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Rich people got "lucky" but they don't define what luck is to begin with. To quote Naval, there are 4 kinds of luck. 1. Blind luck - Where I just got lucky bec

Rich people got "lucky" but they don't define what luck is to begin with. To quote Naval, there are 4 kinds of luck. 1. Blind luck - Where I just got lucky because something completely out of my control happened 2. Luck from hustling - luck that comes through persistence, hard work, hustle, motion. Which is when you’re running around creating lots of opportunities, you’re generating a lot of energy, you’re doing a lot of things, lots of things will get stirred up in the dust. 3. Luck from preparation - If you are very skilled in a field, you will notice when a lucky break happens in that field. When other people who aren’t attuned to it won’t notice. 4. Luck from your unique character - You created your own luck. You put yourself in a position to be able to capitalize on that luck. Or to attract that luck when nobody else has created that opportunity for themselves.

hnhg 7y ago
I remember another study that looked at people who had made it very rich, and they saw that luck was something like 'being educated in a field just when that field is about to make a huge impact in the world' - in other words, great timing in addition to raw talent. I don't have the link to hand now though.
- drchewbacca 7y ago
  There's this ted talk to a similar effect, timing is the most important factor in a startups success. https://www.youtube.com/watch?v=bNpx7gpSqbY&t=1s https://www.youtube.com/watch?v=bNpx7gpSqbY&t=1s
- marcus_holmes 7y ago
  I loved the Whats App founder talk at the YC online class (I don't have the link either). I paraphrase: "we decided to make a messaging app just when that was the best, most profitable thing we could possibly have done." There was a ton of experience and talent behind it, but they acknowledge that they got lucky and timed it perfectly.
adventured 7y ago
That's a spot on point about the various types of luck. The common derogatory saying about smart / rich (referenced in the title) reveals more about the person saying it, than it does the person that it is directed toward. It's the surface assessment equivalent of thinking someone is rich based on the car they drive (or watch they wear etc.). It's a shallow & easy appraisal that someone runs because they're either incapable of deeper analysis or are too lazy to bother. In my experience it tends to reveal that the speaker knows absolutely nothing about money or wealth.
ta1234567890 7y ago
However, 2, 3 and 4 can be reduced to 1. You don't choose your genes or where you are born. Those factors, which are blind luck, determine all of the other lucks for your whole life. In the end, everything is just blind luck, but our egos want to feel like they are in control somehow.
- dsfyu404ed 7y ago
  Hustle and preparation are not luck, they're skills you have to hone for them to be useful. You have to actually do something. They aren't something you can be born into (much to the dismay of rich parents with deadbeat kids). By reducing 2 and 3 to luck you're implying that people have no agency. Sure, the person who develops those skills in rural Africa isn't going to go as far as someone who develops those skills in Chicago but they'll both go a hell of a lot farther than the average persona around them.
  - SolaceQuantum 7y ago
    Being prepared doesn't mean anything unless 1 happens. Hustling => success and preparation => success are dependent on lucky opportunities.
    - dsfyu404ed 7y ago
      No they are not. Yes, there is more opportunity in some settings than others but the people with the skills are much less likely to be passed by by that opportunity than everyone else. There's a lot more opportunity that usable to the people who are in a position to take advantage of it (preparation) and have the drive to do so (hustle).
      - SolaceQuantum 7y ago
        Again, imagine 1 does not occur. You hustle and there is never a lucky opportunity. Do you still achieve success? You prepare for a job interview and you never get the opportunity to interview. Do you still achieve success? No one is saying that there aren’t factors to increase luck insofar as people are saying that success doesn’t necessarily have a linear relationship with preparation or hustle. IE. Person A who earns 100x more than person B did not necessarily prepare 100x harder, or hustled for 100x as much. Person A may only have hustled/prepared 10x or 5x as much, or 0.5x as much and just got exposed to better opportunities.
ohyes 7y ago
No, this article is entirely about blind luck. None of the things you describe matter. There are plenty of prepared, hustlers who can capitalize on lucky events. For every one of them that becomes mega-rich, there are thousands who are exactly as fit who do not. That is, 2 3 and 4 follow a normal distribution, wealth follows a power-law distribution. The attributes don't correlate strongly. Makes me feel better to have a study confirm it.
davidw 7y ago
