Rich people never want to acknowledge their luck, because it doesn't fit the "self-made" narrative.

edit: to please the pedants, I should have said "many rich people", as to not imply "all". My fault.

The nuanced take is that luck is something that can be “made” through putting oneself in situations conducive to getting lucky through exposure, networking, and repeated attempts / not giving up.

You might be able to get successful people to admit that they were in the right place at the right time, but they’ll almost always qualify that with how much effort they put in to be in that situation.

If you want to catch a MLB game ball, you have to a) attend a game, b) pay attention to every ball hit, c) practice actually catching a ball, and (for some) bring a glove. If you're particularly savvy, you can even purchase tickets for seats in an area to where balls are commonly hit, and if you're determined, you can go to lots of games.

However, you're only getting that ball if it's hit in your direction. You can attend hundreds of games and still never have one hit close enough to catch.

While missing one or more preparation steps (e.g., attending a game) may rule out the possibility of catching a game ball, for every person who does catch one, there are dozens if not hundreds of people who prepare at least as much and still never do.

> repeated attempts / not giving up

Being able to afford that wouldn't be lucky, it would imply some sort of per-existing wealth or at least a solid support network.

That’s true, and the extent of how necessary that existing wealth and support network is depends on the kind of venture. For starting a business, absolutely. But there are other kinds of success that aren’t as entrepreneurial.

I was presenting it primarily through the lens of a mindset that is undaunted by failure and having the motivation to avoid giving up prematurely.

Successful writers and entertainers often share stories about how they were rejected dozens and dozens of times before finally getting noticed. I have friends who wanted to change careers by moving to a different industry and they must have submitted hundreds of job applications before they managed to get their junior level role.

...Which you have in the first place by being lucky in your birth.

Or that could be earned

Not just rich people, successful people in general hate to acknowledge the role luck played in their success. It's really obvious on communities devoted to becoming successful at a certain hobby or venture, like blogging, video creation, live streaming, SEO/marketing, game development, startups, etc. Those who made it big will talk about it's all skill and how their amazingly strategies and hard work paid off, whereas those who failed will be talking about its all luck based, how their timing was off and how they didn't have the connections needed to succeed.

It's called self-serving bias, and it's everywhere in society.

The "luck" of many wealthy people is that they were born to wealthy parents (Walton family, Gates, etc).

Yes, this is generally underestimated. The closer I've worked with this class the more it becomes apparent in quiet anecdotes that don't always make the official bios or wikis.

Most self-made billionaires came from at least millionaire families. Generally hard working, smart guys with a lot of skill & luck, but they start at a level we can only dream that maybe our children or grandchildren can start from.

I once worked for a billionaire investor who told us how he got started investing when his father offered him the choice at 13 years old: have his birthday party at one of the most famous & expensive hotels in NYC, or take the cash value of that to invest in stocks. The dollar figure seemed to be something like the equivalent of $50k in 2020 dollars. Much like orange man who got "a small loan of $1M from his father", I am sure the $50k given to a 13 year old was not the first or the last paternal investment.

Another firm managing ~$10B there was a guy who unbelievably made it to the C-suite in his 20s. It was never clear exactly what the connection was, but he was some sort of family friend of the founder and worked for him as a teen. He was also related to a big bank CEO.

> Another firm managing ~$10B there was a guy who unbelievably made it to the C-suite in his 20s. It was never clear exactly what the connection was, but he was some sort of family friend of the founder and worked for him as a teen. He was also related to a big bank CEO.

Sounds like Matthew Grimes, lol

https://www.bloomberg.com/news/articles/2021-07-28/from-inte...

Actually a totally different guy, tells you how common the scenario is...

Most of the richest people today were born solidly middle or upper middle class.

Nassim Taleb again, after mere comfortability ita a long road of blackjack and 100 hour workweeks.

There are plenty of 1%-ers who work hard and they ascribe their success to their hard work and intelligence. But it ignores that there are many people who work harder, are more intelligent, or both, who don't get to those heights. That is the luck aspect.

If one is on top of the heap, it is convenient to believe in meritocracy, doubly so. On the one hand, it makes the person feel they earned what they have, and second it means the poor are also getting what they deserve and so there is no need to artificially prop them up. "Those people" should have worked harder.

It's also because working "hard" isn't enough. You have to put your effort where it matters. That is so often overlooked.

