You Make Your Own Luck

This article was written by Todd Washburn, CFP®, and appeared in the August 2008 issue of Southern Neighbor newspaper in Chapel Hill, NC.

A number of years ago I heard a quote that I have found to be both informative and inspirational.  I don’t know who said it originally, but it was:

            “Luck is when opportunity meets preparation”

This could certainly apply to many aspects of your life, but how about your finances?  After all, who hasn’t experienced a twinge of envy when someone else experiences good financial “luck”?  But have you ever stopped to think about what the person may have done to prepare for that opportunity?

            It’s been my experience that when it comes to their finances most people don’t do much “preparation”.  They go with the flow and make financial decisions in a vacuum.  That particular decision is all that’s being considered.  How it will impact future decisions and their ability to take advantage of opportunities isn’t considered.  But is that wise?

            There was a story recently in the Wall Street Journal Sunday.  The columnist, Jeff Opdyke, was offered an opportunity to relocate to the Hong Kong office.  Living oversees had been a long-time goal and the family decided to move.  But they’re not going after-all.  Why?  The house won’t sell.  It’s bigger than the “starter” homes that are still selling.  And they can’t afford both the mortgage and rent in Hong Kong ($4,800/month).  But unlike many folks, they’ve decided to do something (preparation) so that the next time opportunity knocks, they’ll be ready (and “lucky”).  They’re still going to sell the house.  Seems that when they moved from New York City, housing looked cheap and they bought more than they needed.  But it’s cost them- in taxes, heating/cooling bills, transportation, and oh- the Hong Kong move.  So they’re going to downsize.  Well, actually “right-size”, so that next time they’ll be able to either sell their house easier, or afford both rent and the mortgage.  They are preparing to make their own luck.

            In Salisbury, NC there are a group of people who have been referred to as the “Salisbury Millionaires”.  They are regular folks who have become very wealthy.  People might say they were lucky.  But really they saw an opportunity.  So what did they do?   Well, there was a little grocery store in town that wanted to expand.  But it needed capital and so it sought out local investors.  Some of the townsfolk who had saved some money (preparation) decided to take a chance (opportunity) on a company they admired.  And it worked out quite well.  The company?  Food Lion.  As the company grew so did the number of millionaires in Salisbury.  All because they had prepared for and accepted an opportunity. 

            But it isn’t about selling a house or living in the right place.  It’s about having your ducks in a row, being able to recognize opportunity, and being in a position to accept it.  Here are some situations where a little preparation may make a big difference.

1.     Job and career   In terms of advancing in your career, landing a better job, or even switching careers, are you preparing yourself or just hoping?  Are you learning new skills, even at your own expense?  Are you networking with people doing what you want to do (not just those you already know)?  Are you letting people know that you’re seeking opportunities?  I spent 15 years as a biochemist in research labs before deciding to become a financial planner.  It took 6-7 years to make the switch.  There were informational interviews to learn about the field.  There was education to get (my CFP® designation).  And there was job-hunting.  I went to so many meetings full of financial folks and had so many people ask me- “You do what?  You want to do what?”.  But when it finally came time to find a job, those were the people who found opportunities for me, because they knew I had prepared for it.  The positions I was offered would not have been available to me without the education and networking I had done (preparation).

2.    Retirement    Or more to the point, early retirement.  We are seeing more and more companies offering employees early retirement packages.  But most people don’t know if they can afford to accept them.  If you’re over 50 and working for a large company you should be figuring out what you would do if offered a buy-out.  What would you need?  What would you want to negotiate for?  The time to figure this out is before an offer is made.  You want to make an informed decision.   Will you be prepared, or just winging it?

3.    Business and investments   At some point in time you may decide to go into business.  Or you’ll be offered an “investment opportunity”.   How you handle these situations will depend upon a number of factors:  your current financial needs; your long-term financial goals; the amount of money you’ve saved to invest; the skills you’ve developed or the contacts you’ve made to properly evaluate the opportunity.  Preparation and planning are the key.


In many cases you may be preparing without knowing exactly what you’re preparing for.  That can be understandably frustrating.  But rest assured, without any preparation, Lady Luck will have a very difficult time finding you.  After all, even lottery winners have to buy a ticket to play. 


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