. I suspect he would have obtained similar success in any industry he had chosen to work in.

Jan 15, 2017

Risk is not factored into this discussion, it is my belief that "luck" can be improved by a willingness to take risks to get ahead. Humans naturally have a fear for the unknown. Those who are willing to take calculated risks, tend to be the most successful. Every person has at least 3+ major decision points in life where vastly different outcomes are possible. Often one of these decisions is a high risk-high reward scenario, and one is a scenario of comfort.

Example: Many people are unwilling to move away from the friends and family that they grew up with. This limits them in career/educational/life options. Often it is simply a fear that they will not be able to meet new friends or not like the new area.

Example: Many people get complacent in a job/life and are afraid to take the risk of switching jobs or switching career paths.

Example: The kid growing up who fell in with the wrong friends group. He always had the opportunity to seek out new friends, but this required the risk of destroying relationships with current friends.

Those who are willing to take calculated risks and overcome this fear have a better chance of creating their own "luck". While we can't control our environment, we can control the decisions we make.

While I am young, I personally have had 3 points in my life where I would be on a completely different trajectory in my life had I decided differently. In all three cases, I chose the riskier path and it created opportunities for luck to occur that would not have existed otherwise.

Bottomline: Most people passively let life come to them, successful people aggressively create their own opportunities.

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May 13, 2017

Yeah but those 'risks" you take have to magically work out for you, which is completely OUT OF YOUR CONTROL. You can do the BEST analysis for any investment and some black swan event can fuck things up. Even if I put all my assets into one small cap stock that stock has to go up 50x for me to be a baller. It doesn't have to happen, regardless of how good my analysis is. Things can always backfire, unexpected disasters can always happen. It's still up to LUCK that the event that you are "betting on" works in the way that you expect, at the pace that you expect, and to the extent that you expect.

Jan 15, 2017

I agree, and generally believe a lot of successful people don't realize how much of their success is due to things that are outside of their control.

However, I think the factors that contribute to success are like tools in a toolbox. Some of us get more of the tools of success than others, but even if you got all the necessary tools, you need to choose to use them/use them properly.

May 13, 2017

Malcolm Gladwell's book 'Outliers' is truly eye-opening.

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May 13, 2017

There's always luck in everything in life. You need to win the sperm lottery just to even have a chance in this world. However, what isn't luck is having the work ethic, and the drive when that luck gives you an opportunity. In order to get into the top 0.01% that you're describing there's a lot of luck, but you also need the mental fortitude and skill to use said luck. I tend to think it is both, and will always be both.

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May 13, 2017

Aren't work ethic and mental fortitude genetic, and therefore luck?

May 13, 2017

Unless you're talking about physical or mental disabilities affecting those traits, no they are not. They are learned behaviors, however this where the luck/genetics come into play as most children learn these behaviors from their parents. But, if these traits were entirely genetic then every child of successful hardworking parents would go on to do the same, and while plenty do, we know this not to be the case. In fact affluent teens are much more likely to develop bad drug and alcohol addictions, perhaps succumbing to the pressures of their successful parents therefore showing a possibly weaker mental fortitude than their ilk

May 13, 2017

A former NFL player told me that you need three things to succeed: talent, a maniacal work ethic, and luck. People that make it to the top don't like to admit that luck is involved but it is. However, I believe that people who work hard will create more luck.

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May 13, 2017

What is this luck nonsense? The only luck in life is the genetic lottery, outside of that everything else is created by situational awareness that successful people exploit that unsuccessful people do not.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

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May 13, 2017

In the way most wealthy people are via inheritance, thus the lottery of having the right parents, yes.

May 13, 2017

Uh dude, most wealthy people aren't wealthy due to inheritance.

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May 13, 2017
OverTheHedge:

Uh dude, most wealthy people aren't wealthy due to inheritance.

Depends on whether you consider Forbes methodology more adequate than Piketty.
Unfortunately there aren't that many sources on the topic and after having read both, I have to go with the latter.

May 13, 2017

Mathematically you can not have an expanding economy if you have stagnant economic classes. The rich can get richer but that has to be done at the expense of others in that case. What you are basically saying is that wealth can not be created but rather it just trades hands.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

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May 13, 2017

Massive amounts of luck - and if you're successful and don't admit it you're delusional.

