Luck Is More Important Than Talent and Hard Work For Financial Success: Explore 10 Ways To Get Luckier


If you have at least a few hundred thousand, you probably feel at least a little bit smug about the robustness of your savings accounts. Well, wipe the smirk off your face. New research suggests that your success may have more to do with luck than your talents or even how much effort you have put into work.

lucky with money

Let’s look at wealth and talent across the population.

Distribution of Wealth and Talent Across the Population

Researchers A. Pluchino, A. E. Biondo and A. Rapisarda observed that while wealth is not distributed evenly across the population, human skills are. Talent and aptitude generally follow a normal distribution that is roughly symmetric from an average value. They rightly observed that the distribution of wealth should reflect the distribution of talent. But, that is not what generally occurs in the world.

Wealth is Unevenly Distributed

Wealth disparity – the unequal distribution of money across the population with some people having a lot and others having very little – is a well-known pattern. Most of us know that in the United States, the richest among us have an increasingly larger share of the money than the poorest.

Well, it turns out that this pattern occurs in all societies and at all scales.

The distribution of wealth follows a pattern where a small fraction of the population possesses a disproportionately large share of the total wealth. This concept is commonly referred to as the 80/20 rule which describes 20% of a population controlling at least 80% of the wealth. And, indeed, the ratios are getting worse. Here are a few stats:

  • According to Federal Reserve Statistics through 2023, the top 1% hold $38.7 trillion, more than the combined wealth of America’s middle class.
  • In 2018, the three richest men in the United States at the time — Amazon founder Jeff Bezos, Microsoft founder Bill Gates, and investor Warren Buffett — held combined fortunes worth more than the total wealth of the poorest half of Americans.

Talent is Evenly Distributed

In contrast to wealth, the distribution of talent (including traits that are believed to drive wealth like intelligence, skills, effort, and risk-taking propensity) tends to be more evenly spread across populations.

Intelligence and skills are not restricted to a specific segment of society, and individuals from diverse backgrounds can possess varying levels of talent. Effort and risk-taking behaviors also cut across different demographic groups, as people from all walks of life engage in hard work and entrepreneurial endeavors.

New Research Suggests that Luck and Randomness, Not Talent or Effort, Drives Wealth Inequality

It is commonly believed that the wealthiest among us got there because they are somehow super human: smarter, harder working, and just better than the rest of us. However, research suggests that the real key to success is luck.

Data scientists created a computer model that accounts for analysis suggesting that luck and randomness, not personal qualities such as talent, intelligence, skills, efforts, or risk taking, are what drives financial success.

They developed a simple agent-based model to investigate how talent and luck contribute to individual success over time. The model incorporates the assumption that both talent and luck play roles in shaping one’s career, and it explores the dynamics between these factors.

Key findings from the research include:

  1. Both talent and luck impact success
    • The model suggests that both talent and luck are crucial factors in determining success. Talent increases the probability of success, while luck introduces random fluctuations.
  2. Luck has a substantial impact on individual success
    • The study emphasizes the substantial impact of luck on individual success. Even highly talented individuals may experience variations in their success due to random events or opportunities.
  3. Luck is less of a factor on long-term outcomes
    • Over an extended period, the effects of luck tend to diminish, and the influence of talent becomes more pronounced. However, luck can still play a significant role.
  4. Unpredictability
    • The research highlights the inherent unpredictability in individual career trajectories, emphasizing that success and failure are influenced not only by talent and effort but also by external, unpredictable factors.

In summary, the study provides insights into the complex interplay between talent, luck, and success. It suggests that while talent is an essential factor in long-term success, luck plays a substantial role, especially in short-term outcomes. The research underscores the importance of acknowledging randomness and external factors when understanding success and failure in various domains.

Maximum Success Does Not Coincide with Maximum Talent and Vice-Versa

Luck plays a pivotal role in success, especially at the extremes.

The researchers commented, “The maximum success never coincides with the maximum talent, and vice-versa.”