Working hard implies the labor theory of value, which is that all work is interchangeable. While that might have been closer to the truth during the first industrial revolution, the variability in the value of labor has never been higher than today.

It's comforting to think that those that have achieved the best outcomes in life have simply sacrificed time spent on other things, and spent more time on work. There might be some truth in that, but often they have had better opportunities, due to both circumstance and luck, that they also have made better use of than average.

Luck plays a role. A significant one.

But so do you!

Here's an example from my own life:

In the late 80's, heading into the early 90's I was working in manufacturing. Paid poorly, but man! I love that work. Had a great time, worked with people who had real skills and built up a set of my own too.

Saw the outsource waves coming hard. They were big and they were going to gut manufacturing. We all talked about it.

Few of us really did anything about it. I was one of the ones who did.

I started networking. Got out there, started having lunches with people, attending various groups, all sorts of stuff.

Fast forward today: I'm running a startup with a partner doing work with metal additive technologies after a 25 year run in CAD / PLM. Back to manufacturing as an reshoring wave is headed our way. For many doing the work the pay is still not great, but more opportunities are out there now than there have been for a long time.

My peers from that time period are mostly doing the same work, for almost the same pay ( and if that doesn't speak to some troublesome economic policy, I do not know what does ), or are employed in other fields.

A few of us moved up and into another class basically.

Lucky? Hell yes!

But, had I not done the networking, I know absolutely I would not be in the position I am in today.

In a basic sense, this all works a bit like a lottery or raffle. Consider each interaction with others a ticket.

The game is going to reward X number of tickets. And Y tickets may be rewarded due to unplanned opportunity happening as a result of a group of people realizing something is an opportunity that they would not have realized apart or in a different context.

There are Z tickets total, let's say.

People who are active in this way, talking with others, helping others out, seeking help, and doing projects, whatever they can do, get a lot more tickets than most people do.

And because of that they seem more lucky because more of them find opportunity than the baseline people not so active do.

Now, I have one other thing to say and that is about the "do what you love and money will follow" many people say is really only applicable to well off people who are somehow enabled to do what they love because their basic needs are covered somehow, or put another way, they are just not needy which frees them up to explore what they love.

The truth is many of us can do what we love and money will follow, but it's hard work!!

What I did was work my job and put 20 percent of my free time into "hobbies" that were skill builders toward "what I love" and that activity coupled with the networking and helping others is what got me a lot of those raffle tickets to better opportunities!!

I spent a ton of time doing electronics and programming on my own. A lot of it was retro computer based because I love retro computing. That 8 bit era is so damn much fun! I still love it. But, I also used it as a vehicle to build skills I would need later on, and it all worked out. Working on bigger systems helped too. I didn't put all my time into 8 bitters. I had SGI unix systems purchased off ebay, a couple pretty good Linux machines assembled from parts I got many different ways. And I setup an electronics lab made of second hand gear, some things I made myself, and a few gifts from people or trades I got helping others out too.

When opportunity presented itself I knew enough to be able to go for it and knew enough people to get help too.

Don't get me wrong. I've been lucky. Others I know will own their own luck too. ( in comfortable conversation )

But, I also maximized my chances. The cost was a bit less free play time than my peers had, but really it was also time I really enjoyed because it was invested in things I love to do and that really interest me. Mostly, I didn't catch as many movies and as many parties. No joke!

But, I had many more interesting lunches meeting great people doing all sorts of stuff!!

I am nor sure that was a cost as much as it was just living differently.

To sum up:

Sometimes a person gets noticed, or a co-worker can lend a hand up. This happens sometimes, but not too often.

More often a person gets noticed when they are active among other people. This happens more often.

Getting noticed is "that person deserves an opportunity", or "I know a guy who can get this done", or, "Did you see her project? It lines right up...."

Helping others often results in those others wanting to help us in return! Not always, but pretty often.

Doing stuff results in skills, stories one can tell, reasons to talk with others, and a general increase in competency and capability.

All that type of activity is what does tend to very seriously increase one's chance of a "luck" event happening!

They are also what can very seriously improve one's ability to take advantage of a "luck" event, which is what I call an opportunity, generally speaking.

All of what I just said is what one can do when having means, available capital isn't on the table. Wasn't for me. I came from poverty.

And there is no shame in poverty. It sucks. Way too many of us are there and it's not OK. There is a policy discussion to have one day soon. And we should have already had that discussion. Like I said, we should have it one day soon.

