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?

Choices play a big role too, though. I work in academia, and I love my job. I enjoy the travel, the creativity, and I have great colleagues. However, with my skill set, I could side step into an industry role with more money and a better chance of promotion. Every so often I consider it, but ultimately stay where I am, because I enjoy it. I think making money can also be about choosing to do something you don't enjoy - work-wise or pressure-wise - in order to climb that salary ladder. Plus, having the guts to negotiate for the salary you want (another thing I'm not good at).

A lot of luck involved, but also life choices

If they live a frugal lifestyle, many people can put £ into savings to tide them through difficult times . Some choose to live for the moment, YOLO etc, and it can backfire on them

Actually there is evidence to suggest Grandparents success is more important than parents success.

If you have sucessful Grandparents you are more likely to be successful yourself.

Part of the thinking is, if your parents go off the rails, your DGPs can pull you through but if DGPs are off the rail. Parents are likely to be too, and therefore you life chances deminish.

You also have to consider if your lucky enough to be born into a family who value education.

If your someone who gets little encouragement at home to practice reading or to do homework then your chances of success have to be reduced.

For some who are often teetering around the benefits threshold, getting short term contracts having huge savings is pointless.

The same old trope.
What a dismissive and patronising response. Did you miss the part about making generalisations?

Most people do not take equity form their home to buy rental..in fact private small scale landlords are selling due to the increase in tenants rights which means they can’t sell up at a whim by serving tenants notice. Nor do most people move to cheaper areas…generally they want to move to areas with better schools when kids are young if they can possibly afford to do so,or “nicer “ areas. You’re highlighting a small group of people in the minority. Most landlords either inherited money to buy property, or set themselves up on old buy to let, or are property developing as a living.

butni suspect you do know this with your “yes, buts…”

miras was limited to a 30k mortgage, targeting those that had low mortgage and wages. We, as a newly married couple in late twenties never qualified. I have never benefitted from any tax relief or benefits on mortgage or housing costs. My parents never benefitted form it either. Nor my siblings or anyone I knew. Yes it did peak to £ 9million relief being paid out in 1990-1991, and it was realised it was an unaffordable tax scheme and rates of tax relief were pulled back very quickly.

i say it’s trite to say older people benefitted form house price gains, becuase the reality is most will never benefit form the accumulated value of their property , in terms of cash in pocket, forum those gains. The money is tied into the very bricks and mortar they live in. If they don’t end up in care and paying for that with house equity, then it’s younger generation that will see the benefit from inheritence. And equally value of property could fall, as it did in 1990s. That is the reality. I’m not denying on paper older peoples property value make them seem wealthy, never said that.

It’s the same as people valuing themselves or a company based on the value of their investments today..it’s paper wealth..it is meaningless until assets are crystallised. As people are finding out with trumps games just now. Or the reason I get so bloody angry with personal pension policy that everyone is pretty much pushed into these days…rather than state pension contributions and benefits being raised- your very pensions these days are based on nominal paper value of investment on a day- at any time the value of your personal pension could crash meaning you can’t retire when you thought, or meaning you have less pension income. NI didn’t work like that- it was a gunarenteed income.

so if you want to pop at how much easier the older generation have it, I’ll give you that one..state of pension for anyone under 45 is outrageous..and no one complained or petioles at time to stop it happening. Now that does make me insanely angry on behalf of future generations.

older people, as you put it, didn’t have a lot of luck around other things that impacted their wealth…unemployment was massive (my own exh was made redundant 7 times in 10 years hence our own poverty at times), we paid more on fuel, food up to mid 1990s , then people even pay now as proportion of income (a fact a lot of folks fail to actually look at historical statistic for). Form 2008 to 2017 ish we have never had such a sustained period of low interest rates, many people think that’s the norm. It isn’t. The average interest rates over last 100 years is actually 8%, high than now when people are struggling with cost of living crisis.

The issue here is not costs, the issue is wages. Wages are stagnant, lower, and wealth inequality is frankly a moral outrage. As is the zero hour gig economy impacting many poorer people. The waelthy folks like to say how “flexible” it is…the poorer people know how uncertain it is. We’re back to 1920s, the difference is the political apathy of those impacted …the 1920s saw the rise of unions to battle this inequality…most youngsters don’t want to join unions and fight for their rights. Or voting for reform and blaming immigrants.

Everyone will experience hard times and easier times over their life times. Right now current 20-30 year old are struggling getting on housing market. That isn’t down to older generation, or luck, that’s down to political decisions around wage inequality, social housing etc. but they will, over their lifetime, experience more prosperous times, every generation does. Things change. That’s the certainty. And as I say those kids that can’t get on the housing market, like my own 30 year olds living in south in good professional jobs, will eventually get there…just from what left of mine and exh estates and house prices when we die. I suspect, with luck of one of us at least not getting dementia, they’ll be a lot wealthier than me eventually.

Exactly this. Talking about how they worked hard to be mortgage free and have two properties etc when a hard working 21 year old today earning around £25k with no family support is never going to get on the property ladder at all. The economy you existed in during your 20s and 30s is luck!!!