They show this by ranking individuals according to the number of lucky and unlucky events they experienced throughout their 40-year careers. “It is evident that the most successful individuals are also the luckiest ones,” the researchers said. “And the less successful individuals are also the unluckiest ones.”

So, How Do You Get More Lucky with Money?

We think that there are some clear opportunities to improve your luck, and therefore your chances, of great financial outcomes.

1. Set goals

“If you don’t know where you are going, you’ll end up someplace else.” – Yogi Berra

When you set clear and specific goals, you have a compass heading for where you want to go which can guide your actions and increase the likelihood of achieving success. It is important to define short-term and long-term financial goals. Whether it’s buying a home, funding education, or retiring comfortably, clearly articulated goals provide direction for your financial plan.

Learn more about setting financial goals.

2. Be consistent

In essence, consistency in financial habits, whether it’s saving, investing, budgeting, or career development, establishes a solid financial foundation and increases the likelihood of achieving long-term financial success. It’s the cumulative effect of small, consistent actions over time that often leads to significant financial accomplishments.

Explore 17 micro financial habits for more wealth and peace of mind

3. Be brave

“Fortune favors the brave.”

Being daring and resilient in the pursuit of one’s goals can attract positive circumstances and unexpected advantages. Luck is often associated with those who step out of their comfort zones to pursue ambitious goals.

4. Diversification

By allocating funds across different asset classes, such as stocks, bonds, and real estate, investors can reduce the impact of poor-performing assets on their overall portfolio. This risk mitigation strategy ensures that the potential losses from one investment can be offset by gains in others, contributing to a more stable and resilient portfolio. Diversification not only guards against unforeseen market downturns but also allows investors to capture opportunities for growth in various sectors. This well-rounded approach can lead to more consistent and favorable returns, providing a measure of luck in navigating the unpredictable nature of financial markets.

5. Be resilient

The odds are that you will encounter bad luck. If you are resilient to the negative implications of bad luck, then you can position yourself to capitalize on future good luck opportunities.

6. Persist

“Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.

The slogan ‘Press On’ has solved and always will solve the problems of the human race.” -Calvin Coolidge

Many instances of “luck” come to those who persistently work towards their challenges. Don’t get derailed by bad luck speed bumps.

7. Always be learning and open to opportunities

Stay curious and committed to lifelong learning. Acquiring new skills and knowledge can open doors to unexpected opportunities. And, train yourself to recognize and seize opportunities when they arise.

Being open to new ideas, alert and responsive can expand your opportunities for luck.

8. Maintain and monitor a plan for financial wellness

“Good fortune is what happens when opportunity meets with planning.” – Thomas Edison

If you want to dramatically increase your chances for good luck and financial success, building and maintaining a comprehensive financial plan is a great place to start. Building a financial plan is a critical step in achieving long-term financial success and security. A comprehensive financial plan provides a roadmap to guide your financial decisions, helping you meet your goals and navigate life’s uncertainties.

A plan is a roadmap to “good luck” and success.

Build and monitor your plan with the NewRetirement Planner.

9. Have a plan B: Be prepared for bad luck

“If Plan A doesn’t work, the alphabet has 25 more letters.” – Claire Cook

The unpredictability of life means that not every plan unfolds as expected, and setbacks are inevitable. By having alternative courses of action or contingency plans, individuals can navigate unexpected turns with greater ease and flexibility. This adaptive mindset not only helps mitigate the impact of failures but also opens up new opportunities and avenues for success.

Backup plans foster a proactive approach, allowing individuals to remain focused on their goals while being better prepared to overcome obstacles, ultimately increasing the likelihood of favorable outcomes and, in essence, cultivating a sense of “luck” in navigating life’s uncertainties.

Use the NewRetirement Planner to not only build a plan, but to also have scenarios for how to adjust when things go wrong, because things will go wrong.

Explore 21 things that could (and are likely) to go wrong in your financial plan.

10. Monitor and Evolve Your Plan

“Plans are useless, but planning is essential.” – Dwight D. Eisenhower

A plan only reflects what you know today. You can increase your chance for luck if you evolve your plan on a regular basis as both you and the world changes.


Leave a Comment