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Luck, And The Incredible Role It Plays

February 9, 2018

We all like to feel smart.

And we’d prefer to believe that we are solely responsible for our own successes.

Sometimes that’s true.  But other times it’s not.

Often, there’s many factors outside of our control that we may not recognise.

And thinking it was ‘all us’, is really doing ourselves a disservice.

We’re likely to get overconfident and start to make poor choices.  Or we just won’t appreciate how lucky we’ve actually been.

I’ve been thinking about this a fair bit lately.  And how I’m really a bit of a fraud.  Most of the stuff that’s occurred in my life can probably be put down to good fortune.

While I did work hard and learn furiously to reach my goal of early retirement, it’s fair to say I got very lucky too.

Today, I want to ‘confess’ my good fortune by turning over my lucky cards, in a self-indulgent, therapeutic sort of way!


Birthplace and Living Period

First of all, I was born in 1989 in Scotland.  And my parents had the excellent foresight to bring me to Australia for a better life, with more opportunities.

Being born in 1989 is a hell of a lot better than being born in 1929, at the start of the Great Depression.  And remember, modern day Australia is one of the wealthiest, highest standard of  living countries in the world.


Less Than Your Peers Luck

I spent a fair bit of time in a single parent household.  We definitely had less money than my peers as we rented small properties, while they owned larger homes.  And it wasn’t to optimise housing costs!

While it doesn’t sound like much, as a bratty teenager it makes you feel like you’re missing out and your friends have more than you do.

Actually, I view this as a major positive.  While my friends got handouts, I learned to save hard if I wanted something (like my first car).

Some of my peers had their cars mostly paid for.  And they ended up being crap savers or non-savers as a result.

When a kid receives subtle messages that they’ll be ‘looked after’ or helped out, they learn that they don’t have to bother with saving, because they’ll be able to fall back on their parents.  How sad.

It actually robs the young person from learning how to work and save.  As a result, they end up being crap at managing money for the rest of their life.

So I’m very lucky I didn’t get these subtle hints and learned to save for myself.  Maybe I wouldn’t have bothered with saving if I had a well-off family.


The Lucky Dropout

While school was OK, I lost interest in my mid-teens.  I realised I wasn’t going to be a doctor or a lawyer, and much of the schoolwork was of no interest.  Also, I struggled to see how I’d use it in real life.

Therefore, I didn’t waste any time going to uni or even finishing school for that matter.  After Year 11, I dropped out to do part-time work.  What’s lucky about that, you say?

Well, I never knew what I wanted to do in life.  But I did know that it wasn’t spending another 5 years in school studying a degree I may never use.  Working and earning money as soon as possible, was much more appealing.

Many people follow this path – go to uni, get a degree, then realise they don’t actually like the industry or job that much.  Then they’ll study something else, and effectively start all over again.

In the end, I got a major head-start by getting into the workforce early with no debt.

Clearly, it’s much easier to become financially independent quickly, or retire young if you begin saving at 18-19, than if you start at 24 with a bunch of debt hanging over you.

Learning quickly about what you want and don’t want for your future really helps.  I think too many of us never think outside the square and just follow the approach that our parents and friends expect of us, or consider ‘normal’.

As a result, we don’t stop to question things enough.

We should be following something we’re passionate about and that we find fascinating or exciting.  There’s probably not enough free learning time at school where kids can explore topics that truly interest them and see where it leads to.


Cross Country Luck

When I was 18, I was very fortunate to have a couple of friends who just moved to Perth.  After talking to them, I saw Perth as a place where I could get a good-paying job and hang out with people I knew.

Moving to Melbourne (from country Victoria) seemed a bit scary, since it’s such a big city.  Since Perth was smaller and I knew people there and saw tons of jobs online, I figured it was a pretty good choice.

Who knows what would have happened if I stayed in country Victoria, where there was very few job prospects, especially for low-skilled young people?

I almost certainly wouldn’t be financially independent, that’s for sure.


Job Luck

Arriving in Perth, I had zero qualifications.  Didn’t quite finish school.  And only ever had one part-time job.  Luckily the city was booming at that time (2007), so getting a job was pretty easy.

The first job I got in Perth paid for me to get a forklift license to use in the factory, which was a bonus.

