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The Role of Luck in Investing: A Simple Guide to Financial Good Fortune

For starters, luck is a perception of (unearned) leverage delivered by an invisible hand. If this definition is close enough to the truth, then the role of luck in investing is out of our hands. But if we have to influence the occurrence in any way, this would mean aligning ourselves properly. How to get lucky in finance comes down to a few strategies you can start following today.

For example, to see a 100% capital gain in the first stock you ever bought within a few short weeks is insane. This was the reality I experienced as a first time investor during the 2003 to 2004 era. I will discuss four (4) powerful ideas that can control the luck wheel to your personal finance strategy.

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1 The Role of Luck in Investing: A Simple Guide to Financial Good Fortune

1.5 A Few Parting Words

1. Hard Work

The factor of hard work is pivotal to achieving all manner of success in various kinds of fields. But many people would not attribute success earned by hard work to luck. They will always see it as effort paying off. On the other hand, you could also say that the harder you work, the luckier you’ll become.

In my example above, I gave credit to the hard work I put forth to finding that (one) lucky stock. I toiled day and night as a beginner investor. I remember reading at least 5 years worth of annual reports and contacting the investor relations department. Although I had only a couple of hundred dollars to invest at the time, the zeal for due diligence paid off. That’s the role of luck in investing my money at play.

2. Expertise

Another factor and ingredient for manufacturing luck with regard to finance is knowledge. Become well informed about your craft. Aspire to become the smartest person in the room. This will raise your discernment levels and help you profit from small changes. You will easily take advantage of the small moves that others don’t see.

The industry in which I made my first investment was pretty new to me. But I made it a point to read all about it. I found a treasure trove of information online by just smashing the search button. Google used to have another button next to the search called “Are you feeling lucky?” If you’ve ever clicked on that, you will know what I’m talking about. Luck played a role even though it appears that I was hooked on online info and data from the company’s website. I read investing books at my leisure.

3. Showing Up

Is it true what they say – showing up is winning half the battle? What is the exact role of luck in investing here? The biggest advantage you could have over others is starting! Your competitors (other investor) may have procrastination tendencies. A lot of them will crumble when they are presented with the barriers of entry. You’ll have luck on your side if you just developed the trait of taking action now on your financial goals.

I almost didn’t make it. I hesitated before taking my first stock position. I realized that the stock’s equity had been hammered a few times in the past few days. But I was going in for the record low price. Then luck smiled on me when it finally took off. I did take action even when risk was staring me in the face back in the day.

4. Persistence

Persistence is the invisible virtue of pushing a little harder than average. To achieve anything for that matter, trying relentlessly yields marvelous results. Regarding money-making from a small business, side-hustle, or financial asset, persistence makes you look lucky on the outside. Others admire high achievers and often attribute the term lucky to them. But the secret remains with the victor.

I persisted to learn about investing and fundamental analysis on my own. I must admit that most of the learning wasn’t making any sense to me at first. Reading through financial reports was a pain. Buying investing books and visiting local libraries to consume finance material was my new normal. But I kept at it day and night. I got lucky when I finally found a stock that fit my current buying tenets. That perseverance played a role of luck in investing in the right stock at the right time.

A Few Parting Words

There are definitely two (2) kinds of luck. The best one is that which gives you direct control of your own destiny. As you ground yourself with these virtues, you could dictate the pace of your financial achievements. Oh yes! The role of luck in investing and finance may be subjective; but I imagine that 20% is pure effort, and 80% is luck. The kind that we love is a direct derivative of effort.

On the other hand, refusing to work on your dreams will eventually lead to being forced to build someone else’s ideas. Your boss will count him/herself lucky to have you. But don’t get me wrong here, being an employee is the starting point for all of us. A wonderful and fruitful employment will help you gain skills, experience, and build savings. All your efforts will begin from there until you’re refined sufficiently for a loftier altitude.

Please share your thoughts and ideas below, especially the one that resonated with you the most. How did you get so lucky arriving where you’re at today?

What is the Role of Luck in Investing?

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