My guess is that it's some kind of distribution curve. You can certainly improve your odds via 2, 3 and 4, but some people will do all those and end up not doing well. The average person who does them all will end up a bit better-off than average, and some will end up very well off. In other words, they help, but don't guarantee 'success'.
- moate 7y ago
  Will they? Wouldn't you need to not only do them, but do them better than average? So it's not just that you need to work hard, it's that you need to be working harder than average. But also if someone was already ahead of you, they could work less than that and still wind up ahead of you. So now, is it the hard work that determined the end result, or just the luck again? There are tons of people right now trying really hard to do all sorts of things. Many of them will fail, for a myriad of reasons. That's the idea of "luck". You can't know which reasons will lead to your downfall, because reducing labor and life to "hard work" is so absurdly reductive it's meaningless. Basically, your individual circumstances are your own and comparing yourself to others might be helpful but it also might not and nobody can definitively tell you one way or the other if luck is even real.
shadowtree 7y ago
2-4 are great examples of survivorship bias. For every success story with those traits are thousands of failures. If Bill Gates had been born and raised in Ruanda, you wouldn't know his name today. Same IQ, same hustler. But no parents with connections, no upbringing devoid of war and violence. It's just like in sports. Usain Bolt is not the fastest man alive. He is the fastest professional runner. Within a sample set of 9bn people, there are likely ones with better genetics - but no access or chance to become a professional runner. This is why the slogan "Billionaires should not exist" is not without merit. A net worth of 100mil still means generational wealth. But once you're in the billions, the gap to all the other employees in your company becomes just crazy - but none of the billions would have been possible without their labor. Remember: a million seconds is 11.57 days. A billion seconds? 31.71 years.
- refurb 7y ago
  You’re looking at it way to black and white. I would bet if Gates had been born in Rwanda, he would have stood a good chance of being successful there, better than average.
  - asjw 7y ago
    Not really. When I was a teenager we hosted at our home kids running from Rwanda , my mom was working in an hospital that cured them, doing the best possible for kids (kids!) with arms or legs amputated or a big part of their skull chopped off with a machete. You're assuming Gates had probably more chances when the chances weren't there to begin with.
  - empath75 7y ago
    Libertarians who talk about how the state just gets in the way of innovators like Gates forget how hard it is to start a business when the central government fails and people start hacking away at each other with machetes instead of programming computers.
    - tathougies 7y ago
      Okay, but this is a strawman, because a basic tenet of libertarianism is that a government is necessary to forcefully (if necessary) prevent others from trampling on your individual rights. You are describing anarchy, not libertarianism.
fredley 7y ago
You can't frame things like this without talking about misfortune in the same terms. Lots of things can happen that are 'unluckly', but are vastly skewed to certain demographics. Being unlucky like: * Receiving little or no schooling * Having to labour as a child * Being abused * Having your primary carers be addicts of some kind * Growing up in a relatively poor/deprived * ... Really this list is endless, and other than blind luck (a lotto win, something that can really elevate you out of this situation, as well as having the sense to use the opportunity correctly), no amount of 'hustle' is really going to get you out of this situation. The kind of attitude in parent's comment is prevalent amongst people who have grown up in relatively rich, successful environments, and see vastly more lucky people than unlucky people (when in reality there are orders of magnitude more unlucky people than lucky).
- mvaliente2001 7y ago
  That reminds me a short fictional story by Jorge Luis Borges (if you excuse the quasi non-sequitur): The Lottery in Babylon. It describes how the lottery became so popular in Babylon that they began not just to play for money, but all kind of prizes, and then not only prizes but punishments. Finally, they decided that people didn't even need to buy a ticket. Everybody was implicitly part of the game, where good or bad things could be made to happen to you just by random chance... At the end of the day, The Lottery in Babylon became indistinguishable from normal life.
ska 7y ago
> but they don't define what luck is to begin with. They do though, the paper is focused on what you call "blind luck" in (1). I suppose it can be summarized as a evidence based counter argument to the cultural narrative weight given to 2,3,4, especially in the US. I don't think it is complete of course, but it is interesting.

