“Luck is what happens when preparation meets opportunity.”

About two thousand years ago, Seneca, a Roman philosopher and tutor to the emperor Nero uttered those words (probably while trying to convince Nero to stop murdering his family members or something). It’s obvious that both hard work and luck play a large role in where we end up in life, but what can this toga wearing Stoic teach us about money?

Sometimes when we look at the world around us, it’s difficult to tell where hard work ends and luck begins. We see a friend get promoted, and we wonder if it’s because they knew someone, or if it’s due to the great work they’ve done at their previous job. We find ourselves face to face with a costly home repair and we wonder if we’ve been cursed by the divine or if it’s because we neglected smaller maintenance along the way. 

Good Luck or Hard Work: Which Earns You More Money?

Often, we end up where we are due in part to a combination of chance and our choices. But is either of them more important when it comes to your finances? Which will earn you more money: luck, or hard work?

The Good News: We are ALL Lucky

There’s a hilarious video on the Youtube channel Weird History, that discusses all the ways in which living an average life in today’s time is way more comfortable than living as royalty in Medieval times. 

We have modern medicine, we’re largely literate, and you don’t have to marry your cousin at the ripe old age of 12. Most of us have air conditioning and heat, running water, and are considerably less stinky than most of the wealthiest people in history. Even history’s most elite don’t seem too lucky when you compare their everyday life to ours. 

It’s important to recognize how lucky we are to be born during the time we live now. If you’re reading this online, chances are you enjoy the benefits of modern technology. That’s pure luck. We have no control over when or where we’re born, if it’s into peace or war, famine or plague. 

Acknowledging the fact that we have a lot to be thankful for can actually make us happier and more content! On the flip side, the more we diminish the role that luck plays, the less likely we are to give to charity and feel inclined to help others who were dealt a more difficult hand. This is why it’s so important to admit that luck does play a key role in our lives.  

Luck Vs. Work Ethic: It Isn’t Black & White

While some people come down on either side of this debate, we believe we should take a more balanced approach. Personal finance doesn’t come down to 100% luck or 100% hard work. Our financial situations are a combination of our work ethic, our choices, and circumstances beyond our control.

Good luck or hard work

Money Isn’t 100% Luck…

Choosing to believe that money is made 100% via random luck will likely not get you very far. This approach can leave you without a plan, or without the discipline to follow through and make progress on your goals! If you’re not putting rubber to the roads, you’re not very likely to achieve much.

It’s Not 100% Hard Work Either…

Choosing to believe that money only comes down to hard work just isn’t grounded in reality. Not everyone starts their personal finance journey in the same place. You can’t deny that some people are given a head start, and that extra hurdles are placed in the paths of others. 

The truth is, that hard work can get you far, but it can’t get you everywhere. For example, if you’re looking to be a professional athlete, you can work hard your entire life, but there’s still a chance that you might not make it to the pros. That doesn’t mean it’s impossible, but luck could play a part in whether or not you accomplish your end goal.

Even Warren Buffet acknowledges the role that luck played in his story, stating that it was through “dumb luck Charlie and I were born in the United States,” and writes that he is “forever grateful for the staggering advantages this accident of birth has given us.” If even Warren Buffet can admit that luck has played a role in his success, so can we!

Hard Work Often Precedes Luck

Let’s say you’ve always dreamed of becoming a director of photography. You’ve always loved movies and want to help bring stories to life through the medium of film. You’re out at a bar and you meet a big shot movie director, and he asks you a question about framing. It’s your big chance!

This situation can go two ways. Either, you impress them with your knowledge and experience. Or, you miss your opportunity to get your foot in the door because you aren’t prepared. This is exactly what our Roman friend Seneca was getting on about!

Whatever way you spin it, luck favors the prepared. If you’ve put in the hard work, you’re more likely to be able to take advantage of a lucky break. So in a way, with some good old fashioned elbow grease, you can create a degree of luck. Without hard work, you aren’t able to capitalize on big opportunities. Through effort, you can increase your chances of success.

The Hard Work You Don’t See

Sometimes, it’s easy to only see luck and neglect to find the hard work behind a lucky break. For example, podcast listeners might know that Matt & Joel bought their first homes in 2009, and were able to take advantage of a significant tax credit for first time homebuyers.

Sounds pretty lucky, right? It was lucky! But what you might forget about is that they had to have the down payment saved up in order to take advantage of that. Without years of hard work behind them, they wouldn’t have been able to take advantage of that opportunity. 

Especially with social media, it’s easy to see people getting things like promotions, new houses, fancy trips, or big opportunities and think, “wow, must be nice!” But remember that often social media is a highlight reel. What you don’t see are the late nights, the extra hours worked, the opportunities they passed up. Remember that there’s often more than meets the eye. 

Bonus- If you find yourself struggling whenever you see others making financial progress around you, check out 6 Ways To Avoid Financial FOMO.

Big Differences Between Good Luck & Hard Work:

Perhaps the biggest difference between luck and hard work is that only one of them is within our control. Here are a few things to focus on in your life to help you create your own luck!

Focus on what you can control

In the Workplace

There are so many aspects of your career that you have complete control over. Spending time maintaining your network, continuing to learn new skills, and just generally trying to do your best work is a great way to attract more lucky breaks. 

Getting Control Over Your Spending

Another great way to position yourself to “be luckier” is to put in the work to get your spending under control. Sticking to a budget and saving money can put you in a better position to take advantage of opportunities that come your way. 

Researching Vehicles

A little hard work spent before purchasing a new vehicle can help you to ward off some of the “bad luck” of having a car that is constantly breaking down. Getting a used car inspected before buying it is a good example. Also doing research into the reliability of different makes and models will save you thousands of dollars and dozens of hours spent at the mechanic. 

Pro Tip: Check out HTM Episode 589 for tips on finding a killer $5,000 car. 

Screen Your Tenants/Landlords

Sometimes landlords can get stuck with bad tenants, and vice versa! While this can feel like luck, often it’s due to a failure on our part to do our due diligence!

If you’re renting a property, it’s important to take the time to screen your tenants. Actually calling their references and performing a background check can prevent you from getting stuck with someone unpleasant. 

If you’re looking for a place to rent, make sure to talk to the other people who live in the building/development, or ask to chat with others who rent from them. You can also look to public records to make sure there are no lawsuits or criminal records. 

Luck with Investing

It’s hard to feel lucky when the market is down, and we see our investment accounts plummeting. However, the good news is that the market has historically returned about 10% on average over the past 50 years. You may not have control over whether or not this year is up or down. But you can decide how much you invest, and how diversified you make your portfolio! 

The Bottom Line:

While we can’t always control how lucky we get, we can increase our ability to take advantage of golden opportunities by working hard and staying focused! 
We might start our personal finance journeys in different places. But we all have to make something out of the cards we’ve been dealt.

Attributing too much of our situation to luck can lead us to inaction. And attributing everything to hard work could cause us to get extremely frustrated when things don’t go our way. That’s why it’s important to acknowledge that both of them play a role in our finances if we want to make the most money!

Related posts:

Beer from this episode:

While debating good luck or hard work with finances, we enjoyed a SLUSHY XL Fruitmine by 450 North Brewing Company. Thank you to our neighbor Mark for donating this one to the show! And as we’ve kicked things off with a bang in 2021, we could really use your help! Spread the word by hitting the share button and subscribing if you’re not already a regular. And give us a quick review in Apple Podcasts or wherever you get your podcasts. Help us to spread the word to get more people doing smart things with their money in these difficult times!

Best friends out!

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