That said, intelligence and hard work are typically necessary for success/wealth - though not sufficient. Its the old adage of "creating your own luck" couldn't be more true. Right place, right time, timing, so many things are outside of ones control. Ideally, if you keep plugging away something will stick.

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May 13, 2017

Outside of the "genetic lottery" and the "parental lottery" I think it's mostly (not all, but mostly) hard work and intelligence (i.e. natural skill, strategic thinking, situational awareness, industry expertise) to become a millionaire. To become a billionaire, however, seems to require a lot of "luck." I think Mark Zuckerberg is an amazing example of this. The guy is wicked smart and a very hard worker and I suspect would have been successful (i.e. eventually a millionaire) regardless of Facebook, but Facebook could have just as easily failed as any of the dozens of other social networking sites that failed, or Facebook could have succeeded and made Zuckerberg simply a millionaire rather than a billionaire. (Hell, 21-year-old Zuckerberg could have fallen in love and been too pre-occupied with a chick to focus on a social networking site.) And I suspect there are all kinds of fortunate and fortuitous events that occurred around the business ventures of most billionaires (e.g. stock market boom, bubbles with fortunately timed sales, an individual passion that is well timed with economic viability (i.e. computers), meeting the right person, marrying into the right family, etc.).

May 13, 2017

Having TA'ed for Dr. Frank (and having read his book), I agree completely with his thesis. However, people take it entirely the wrong way. They take it as "if luck is a factor, hard work doesn't matter". That's not what he argues. His argument is that no matter how much hard work and talent is involved, luck always matters. He came up with a simulation to demonstrate: a contest which is 98% hard work and talent and 2% luck. He put 100,000 people into this simulation and assigned each a random score from 0-98 for talent/hard work and from 0-2 for luck. He then summed the scores. As anyone familiar with math might expect, the luckiest people were the winners. When you have a subset of people who score 97.999, 97.998, 97.997, etc on talent, the one who scores 2.0 on luck will almost always win. In this simulation, being near the top in hard work and talent was necessary but not sufficient to win. In a society where so many of the rewards accumulate to the top 1-5% of the population, I think this is a fairly decent metaphor for how luck plays into success.

On another note, ask someone significantly more senior than you to tell you their career story. Ask only about the events, not about the "why". I bet you'll find all kinds of instances of luck along the way. They ran into X person on the street whose company happened to have Y opening. They were forced to take the 1 CS class for requirements, loved it and had a brilliant engineering career. You'll probably find a few examples like this along the way.

May 13, 2017

Luck plays a factor both positively or negatively in most interactions in life, if people can't admit that its their ego getting in the way of rational thinking. That's not to say that you can't do your best to create your own luck by creating a susceptible environment but some things will always be out of your control... hence luck.

May 13, 2017

Interesting read that I cam across in Bloomberg recently

http://www.bloomberg.com/news/articles/2016-08-23/...

May 13, 2017

If you listen to the Masters in Business Podcast (highly recommend) almost all of his guests attribute part of their success to luck. As others have said, you can probably become a millionaire through hard work / talent but you'll need a lot of luck to along the way in order to reach the f-you money

May 13, 2017
May 13, 2017

Not to discredit his achievements (numerous), but Robert Frank is "only" an Economics professor at Cornell. People can't comprehend well things they've never experienced and I don't imagine academia has a lot of luck involved, so I'm uncertain about the validity of his statement. Not to mention, professors are more theory-based than pragmatic (see: Efficient Market Hypothesis).

What I believe Frank glosses over is the imperfect human component. Everyone has luck in one way or another, it's the people who can identify and "leverage" lucky coincidences that get ahead. The ones most likely to do this are ones with work ethic and "hustle."

You can be the luckiest gambler in the world, but if you don't recognize and build on the opportunities with your luck you won't get very far.

It's important to remember:

Seneca:

Luck is what happens when preparation meets opportunity

and that you very much create your own luck.

May 13, 2017
Bonzo Bojangles:

Seneca:Luck is what happens when preparation meets opportunity

and that you very much create your own luck.

But it's important to remember that "luck" doesn't distribute opportunities equally across the world.

May 13, 2017

Well then you're in luck --

You're right. Although most people don't take opportunity by the balls when it presents itself, so even the unluckiest can still get ahead by just hustling.