hnhg 7y ago

I remember another study that looked at people who had made it very rich, and they saw that luck was something like 'being educated in a field just when that field is about to make a huge impact in the world' - in other words, great timing in addition to raw talent. I don't have the link to hand now though.

drchewbacca 7y ago
There's this ted talk to a similar effect, timing is the most important factor in a startups success. https://www.youtube.com/watch?v=bNpx7gpSqbY&t=1s https://www.youtube.com/watch?v=bNpx7gpSqbY&t=1s
marcus_holmes 7y ago
I loved the Whats App founder talk at the YC online class (I don't have the link either). I paraphrase: "we decided to make a messaging app just when that was the best, most profitable thing we could possibly have done." There was a ton of experience and talent behind it, but they acknowledge that they got lucky and timed it perfectly.

adventured 7y ago

That's a spot on point about the various types of luck. The common derogatory saying about smart / rich (referenced in the title) reveals more about the person saying it, than it does the person that it is directed toward. It's the surface assessment equivalent of thinking someone is rich based on the car they drive (or watch they wear etc.). It's a shallow & easy appraisal that someone runs because they're either incapable of deeper analysis or are too lazy to bother. In my experience it tends to reveal that the speaker knows absolutely nothing about money or wealth.

ta1234567890 7y ago

However, 2, 3 and 4 can be reduced to 1. You don't choose your genes or where you are born. Those factors, which are blind luck, determine all of the other lucks for your whole life. In the end, everything is just blind luck, but our egos want to feel like they are in control somehow.

dsfyu404ed 7y ago
Hustle and preparation are not luck, they're skills you have to hone for them to be useful. You have to actually do something. They aren't something you can be born into (much to the dismay of rich parents with deadbeat kids). By reducing 2 and 3 to luck you're implying that people have no agency. Sure, the person who develops those skills in rural Africa isn't going to go as far as someone who develops those skills in Chicago but they'll both go a hell of a lot farther than the average persona around them.
- SolaceQuantum 7y ago
  Being prepared doesn't mean anything unless 1 happens. Hustling => success and preparation => success are dependent on lucky opportunities.
  - dsfyu404ed 7y ago
    No they are not. Yes, there is more opportunity in some settings than others but the people with the skills are much less likely to be passed by by that opportunity than everyone else. There's a lot more opportunity that usable to the people who are in a position to take advantage of it (preparation) and have the drive to do so (hustle).
    - SolaceQuantum 7y ago
      Again, imagine 1 does not occur. You hustle and there is never a lucky opportunity. Do you still achieve success? You prepare for a job interview and you never get the opportunity to interview. Do you still achieve success? No one is saying that there aren’t factors to increase luck insofar as people are saying that success doesn’t necessarily have a linear relationship with preparation or hustle. IE. Person A who earns 100x more than person B did not necessarily prepare 100x harder, or hustled for 100x as much. Person A may only have hustled/prepared 10x or 5x as much, or 0.5x as much and just got exposed to better opportunities.

ohyes 7y ago

No, this article is entirely about blind luck. None of the things you describe matter. There are plenty of prepared, hustlers who can capitalize on lucky events. For every one of them that becomes mega-rich, there are thousands who are exactly as fit who do not. That is, 2 3 and 4 follow a normal distribution, wealth follows a power-law distribution. The attributes don't correlate strongly. Makes me feel better to have a study confirm it.