The second job ended up being excellent for saving.  It was in a large warehouse and paid relatively well.  And my free forklift license got me in the door.

Also, the job had lots of night shift, weekends and overtime – you know what that means…$$$!

I stayed at this job until retiring last year.  If it wasn’t for the benefits of this job, my savings rate would have been much lower and my journey would’ve taken a few years longer!


Spouse Luck

Being able to team up with someone on the FI journey helps too.

I’m very lucky my partner put up with my obsessive nature all this time.  She was very supportive, even though I worked so many strange hours and had little time to spend with her.

In the early days I wanted money so bad I just tried to work as much as possible.  And on days off I was tired, grumpy, and didn’t want to do anything.  What a fun person to be with hey?

Luckily, she stuck around as I tried to convince her it wasn’t going to be like that forever.

On top of that, she had a huge chunk of equity in her house.  We used that to purchase a couple of properties.

Our savings rate estimates show that we retired at roughly the same time (perhaps a year or so earlier), as if we didn’t have it and just bought shares instead.  But the benefit is, because of her equity we have much more than we actually needed.  So it provides some extra safety margin.  Incredibly lucky.


Investment Luck

Our investments have also been made at a very fortunate time.

Back in the early saving days, my high-interest savings account was paying around 6% interest.  Can’t get that anymore!

Then the GFC hit.  Honestly, I had no idea what was going on.  All I know is, I got a cheque from Mr Kevin Rudd – thanks mate!

He wanted us to spend it to stimulate the economy.  But I put that cash straight into the savings account!

Then, since we started buying property, there’s been no property crash.  In fact, some markets have done very well over the last 5 years or so.  Granted, some of the properties we’ve held haven’t done much at all.  But still, we’ve not gone through any major price drops.

There’s been no recession over our investing timeframe so far, which is lucky.

If there’d been a nasty recession in the last few years, the property and sharemarkets would have tanked and we’d probably still be working.  Also, we could’ve lost our jobs in a nasty scenario and even been forced to sell some assets.



It’s lucky I figured out what I wanted in my life so early.

I wanted financial independence.  And more than anything, the freedom it provides.  To pursue any interests or projects that seem interesting, uninterrupted by the need for a job to pay the bills.

Once I realised it’s actually very doable, following any other path seemed insane!

Some folks spend their whole life just floating around, lost.  They don’t know what they want, or where they’re going.

If you know what you want, and you’re happily progressing towards it, you’re among the lucky few.


Number Crunching

I’m lucky that basic number crunching comes easy to me.  For some people it’s painful.

Maybe this stuff wouldn’t have happened if I was crap with numbers.

Especially coming up with a strategy to convert our property equity into shares for income.  That required a fair bit of crunching to see if it would work with enough margin of safety.

Also calculating spending and savings rates over the years, how numbers interact and making estimates of possible investment returns.  This stuff is super helpful.  Numbers have been one of the few things I’ve felt very comfortable with from an early age.

Mind you, there’s always good calculators like this one, to help you play around with your own figures.


Lucky Learning

It’s fortunate I developed a thirst for learning, which keeps plenty of new info travelling up to the old noggin’.

To be honest, before having goals I didn’t give a shit about reading! In fact, I hated the thought of picking up a book and expected anything valuable to be put into documentary form to watch.

It’s turned out that reading and researching is the best thing I ever started doing.

I wouldn’t be in this position if I never started learning about basic wealth creation, personal finance and investments.

Then later on, the stuff we researched that helped chop our journey down massively includes early retirement blogs, frugality, happiness and dividend investing.


No Bad Events

This may seem an odd one.  But it’s extremely lucky that nothing bad happened to us over the last 8-10 years.  So many things could have happened to derail our efforts, but nothing did.

We’re very fortunate to have remained healthy.  And there’s been no type of personal traumas or big obstacles for us to overcome.

There’s absolutely nothing to complain about.


Look for Luck

There’s an underlying truth here for all of us.

In modern-day Australia, we’re all lucky in many ways.  Even when life is uneventful and nothing happens, we’re still lucky nothing bad happened.  Whether we choose to look at it this way or not, is up to us.  And whether we make the most of our good fortune, is another story altogether!

