To think money is mostly about luck, not effort?

[TheGreyShark]

I’ve been thinking about how much luck plays a role in financial success. Some people work incredibly hard and never get ahead, while others are born into wealth, stumble into the right opportunities, or just happen to be in the right place at the right time.

I personally feel like the money I have is due to luck, not effort. If I’d been born in different circumstances or made different connections, my financial situation would be totally different.

AIBu to think money is mostly down to luck rather than hard work? Or is effort actually the key factor?

DH and I have worked incredibly hard during our lives and taken risks (calculated, but still risky) which have paid off. DH’s physical and mental health in particular has suffered recently, so we have sold our business and are working on healing him. Nothing about our situation has had anything to do with luck, it’s 100% hard work and being prepared to go outside our comfort zones. Absolutely no family money either, we’ve done it all ourselves.

As with most generalisations, it will be true for some people, and not for others.
Some people get rich through inheritance or lottery wins. Of that group, some don’t have the sense to invest or spend the money wisely, and find themselves in the same position they were previously in - despite their ‘luck’.
The inverse is also true. Some people come from no money, and work hard in minimum wage jobs and never have any money. Others come from nothing and work their way to higher paying jobs / start businesses and have plenty of money.
Some people’s parents have a lot, but leave them nothing. Of that group, some succeed, some don’t.

Ultimately, having wealth is usually a combination of hard work and opportunities. What you do to create those opportunities for yourself, probably largely depends on how big your world is.

Almost everybody has luck though. It depends how far you want to take it.
Born in the west?
Born with healthy mind and body?
Have a home, bed, cleaning running water?
Access to free education?
Access to books?
Parents weren’t abusive?
Didnt suffer lifelong injuries or die in an accident?

Lets not deny that in this country, it’s mostly hard work that makes the real difference between a comfortable life and a struggling one.
When you look at the very wealthy, there could be more luck involved or even harder work.

Totally agree with this- so much of money management is about your mindset around money and that absolutely can be changed.

Yes, noone can deny that if you are handed a lottery win or a huge inheritance that it is "lucky" - thats very obvious, but its a known phenomenon that many lottery winners eventually go bankrupt because they arent used to managing money and they spend it all due to their beliefs around money. From US research- approx 70% of lottery winners lose it all within a few years. Just look at how many celebrities end up bankrupt after earning millions at the height of their fame.

I know people who earn a lot and therefore could be seen as "lucky" but they fritter it on crap and are massively in debt as a result and equally, I know people who havent been objectively lucky but had a healthy mindset around money and saved. Ignoring all this is makes you powerless in your life and its important to be aware of the factors involved if you want to save and build wealth.

I think luck will always play its part. I feel lucky to be born into a Country where education is free, where women are allowed to work, where medical care at source is free. So in that sense yes of course I am lucky. But, I think it’s wrong to always assume people who have “more” than you have it because they are, in the main, lucky.
A pp mentioned growing up in a broken home in a shit town. DH grew up in care. I had entirely absent parents. We have never and will never be given anything, and actually I sometimes feel lucky for that because it means we both always knew we’d have to work for it. We both grew up feeling “less than” so had something to prove I think?
Another pp mentioned risk. Any yes, in our case, absolutely, we took enormous risks with zero safety net and made massive sacrifices. Most people, quite understandably, don’t want to do that. It worked out and that’s what got us where we are. Are we lucky we were both physically and mentally well enough to actually do that? Yes, of course, but it definitely isn’t just luck.

Let's not forget within that same generation millions will also have been unlucky.

@Needspaceforlego add you replying to my post? I am the one acknowledging luck. I agree with you millions were unlucky as opposed to making bad choice, not working hard enough.

No I don't for the reasons I have given in my post. Risk is risk it isn't comfortable for anyone. I would actually say age makes it easier to start a business than wealth. Younger you are the more opportunity there is to gain back any loss so the risk is smaller.

No it’s mostly about attitude, talent and skill which you conveniently ignore, plus a healthy dose of luck.
People envious of others lamenting their miserable lives often like to say it’s out of their control. It isn’t. But it’s not about hard work. It’s a meritocracy. Get educated. Learn a valuable skill. And rise through the ranks.

* Let's* not deny that in this country, it’s mostly hard work that makes the real difference between a comfortable life and a struggling one.

But why isn't social mobility improving?

"Previous work has shown that intergenerational income mobility in England was lower for those born in 1970 than those born in 1958. Using administrative data on the most recent birth cohorts for whom earnings data are available, we find no evidence of recovery from that decline. National estimates of mobility of cohorts born in the late 1980s looks very similar to those of the 1970 cohort and education inequalities continue to be the dominant mediator."

Because of housing now days it's very much about if your parents own/can help you on the ladder vs your income.