May 13, 2017

I know hard work, and its in your control, luck is beyond your control, and wealth is by luck

May 13, 2017
heister:

What is this luck nonsense? The only luck in life is the genetic lottery, outside of that everything else is created by situational awareness that successful people exploit that unsuccessful people do not.

If i move my family and I to a city with the lowest crime rate in the country and a meth addict happens to stroll into my neighborhood, enter my house, and then proceeds to shoot me in the face. How did my preparation lead to that horrible opportunity? Did I very much create my own bad luck?

How is my grammar? Drop me a note with any errors you see!

May 13, 2017

Given Frank's personal experience which led to his interest in the subject of luck, you could actually argue that he actually should have quite a lot of meaningful things to say on the issue. He's likely to be more pragmatic than anyone else out there.

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May 13, 2017

You're probably right. He's got more of a leg in this than I do and he's much more educated on the subject.

Although, that doesn't stop him from making false presumptions on the subject.

May 13, 2017

It's easy to say naive shit and quote Seneca and lots of people talk like this. I've gotten lectures from these walking Successories posters.

But when I mention Bad Luck, there is silence.

Everyone agrees that bad luck exists. Cancer. Auto Accidents. Certain airline passengers on 9/11. I lost my home and factory in a natural disaster. A friend lost his factory in a lightening-strike fire.

I suppose if you macho, no-such-thing-as-luck guys really wanted to prove your faith, you would commit to living a life without insurance. Good luck.

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May 13, 2017
Paladin:

It's easy to say naive shit and quote Seneca and lots of people talk like this. I've gotten lectures from these walking Successories posters.

But when I mention Bad Luck, there is silence.

Everyone agrees that bad luck exists. Cancer. Auto Accidents. Certain airline passengers on 9/11. I lost my home and factory in a natural disaster. A friend lost his factory in a lightening-strike fire.

I suppose if you macho, no-such-thing-as-luck guys really wanted to prove your faith, you would commit to living a life without insurance. Good luck.

^^Hardo

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May 13, 2017

We've all had bad luck. Shit happens, and without turning this into a dick-measuring, pity-party "who's got the worst luck," I know that horrible stuff does happen (I got hit with a load of rare genetic and chronic diseases from a young age that I had to figure out and get treated on my own as a kid because I didn't have access to good healthcare) and all you can do is mitigate how much damage it does and work towards getting back on track.

There's no reason to really dwell on bad luck. Again, shit happens. You can: wallow in it "woe is me, how will I ever live a 'normal' life ever again" or you can put it behind you and work harder. If you think about it too much you're likely to get into the depression spiral of over-thinking and make matters worse.

I don't know your story, but you write like you're peeved. Maybe you think I'm talking out of my privileged ass, that I've never really had it tough. I don't know what's going through your head, but I know that there's no point in being pessimistic about life (as opposed to realistic which doesn't actually exist in humans). Take the pain with a smile. Don't blame luck on your problems. If you start seeing things in the way of "I'm solely responsible for my life, no matter what happens" then you might get more motivated and hopeful. I know it's worked for me and many others atleast.

May 13, 2017

I graduated with a ton of extremely smart petroleum engineers, who I'm sure a few of the were going to carve out their fortunes in oil and gas. Over half my class was smart and hardworking.

In less than a year the market crashed and all that knowledge and connections disappeared and were made worthless seemingly overnight.

I know one who is now selling cars. A few others took low level engineering roles in random companies.

I'm sure a large part of my class is going to be much less wealthy at 50 because of that.

Yes, luck is definitely a big factor, and in some cases can make or break your chances.

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May 13, 2017

Mauboussin wrote an interesting book called "The Success Equation: Untangling Skill and Luck in Business, Sports and Investing". https://www.amazon.com/Success-Equation-Untangling...
Maybe I don't pass on the point in the most convincing way, but he draws on this idea of a skill-luck continuum, and any successes and failures are placed in this continuum. To some extent, I have adopted the same approach and never believe a person who claims their success to be 100% based on either skill or luck.

May 13, 2017

Luck is a bigger component of success than hard work or talent, because luck can move certain immovable objects in your favor or against your favor, that no amount of hard work or talent can affect.

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May 13, 2017

"The harder I work, the luckier I get." - Samuel Goldwyn

Absolute truths don't exist... celebrated opinions do.