(Warning:  If you’re like me, after realising how lucky you are, you may not feel very smart or like you’ve achieved much at all!)

Reflecting on this stuff has made me think.  Sometimes I probably come across as an inconsiderate twit who is too harsh and expecting too much of other people.

I’m not going soft, I still think people need to get more disciplined and stronger in their financial life.  But I’m still biased by my own experience.  Many people don’t have a situation as conducive to saving as we did.


Final Thoughts

Overall, it was a smooth ride.  And we can’t honestly take much credit for what’s occurred.  Many things folded neatly together to create a very favourable set of circumstances.   Even writing it down makes me feel like a bit of a fraud.

To use the poker theme:  the reason we were able to, um, stack a lot of chips, is because we had a damn good set of cards which turned over in our favour.

Perhaps we played those cards well.  But when the game plays out like this, there’s a much higher chance of winning.

Then, it’s not about making really smart decisions in life.  Instead, it’s about trying not to make any terrible decisions!

So the truth is, I got lucky.  Just a few good choices, mixed with a staggering amount of helpful nudges along the way.

There it is…the incredible role that luck plays!


How have you been lucky?  Do you have a fortunate set of circumstances?  And are you using it to your advantage?


23 Replies to “Luck, And The Incredible Role It Plays”

  1. I couldn’t agree more with your sentiment here SMA. Must admit, I’m constantly reflecting on how blessed I am to be where I am, and all the incredibly fortunate events that have happened throughout my life. If I had 10,000 chances to start over again and see what might happen along another path, there’s no way I’d take the chance!

    It’s great to be able to recognise the role of luck – especially with investments. Too easy to fall into the trap of thinking your a master investor when your stocks do well. I love the book ‘Fooled by Randomness’ on this topic too…

    1. Cheers Frankie – even the simple luck of growing up in Oz and living in the prosperous times we do. Most people don’t appreciate this good fortune!

      So true mate. There’s probably a few people out there thinking they’re a genius for investing in bitcoin, stocks or property over the last few years. This ‘midas touch’ might see them start to make poor decisions or get carried away. Hopefully we’ll stay grounded and make sensible choices, knowing the good times don’t last forever and these recent returns are not realistic to extrapolate out into the future.

      Haven’t read that book, but it’s on the list. That list is getting mighty long now.

  2. Good to finally come across another PF blogger from Perth!!!! Hope you have thought about the best way to structure purchasing these shares (long term realisation of capital gains / deductibility of interest / etc)

    1. Haha yeah, I noticed basically everyone is from the east coast!

      For structuring – we both hold these shares to take advantage of tax-free thresholds in both names, meaning the first 40k of dividends will be tax-free. Above this tax will be minimal at first, but then escalate upwards. Although it’s a long way off, if tax becomes an issue we may start diverting funds to super or start a holding company for the shares 🙂

      We have no debt relating to our shares at this stage, but may recycle some debt after property sales over the next 5-10 years, as there will then be some debt relating to those investment properties (against our old PPOR) which couldn’t be claimed as we no longer hold the investment it was used for.

  3. Incredibly lucky and very hard working – a winning combination.

    You are right though, you should never discount the positive impact of your personal circumstances. for me being born in Australia, being of Anglo heritage and having a good education puts me so far ahead of so many others and I can’t discount those factors in allowing me to achieve what I have.

    1. Spot on Miss B, it’s those simple ones – like country, education and relative opportunities that most people ignore when the ‘life is stacked against us’ crowd comes out.

      We’re luckier than we think 🙂

  4. I just commented on a post of Miss Balance’s – I think very little here is actually luck. I’m not saying that you had all of these events fully mapped out and under your control, but that you were proactive. You positioned yourself to create or take up opportunities.

    I would possibly pay “no bad events” as luck, but even if there was a bad event you’d still be writing this blog post, because you would have positioned yourself to recover from it. It may have even opened up another ‘lucky’ opportunity.

    I’m not saying some people don’t suffer from a range of negative events out of their control. But two people in exactly the same circumstances may have very different outcomes. In your words … “whether we make the most of our good fortune, is another story altogether!”

    You’re not a fraud. You think differently and take the time to reflect. Learning to do this is as important as learning the financial side of FIRE.

