Have you ever noticed how some people are always lucky? Some people always seem to earn a work bonus, win in Las Vegas, or get a scratch-off victory. But we are talking about a different kind of luck. Going even bigger, some people also consider movie stars, YouTube artists, and big-time bloggers as lucky.
But how did these people create their luck? How did these stars do what others seem to want, but could not achieve? Is it really luck that got them their achievements?
To the final question, the answer is yes and no. There is always some form of luck (or other divinity) that makes certain things happen. However, there are things that we can control that will put us in a position to get lucky. The equation for luck is education + opportunity + action = lucky position. Once you are in a lucky position then things may or may not happen for you. But if you have yourself in enough lucky positions throughout life, then your chances of becoming lucky increase significantly.
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I will break down the complete luck formula in a couple of seconds, however, first I want to give a quick example. Education: I stumbled upon an article about a growth stock company named Palantir (PLTR). It seemed interesting. Opportunity: The price of the stock was $25/share, which is affordable for us. Action: I looked at my bank account and I could spare some cash, so I invested $180. My wife also read the article and wanted in, so she put in $200. Lucky Position: Now we just sit back and wait. Within two weeks, the stock had a huge day, up 25% in one day. Combined we made close to $100. We got “lucky.”
Let’s go over the Luck formula in detail.
Education. The more you learn, the luckier you become. In order to recognize an opportunity, you need to have the education to know that it is an opportunity. If you are working your job and not expanding your knowledge of finance, don’t expect to be lucky. If you focus your time on football, then your football team will be lucky (maybe). If you focus your time on Netflix, then your favorite show will appear up on Netflix. You will get lucky. However, if you focus on finance, you will start to get lucky with money.
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Financial education is a world like no other. The education is never-ending. Every day something new happens. There is education on taxes, stocks, bonds, real estate, business, legal, and retirement. There is so much going on, however, all you have to do is take it slow. Focus on reading one article a day from a different financial sector. What I do is read a book for 1 hour a night. Then I read an article from each of my sectors. Here are my favorite websites. I have been getting lucky just by focusing on reading these at night. Pro-tip: When I don’t have time to read articles at night, I print the articles as PDFs, and send them to my work email. That way I can read them on my “lunch” break.
Retirement: https://www.kiplinger.com/retirement
Investments: https://seekingalpha.com/
Business: https://www.allbusiness.com/
Real Estate: https://www.biggerpockets.com/blog
Relationships: https://www.marriage.com/
Opportunity. Now that you have some education, you will start to see opportunities more often. For example, I joined Fundrise in September 2019. Around February of 2020, they gave investors a chance to invest in the actually Fundrise company, not just in the real estate products. It was an internal Initial Public Offering (IPO). The email came and I knew what an IPO was and realized that this was a once in a lifetime chance to buy stocks in Fundrise for less than $9 each.
You do not have to go out of your way to see opportunities. However, if you are reading a book about real estate auctions, you may have to look up auctions near you. Not everything is going to drop into your lap. What you can do is live below your means, eliminate liabilities, and reduce expenses. That way when an opportunity arises you have the right mindset, and bank account, to take action.
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Take Action. This is the hardest part for most people. When they have the education and recognize an opportunity, they have “analysis paralysis”. This means that they freeze up and can’t make the final decision. But, why not? This is your decision to make. No one is going to rescue you by coming to make the decision for you.
That is why a well-rounded education is so important. You need to understand the psychology of money. Know your own limits. If you have $10,000 saved up and you see an opportunity for $8,000, you do not have to take it. If $2,000 is your comfort zone, there are tons of opportunities inside that price range. It is your life, you are in control. If you are not comfortable with leverage, don’t use it.
Some people buy 10 houses leveraged to the max to generate $3,000 a month of income. Other people prefer to buy a house, pay it off, then buy the next house. They all get to the same amount of income, just two completely different ways. Some people like to invest for capital gains via growth stocks. Others like to build a huge dividend portfolio. Some people want a huge business with 20+ employees, others want to be a “company of one”. No matter the case, take action.
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Lucky Position. Now you are in a lucky position. What does that mean? Nothing. Move on. Don’t focus on anything. Move on to the next deal. Keep reading and writing. Focus on your next investment opportunities. Then, when you are completely into the next scenarios, something will happen. You will get some form of news that will put a smile on your face.
My wife and I found our third house, the one we really wanted, by getting lucky. Then the house appraised for $10,000 less than the asking price. We ended up paying $2,000 out of pocket for a $340,000 house (not even using our full VA loan). Our first house was a crap-show. We had no education and we got eaten alive. 13 years later, it has started to show signs of life. It is funny how things improved with our first house as our financial education improved.
Do not get discouraged. Use your education to get yourself into great investments. Luck is just the icing on the cake. If you are building a great business and you are very happy, someone might come by and want to buy you out for a large amount. If you are running a crappy business, no one is going to want to buy you out. When my wife and I started our financial independence journey in June 2019, I thought it would take us 10 years to invest $100,000. In less than two years, we are already at $65,000. Luck? Yes and no. Understand the formula, use the formula, respect the formula. Education + Opportunity + Action = Lucky Position
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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