The shame, if there is any at all, boils down to those of us able to help others out not doing it. And in like kind, those of us needing help, some opportunity, not doing things to increase our chances of seeing opportunity and being able to act on it in a meaningful way.

*Labor theory of value*

I think you are right about work not being interchangeable. It's not been that way in my experience. Some work is. Other work isn't, and people and their basic nature vary widely too.

This does imply just working hard isn't enough. I don't agree with that at all!

What you do matters. And "working hard" means doing more of the kinds of things needed to improve luck more of the time in my view.

Cynical but doesn't match my experience, plenty of rich people acknowledge luck

I bet there's a selection thing going on there. Most people, not being rich, aren't around rich people -- and so the rich people they "see" are exactly the type to not acknowledge luck, Trump perhaps being an extreme here.

“You know, some people got no choice, and they can never find a voice, to talk with that they can even call their own. So the first thing that they see, that allows them the right to be, why they follow it, you know, it’s called bad luck.”

Lou Reed

“Which contributes more to wealth: luck or hard work? Which contributes more to the area of a rectangle: height or width?”

By framing the problem like this you are making the assumption the variables are independent which is very much not the case. Your work can influence your luck, and even how much effect said luck has.

Luck indeed finds you hard at work. But also, if you’re not sitting at the table, you’re on the menu.

That hasn't really been my experience, but ymmv. But it's also why we should fight so much against centralization in the economy even if it brings efficiency gains. Ideally you'd want to have as large of a table as possible.

Many rich people do acknowledge it, because another way to say it is odds or opportunities. And you can absolutely increase the likelihood of getting "lucky" through work.

Maybe the real takeaway from his story is to bet big in a new market to get rich. And if you lose it all, earn more and do it again. It would have happened in the early days of the internet just the same.

Yes, it's incredibly risky but at least it has a better chance than playing the lottery. Like Nassim Taleb says, bet on things with a limited downside and unlimited upside. And if you don't try, nothing will happen.

I mean, lets get Taleb exactly right here: He basically says don't invest "moderately," -- like putting your large amounts of money in stocks, even index funds, is a bad idea.

Invest in both extremes, barbell style. Put MOST of it in something bulletproof (he goes with Treasury Bonds) and then the rest as big bets on long shots.

Really depends on you goals and also current financial security. I would rather receive 50.000$ than a 10% chance at 500.000$. But a richer person would probably choose the latter.

Sure, but one of the big points of "The Black Swan" is that your (and everybody's) percentages numbers are way less reliable than you think.

“things with a limited downside and unlimited upside”

Penny stocks and junk bonds, a classic recipe for attaining mega wealth.

That is how Warren Buffet got started, or as he called them, used cigarbuts.

It also helped that his father was a congressman and stock trader who brought Buffet around his finance friends throughout his youth and helped him start buying stocks as a young teenager.

Theoretically yes. Even putting it all on black in Vegas could work. But it doesn't mean you should do it. Any investment is inherently a gamble, some are riskier than others and some have a too small payoff for the risk.

That's a pretty big advantage rich people have as well: knowing they won't starve to death if they fail.

Granted that based on probability alone he just got lucky but from the details of the story it's not possible to be certain of that. If he can offer a narrative about why and how he knew such a move would have such a result and the narrative fits with reality, then how is he not correct? Yes you can get both lucky and tragically unlucky when it comes to investments, but that doesnt mean there's no such thing as a rational investment with a high payoff. It's not impossible that's what he did, people do it, it does happen.

Yes, in any cohort of investors, by nature some random sample or going to outperform in any given year. In fact, statistically the concept of "hot hands" will rear its head because.. some subset of the outperformers will actually outperform over multiple years.

It may be skill, it may be luck, or it may be both.

But consider that this outperformance & hot-hand phenomenon can be replicated even in purely random games like coin flipping.

So sometimes taking the "winners" and trying to craft narratives of why they succeeded and what you should do to replicate them is a silly game.

I get what you mean and I agree to an extent, but to give an absurd example, if you knew of a company that had a patent on cold fusion, and you had watched it actually work yourself and deployed it at scale in a project successfully, investing in such a venture and having an outsized return would have absolutely nothing whatsoever to do with probability.

For sure! The point is that simply replication the behavior of winners is not any guarantee of winning.

