Posted: 04 Mar 2008 04:48 AM CST Right now, I'm reading a book titled "All The Money in the World - How the Forbes 400 Make-and Spend-Their Fortunes" written by Peter Bernstein and Annalyn Swan. I'm not too far along in the book yet, but I love it. In fact, I love to study wealthy people. I have learned a great deal through observation. Chapter 3 is titled - "Luck - and Timing" The chapter starts out by quoting many wealthy people on the Forbes 400 list. The common theme of the comments was that "luck" played a part in their wealth building. Here are a few examples as presented in the book: 1. Microsoft billionaire Paul Allen was lucky to go to school with Bill Gates. 2. Ross Perot met a visiting executive from IBM while on a navy aircraft carrier. This executive offered him a sales job. He took the job and went on to become one of their best salespeople. 3. Mort Zuckerman luckily heard a passing remark by one of his college professors. The remark was: "...George Bernard Shaw was a clerk in a dry goods store and decided that he would go to London for three years and write plays, because if that didn't work out, he could always be a clerk in a dry goods store." After hearing this comment, Zuckerman decided to "try" real estate. He is now a multi-billionaire. Harvard sociologist Christopher Jencks wrote a paper in the 1970s that suggested that luck mattered as much as ability and experience in determining one's income. He wrote - "neither family background, cognitive skill, educational attainment, nor occupational status explains much of the variation in men's incomes." What do you think? Is luck required for success in life. Are wealthy people all just lucky? As the chapter unfolded, the authors went on to define luck. In fact, they linked "luck" to instinct. Zuckerman (above) has said that instinct does play a role in one's success. He specifically said, "I found that I had a great instinct for the real estate business." Over the last 30 years, he has made a significant amount of money buying properties during market downturns and then selling them at peaks. Was this luck or is this more about capitalizing on opportunity? Sounds like capitalizing on opportunity to me. Another definition of luck written by Richard Wiseman, a psychologist at the University of Hertfordshire in England wrote is: "Lucky people are skilled at creating and noticing chance opportunities, make lucky decisions by listening to their intuition, create self-fulfilling prophesies via positive expectations, and adopt a resilient attitude that transforms bad luck into good." So, are you lucky if you can spot opportunity or are you simply looking for it? I believe that we create our own luck. We create our own luck by paying attention, looking for opportunity and then acting to capitalize on the opportunity. Here is a comparison for you: You see a hundred dollar bill on the ground. Was this luck or were you just paying attention? Is bending over to pick up the hundred dollar bill lucky? Or is it more about taking action? This is the exact same thing with Zuckerman. Was he lucky to spot undervalued properties in the real estate market, or was he simply paying attention? Did he become a billionaire by watching or by actually buying the properties. Above, I referred to three billionaires who all said they were lucky. Let us go back to each one and really see if they were "lucky." Paul Allen - how many other college kids met Bill Gates while he was at Harvard? I would have to guess at least 100, if not more. If it were just "luck" wouldn't some of these other kids be billionaires because they met Bill Gates? No. Paul Allen could see the opportunity in computer operating systems. He also could see talent, knowledge and skill in Bill Gates. He paid attention, saw opportunity and got involved. Did other kids who met Bill Gates have this exact same opportunity. Yes. Did they take advantage of it. No. I guess this makes Paul Allen lucky and everyone else unlucky. Ross Perot - how many other people were hired by IBM into sales positions over the years? I don't know, maybe thousands. Ross Perot became their top sales man. He learned a great deal about his customers and what their needs were. He spotted a need in the market place and then started his own company to fill that need. Did other sales people at IBM see this opportunity? I don't know. I do know that Ross Perot tried to convince the big wigs at IBM to go after the opportunity before he branched out on his own, but they said - no thanks. I guess this makes Ross lucky and IBM unlucky... Mort Zuckerman - how many other kids in his class heard the professor's comments about trying new things in life and didn't follow the advice? How many other people in the real estate business saw similar deals over the years, but didn't buy them? I don't know. I guess Mr. Zuckerman is lucky and everyone else is unlucky. All sarcasm aside, luck is important. But every single person, including you, has had and will continue to have the ability to be "lucky." In fact, I would argue that every single day you and I can be lucky simply by looking for and taking advantage of opportunity. I'll wrap up this post with one last sentence from All of the Money in the World: "One thing is for sure, though: When that piece of luck comes along, members of the Forbes 400 have been smart enough to spot it and leverage it to an exceptional degree." P.S. If you missed last week's IFL Tuesday conference call, you can join us tonight at 8 PM. We will replay last week's conference call. This was a great call. Matt Shreves interviewed our 2007 Income for Life Members of the year for St. Louis. You don't need to register for this replay conference call. Simply dial 1-212-461-8613 tonight at 8 PM. The call is FREE! |
| Email Delivery powered by FeedBurner | |