"Second, existing research on intergenerational mobility has tended to focus on income from earnings. We find that ‘unearned’ sources of income, here meaning returns to wealth and wealth transfers received, look to be an important driver of the persistence across generations in total lifetime income (i.e. the sum of earnings and returns to wealth and wealth transfers received). These ‘unearned’ sources of income are likely to be of growing importance over time."

I would probably use the term 'chance' rather than 'luck'. There are lots of factors around background, parents' wealth, inheritance, connections and so on, but also what characteristics a person is born with.

Someone who is clever and/or good looking has a better chance in life than someone who is of low intelligence and/or unattractive. It doesn't follow automatically that one will end up rich and the other poor but the opportunities presented to the clever, attractive person will be greater than to the unintelligent and unattractive person.

Add to that the immense variables in background and the result is that people are given very different tickets in life's lottery.

Agree.
And few people today work as hard as individuals used to.

My parents, grandparents and my sister and I have almost always worked two jobs or otherwise generated multiple income streams (lodgers etc). The younger generations I know are aghast at having housemates let alone lodgers, and don’t want to work second shifts or weekends.

But that’s how we got ahead, built large savings and acquired property. It didn’t fall into our laps. One has to hustle.

Agree.
And few people today work as hard as individuals used to.

My parents, grandparents and my sister and I have almost always worked two jobs or otherwise generated multiple income streams (lodgers etc). The younger generations I know are aghast at having housemates let alone lodgers, and don’t want to work second shifts or weekends.

But that’s how we got ahead, built large savings and acquired property. It didn’t fall into our laps. One has to hustle.

Agree.
And few people today work as hard as individuals used to.

My parents, grandparents and my sister and I have almost always worked two jobs or otherwise generated multiple income streams (lodgers etc). The younger generations I know are aghast at having housemates let alone lodgers, and don’t want to work second shifts or weekends.

But that’s how we got ahead, built large savings and acquired property. It didn’t fall into our laps. One has to hustle.

No I don't for the reasons I have given in my post

But my answer is based on how many people rely on family support to launch a business vs borrowing from the bank or against your home. It's not based on 'feels' 🤷🏻‍♀️

Luck might help a few people but most people make their own finances and any inheritance is often quite late in life.

My parents are wealthy but both came from working class families. What they did have was encouragement to study, ambition to work hard, and confidence to go for new opportunities.

Myself and DH are financially secure but not a penny from our parents. We both work hard and looked for opportunities and thought about our future.

My DH worked very hard to get where he is. Grew up in poverty and now doing very well. He received nothing from his parents. Worked full time then did night school straight after. It was hard work, not luck

50% of all wealth in this country is inherited. It's largely background - both in terms of inheritance but also schooling and career advice. Obviously there are exceptions but those are exceptions.

By far the biggest indicator of a person's eventual wealth is their parents' finances and social status. Luck plays a huge part.

I strongly disagree OP. Some people inherit wealth/win the lottery and keep it, some piss it away. I would say that the majority of people who created their own wealth did so through hard work/having the ability to spot and exploit opportunities.

DH worked bloody hard in a job where staying awake for 48hrs at a time (in the days before H&S laws) and being away from home for a month at a time was the norm. I was virtually a single mum for many years as he worked his way up the career ladder.

We went on holiday rarely yet, and I worked too, but sometimes could only save £10 a month. After the DC finished uni and left home, we were finally able to save and became comfortably off. The kicker is that after working hard all his life and retiring at 65 on health grounds, DH passed away. He had received a pension for all of five months.

I'm not happy that anyone would consider inheriting wealth is always 'lucky'. Sometimes it's bloody tragic actually, and that's the problem with making such sweeping statements.

Partly luck yes, if you're born into a billionaire's family. But mostly attitude to it. Are you a "do as much as you can" person or a "get away with as little as possible". Are you frugal or a spendthrift. Saver or spender.

There is also a role for judgement in terms of financial success - separate to luck and hard work.

Eg choosing to study computer science rather than media studies opens up higher paying careers. You can choose to be a professional violinist but no matter how hard you work, you are unlikely to make tons of money.

NB media and music are great, interesting professions, just not paid like banking or tech.

Right place, right time has a lot to do with it.

That said,

If you work hard, there is a small chance that you may make it without luck.
If you don’t work at it, even right place, right time will be wasted on you. Let’s face it, in western countries, most people are in the right place, at the right time, yet many have no inclination to make anything of themselves, always complaining about how society has failed them, always wanting the taxpayer to give them more, and being perpetually entitled.

I'm not happy that anyone would consider inheriting wealth is always 'lucky'. Sometimes it's bloody tragic actually, and that's the problem with making such sweeping statements.

The same old trope. Nobody is lucky to lose a parent but not everyone who loses someone inherits, that's the luck part!

It's always some mix of both.

Health, brains, background, location, educational opportunities, personality - so much feeds into it.

By far the biggest indicator of a person's eventual wealth is their parents' finances and social status. Luck plays a huge part.

It's interesting so many refute this though.