Replicating SOME of the behaviors of SOME winners, upon careful study of what in their process actually allows them to differentiate themselves from others is the key, and is usually a process that requires a lot more work.

The work here was that they had some sort of investment process that required time & effort evaluating projects & their prospects over long time horizons. These sorts of processes require entire investment teams and are not the sort of thing that make it into their Fortune magazine blurb or pithy twitter posts.

The process cannot be summarized in a paragraph blurb, and even if you were to read a 300 page book you may not have the man-hours, technical skills or knowledge to replicate it.

IIRC, he went all-in on HEX when it was dirt cheap and picking up volume, because it was a staking coin.

Got it, pure luck, no argument.

> Can you imagine if some newspaper interviewed a recent lottery winner [...] But to the ignorant, it all sounds very impressive

the Gell-Mann Amnesia effect described by Crichton comes to mind here.

It is quite potent when media talk about crypto and usually involves evident logical fallacies that are not dissimilar to Orwellian double-speak.

Like the idea that cash is freedom so crypto supporters also support no cash limits, even though you can't buy crypto with cash and crypto cannot be converted directly to cash and people who won the crypto lottery keep their money in a good old bank when a good old investment manager handles them to buy good old banking products using good old FIAT money taxed by the good old government, because "freedom propaganda" is the best tool to sell a fraud to the ignorant.

But media don't write about it, I don't know why.

> even though you can't buy crypto with cash and crypto cannot be converted directly to cash

I have bought and sold crypto primarily using cash for the last ten years, what are you talking about.

Yes, many people use an exchange. Many do not.

Physical cash? How?

Bitcoin Local offers the opportunity to meet a seller at a physical location. Same with Local Monero. If you're planning to exchange $10M, you'll probably need a couple of bag-carriers, and perhaps some muscle as well.

You can also trade for non-physical "cash", e.g. local bank transfer via escrow. As far as I'm concerned, that's a cash exchange.

Won't the usage of escrow trigger a KYC/AML "event" of some sort? That would tie the two parties' identities in a way that a cash evades.

I think local traders are expected to execute some level of KYC. In my experience (under £1K, online) that's a photo of me, holding my driving licence and a piece of paper syaing "I'm buying X from Y". I've never tried a physical cash trade in person.

You arrange to meet someone online, meet up, exchange cash for btc/whatever, done.

Never had a bad experience with it. You just sit in a coffee shop with the person for the few minutes it takes for a transaction confirmation.

One simple option: Hand someone some cash, they send you some BTC

Not that simple. You need to validate the transaction on the chain and that takes hours

You only need a single confirmation these days. It takes 10 minutes.

Source: have been doing this for years.

How much do you pay on the transaction cost

Precisely this. There's nothing complex about it either. You get a bunch of cash, they get btc, or vice versa.

Presumably a Bitcoin ATM

Really hard to underestimate how bad and old the doublespeak is.

You ever thought about how a credit card is a debt card?

Whereas, it's the debit card that actually spends your credits?

Credit cards create credits (a liability). Debit cards create debits (a nearly immediate transfer from your account). Seems accurate enough to me although I can see how debt and debit could be confused.

But no:

When your account is credited, that means you gain money. That's the definition of "credit."

So yes, you are creating credits for the credit card company, against you. What you are gaining is debt/liability. Which why it's weird for it to be "your" credit card.

If I have a Chuck E. Cheese game token card, that doesn't mean I owe Chuck E. Cheese tokens.

No. “Debit” isn’t “debt”.

A credit card offers you credit.

credit: noun An arrangement for deferred payment of a loan or purchase.

A 'debit card' is one where funds are debited from your account. A 'credit card' is one where you're buying on credit.

It takes a certain combination of work/knowledge/luck to profit from anything in life.

Seems reductionist to equate buying low and selling at peak to buying a lottery ticket. But so it does to claim hard work has been the main reason why financial investors profit

>It takes a certain combination of work/knowledge/luck to profit from anything in life.

Plenty of people 'profiting' on the wealth of their parents, grandparents, etc. when they themselves have never worked a day in their life and don't have much knowledge of anything.

Inherited wealth is an obvious contradiction to the meritocracy that so many people believe we live within today.

If my response seemed to support the idea of meritocracy as a fact it was unintended. Obviously I missed "inheritance" or family-estate from the triad.

Obligatory xkcd:

https://xkcd.com/1827/

Perfect example of fundamental attribution error