This is a very good point…certainly both me and exh were raised in working class households where eduction was highly valued. And expectation set we’d go to university. We were both schooled at home by parents as well as state schools to enrich our education and experiences.

my exh particualrly, was first generation benefitting form free university…his parents fought hard to ensure he made the most of this, having some form very impoverished backgrounds themselves.

Have a read of The Richest Man in Babylon.

I do think luck plays a part. But frankly, if you’re born in this country you are far far luckier than many countries in the world and already have a massive head start.

I also think the saying the harder your work the luckier you become is true.

Let’s be clear though, that 50% of wealth is not going to 50% of the population.

Just 10% of uk population own 57% of the entire wealth.
in fact quick google says just 13% of population benefits form inheritence.

that’s the wealth inequality bit…

Luck, also influenced by family and circumstances.

I'm an author, and earn the greater part of my income from writing books. But getting published in the first place is mainly luck - getting the right book in front of the right person at the right time. There are plenty of other writers more talented than me whose work will never see the light of day - either they give up or they just aren't hitting the right editors desk just as the editor is looking for their precise 'thing'. And self published books are even more a matter of luck.

So I feel extremely, overwhelmingly lucky to have got that first contract which led to much bigger and better things. The money enables me to live comfortably (I am mortgage free because my parents owned their own house and their wills split equally between my brother and I). So after a lifetime of struggling, being on benefits as a single mum of five in an unheated and damp rented house - I finally got lucky.

Let’s be clear though, that 50% of wealth is not going to 50% of the population.

But that isn't what @bigvig said?

I totally disagree with telling kids ‘you can be anything you wish to be’ as it’s ridiculous as well as unrealistic and sets kids up for disappointment.

I also disagree that all financial success is down to luck only. I think that’s a terrible message to send because in many cases it’s a combination of luck and incredibly hard work.

I think the ‘it’s all luck’ people say this as a coping mechanism to cover bad choices.

Im at the age all my friends have had inheritance money and i can see how its helped them and their kids. We never had inheritance money and i feel the difference.

@Marshbird

so if you want to pop at how much easier the older generation have it,

Why are you so triggered by me writing the below?

"Lots of older people have been lucky with property prices simply because of when they were born"

Is it a lack of comprehension as you are inferring things I haven't said?

Nor do most people move to cheaper areas…

It's really quite common in London, google may help you here but you seem very fixed in your mindset....

I think this is the kind of logic that traps people. Ultimately getting more contracts, more work experience and progressing will almost certainly be better for people in the long term rather than managing your career so that you stay below various tax thresholds or benefit cliff edges. This mentality is what keeps people at best stagnant and at worst poor. It is also causing a productivity crisis in this country.

I'm currently reading 'Weapons of Math Destruction' by Cathy O'Neill

Some of it is terrifying. It looks at big data and how decisions are made about targeting advertising, policing efficiently, how universities in the US are ranked and how CVs are filtered for jobs. It's mainly focused on the US but there are British examples - our data rules are stricter but honestly I don't think they are strict enough.

One of the first things it talked about is how advertisers in certain situations deliberately target vulnerable people to exploit them financially. So if you are in the bottom 40% of the population income wise, they will advertise things like pay day loans to you. Think about this and how certain products (and indeed scams) with unfavorable prices / terms etc are deliberately targeted - and how if you are better off or educated you'll pretty much never see these same adverts. If course this also means those with the most knowledge of how these might be dubious (because of education) never report them because they don't see them - thus they are able to exploit more easily.

A friend of mine was talking about this and how she was currently being massively being targeted by adverts for weight loss drugs. She's a bigger girl and has a complex about it (by her own admission). On principle she doesn't want to try these drugs because she's concerned about the long term unintended consequences and thinks it's too good to be true. But this constant barrage of adverts has made her nearly crack on several occasions. Meanwhile her friends who aren't overweight aren't being picked up by the data and aren't getting targeted by these adverts.

Then the book goes on to talk about how data is being used to filter CVS. This is supposed to remove certain biases but in actual fact a lot of these biases are either inadvertently being programmed with bias in or are being deliberately written to include them in less identifiable ways which aren't transparent and aren't as easy to challenge legally.

It talks about how certain ideas or traits are used as proxies to suggest something else and theres little follow up on whether these are accurate or not accurate.

One example is how the 'bottom performing' teachers were automatically sacked - without thought as to how people were gaming the system and over inflating performance because they got bonuses for higher achievement. Thus a good teacher who came after a cheating teacher got sacked despite having an amazing reputation with colleagues and parents because the data said she'd understand performed.

And how one IT recruitment company had made a connection between star employees and liking a particular type of Japanese Manga so was favouring them (and of course this also massively disadvantaged women in multiple ways). This also begs questions about creating group think on an industrial scale.

The author reflects on these correlations and untested assumptions as akin to phrenology. And she stresses how the actively target and entrench poverty, often by design - and people not subject to this would be completely oblivious whilst those on the recieving end might well be fully aware of how off something was but unable to challenge it because they a) can't prove it, b) need a higher level of proof than all the work going into creating these ideas c) all without the education and financial means to fight back against such injustices - coupled with a culture of non disclosure and lack of transparency making these decision making processes pretty much infallible despite potentially catastrophic flaws which act as a feed back loop without checks to thrive and damage society as a whole.