    1. Thanks for those nice words Mrs ETT – very kind of you!

      Being proactive is a good point. We can have the good fortune of living in Oz with good wages, but that’s not quite enough to generate results – we need to make the most of it too.

      Things have gotten a little ‘heavy’ on the reflection lately. Been thinking about life quite a lot. It’s much more complex (and hard) to think about than getting to early retirement, that’s for sure. I’ve seen a other FI bloggers make similar comments in the last few months or so as well. Sometimes I think I’d like to start again and do it from a harder position and see how quick I could reach FI just for fun lol. But then I remember when I was doing it, it wasn’t all that fun lol.

    2. I was about to say exactly the same. When you take opportunities (some others see them as “risk”), it’s not luck anymore.
      You need balls to move on the other side of the world, you need balls to arrive without a degree, you need balls to invest in shares… and the list goes on…

  5. couldn’t agree more, I think we are lucky to be living in Australia with a sound financial system which allows us to utilise our capital allocation ability and able to retire early if we choose to.

    there are so much information and knowledge out there, with people willing to share that knowledge, this is invaluable and we are lucky to be living in a world where information can be shared instantly. For instance, Warren B is so generous and willing to share their knowledge and have given us a clear path to FIRE, it is up to us to listen and take that in, unfortunately, too many people in this world are just not willing to listen or too arrogant to take in any advice.

    1. What an excellent comment!

      Very true. Uncle Warren is so humble and loves educating people. I’m aiming to get thru all his shareholder letters (read about 15 so far). He shares so much knowledge about life, business and the economy – all wrapped up with witty points and told like a caring grandfather!

      This is an awesome country with many awesome and helpful people. And like you said, because of technology, we can even learn from those yankee early retirees 😉

  6. 3 of most knowledgeable persons in Investing
    1. Warren B
    2. Charlie M
    3. Howard Marks

    you should also read Peter Thornhill’s articles, V good too.
    But I enjoyed reading and listening to Howard Mark’s, he does not invest in share (invest in distressed bonds) but his knowledge are invaluable and his memos are fun to read.
    Makes you wonder some people are born to do the precise thing of capital allocation.

    1. Cheers Jack.

      I’m a big fan of Thornhill, a great educator with a simple and powerful message. Especially because he’s an Aussie based investor!

      Charlie is such a character, his book is on my to-do list. And Howard Marks is super smart, although I don’t read much of his writings (probably should). The intelligence level of these guys is off the chart, but it’s more wisdom than anything technical – which is the best part!

      1. Absolutely, The more I learn about investing, the more I realised what Warren said is so true……and I personally think investing is a journey of self discovery more than anything….

        Nice to meet like minded people like you and live so close by, catch up sometime for a coffee if you wish


        1. Haha yes it’s definitely a venture where you learn a lot about your personality and tolerance for certain risks.

          That sounds like a good idea – feel free to drop me a line thru my contact page.

  7. While I commend you for doing so well without having finished high school, I would never recommend someone take this route. There is just so much more that comes from a formal education than you can know. You learn more than you could ever imagine and grow in ways that are surprising and rewarding. And even though I am not doing work directly in the field for which I studied, it led to something even better. There are a number of skills that come from formal education that can always be put to good use — even as a side hustle. I am also very lucky to live in Australia (migrated from Canada) where I was able to have uni fees covered by HECS and receive AusStudy.

    1. Thanks for the comment Scott.

      You’re right that an extended education can lead to a much better future in many cases. I wasn’t trying to say dropping out of school is a great idea. But I would point out that finishing school and achieving things in life are often completely unrelated in my view. The list is long with people who dropped out of school to achieve wonderful things. Clearly this is not a given either. It comes down to the individual and whether they have any drive, ambition or thirst for knowledge.

  8. Luck and the Birth lottery

    $100 invested in S&P 500 in the beginning of…

    1960 became $375 in 20 years
    1980 became $2,684 in 20 years
    2000 became $324 in 20 years

    1. Yes totally, when and where you’re born is a big form of luck. Though do people really invest one lump on one day and never ever invest again? You’d likely be buying over time, so after those peaks come large crashes, where you’d be buying more shares at lower prices without even thinking about it, thanks to dollar cost averaging. Extreme results are much less likely to occur for an average person investing regularly over time.

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