May 13, 2017

Hard work can put you in a position where more opportunities present themselves that you can take advantage of.

Whether or not those opportunities arise very often comes down to luck.

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May 13, 2017
SSits:

Hard work can put you in a position where more opportunities present themselves that you can take advantage of.

Whether or not those opportunities arise very often comes down to luck.

Nailed it.

Jan 15, 2017

I'm successful by any objective measure (top 10% of American earners, which puts me solidly among the top 1% of global earners), and I attribute almost all my success to luck.

I was born in a London orphanage to an unwed Irish teenager. Starting from there, an utterly comical confluence of events had to transpire to find me here nearly 50 years later. If any single one of them had not, my life would be drastically worse.

I'd rather than be lucky than good any day.

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Jan 15, 2017

Eddie, is your real name Oliver?

May 13, 2017

Investing/trading is an information game.

Unlike a casino game, in financial markets there are ways of "mining" or acquiring better information than other participants, and if not "better information," then there may be ways of acquiring (or reacting) to information faster than other participants. Even the slightest informational edge may often be worth millions if not sometimes billions.

Therefore some successful traders are the product of pure luck, while others are the product of clever engineering in the art and science of mining more accurate information and/or "reacting" to information faster than other participants.

Jan 15, 2017

I feel a lot of people are misunderstanding OP's thoughts.

To boil it down to a simple format, my life is a linear progression of states. My "decisions" at time Tn is a derived by T(n-1) + noise/chance. This model can be traced backwards until T0. Logically T0 is the beginning of time, as your identity is equally decided by those before you, but to dumb it down, lets say T0 is birth. At T0 my life is summarized just by chance (what genes/personality/family affluence/economic environment). As such, my whole world is deterministic.

Importantly, this does not diminish my role or responsibility. If i'm watching a movie i've seen before, and a character makes morally poor decision, the fact that I knew he had to make the decision in no one discounts his responsibility for it. If anything, acknowledging the determinism in our universe leads to greater accountability. I am an accumulation of states, this is who I am, and if something poor exists within this identity, it is as much a part of me as any of my strengths.

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May 13, 2017

A 50% move in an ultra penny stock. Wow, what are the odds eyy?

Absolute truths don't exist... celebrated opinions do.

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May 13, 2017

Being sarcastic really reflects your intelligence well

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May 13, 2017

Absolute truths don't exist... celebrated opinions do.

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Jan 16, 2017

As I have gotten older I have more and more embraced the idea that success is in fact often produced by "luck" as I believe it is defined by the OP, at least for the very top performers.

However, I do not believe the OP properly names the traits...when thinking about truly high achievers in finance I actually see very little correlation to things like looks, height, EQ, or even IQ. I think real top performers tend to have at least "baseline" luck on those traits (ie they have no physical deformities and aren't complete morons) but what they share is something in their background that makes them insanely and almost irrationally committed to suceeding. In my experience this usually comes from something traumatic in their early lives...abandonment by a parent, abuse, violent tragedy, etc. It is kind of morbid but I find that this type of negative "luck" + a decent education can often produce people who literally cannot accept failure.

Note that I am not talking about your average fairly successful finance person but rather people who have become real top .1% in the business....if you want dependable "medium successful" people then you want the standard traits such as high IQ, high EQ, etc.

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May 13, 2017

your mom did until you happened

heister:

Look at all these wannabe richies hating on an expensive salad.

May 13, 2017

she was unlucky af

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Jan 17, 2017

Coming from a lower middle income community, I think you're high. I'm better off than 99% of my healthy, white peers due to hard work.

Don't get me wrong, I'm incredibly grateful for everything I have, but Malcolm Gladwell is definitely into guys.

May 13, 2017

saw23, yeah but you are not factoring in the reality that you are white/caucasian. If you were latino or black, NO AMOUNT of hard work can allow you to be as successful as Bill Ackman or some MD at a hedge fund, no matter how hard you work. You still benefit from a form of luck (being white) that you are completely ignoring in this analysis. Being white makes others treat you better, easier to get jobs, easier to make friends, make allies in the workplace, etc... that often people of color cannot have, regardless of how hard you work.

If you think hard work is all there is, how come I don't see African American women as hedge fund managers? How come? Based on your analysis, as long as they worked equally hard as David Einhorn or Bill Ackman, shouldn't they be also worth $2B or so?

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