It's fascinating. The book a few years old now - it was published 9 years ago - but I think we can start to see a lot of the fall out from these patterns. And the trend is towards yet more AI.

The underlying point here is that if you are rich or have the right postcode you are often targeted in a positive way and have more opportunities compared with someone poor or who has the wrong postcode - before you even do a single thing. Working hard is something of a mute point - there are greater barriers at every step of the way. It's crucially primarily an economic thing (race and sex gets caught up in this because of pre-existing economic disadvantages).

It goes a long way to explain many of our current political challenges. If you are on the wrong side of the divide, it's not just that you are disadvantaged - it's that you are also seen as a legitimate target to exploit and/or discount.

Note social mobility is at its lowest rate since WWII.

If you are older you had a greater chance of social mobility because of many factors.

'Working hard' now is different to working hard then for that reason.

The odds are stacked against young people who aren't better off no matter how hard they work.

I came to the UK with literally nothing (legally of course !!). I had to borrow money just to buy the ticket. No job lined up, no fancy degree, no safety net. Just decent English and a strong work ethic. I stayed with a friend for 3 months before moving out to shared accommodation. I arrived with one 15kg suitcase.

At 18, I was earning £5 an hour. I waited tables, cleaned hotel rooms, worked at a dry cleaner, served coffee, I took on double shifts, worked weekends, I worked nights behind the bar in the clubs, some weeks I didn’t have a single day off. And it wasn’t easy. During that time, I was sick many times but I never quit my job. At one point, I had a kidney stone stuck in my urinary tract. I worked through the pain for months before surgery. Even after surgery, I took the bare minimum time off, just two weeks, and I was back at work. I kept going. I didn’t rely on the state. I didn’t ask for help. I just showed up I could not work.

Because I knew I didn’t want to live like that forever. I didn’t want to spend my life on the lowest wage, sharing cramped housing. So I started looking into training and courses until I found free courses to start with, saved whatever I could, and eventually paid for more training. Bit by bit, I moved into office work, working out what I want to do long term. Now I work in a specialised field, and the rest is history. I am citizen of many years, I got amazing husband, beautiful home and great paid job.

No handouts. No luck. Just grit, consistency, THINKING about my life choices and a refusal to give up.

So when someone tells me their life didn’t turn out because of “bad luck”? I can’t accept that. I’ve been there. I know what it’s like to have nothing and still build something.

I think that's true of all Arts, whether it's writing books, arts you'd put on the wall or musical arts.

A huge amount of luck in getting that first break.

But their are also people who effectively become one hit wonders. They get lucky with one song or book and are never really heard of again.

DH's parents never owned their own home. He joined the forces at 16, and being intelligent and diligent he worked his way up to fairly senior officer level. Neither of us have inherited wealth. But due to his hard work and spousely support (!) we are very comfortable now. Sister is the same through her hard work.

My parents are similar - no inherited wealth but bought their house and lived through 15% mortgage rates, no foreign holidays, very little eating out. Now comfortably off and took several foreign trips until a few years ago until health problems curtailed things.

From the outside it might look like luck, but that would downgrade the hard slog and sacrifices required to get to our position.

There are many reasons why several things you say in this post, simply would not be possible for someone like you now.

You god lucky, because you came at the right time...

I agree.

I’m wealthy because of an inheritance.

I used to work incredibly hard in frontline child protection, but wasn’t particularly well paid in that job.

It was pure luck that I was born into wealth. I have benefited from that my entire life from private education, travel opportunities and the ability to pursue anything I wanted at university without worrying about the potential salary I may earn. Now I’m a stay at home mum with no plans to ever work again, once again it’s the inheritance or inter generational wealth that gave me that option. I didn’t work to be wealthy, I was simply born into it.

Working hard didn’t make me wealthy, and I think some of the hardest working people out there are often public servants on average wages like social workers, teachers, nurses, police etc.

I disagree, setting aside the fact that I came from a different country.

For people who are already here, born and raised, there’s nothing truly stopping anyone from getting a job, any job, just to get started. Sure, many of these roles are low-paid, but they exist. And they’re a stepping stone.

When it comes to building your way up, I don’t believe the barriers are as insurmountable as some people make them out to be. What’s stopping someone from working as a waitress? Washing dishes? Cleaning? Literally any job to earn money and hopefully invest in yourself. No new iPhones every year, no holiday for a long while, just bare essentials. It does get easier but starting out is hard.

Life has always been expensive — that’s not new. That’s why I worked multiple jobs, sometimes with no days off. It’s not perfect, and of course one could argue that no one should have to work two jobs or run themselves into the ground. But that’s the harsh reality when you want to achieve something and there’s no external help, no inheritance, no family safety net, no one handing you a lifeline.

You have to bend over backwards. You have to do what it takes. Because no one else is going to do it for you.