davidw 7y ago

My guess is that it's some kind of distribution curve. You can certainly improve your odds via 2, 3 and 4, but some people will do all those and end up not doing well. The average person who does them all will end up a bit better-off than average, and some will end up very well off. In other words, they help, but don't guarantee 'success'.

moate 7y ago
Will they? Wouldn't you need to not only do them, but do them better than average? So it's not just that you need to work hard, it's that you need to be working harder than average. But also if someone was already ahead of you, they could work less than that and still wind up ahead of you. So now, is it the hard work that determined the end result, or just the luck again? There are tons of people right now trying really hard to do all sorts of things. Many of them will fail, for a myriad of reasons. That's the idea of "luck". You can't know which reasons will lead to your downfall, because reducing labor and life to "hard work" is so absurdly reductive it's meaningless. Basically, your individual circumstances are your own and comparing yourself to others might be helpful but it also might not and nobody can definitively tell you one way or the other if luck is even real.

shadowtree 7y ago

2-4 are great examples of survivorship bias. For every success story with those traits are thousands of failures. If Bill Gates had been born and raised in Ruanda, you wouldn't know his name today. Same IQ, same hustler. But no parents with connections, no upbringing devoid of war and violence. It's just like in sports. Usain Bolt is not the fastest man alive. He is the fastest professional runner. Within a sample set of 9bn people, there are likely ones with better genetics - but no access or chance to become a professional runner. This is why the slogan "Billionaires should not exist" is not without merit. A net worth of 100mil still means generational wealth. But once you're in the billions, the gap to all the other employees in your company becomes just crazy - but none of the billions would have been possible without their labor. Remember: a million seconds is 11.57 days. A billion seconds? 31.71 years.

refurb 7y ago
You’re looking at it way to black and white. I would bet if Gates had been born in Rwanda, he would have stood a good chance of being successful there, better than average.
- asjw 7y ago
  Not really. When I was a teenager we hosted at our home kids running from Rwanda , my mom was working in an hospital that cured them, doing the best possible for kids (kids!) with arms or legs amputated or a big part of their skull chopped off with a machete. You're assuming Gates had probably more chances when the chances weren't there to begin with.
- empath75 7y ago
  Libertarians who talk about how the state just gets in the way of innovators like Gates forget how hard it is to start a business when the central government fails and people start hacking away at each other with machetes instead of programming computers.
  - tathougies 7y ago
    Okay, but this is a strawman, because a basic tenet of libertarianism is that a government is necessary to forcefully (if necessary) prevent others from trampling on your individual rights. You are describing anarchy, not libertarianism.

fredley 7y ago

You can't frame things like this without talking about misfortune in the same terms. Lots of things can happen that are 'unluckly', but are vastly skewed to certain demographics. Being unlucky like: * Receiving little or no schooling * Having to labour as a child * Being abused * Having your primary carers be addicts of some kind * Growing up in a relatively poor/deprived * ... Really this list is endless, and other than blind luck (a lotto win, something that can really elevate you out of this situation, as well as having the sense to use the opportunity correctly), no amount of 'hustle' is really going to get you out of this situation. The kind of attitude in parent's comment is prevalent amongst people who have grown up in relatively rich, successful environments, and see vastly more lucky people than unlucky people (when in reality there are orders of magnitude more unlucky people than lucky).

mvaliente2001 7y ago
That reminds me a short fictional story by Jorge Luis Borges (if you excuse the quasi non-sequitur): The Lottery in Babylon. It describes how the lottery became so popular in Babylon that they began not just to play for money, but all kind of prizes, and then not only prizes but punishments. Finally, they decided that people didn't even need to buy a ticket. Everybody was implicitly part of the game, where good or bad things could be made to happen to you just by random chance... At the end of the day, The Lottery in Babylon became indistinguishable from normal life.

ska 7y ago

> but they don't define what luck is to begin with. They do though, the paper is focused on what you call "blind luck" in (1). I suppose it can be summarized as a evidence based counter argument to the cultural narrative weight given to 2,3,4, especially in the US. I don't think it is complete of course, but it is interesting.